UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2024

☐	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. 000-16867

	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 October 31, 2024 was 3,153,247.

UTG, Inc.

(The “Company”)

TABLE OF CONTENTS

Part I. Financial Information	4
Item 1. Financial Statements	4
Condensed Consolidated Balance Sheets	4
Condensed Consolidated Statements of Operations	5
Condensed Consolidated Statements of Comprehensive Income (Loss)	6
Condensed Consolidated Statements of Shareholders’ Equity	7
Condensed Consolidated Statements of Cash Flows	9
Notes to Condensed Consolidated Financial Statements	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 4. Controls and Procedures	33
Part II. Other Information	33
Item 1. Legal Proceedings	33
Item 1A. Risk Factors	33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosures	33
Item 5. Other Information	33
Item 6. Exhibits	33
Signatures	34

Part 1. Financial Information.

Item 1. Financial Statements.

UTG, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

	September 30, 2024			December 31, 2023*
ASSETS
Investments:
Investments, available for sale:
Fixed maturities, at fair value (amortized cost $104,413,377 and $109,554,738)	$	99,888,682		$	103,409,836
Held to maturity redeemable preferred stock, at amortized cost		2,500,000			2,500,000
Equity securities, at fair value (cost $93,493,236 and $89,387,893)		209,395,420			156,550,812
Equity securities, at cost		16,733,309			15,977,368
Mortgage loans on real estate, at amortized cost (net of credit loss reserve of $265,000 and $274,000)		18,233,549			15,318,176
Notes receivable (net of credit loss reserve of $209,000 and $250,000)		13,746,866			14,009,225
Investment real estate, net		29,113,167			21,975,120
Policy loans		5,812,048			6,018,248
Short-term investments		8,174,456			29,132,236
Total investments		403,597,497			364,891,021

Cash and cash equivalents		36,008,132			41,185,196
Accrued investment income		1,482,531			2,001,064
Reinsurance receivables:
Future policy benefits		23,772,150			23,847,623
Policy claims and other benefits		4,387,584			4,734,575
Cost of insurance acquired		1,560,035			2,036,896
Income tax receivable		1,375,394			2,128,027
Other assets		776,257			884,531
Total assets	$	472,959,580		$	441,708,933

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Policy liabilities and accruals:
Future policyholder benefits	$	220,076,367		$	223,757,860
Policy claims and benefits payable		3,992,089			4,188,917
Other policyholder funds		243,163			260,892
Dividend and endowment accumulations		14,608,032			14,749,258
Deferred income taxes		22,857,990			12,426,840
Notes payable		0			19,000,000
Other liabilities		6,139,163			5,635,373
Total liabilities		267,916,804			280,019,140

Shareholders' equity:
Common stock - no par value, stated value $0.001 per share. Authorized 7,000,000 shares - 3,166,033 and 3,165,320 shares outstanding		3,168			3,167
Additional paid-in capital		32,636,397			32,613,817
Retained earnings		175,434,410			133,491,797
Accumulated other comprehensive loss		(3,574,509	)		(4,882,317	)
Total UTG shareholders' equity		204,499,466			161,226,464
Noncontrolling interest		543,310			463,329
Total shareholders' equity		205,042,776			161,689,793
Total liabilities and shareholders' equity	$	472,959,580		$	441,708,933

* Balance sheet audited at December 31, 2023.

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2024			2023			2024			2023
Revenue:
Premiums and policy fees	$	1,819,591		$	1,855,251		$	5,745,549		$	5,999,868
Ceded reinsurance premiums and policy fees		(448,154	)		(601,994	)		(1,480,737	)		(1,926,975	)
Net investment income		3,591,503			3,432,684			10,936,013			9,994,645
Other income		31,631			69,901			186,600			176,719
Revenue before net investment gains (losses)		4,994,571			4,755,842			15,387,425			14,244,257
Net investment gains (losses):
Other realized investment gains, net		1,668,652			7,938,232			2,120,242			8,973,842
Change in fair value of equity securities		32,302,676			(23,403	)		51,172,076			(7,209,399	)
Total net investment gains (losses)		33,971,328			7,914,829			53,292,318			1,764,443
Total revenue		38,965,899			12,670,671			68,679,743			16,008,700

Benefits and other expenses:
Benefits, claims and settlement expenses:
Life		3,817,317			3,773,579			10,056,490			11,922,019
Ceded reinsurance benefits and claims		(536,745	)		(461,207	)		(1,885,615	)		(1,958,223	)
Annuity		258,186			259,299			762,278			768,742
Dividends to policyholders		59,844			61,770			221,219			230,472
Commissions and amortization of deferred policy acquisition costs		(31,905	)		(30,318	)		(87,390	)		(84,472	)
Amortization of cost of insurance acquired		158,953			165,304			476,861			495,943
Operating expenses		1,979,928			3,136,691			6,188,166			7,444,106
Interest expense		0			0			11,600			16,820
Total benefits and other expenses		5,705,578			6,905,118			15,743,609			18,835,407

Income (loss) before income taxes		33,260,321			5,765,553			52,936,134			(2,826,707	)
Income tax expense (benefit)		6,920,628			531,882			10,913,540			(1,257,308	)

Net income (loss)		26,339,693			5,233,671			42,022,594			(1,569,399	)

Net income attributable to noncontrolling interests		(21,773	)		(28,994	)		(79,981	)		(88,506	)

Net income (loss) attributable to common shareholders	$	26,317,920		$	5,204,677		$	41,942,613		$	(1,657,905	)

Amounts attributable to common shareholders
Basic income (loss) per share	$	8.31		$	1.64		$	13.24		$	(0.52	)

Diluted income (loss) per share	$	8.31		$	1.64		$	13.24		$	(0.52	)

Basic weighted average shares outstanding		3,166,722			3,169,466			3,168,376			3,181,306

Diluted weighted average shares outstanding		3,166,722			3,169,466			3,168,376			3,181,306

See accompanying notes.

UTG, Inc.

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

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2024			2023			2024			2023
Net income (loss)	$	26,339,693		$	5,233,671		$	42,022,594		$	(1,569,399	)

Other comprehensive income (loss):

Unrealized holding gains (losses) arising during period, pre-tax		3,852,955			(3,606,251	)		1,648,051			(2,521,367	)
Tax (expense) benefit on unrealized holding gains (losses) arising during the period		(809,121	)		759,387			(340,243	)		539,165
Unrealized holding gains (losses) arising during period, net of tax		3,043,834			(2,846,864	)		1,307,808			(1,982,202	)

Less reclassification adjustment for gains included in net income (loss)		0			(12,500	)		0			(58,333	)
Tax expense for gains included in net income (loss)		0			2,625			0			12,250
Reclassification adjustment for gains included in net income (loss), net of tax		0			(9,875	)		0			(46,083	)

Subtotal: Other comprehensive income (loss), net of tax		3,043,834			(2,856,739	)		1,307,808			(2,028,285	)

Comprehensive income (loss)		29,383,527			2,376,932			43,330,402			(3,597,684	)

Less comprehensive income attributable to noncontrolling interests		(21,773	)		(28,994	)		(79,981	)		(88,506	)

Comprehensive income (loss) attributable to UTG, Inc.	$	29,361,754		$	2,347,938		$	43,250,421		$	(3,686,190	)

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

Three Months Ended September 30, 2024	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest		Total Shareholders’ Equity

