☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
UTG, INC.
|
||
(Exact name of registrant as specified in its charter)
|
||
Delaware
|
20-2907892
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
|
5250 SOUTH SIXTH STREET
|
||
P.O. BOX 13080
|
||
SPRINGFIELD, IL 62791
|
||
(Address of principal executive offices) (Zip Code)
|
||
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company☒
|
PART I. Financial Information
|
3
|
Item 1. Financial Statements
|
3
|
Condensed Consolidated Balance Sheets
|
3
|
Condensed Consolidated Statements of Operations
|
4
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
5
|
Condensed Consolidated Statements of Cash Flows
|
6
|
Notes to Condensed Consolidated Financial Statements
|
7
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
18
|
Item 4. Controls and Procedures
|
23
|
PART II. Other Information
|
23
|
Item 1. Legal Proceedings
|
23
|
Item 1A. Risk Factors
|
23
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
23
|
Item 3. Defaults Upon Senior Securities
|
23
|
Item 4. Mine Safety Disclosures
|
23
|
Item 5. Other Information
|
23
|
Item 6. Exhibits
|
24
|
Signatures
|
25
|
Exhibit Index
|
26
|
June 30,
2017
|
December 31,
2016*
|
|||||||
ASSETS
|
||||||||
Investments:
|
||||||||
Investments available for sale:
|
||||||||
Fixed maturities, at fair value (amortized cost $168,088,959 and $170,595,860)
|
$
|
189,392,628
|
$
|
187,239,718
|
||||
Equity securities, at fair value (cost $38,166,461 and $37,014,712)
|
52,929,758
|
51,707,103
|
||||||
Trading securities, at fair value (cost $0 and $70,690)
|
-
|
2,500
|
||||||
Mortgage loans on real estate at amortized cost
|
18,378,499
|
18,577,372
|
||||||
Investment real estate
|
53,077,397
|
57,138,980
|
||||||
Notes receivable
|
18,618,464
|
16,876,485
|
||||||
Policy loans
|
9,764,728
|
10,070,134
|
||||||
Total investments
|
342,161,474
|
341,612,292
|
||||||
Cash and cash equivalents
|
12,506,426
|
15,156,548
|
||||||
Accrued investment income
|
2,542,560
|
2,872,850
|
||||||
Reinsurance receivables:
|
||||||||
Future policy benefits
|
26,592,514
|
26,974,819
|
||||||
Policy claims and other benefits
|
4,165,149
|
3,952,465
|
||||||
Cost of insurance acquired
|
6,847,844
|
7,267,397
|
||||||
Property and equipment, net of accumulated depreciation
|
1,341,019
|
1,564,944
|
||||||
Income tax recoverable
|
1,298,756
|
1,223,682
|
||||||
Other assets
|
1,446,782
|
1,476,356
|
||||||
Total assets
|
$
|
398,902,524
|
$
|
402,101,353
|
||||
LIABILITIES & SHAREHOLDERS' EQUITY
|
||||||||
Liabilities:
|
||||||||
Policy liabilities and accruals:
|
||||||||
Future policyholder benefits
|
$
|
261,052,800
|
$
|
263,844,559
|
||||
Policy claims and benefits payable
|
4,799,231
|
3,889,572
|
||||||
Other policyholder funds
|
454,177
|
428,769
|
||||||
Dividend and endowment accumulations
|
14,527,876
|
14,504,583
|
||||||
Deferred income taxes
|
16,294,785
|
15,459,049
|
||||||
Notes payable
|
1,450,000
|
2,900,000
|
||||||
Trading securities, at fair value (proceeds $0 and $181,159)