Balance at July 1, 2024	$	3,170		$	32,696,383		$	149,116,490	$	(6,618,343	)	$	521,537	$	175,719,237
Common stock issued during year		2			49,996			0		0			0		49,998
Treasury shares acquired		(4	)		(109,982	)		0		0			0		(109,986	)
Net income attributable to common shareholders		0			0			26,317,920		0			0		26,317,920
Unrealized holding gain on securities net of noncontrolling interest and reclassification adjustment and taxes		0			0			0		3,043,834			0		3,043,834
Gain attributable to noncontrolling interest		0			0			0		0			21,773		21,773
Balance at September 30, 2024	$	3,168		$	32,636,397		$	175,434,410	$	(3,574,509	)	$	543,310	$	205,042,776

Nine Months Ended September 30, 2024	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest		Total Shareholders’ Equity

Balance at January 1, 2024	$	3,167		$	32,613,817		$	133,491,797	$	(4,882,317	)	$	463,329	$	161,689,793
Common stock issued during year		12			349,300			0		0			0		349,312
Treasury shares acquired		(11	)		(326,720	)		0		0			0		(326,731	)
Net income attributable to common shareholders		0			0			41,942,613		0			0		41,942,613
Unrealized holding gain on securities net of noncontrolling interest and reclassification adjustment and taxes		0			0			0		1,307,808			0		1,307,808
Gain attributable to noncontrolling interest		0			0			0		0			79,981		79,981
Balance at September 30, 2024	$	3,168		$	32,636,397		$	175,434,410	$	(3,574,509	)	$	543,310	$	205,042,776

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

Three Months Ended September 30, 2023	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest		Total Shareholders’ Equity

Balance at July 1, 2023	$	3,184		$	33,136,764		$	124,672,520	$	(6,283,132	)	$	512,984	$	152,042,320
Treasury shares acquired		(17	)		(533,451	)		0		0			0		(533,468	)
Net income attributable to common shareholders		0			0			5,204,677		0			0		5,204,677
Unrealized holding loss on securities net of noncontrolling interest and reclassification adjustment and taxes		0			0			0		(2,856,739	)		0		(2,856,739	)
Gain attributable to noncontrolling interest		0			0			0		0			28,994		28,994
Balance at September 30, 2023	$	3,167		$	32,603,313		$	129,877,197	$	(9,139,871	)	$	541,978	$	153,885,784

Nine Months Ended September 30, 2023	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest		Total Shareholders’ Equity

Balance at January 1, 2023	$	3,166		$	32,693,972		$	131,989,352		$	(7,111,586	)	$	453,472	$	158,028,376
Adoption of new accounting standard		0			0			(454,250	)		0			0		(454,250	)
		3,166			32,693,972			131,535,102			(7,111,586	)		453,472		157,574,126
Common stock issued during year		27			674,363			0			0			0		674,390
Treasury shares acquired		(26	)		(765,022	)		0			0			0		(765,048	)
Net loss attributable to common shareholders		0			0			(1,657,905	)		0			0		(1,657,905	)
Unrealized holding loss on securities net of noncontrolling interest and reclassification adjustment and taxes		0			0			0			(2,028,285	)		0		(2,028,285	)
Gain attributable to noncontrolling interest		0			0			0			0			88,506		88,506
Balance at September 30, 2023	$	3,167		$	32,603,313		$	129,877,197		$	(9,139,871	)	$	541,978	$	153,885,784

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended
	September 30,			September 30,
	2024			2023
Cash flows from operating activities:
Net income (loss)	$	42,022,594		$	(1,569,399	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Accretion of investments		(456,933	)		(149,951	)
Realized investment gains, net		(2,120,242	)		(8,973,842	)
Change in fair value of equity securities		(51,172,076	)		7,209,399
Amortization of cost of insurance acquired		476,861			495,943
Provision for deferred income taxes		10,090,907			(446,037	)
Depreciation and depletion		1,408,204			447,698
Stock-based compensation		349,312			674,390
Charges for mortality and administration of universal life and annuity products		(4,115,148	)		(4,288,294	)
Interest credited to account balances		2,682,616			2,741,851
Change in accrued investment income		518,533			133,627
Change in reinsurance receivables		422,464			865,679
Change in policy liabilities and accruals		(2,126,806	)		(3,464,745	)
Change in income taxes receivable (payable)		752,633			(6,611,271	)
Change in other assets and liabilities, net		714,891			3,210,465
Net cash used in operating activities		(552,190	)		(9,724,487	)

Cash flows from investing activities:
Proceeds from investments sold and matured:
Fixed maturities available for sale		5,000,000			4,058,333
Equity securities		10,408,667			6,861,942
Trading securities		102,699			0
Mortgage loans		2,402,495			17,601,131
Notes receivable		1,103,360			4,650,509
Real estate		3,098,290			15,533,712
Policy loans		864,973			1,106,310
Short-term investments		22,500,000			9,740,815
Total proceeds from investments sold and matured		45,480,484			59,552,752
Cost of investments acquired:
Equity securities		(10,882,905	)		(7,874,161	)
Trading securities		(102,699	)		0
Mortgage loans		(5,301,867	)		(2,050,124	)
Notes receivable		(800,000	)		(3,579,241	)
Real estate		(11,603,519	)		(4,115,151	)
Policy loans		(658,774	)		(699,167	)
Short-term investments		(950,925	)		(29,300,034	)
Total cost of investments acquired		(30,300,689	)		(47,617,878	)
Net cash provided by investing activities		15,179,795			11,934,874

Cash flows from financing activities:
Policyholder contract deposits		3,056,728			3,144,884
Policyholder contract withdrawals		(3,534,666	)		(3,315,173	)
Proceeds from notes payable/line of credit		0			2,500,000
Payments of principal on notes payable/line of credit		(19,000,000	)		(21,500,000	)
Purchase of treasury stock		(326,731	)		(765,048	)
Net cash used in financing activities		(19,804,669	)		(19,935,337	)
Net decrease in cash and cash equivalents		(5,177,064	)		(17,724,950	)
Cash and cash equivalents at beginning of period		41,185,196			45,290,385
Cash and cash equivalents at end of period	$	36,008,132		$	27,565,435

See accompanying notes.

UTG, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of September 30, 2024, 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, 2023. The Company’s results of operations for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 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 Chairman of the Board of Directors, Chief Executive Officer, President, and a Director of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates. At September 30, 2024, Mr. Correll owns or controls directly and indirectly approximately 66% 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 nine months ended September 30, 2024, there were no additions to or changes in the critical accounting policies disclosed in the 2023 Form 10-K.

Note 3 – Investments

Investment in 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 fixed maturity securities are summarized by type as follows:

September 30, 2024	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government and govt. agencies and authorities	$	14,315,322	$	3,908	$	(419,118	)	$	13,900,112
U.S. special revenue and assessments		7,524,337		0		(110,906	)		7,413,431
All other corporate bonds		82,573,718		169,990		(4,168,569	)		78,575,139
Total fixed maturities, available for sale		104,413,377		173,898		(4,698,593	)		99,888,682
Redeemable preferred stock		2,500,000		0		0			2,500,000
Total	$	106,913,377	$	173,898	$	(4,698,593	)	$	102,388,682

December 31, 2023	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government and govt. agencies and authorities	$	14,316,976	$	0	$	(729,197	)	$	13,587,779
U.S. special revenue and assessments		7,528,985		0		(220,527	)		7,308,458
All other corporate bonds		87,708,777		89,004		(5,284,182	)		82,513,599
Total fixed maturities, available for sale		109,554,738		89,004		(6,233,906	)		103,409,836
Redeemable preferred stock		2,500,000		0		0			2,500,000
Total	$	112,054,738	$	89,004	$	(6,233,906	)	$	105,909,836

The amortized cost and estimated market value of fixed maturity securities at September 30, 2024, by contractual maturity, is shown below.

Fixed Maturity Securities September 30, 2024	Amortized Cost		Fair Value
Due in one year or less	$	14,543,374	$	14,451,840
Due after one year through five years		38,105,357		37,482,619
Due after five years through ten years		5,375,022		5,443,035
Due after ten years		21,725,677		20,330,040
Fixed maturities with no single maturity date		27,163,947		24,681,148
Total	$	106,913,377	$	102,388,682

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options.

By insurance statute, the majority of the Company’s investment portfolio is invested in investment grade securities to provide ample protection for policyholders.

Below investment grade debt securities generally provide higher yields and involve greater risks than investment grade debt securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment grade issuers. In addition, the trading market for these securities is usually more limited than for investment grade debt securities. Debt securities classified as below-investment grade are those that receive a Standard & Poor’s rating of BB+ or below.

The Company held below investment grade investments with an estimated market value of $0 as of September 30, 2024 and December 31, 2023.

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position:

September 30, 2024	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	$	0		0			12,395,567	$	(419,118	)		12,395,567	$	(419,118	)
U.S. Special Revenue and Assessments		0		0			7,413,431		(110,906	)		7,413,431		(110,906	)
All other corporate bonds		3,037,530		(596	)		68,175,058		(4,167,973	)		71,212,588		(4,168,569	)
Total fixed maturities	$	3,037,530		(596	)		87,984,056		(4,697,997	)		91,021,586	$	(4,698,593	)

December 31, 2023	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	$	1,497,390		(3,696	)		12,090,389		(725,501	)		13,587,779	$	(729,197	)
U.S. special revenue and assessments		0		0			7,308,458		(220,527	)		7,308,458		(220,527	)
All other corporate bonds		544,610		(2,319	)		73,678,567		(5,281,863	)		74,223,177		(5,284,182	)
Total fixed maturities	$	2,042,000		(6,015	)		93,077,414		(6,227,891	)		95,119,414	$	(6,233,906	)

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

	Less than 12 months		12 months or longer		Total
As of September 30, 2024
Fixed maturities		1		42		43
As of December 31, 2023
Fixed maturities		2		45		47

Allowance for Credit Loss - Available for Sale Securities

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (1) the extent to which the estimated fair value has been below amortized cost, (2) adverse conditions specifically related to a security, an industry sector, adverse change in the financial condition of the issuer of the security, (3) payment structure of the security and likelihood of the issuer being able to make payments, (4) failure of the issuer to make scheduled interest and principal payments, (5) whether the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (6) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers, (7) changes in the rating of the security by a rating agency, and (8) other subjective factors.

Substantially all of the unrealized losses on fixed maturity securities at September 30, 2024 and December 31, 2023 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. At September 30, 2024, the Company did not intend to sell its securities in an unrealized loss position, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost. Therefore, the Company concluded that these securities had not incurred a credit loss and should not have an allowance for credit loss at September 30, 2024.

Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance, and changes in credit ratings.

Net unrealized losses included in other comprehensive income (loss) for investments classified as available-for-sale, net of the effect of deferred income taxes, assuming that the depreciation had been realized as of September 30, 2024 and December 31, 2023:

	September 30, 2024			December 31, 2023
Unrealized appreciation (depreciation) on available-for-sale securities	$	(4,524,695	)	$	(6,180,148	)
Deferred income taxes		950,186			1,297,831
Net unrealized appreciation (depreciation) on available-for-sale securities	$	(3,574,509	)	$	(4,882,317	)

Cost Method Equity Investments

The Company held equity investments with an aggregate cost of $16,733,309 and $15,977,368 at September 30, 2024 and December 31, 2023, 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 reviews and considers events or changes in circumstances that might have a significant adverse effect on the reported value of those investments. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.

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 nine months ended September 30, 2024 and 2023, the Company acquired $5,301,867 and $2,050,124 in mortgage loans, respectively. FSNB services the majority of the Company’s mortgage loan portfolio. The Company pays FSNB a 0.25% servicing fee on these loans and a one-time fee at loan origination of 0.50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2024 and 2023, the maximum and minimum lending rates for mortgage loans were:

	2024						2023
	Maximum rate			Minimum rate			Maximum rate			Minimum rate
Farm Loans		5.00	%		5.00	%		5.00	%		5.00	%
Commercial Loans		10.00	%		4.00	%		8.75	%		4.00	%
Residential Loans		5.00	%		4.15	%		5.00	%		4.15	%

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. 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.

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

	September 30, 2024		December 31, 2023
In good standing	$	18,233,549	$	15,318,176
Total mortgage loans	$	18,233,549	$	15,318,176

The following is a summary of the mortgage loans outstanding and the related allowance for credit losses:

	September 30, 2024			December 31, 2023
Farm	$	326,385		$	332,417
Commercial		16,716,671			13,764,209
Residential		1,455,493			1,495,550
Total mortgage loans		18,498,549			15,592,176
Less allowance for credit losses		(265,000	)		(274,000	)
Total mortgage loans, net	$	18,233,549		$	15,318,176

There were no past due loans as of September 30, 2024 and December 31, 2023.

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. 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 nine months ended September 30, 2024 and 2023 the Company acquired $800,000 and $3,579,241 of notes receivable, 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 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.

The following is a summary of the notes receivable outstanding and the related allowance for credit losses:

	September 30, 2024			December 31, 2023
Notes receivable	$	13,955,866		$	14,259,225
Less allowance for credit losses		(209,000	)		(250,000	)
Total notes receivable, net	$	13,746,866		$	14,009,225

Allowance for Credit Loss - Loans

The allowance for credit loss ("ACL") is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when Management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance for credit losses represents Management's estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses is estimated by Management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

The Company measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. The Company has identified the following portfolio segments - mortgage loans on real estate and notes receivable.

The allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for risk tolerance, loan review and audit results, asset quality and portfolio trends, industry concentrations, external factors and economic conditions.

Loans that do not share risk characteristics are evaluated on an individual basis. When Management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of collateral at the reporting date unadjusted for selling costs as appropriate.

Allowance for Credit Loss - Unfunded Commitments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Company's income statements. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well a any third-party guarantees. The allowance for unfunded commitments as of September 30, 2024 and December 31, 2023 was $41,000 and $51,000, respectively, and is included in other liabilities on the Company's Condensed Consolidated Balance Sheets.

Allowance for Credit Loss - Accrued Interest

Accrued interest is not included in the ACL and if deemed uncollectible, it is charged against interest income when determined to be uncollectible.

Investment Real Estate

Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis for financial reporting purposes using estimated useful lives of 3 to 30 years. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable. During the nine months ended September 30, 2024, no impairments were recognized on the investment real estate.

Note 4 - Fair Value Measurements of the Condensed Consolidated Financial Statements provides further information regarding the fair value of financial instruments that are not measured at fair value. The investment real estate owned by the Company is included in this portion of the Note 4 - Fair Value Measurements disclosure.

The following table provides an allocation of the Company’s investment real estate by type:

	September 30, 2024		December 31, 2023
Raw land	$	16,446,147	$	6,971,930
Commercial		6,315,487		4,106,938
Residential		1,941,048		3,512,408
Land, minerals and royalty interests		4,410,485		7,383,844
Total investment real estate	$	29,113,167	$	21,975,120

The Company’s investment real estate portfolio includes ownership in oil and gas royalties. As of September 30, 2024 and December 31, 2023, investments in oil and gas royalties represented 21% and 34%, respectively, of the total investment real estate portfolio. See Note 9 – Concentrations of Credit Risk of the Condensed Consolidated Financial Statements for additional information regarding the allocation of the oil and gas investment real estate holdings by industry type.