|
-
|
1,439
|
||||||
Other liabilities
|
6,348,264
|
6,771,540
|
||||||
Total liabilities
|
304,927,133
|
307,799,511
|
||||||
Shareholders' equity:
|
||||||||
Common stock - no par value, stated value $.001 per share. Authorized 7,000,000 shares - 3,349,736 and 3,349,927 shares outstanding
|
3,349
|
3,350
|
||||||
Additional paid-in capital
|
37,870,021
|
37,878,712
|
||||||
Retained earnings
|
31,702,183
|
34,230,307
|
||||||
Accumulated other comprehensive income (loss)
|
23,373,129
|
20,353,692
|
||||||
Total UTG shareholders' equity
|
92,948,682
|
92,466,061
|
||||||
Noncontrolling interests
|
1,026,709
|
1,835,781
|
||||||
Total shareholders' equity
|
93,975,391
|
94,301,842
|
||||||
Total liabilities and shareholders' equity
|
$
|
398,902,524
|
$
|
402,101,353
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Revenue:
|
||||||||||||||||
Premiums and policy fees
|
$
|
2,670,468
|
$
|
3,040,968
|
$
|
5,373,222
|
$
|
5,815,731
|
||||||||
Ceded reinsurance premiums and policy fees
|
(843,636
|
)
|
(736,897
|
)
|
(1,570,290
|
)
|
(1,504,198
|
)
|
||||||||
Net investment income
|
2,816,417
|
3,210,481
|
5,852,901
|
7,228,972
|
||||||||||||
Other income
|
95,578
|
110,351
|
211,537
|
295,547
|
||||||||||||
Revenues before realized gains (losses)
|
4,738,827
|
5,624,903
|
9,867,370
|
11,836,052
|
||||||||||||
Realized investment gains (losses), net:
|
||||||||||||||||
Other-than-temporary impairments
|
-
|
-
|
-
|
-
|
||||||||||||
Other realized investment gains, net
|
1,042,751
|
655,564
|
544,060
|
4,067,797
|
||||||||||||
Total realized investment gains (losses), net
|
1,042,751
|
655,564
|
544,060
|
4,067,797
|
||||||||||||
Total revenue
|
5,781,578
|
6,280,467
|
10,411,430
|
15,903,849
|
||||||||||||
Benefits and other expenses:
|
||||||||||||||||
Benefits, claims and settlement expenses:
|
||||||||||||||||
Life
|
4,860,950
|
5,567,327
|
9,828,602
|
11,382,479
|
||||||||||||
Ceded Reinsurance benefits and claims
|
(703,666
|
)
|
(910,789
|
)
|
(989,776
|
)
|
(1,506,070
|
)
|
||||||||
Annuity
|
294,813
|
298,677
|
538,210
|
627,576
|
||||||||||||
Dividends to policyholders
|
107,914
|
121,555
|
221,200
|
249,234
|
||||||||||||
Commissions and amortization of deferred policy acquisition costs
|
(41,103
|
)
|
(39,176
|
)
|
(77,084
|
)
|
(71,942
|
)
|
||||||||
Amortization of cost of insurance acquired
|
209,777
|
218,246
|
419,553
|
436,492
|
||||||||||||
Operating expenses
|
1,758,608
|
1,904,102
|
3,804,665
|
3,678,339
|
||||||||||||
Total benefits and other expenses
|
6,487,293
|
7,159,942
|
13,745,370
|
14,796,108
|
||||||||||||
Income (loss) before income taxes
|
(705,715
|
)
|
(879,475
|
)
|
(3,333,940
|
)
|
1,107,741
|
|||||||||
Income tax (expense) benefit
|
196,624
|
307,193
|
710,214
|
(492,487
|
)
|
|||||||||||
Net income (loss)
|
(509,091
|
)
|
(572,282
|
)
|
(2,623,726
|
)
|
615,254
|
|||||||||
Net (income) loss attributable to noncontrolling interests
|
(45,632
|
)
|
(140,540
|
)
|
95,602
|
(45,973
|
)
|
|||||||||
Net income (loss) attributable to common shareholders