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 nine months ended September 30, 2024 and 2023, the Company acquired $11,603,519 and $4,115,151 of investment real estate, respectively.

Short-Term Investments

Short-term investments have remaining maturities exceeding three months and under 12 months at the time of purchase and are stated at amortized cost, which approximates fair value. The short-term investments consist of United States Treasury securities.

During 2024 and 2023, the Company acquired $950,925 and $29,300,034, respectively, in short-term investments.

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						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Realized gains:
Sales of fixed maturities	$	0		$	12,500		$	0		$	58,333
Sales of equity securities		1,668,655			110,742			1,954,233			359,216
Sales of real estate		0			7,815,364			166,020			8,541,124
Sales of short-term investments		0			0			0			23,509
Total realized gains		1,668,655			7,938,606			2,120,253			8,982,182
Realized losses:
Sales of equity securities		0			0			0			(7,966	)
Sales of short-term investments		(3	)		(374	)		(11	)		(374	)
Total realized losses		(3	)		(374	)		(11	)		(8,340	)
Net realized investment gains		1,668,652			7,938,232			2,120,242			8,973,842
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		32,302,676			(23,403	)		51,172,076			(7,209,399	)
Change in fair value of equity securities		32,302,676			(23,403	)		51,172,076			(7,209,399	)
Net investment gains (losses)	$	33,971,328		$	7,914,829		$	53,292,318		$	1,764,443
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	3,852,955		$	(3,606,251	)	$	1,648,051		$	(2,521,367	)
Net increase (decrease)	$	3,852,955		$	(3,606,251	)	$	1,648,051		$	(2,521,367	)

Note 4 – Fair Value Measurements

Fair Value Measurements on a Recurring Basis

Assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three levels based on the observability of valuation inputs:

Level 1 – Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Valuation methodologies include quoted prices for similar assets and liabilities in active markets or quoted prices for identical, quoted prices for identical or similar assets or liabilities in markets that are not active, or 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.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:

September 30, 2024	Level 1		Level 2		Level 3		Total
Fixed maturity securities:
U.S. Government and government agencies and authorities	$	13,900,112	$	0	$	0	$	13,900,112
U.S. special revenue and assessments		0		7,413,431		0		7,413,431
Corporate securities		0		78,575,139		0		78,575,139
Total fixed maturities		13,900,112		85,988,570		0		99,888,682
Equity securities:
Common stocks		41,018,457		5,839,400		2,981,951		49,839,808
Limited liability companies		0		0		80,481,098		80,481,098
Total equity securities		41,018,457		5,839,400		83,463,049		130,320,906
Short-term investments		8,174,456		0		0		8,174,456
Total financial assets	$	63,093,025	$	91,827,970	$	83,463,049	$	238,384,044

December 31, 2023	Level 1		Level 2		Level 3		Total
Fixed maturity securities:
U.S. Government and government agencies and authorities	$	13,587,779	$	0	$	0	$	13,587,779
U.S. special revenue and assessments		0		7,308,458		0		7,308,458
Corporate securities		0		82,513,599		0		82,513,599
Total fixed maturities		13,587,779		89,822,057		0		103,409,836
Equity securities:
Common stocks		35,819,973		5,329,080		2,807,634		43,956,687
Limited liability companies		0		0		57,604,806		57,604,806
Total equity securities		35,819,973		5,329,080		60,412,440		101,561,493
Short-term investments		29,132,236		0		0		29,132,236
Total financial assets	$	78,539,988	$	95,151,137	$	60,412,440	$	234,103,565

Total assets included in the fair value hierarchy exclude certain equity securities that were measured at estimated fair value using the net asset value (“NAV”) per share practical expedient. At September 30, 2024 and December 31, 2023, the estimated fair value of such investments was $79,074,514 and $54,989,319, respectively. These investments are generally not readily redeemable by the investee.

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. There have been no significant changes in the valuation techniques utilized by the Company for the nine months ended September 30, 2024.

Available for Sale Securities

Securities classified as available for sale are recorded at fair value on a recurring basis. Securities classified as Level 1 utilized fair value measurements based upon quoted market prices, when available. If quoted market prices are not available, the Company obtains fair value measurements from recently executed transactions, market price quotations, benchmark yields and issuer spreads to value Level 2 securities. In certain instances where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standards generally accepted in the United States.

Equity Securities at Fair Value

Equity securities consist of common and preferred stocks and limited liability companies 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.

Change in Recurring Fair Value Measurements

The following table presents the changes in Level 3 equity securities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 equity securities.

			Investments in
	Investments in Common Stocks		Limited Liability Companies		Total
Balance at December 31, 2023	$	2,807,634	$	57,604,806	$	60,412,440
Realized gains (losses)		0		0		0
Unrealized gains (losses)		174,317		21,218,789		21,393,106
Purchases		0		1,657,503		1,657,503
Sales		0		0		0
Balance at September 30, 2024	$	2,981,951	$	80,481,098	$	83,463,049

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the table above. As a result, the unrealized gains (losses) on instruments held at September 30, 2024 and December 31, 2023 may include changes in fair value that were attributable to both observable and unobservable inputs.

Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable.

Quantitative Information About Level 3 Fair Value Measurements

The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments and includes only those instruments for which information about the inputs is reasonably available to the Company, such as data from independent third-party valuation service providers and from internal valuation models.

Financial Assets	Fair Value at September 30, 2024		Fair Value at December 31, 2023		Valuation Technique
Common stocks	$	2,981,951	$	2,807,634	Pricing Model
Limited liability companies		80,481,098		57,604,806	Pricing Model
Total	$	83,463,049	$	60,412,440

Uncertainty of Fair Value Measurements

The significant unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that if changed could result in higher or lower fair value measurements of these assets as of the reporting date.

Equity Securities at Fair Value

Fair market value for equity securities is derived based on unobservable inputs, such as projected normalized revenues and industry standard multiples of revenue for the equity securities valued using pricing model. Significant increases (decreases) in either of those inputs in isolation would result in a significantly higher (lower) fair value measurement.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

The Company holds certain equity securities that are measured at estimated fair value using the NAV per share practical expedient. These investments are generally not readily redeemable by the investee. The following tables provide additional information regarding the assets carried at NAV.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

Investment Category

Fair Value at

September 30, 2024

Unfunded Commitments

Redemption Frequency

Redemption Notice Period

Equity securities

Growth Equity

Redeemable

Limited partnership

45,016,456

Quarterly

45 days

Non-redeemable

Limited liability companies

11,165,012

4,468,482

n/a

Limited partnerships

22,893,048

4,373,477

n/a

Total

79,074,516

8,841,959

Investment Category

Fair Value at December 31, 2023

Unfunded Commitments

Redemption Frequency

Redemption Notice Period

Equity securities

Growth Equity

Redeemable

Limited partnership

34,081,797

Quarterly

45 days

Non-redeemable

Limited liability companies

11,960,929

9,464,608

n/a

Limited partnerships

8,946,593

2,410,599

n/a

Total

54,989,319

11,875,207

The following are descriptions of the Company's assets held at NAV.

The Company invested in a closed-end LP fund that was formed pursuant to the laws of the State of Delaware under a limited partners agreement (the “Agreement”) in 2012 and is scheduled to terminate on the tenth anniversary of the final closing date, unless terminated sooner or extended in accordance with the Agreement. In 2023, the Fund elected to extend its operations for one year and is currently in the wind down phase. The purpose of the LP is to make investments in and pursue targets that educate, train, and inspire men and women in the United States and around the world to value free enterprise, business, and economics to improve the quality of their lives and the lives and the lives of those in their communities. In 2012, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a limited partnership that was formed under the laws of the State of Delaware on October 5, 1999, as a Delaware limited partnership (“LP”). The Limited Partnership Agreement provides for the Fund to continue until dissolved. There are significant restrictions to the dissolution process, which are outlined in the LP Agreement. The Fund invests in listed equity and fixed income securities as well as non-listed securities, including direct-owned minerals and other royalties. In 2013, UG entered into an irrevocable subscription agreement to invest in the LP.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware in 2020. The LLC agreement provides for the Company to continue until dissolved. There are significant restrictions to the dissolution process, which are outlined in the LLC Agreement. The LLC Company was formed for the purpose of acquiring, making investments in, and owning, holding, and growing operating businesses through the United States. In 2020, UG entered into a LLC Agreement to invest in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed on October 15, 2020 to provide long-term investment returns. The Company will continue to operate until December 31, 2032, or until each of the investment funds in which the LLC invests terminates, unless terminated earlier or extended in accordance with the Operating Agreement. In 2020, UG completed the Subscription Agreement to become an investor in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed on July 1, 2022 to amplify philanthropy by primarily investing in venture capital investment funds and in direct venture capital investments of operating companies. The Company will continue to operate until December 31, 2034, or until each of the investment funds in which the LLC invests terminates, unless terminated earlier or extended in accordance with the Operating Agreement. In 2022, the Company completed the Subscription Agreement to become an investor in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was organized solely for the purpose owning, managing, supervising and disposing of the investment. The Partnership will continue in existence for the investment period (subject to extension), unless sooner terminated by operation of law or pursuant to any provision of the Limited Partnership Agreement. In 2022, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a closed-end LP fund that was formed pursuant to the laws of the State of Delaware under a limited partners agreement (the “Agreement”) on April 6, 2015 and is scheduled to terminate on the tenth anniversary of the final closing date, unless terminated sooner or extended in accordance with the Agreement. The purpose of the LP is to make investments in and pursue targets that educate, train, and inspire men and women in the United States and around the world to value free enterprise, business, and economics to improve the quality of their lives and the lives and the lives of those in their communities. In 2015, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a closed-end LP fund that was formed pursuant to the laws of the State of Delaware under a limited partners agreement (the “Agreement”) on September 5, 2018 (the “Agreement”), and is scheduled to terminate on the twelfth anniversary of the Final Closing Date, unless terminated sooner or extended in accordance with the Agreement. The purpose of the Partnership is to make investments in and pursue targets that educate, train, and inspire men and women in the United States and around the world to value free enterprise, business, and economics to improve the quality of their lives and the lives and the lives of those in their communities. In 2018, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed September 29, 2021 for the purpose of investing in companies located in emerging markets. The Limited Liability Company Agreement provides for LLC to continue until dissolved, unless terminated earlier through terms specified in the Operating Agreement. In 2021, the Company entered into a Limited Liability Company Agreement to invest in the LLC.

The Company invested in a LP that was formed pursuant to the laws of the state of Delaware under a limited partnership agreement on October 27, 2021 (the “Agreement”) and is scheduled to terminate on the tenth anniversary of the Final Closing Date, unless terminated sooner or extended in accordance with the Agreement. The Partnership is organized for the principal purposes of acquiring, holding, supervising, managing and disposing of investment in recapitalization, management buyouts, and corporate divestitures of Portfolio Companies operating in various segments of the U.S. lower middle markets. In 2022, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a LLC that was formed as an Alabama Limited Liability Company on April 6, 2022. The Limited Liability Company Agreement provides for the LLC to continue until dissolved, unless terminated earlier through terms specified in the Operating Agreement. The purpose of Trivela is to (1) acquire, own and operate football (soccer) clubs (each a “Target Company”) (2) establish investment vehicles for the acquisition of Target Companies (3) sponsor private placements of securities on behalf of each investment vehicle (4) manage the operations of each investment vehicle & Target Company on a fee for services basis (5) engage in any lawful act or activity incidental to the Business as reasonably determined by the managers. The Company entered into a Limited Liability Company Agreement to invest in Trivela Group, LLC.

The Company invested in a LP that was formed as a Delaware Limited Partnership on September 22, 2023. The Limited Partnership Agreement states that the LP shall continue, unless the Partnership is sooner dissolved , until the fifteenth (15^th) anniversary of the final closing, provided, that the General Partner may further extend the term of the Partnership beyond the aforementioned term with the approval of a majority in interest of the limited partners for up to two consecutive period of five years. The nature of the business to be conducted and promoted by the partnership is to: (1) acquire, own, and operate one or more clubs, (2) establish subsidiaries for the acquisition of clubs and club ownership interests, (3) pursue and exploit business, investment or real estate opportunities related or incidental to clubs, their stadiums or any other sport or entertainment activities, and (4) engage in any lawful act or activity incidental to the foregoing purposes, as determined by the general partner.

The Company invested in a LP that was formed pursuant to the laws of the state of Delaware under a limited partnership agreement In June of 2024 (the “Agreement”) and is scheduled to terminate on the tenth anniversary of the Final Closing Date, unless terminated sooner or extended in accordance with the Agreement. The Partnership is organized for the principal purposes of providing equity capital for investment in the fundraising for acquisition of Investment Entity and engaging in such other lawful activities as allowed under the Delaware Act. In 2024, the Company entered into a Limited Partnership Agreement to invest in this LP.

Fair Value Measurements on a Nonrecurring Basis

Certain assets are not carried at fair value on a recurring basis. 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 Company did not recognize any re-measurements or impairments of financial instruments at September 30, 2024 or December 31, 2023.

Fair Value Information About Financial Instruments Not Measured at Fair Value

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:

	Carrying		Estimated
September 30, 2024	Amount		Fair Value		Level 1		Level 2		Level 3
Assets
Held to maturity redeemable preferred stock	$	2,500,000		2,500,000		0		0		2,500,000
Equity securities, at cost		16,733,309		16,733,309		0		0		16,733,309
Mortgage loans on real estate		18,233,549		17,559,866		0		0		17,559,866
Notes receivable		13,746,866		13,948,621		0		0		13,948,621
Investment real estate		29,113,167		86,823,500		0		0		86,823,500
Policy loans		5,812,048		5,812,048		0		0		5,812,048
Accrued investment income		1,482,531		1,482,531		0		0		1,482,531

Liabilities
Policy claims and benefits payable		3,992,089		3,992,089		0		0		3,992,089
Dividend and endowment accumulations		14,608,032		14,608,032		0		0		14,608,032

	Carrying		Estimated
December 31, 2023	Amount		Fair Value		Level 1		Level 2		Level 3
Assets
Held to maturity redeemable preferred stock	$	2,500,000		2,500,000		0		0		2,500,000
Equity securities, at cost		15,977,368		15,977,368		0		0		15,977,368
Mortgage loans on real estate		15,318,176		14,447,026		0		0		14,447,026
Notes receivable		14,009,225		14,189,147		0		0		14,189,147
Investment real estate		21,975,120		62,899,838		0		0		62,899,838
Policy loans		6,018,248		6,018,248		0		0		6,018,248
Accrued investment income		2,001,064		2,001,064		0		0		2,001,064

Liabilities
Policy claims and benefits payable		4,188,917		4,188,917		0		0		4,188,917
Dividend and endowment accumulations		14,749,258		14,749,258		0		0		14,749,258
Notes payable		19,000,000		19,000,000		0		19,000,000		0

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.

Held to maturity redeemable preferred stock is carried at cost, which approximates fair value.

Certain equity securities are reported at their cost basis, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. It is not practicable to estimate their fair values due to insufficient information being available.

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.

The fair values of notes receivable 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 the notes receivable 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.

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 value of accrued investment income approximates its fair value.