|
$
|
(554,723
|
)
|
$
|
(712,822
|
)
|
$
|
(2,528,124
|
)
|
$
|
569,281
|
|||||
Amounts attributable to common shareholders'
|
||||||||||||||||
Basic income (loss) per share
|
$
|
(0.17
|
)
|
$
|
(0.19
|
)
|
$
|
(0.75
|
)
|
$
|
0.15
|
|||||
Diluted income (loss) per share
|
$
|
(0.17
|
)
|
$
|
(0.19
|
)
|
$
|
(0.75
|
)
|
$
|
0.15
|
|||||
Basic weighted average shares outstanding
|
3,355,850
|
3,673,545
|
3,353,416
|
3,686,968
|
||||||||||||
Diluted weighted average shares outstanding
|
3,355,850
|
3,673,545
|
3,353,416
|
3,686,968
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Net income (loss)
|
$
|
(509,091
|
)
|
$
|
(572,282
|
)
|
$
|
(2,623,726
|
)
|
$
|
615,254
|
|||||
Other comprehensive income (loss):
|
||||||||||||||||
Unrealized holding gains (losses) arising during period, pre-tax
|
384,871
|
19,065,483
|
4,855,895
|
30,868,008
|
||||||||||||
Tax (expense) benefit on unrealized holding gains (losses) arising during the period
|
(134,705
|
)
|
(6,672,919
|
)
|
(1,699,563
|
)
|
(10,803,803
|
)
|
||||||||
Unrealized holding gains (losses) arising during period, net of tax
|
250,166
|
12,392,564
|
3,156,332
|
20,064,205
|
||||||||||||
Less reclassification adjustment for gains included in net income
|
(224,951
|
)
|
(442,220
|
)
|
(210,607
|
)
|
(696,673
|
)
|
||||||||
Tax expense for gains included in net income
|
78,732
|
154,777
|
73,712
|
243,836
|
||||||||||||
Reclassification adjustment for gains included in net income, net of tax
|
(146,219
|
)
|
(287,443
|
)
|
(136,895
|
)
|
(452,837
|
)
|
||||||||
Subtotal: Other comprehensive income (loss), net of tax
|
103,947
|
12,105,121
|
3,019,437
|
19,611,368
|
||||||||||||
Comprehensive income (loss)
|
(405,144
|
)
|
11,532,839
|
395,711
|
20,226,622
|
|||||||||||
Less comprehensive (income) loss attributable to noncontrolling interests
|
(45,632
|
)
|
(140,540
|
)
|
95,602
|
(45,973
|
)
|
|||||||||
Comprehensive income (loss) attributable to UTG, Inc.
|
$
|
(450,776
|
)
|
$
|
11,392,299
|
$
|
491,313
|
$
|
20,180,649
|
Six Months Ended
|
||||||||
June 30,
|
June 30,
|
|||||||
2017
|
2016
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income attributable to common shareholders
|
$
|
(2,528,124
|
)
|
$
|
569,281
|
|||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Amortization (accretion) of investments
|
178,699
|
(658,331
|
)
|
|||||
Realized investment gains, net
|
(544,060
|
)
|
(4,067,797
|
)
|
||||
Unrealized trading (gains) losses included in income
|
111,531
|
(39,476
|
)
|
|||||
Realized trading (gains) included in income
|
(110,470
|
)
|
-
|
|||||
Amortization of cost of insurance acquired
|
419,553
|
436,492
|
||||||
Depreciation
|
349,582
|
412,472
|
||||||
Net income (loss) attributable to noncontrolling interest
|
(95,602
|
)
|
45,973
|
|||||
Charges for mortality and administration of universal life and annuity products
|
(3,324,867
|
)
|
(1,107,778
|
)
|
||||
Interest credited to account balances
|
2,181,552
|
867,663
|
||||||
Change in accrued investment income
|
330,290
|