The carrying amounts reported for policy claims and benefits payable approximates fair value.

The carrying value for dividend and endowment accumulations approximates fair value.

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

Note 5 – Credit Arrangements

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2023		Borrowings	Repayments	September 30, 2024
Lines of Credit:
UTG	11/20/2013	11/20/2024	$	8,000,000		0	0	0	$	0
UG - CMA	10/21/2021	10/3/2025		25,000,000		19,000,000	0	19,000,000		0

UTG has a variable rate revolving line of credit. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.

During October of 2023, 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 $20,248,551. During the first quarter of 2024, the Company repaid the entire outstanding principal balance.

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. The Board of Directors of UTG authorized the repurchase of up to $22 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 nine months ended September 30, 2024, the Company repurchased 11,154 shares through the stock repurchase program for $326,731. Through September 30, 2024, UTG has spent $20,518,135 in the acquisition of 1,368,013 shares under this program. Effective November 1, 2024, Management has suspended the stock repurchase program.

During 2024, the Company issued 11,867 shares of stock to management and employees as compensation at a cost of $349,312. 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 nine months ended September 30, 2024 and 2023, 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 consolidated financial statements, though the Company has no control over such assessments.

Mortgage Loan Commitments - The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $788,900 and $878,132 at September 30, 2024 and December 31, 2023, respectively.

Notes Receivable Commitments - The Company commits to lend funds under notes receivable funding commitments. The amounts of these notes receivable commitments were $2,000,000 and $2,800,000 at September 30, 2024 and December 31, 2023, respectively.

Commitments to Fund Limited Liability Company and Limited Partnership Investments - The Company commits to fund investments in limited liability companies and limited partnership. The amounts of the unfunded commitments were $11,331,603 and $16,153,903 at September 30, 2024 and December 31, 2023, respectively.

Note 8 – Other Cash Flow Disclosures

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

	Three Months Ended
	September 30,
	2024			2023
Interest		$	0		$	0
Federal income tax			0			740,000

	Nine Months Ended
	September 30,
	2024			2023
Interest		$	23,169		$	44,814
Federal income tax			70,000			5,800,000

Note 9 – Concentrations of Credit Risk

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

Because UTG serves primarily individuals located in three states, the ability of the Company's customers to pay their insurance premiums is impacted by the economic conditions in these areas. As of September 30, 2024 and 2023, approximately 52% and 51%, respectively, of the Company’s total direct premium was collected from Illinois, Ohio, and Texas. 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 September 30, 2024 and December 31, 2023, respectively. Insurance ceded represented 32% and 34% of premium income for the nine months ended September 30, 2024 and 2023, 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 33% and 28% of the Company’s total invested assets as of September 30, 2024 and December 31, 2023, respectively. The following table provides an allocation of the oil and gas investments by type.

September 30, 2024	Land, Minerals & Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,090,090	$	1,090,090
Equity securities, at fair value		118,580,581		0		118,580,581
Equity securities, at cost		5,463,775		0		5,463,775
Investment real estate		6,123,648		0		6,123,648
Notes receivable		2,000,000		0		2,000,000
Total	$	132,168,004	$	1,090,090	$	133,258,094

December 31, 2023	Land, Minerals & Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,075,240	$	1,075,240
Equity securities, at fair value		84,066,203		0		84,066,203
Equity securities, at cost		5,826,381		0		5,826,381
Investment real estate		7,383,851		0		7,383,851
Notes receivable		2,000,000		0		2,000,000
Total	$	99,276,435	$	1,075,240	$	100,351,675

At September 30, 2024 and December 31, 2023, the Company owned 4 equity securities that represented approximately 79% and 73%, respectively, of the total investments associated with the oil and gas industry.

The Company’s results of operations and financial condition have in the past been, and may in the future be, adversely affected by the degree of certain industry specific concentrations in the Company’s investment portfolio. The Company has significant exposure to investments associated with the oil and gas industry. Events or developments that have a negative effect on the oil and gas industry may adversely affect the valuation of our investments in this specific industry. The Company’s ability to sell its investments associated with the oil and gas industry may be limited.

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, 2023, 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, the acquisition of blocks of business and the administration and processing of life insurance business for other entities.

UTG has a strong philanthropic program. The Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor. The Company also encourages its staff to be involved on a personal level through monetary giving, volunteerism and use of their talents to assist those less fortunate than themselves. Through these efforts, the Company hopes to make a positive difference in the local community, state, nation and world.

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, 2023. Management has identified the accounting policies related to cost of insurance acquired, assumptions and judgments utilized in determining whether any decline in value is the result of a credit loss or other factors, and valuation methods for investments that are not actively traded as those, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's Condensed Consolidated Financial Statements and this Management's Discussion and Analysis.

During the nine-months ended September 30, 2024, there were no additions to or changes in the critical accounting policies disclosed in the 2023 Form 10-K.

Results of Operations

On a consolidated basis, the Company reported net income attributable to common shareholders of approximately $41.9 million for the nine-month period ended September 30, 2024, and net income attributable to common shareholders of approximately $26.3 million for the three-month period ended September 30, 2024.

For the nine-month period ended September 30, 2023, the Company reported a net loss attributable to common shareholders of approximately $(1.7) million, and net income attributable to common shareholders of approximately $5.2 million for the three-month period ended September 30, 2023.

Revenues

For the nine-month period ended September 30, 2024, the Company reported total revenues of approximately $68.7 million and for the same period in 2023 total revenues of approximately $16.0 million. The Company reported total revenues of approximately $39.0 million and $12.7 million for the three-month period ended September 30, 2024 and 2023, respectively.

The variance in total revenue between third quarter 2023 and 2024 results, and the year-to-date is primarily the result of the change in the fair value of equity securities. The Company reported a third quarter 2024 gain in the change in the fair value of equity securities of approximately $32.3 million and a year-to-date 2024 gain of approximately $51.2 million. In 2023, the Company reported a third quarter loss in the change in the fair value of equity securities of approximately $(23,000) and a year-to-date loss of approximately $(7.2) million. The stock markets have experienced volatility in recent periods, which in general, should always be expected.

This line item is material to the results reported in the Condensed Consolidated Statements of Operations, and this line item can also be extremely volatile, as it reflects changes in the stock market. While these results can be material and volatile, most of the equity holdings of the Company were acquired with a long-term view, thus making these intermediate changes in value of less concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

The Company reported revenue before net investment gains (losses) of approximately $15.4 million and $14.2 million for the nine-month-period ended September 30, 2024 and 2023, respectively. The Company reported $5.0 million and $4.8 million, respectively, of revenue before net investment gains (losses) for the third quarter of 2024 and 2023, respectively. The increase in the 2024 results, when compared to 2023, are the result of an increase in net investment income in the third quarter and year-to-date.

The following table summarizes our investment performance.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net investment income	$	3,591,503	$	3,432,684	$	10,936,013	$	9,994,645
Net investment gains	$	1,668,652	$	7,938,232	$	2,120,242	$	8,973,842
Change in net unrealized investment gains (losses) on equity securities, pre-tax	$	32,302,676	$	(23,403)	$	51,172,076	$	(7,209,399)

The following table reflects net investment income of the Company:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2024		2023		2024		2023

Fixed maturities available for sale	$	923,163	$	1,012,577	$	2,801,187	$	3,032,835
Fixed maturities held to maturity		43,570		41,624		125,912		123,513
Equity securities		969,398		559,587		2,204,127		1,905,122
Mortgage loans		234,542		242,073		652,803		916,524
Real estate		1,817,807		2,575,306		5,984,089		5,942,021
Notes receivable		249,936		354,125		880,620		1,087,103
Policy loans		95,873		103,137		310,525		327,353
Short-term investments		100,780		114,244		591,295		213,447
Cash and cash equivalents		416,321		333,643		1,199,268		700,182
Total consolidated investment income		4,851,390		5,336,316		14,749,826		14,248,100
Investment expenses		(1,259,887)		(1,903,632)		(3,813,813)		(4,253,455)
Consolidated net investment income	$	3,591,503	$	3,432,684	$	10,936,013	$	9,994,645

Net investment income represented 71% and 70% of the Company's revenue before net investment gains (losses) as of 2024 and 2023, respectively. For the third quarter ended September 30, net investment income represented 72% and 72% of revenue before net investment gains (losses) for 2024 and 2023, respectively. When comparing current and prior year results, net investment income was comparable in a majority of the investment categories outside of the equity securities, mortgage loans, short term, and cash and cash equivalents investment portfolios.

Beginning in March 2022 and ending in July 2023, the Federal Open Market Committee (“FOMC”) aggressively raised interest rates to fight inflation. During this time period, the interest rate environment experienced eleven rate increases totaling 5.25%, including four increases during the first part of 2023. While these actions had a negative impact on some of our investments currently owned, this has also allowed for better yields on cash balances and recent investments acquired as investments mature. In September 2024, the FOMC declined the interest rate 0.50% making the current rate 4.75%. The Company anticipates a similar decline in earnings on cash balances and any new investments that are acquired as investments mature.

Earnings from the equity securities investment portfolio represented approximately 15% and 8% of the total consolidated investment income reported by the Company during the nine months ended September 30, 2024 and 2023, respectively. Income from the equity securities portfolio was up approximately 73% or $410,000 when comparing third quarter 2024 and 2023 results. This third quarter increase in equity securities earnings is the result of increased dividends on some of the Company’s equity holdings.

Mortgage loan investment income declined approximately 29%, or $264,000 when comparing year-to-date 2024 to 2023. Third quarter earnings from mortgage loan investments were also down approximately 3%, or $8,000 when comparing 2024 to 2023. This is the result of two large payoffs on mortgage loans in the first and second quarters of 2023.

The earnings reported by the cash and short term investments represented 12% and 6% of the total consolidated investment income reported by the Company during the nine months ended September 30, 2024 and 2023, respectively. Third quarter 2024 and 2023 earnings from cash and short term investments represented approximately 11% and 8% of the total investment income reported by the Company, respectively. The increase in earnings in this category is the result of a combination of higher cash and short term holdings in 2024 and from increased interest rates received from banks and other deposit institutions due to FOMC rate changes. With the September 2024 rate decline of 0.50%, the Company anticipates experiencing a similar decline in earnings on cash balances going forward.

The following table reflects net investment gains (losses):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2024		2023		2024		2023
Fixed maturities available for sale	$	0	$	12,500	$	0	$	58,333
Equity securities		1,668,655		110,742		1,954,233		351,250
Real estate		0		7,815,364		166,020		8,541,124
Short-term investments		(3)		(374)		(11)		23,135
Consolidated net realized investment gains		1,668,652		7,938,232		2,120,242		8,973,842
Change in fair value of equity securities		32,302,676		(23,403)		51,172,076		(7,209,399)
Net investment gains (losses)	$	33,971,328	$	7,914,829	$	53,292,318	$	1,764,443

Realized investment gains are the result of one-time events and are expected to vary from year to year.

The sale of three equity securities holdings represents approximately $297,000 of the realized investment gains from equity securities during 2023. In 2024, the sale of four equity securities represents all the realized investment gains from equity securities.

In 2024, the Company reported realized gains on real estate of $166,000. This was the result of the sale of several smaller parcels of property located in Kentucky resulting in gains of approximately $101,000, and the sale of one smaller parcel of property located in Illinois that produced a gain of approximately $65,000. The 2023 real estate gains are the result of sales of real estate in Kentucky producing realized gains of approximately $760,000. Additionally, during third quarter 2023, the Company sold a large land parcel in West Virginia realizing a gain of $7.6 million.

The Company reported a year-to-date 2024 change in the fair value of equity securities of approximately $51.2 million, and a third quarter 2024 gain of approximately $32.3 million. In 2023, The Company reported a year-to-date change in the fair value of equity securities of approximately $(7.2) million, and a third quarter loss of approximately $(23,403). This line item is material to the results reported in the Condensed Consolidated Statements of Operations, and this line item can also be extremely volatile, as it reflects changes in the stock market. While these results can be material and volatile, most of the equity holdings of the Company were acquired with a long-term view, thus making these intermediate changes in value of less concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

In 2023, the Company saw negative results in its equity investments. However, most all the negative results occurred in the first quarter of 2023. Equity investments primarily in the oil and gas area represent almost all the unrealized gains reported in 2024 and unrealized losses reported in 2023. Periodic pull backs and rallies are expected by management. Management believes its current equity investments continue to be solid investments for the Company and have further growth potential; however, changes in market conditions could cause volatility in market prices.

In summary, the Company’s basis for future revenue 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 $15.7 million for the nine month period ended September 30, 2024, a decrease of approximately 16% from the same period in 2023. Benefits, claims and settlement expenses represented approximately 58% of the Company's total expenses for the nine month periods ended September 30, 2024 and 2023, respectively. The other major expense category of the Company is operating expenses, which represented approximately 39% and 40% of the Company's total expenses for the nine month periods ended September 30, 2024 and 2023, respectively.

Life benefits, claims and settlement expenses, net of reinsurance benefits and claims were down approximately 16% when comparing the nine months ended September 30, 2024, and 2023. When comparing third quarter 2024 and 2023 results, life benefits, claims and settlement expenses were down approximately 1%. Policy claims vary from period to period and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.

Changes in policyholder reserves, or future policy benefits, also impact this line item. Reserves are calculated on an individual policy basis and generally increase over the life of the policy as a result of additional premium payments and acknowledgment of increased risk as the insured continues to age.

The short-term impact of policy surrenders is negligible since a reserve for future policy benefits payable is held which is, at a minimum, equal to and generally greater than the cash surrender value of a policy. The benefit of fewer policy surrenders is primarily received over a longer time period through the retention of the Company’s asset base.

Operating expenses decreased approximately 17% in the nine month period ended September 30, 2024 as compared to the same period in 2023. There is one expense item that comprises the majority of the decrease in operating expenses, charitable contributions. Charitable expense was approximately $791,000 less in the nine month period ended September 30, 2024 as compared to the same period in 2023. Charitable expense fluctuates based on reported taxable income of the Company. Expenses in the remaining categories are comparable between years.

As mentioned above in the Overview section of the Management Discussion and Analysis, UTG has a strong philanthropic program. The Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor. Charitable contributions made by the Company are expected to vary from year to year depending on the earnings of the Company.

Net amortization of cost of insurance acquired decreased approximately 4% when comparing current and prior year activity. 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.

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

Financial Condition

Investment Information

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 they are permitted to make, and the amount of funds that may be used for any one type of investment.

The following table reflects, by investment category, the investments held by the Company as of September 30, 2024, and December 31, 2023:

September 30, 2024		Amount	As a % of Total Investments	As a % of Total Assets
Fixed maturities, available for sale	$	99,888,682	25%	21%
Fixed maturities, held to maturity		2,500,000	1%	1%
Equity securities, at fair value		209,395,420	52%	44%
Equity securities, at cost		16,733,309	4%	4%
Mortgage loans		18,233,549	5%	4%
Real estate		29,113,167	7%	6%
Notes receivable		13,746,866	3%	3%
Policy loans		5,812,048	1%	1%
Short-term investments		8,174,456	2%	2%
Total investments	$	403,597,497	100%	85%

December 31, 2023		Amount	As a % of Total Investments	As a % of Total Assets
Fixed maturities, available for sale	$	103,409,836	28%	23%
Fixed maturities, held to maturity		2,500,000	1%	1%
Equity securities, at fair value		156,550,812	43%	35%
Equity securities, at cost		15,977,368	4%	4%
Mortgage loans		15,318,176	4%	3%
Real estate		21,975,120	6%	5%
Notes receivable		14,009,225	4%	3%
Policy loans		6,018,248	2%	1%
Short-term investments		29,132,236	8%	7%
Total investments	$	364,891,021	100%	83%

The Company's investments are generally managed to match related insurance and policyholder liabilities. The comparison of investment return with insurance or investment product crediting rates establishes an interest spread. Interest crediting rates on adjustable-rate policies have been reduced to their guaranteed minimum rates, and as such, cannot be lowered any further. Policy interest crediting rate changes and expense load changes become effective on an individual policy basis on the next policy anniversary. Therefore, it takes a full year from the time the change was determined for the full impact of such change to be realized. If interest rates decline in the future, the Company will not be able to lower rates and both net investment income and net income will be impacted negatively.

The Company’s total investments represented 85% and 83% of the Company’s total assets as of September 30, 2024, and December 31, 2023, respectively. Fixed maturities and equity securities consistently represented a substantial portion, 77% and 72%, of the total investments during 2024 and 2023, respectively. The overall investment mix, as a percentage of total investments, remained fairly consistent when comparing the respective investments held as of September 30, 2024 and December 31, 2023.

As of September 30, 2024, 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 value, with changes in market value charged directly to the other comprehensive component of shareholders' equity. Changes in the market value of available for sale securities resulted in net unrealized gains (losses) of approximately $1.3 million and $(2.0) million as of September 30, 2024 and 2023, respectively. The variance in the net unrealized gains and losses is the result of normal market fluctuations mainly related to changes in interest rates in the marketplace.

Management continues to view the Company’s investment portfolio with utmost priority. Significant time has been spent internally researching the Company’s risk and communicating with outside investment advisors about the current investment environment and ways to ensure preservation of capital and mitigate losses. Management has put extensive efforts into evaluating the investment holdings. Additionally, members of the Company’s Board of Directors and investment committee have been solicited for advice and provided with information. Management reviews the Company’s entire portfolio on a security level basis to be sure all understand our holdings, potential risks and underlying credit supporting the investments. Management intends to continue its close monitoring of its bond holdings and other investments for possible deterioration or market condition changes. Future events may result in Management’s determination that certain current investment holdings may need to be sold which could result in gains or losses in future periods. Such future events could also result in other than temporary declines in value that could result in future period impairment losses.

There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if impairment is other-than-temporary. These risks and uncertainties related to Management’s assessment of other-than-temporary declines in value include but are not limited to: the risk that Company's assessment of an issuer's ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer; the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; the risk that fraudulent information could be provided to the Company's investment professionals who determine the fair value estimates.

Capital Resources

Total shareholders' equity increased by approximately 26.8% as of September 30, 2024, compared to December 31, 2023. The increase is mainly attributable to an increase in retained earnings, which is the result of the current year net income reported by the Company and by the increase in market value of the available for sale fixed maturities portfolio.

Liquidity

Liquidity provides the Company with the ability to meet on demand the cash commitments required by its business operations and financial obligations. The Company’s liquidity is primarily derived from cash balances, a portfolio of marketable securities and line of credit facilities. The Company has two principal needs for cash – the insurance company’s contractual obligations to policyholders and the payment of operating expenses.

Parent Company Liquidity

UTG is a holding company that has no day-to-day operations of its own. Cash flows from UTG’s insurance subsidiary, UG, are used to pay costs associated with maintaining the Company in good standing with states in which it does business and purchasing outstanding shares of UTG stock. 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. As of September 30, 2024, and December 31, 2023, substantially all of the consolidated shareholders’ equity represents net assets of its subsidiaries. As of September 30, 2024, the Parent company has received no dividends from its insurance subsidiary. Certain restrictions exist on the payment of dividends from the insurance subsidiary to the Parent company. For further information regarding the restrictions on the payment of dividends by the insurance subsidiary, see Note 6 – Shareholders’ Equity in the Notes to the Consolidated Financial Statements. Although these restrictions exist, dividend availability from the insurance subsidiary has historically been sufficient to meet the cash flow needs of the Parent company.

Insurance Subsidiary Liquidity

Sources of cash flows for the insurance subsidiary primarily consist of premium and investment income. Cash outflows from operations include policy benefit payments, administrative expenses, taxes and dividends to the Parent company.

Short-Term Borrowings

During October of 2024, the Federal Home Loan Bank approved the renewal of UG’s Cash Management Advance Application (“CMA”). The CMA is a source of overnight liquidity utilized to address the day-to-day cash needs of a Company. 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 $20.2 million as of September 30, 2024. During the fourth quarter of 2023, the Company borrowed $19 million and planned to utilize the funds for investing activities. During the first quarter of 2024, the Company repaid the entire outstanding principal balance.

Consolidated Liquidity

Cash used in operating activities was approximately $552,000 in 2024 and cash used by operating activities was approximately $9.7 million in 2023. Sources of operating cash flows of the Company, as with most insurance entities, is comprised primarily of premiums received on life insurance products and income earned on investments. Uses of operating cash flows consist primarily of payments of benefits to policyholders and beneficiaries and operating expenses. The Company has not marketed any significant new products for several years. As such, premium revenues continue to decline with the exception of fluctuations in reinsurance premiums. Management anticipates future cash flows from operations to remain similar to historic trends.

During 2024, the Company’s investing activities provided net cash of approximately $15.2 million and provided net cash of approximately $11.9 million in 2023. The Company recognized proceeds of approximately $45.5 million and $59.6 million from investments sold and matured in 2024 and 2023, respectively. The Company used approximately $30.3 million and $47.6 million to acquire investments during 2024 and 2023, respectively. The net cash provided by or used in investing activities is expected to vary from year to year depending on market conditions and management’s ability to find and negotiate favorable investment contracts.

Net cash used in financing activities was approximately $19.8 and $19.9 million during 2024 and 2023, respectively. As of September 30, 2024 and 2023, the Company had no debt outstanding with third parties.

The Company had cash and cash equivalents of approximately $36.0 million and $41.2 million as of September 30, 2024 and December 31, 2023, respectively. The Company has a portfolio of marketable fixed maturity securities that could be sold, if an unexpected event were to occur. These securities had a fair value of approximately $99.9 million at September 30, 2024. However, the strong cash flows from investing activities, investment maturities and the availability of the line of credit facilities make it unlikely that the Company would need to sell securities for liquidity purposes.

Management believes the overall sources of liquidity available will be sufficient to satisfy its financial obligations.

Item 4. Controls and Procedure

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

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 and Senior Vice President 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 and Senior Vice President of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**101	The following financial statements from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Shareholders' Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to the Condensed Consolidated Financial Statements (detail tagged).
**104	Cover Page Interactive Data File (formatted in iXBRL and included in exhibit 101).

* Filed herewith

SIGNATURES

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

UTG, INC.

(Registrant)

Date:	November 13, 2024	By	/s/ Jesse T. Correll
			Jesse T. Correll
			Chairman of the Board, Chief Executive Officer, President and Director (Principal Executive Officer)

Date:	November 13, 2024	By	/s/ Theodore C. Miller
			Theodore C. Miller
			Chief Financial Officer and Senior Vice President (Principal Financial and Accounting Officer)