(101,071
|
)
|
|||||
Change in reinsurance receivables
|
169,621
|
160,739
|
||||||
Change in policy liabilities and accruals
|
(321,400
|
)
|
(1,764,350
|
)
|
||||
Change in income taxes receivable (payable)
|
(75,074
|
)
|
(133,218
|
)
|
||||
Change in other assets and liabilities, net
|
(1,153,065
|
)
|
(1,701,843
|
)
|
||||
Net cash used in operating activities
|
(4,411,834
|
)
|
(7,081,244
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Proceeds from investments sold and matured:
|
||||||||
Fixed maturities available for sale
|
9,585,460
|
21,633,273
|
||||||
Equity securities available for sale
|
2,126,149
|
1,195,793
|
||||||
Trading securities
|
0
|
72,279
|
||||||
Mortgage loans
|
562,792
|
2,000,374
|
||||||
Real estate
|
5,083,776
|
8,002,596
|
||||||
Notes receivable
|
305,874
|
2,682,590
|
||||||
Policy loans
|
1,087,870
|
1,300,996
|
||||||
Total proceeds from investments sold and matured
|
18,751,921
|
36,887,901
|
||||||
Cost of investments acquired:
|
||||||||
Fixed maturities available for sale
|
(7,141,692
|
)
|
(6,139,596
|
)
|
||||
Equity securities available for sale
|
(2,424,875
|
)
|
(1,463,409
|
)
|
||||
Trading securities
|
0
|
(70,690
|
)
|
|||||
Mortgage loans
|
(354,306
|
)
|
(2,694,686
|
)
|
||||
Real estate
|
(1,678,891
|
)
|
(8,668,777
|
)
|
||||
Notes receivable
|
(2,047,853
|
)
|
(7,047,843
|
)
|
||||
Policy loans
|
(782,464
|
)
|
(1,182,883
|
)
|
||||
Total cost of investments acquired
|
(14,430,081
|
)
|
(27,267,884
|
)
|
||||
Net cash provided by investing activities
|
4,321,840
|
9,620,017
|
||||||
Cash flows from financing activities:
|
||||||||
Policyholder contract deposits
|
2,470,129
|
772,689
|
||||||
Policyholder contract withdrawals
|
(2,838,813
|
)
|
(594,960
|
)
|
||||
Payments of principal on notes payable/line of credit
|
(1,450,000
|
)
|
0
|
|||||
Purchase of treasury stock
|
(8,692
|
)
|
(455,645
|
)
|
||||
Non controlling contributions (distributions) of consolidated subsidiary
|
(732,752
|
)
|
(49,893
|
)
|
||||
Net cash used in financing activities
|
(2,560,128
|
)
|
(327,809
|
)
|
||||
Net increase in cash and cash equivalents
|
(2,650,122
|
)
|
2,210,964
|
|||||
Cash and cash equivalents at beginning of period
|
15,156,548
|
11,822,615
|
||||||
Cash and cash equivalents at end of period
|
$
|
12,506,426
|
$
|
14,033,579
|
June 30, 2017
|
Original or Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
||||||||||||
Investments available for sale:
|
||||||||||||||||
Fixed maturities
|
||||||||||||||||
U.S. Government and govt. agencies and authorities
|
$
|
7,677,783
|
$
|
51,149
|
$
|
(71,452
|
)
|
$
|
7,657,480
|
|||||||
U.S. special revenue and assessments
|
9,998,384
|
840,533
|
(8,973
|
)
|
10,829,944
|
|||||||||||
All other corporate bonds
|
150,412,792
|
20,946,796
|
(454,384
|
)
|
170,905,204
|
|||||||||||
168,088,959
|
21,838,478
|
(534,809
|
)
|
189,392,628
|
||||||||||||
Equity securities
|
38,166,461
|
16,885,577
|
(2,122,280
|
)
|
52,929,758
|
|||||||||||
Total
|
$
|
206,255,420
|
$
|
38,724,055
|
$
|
(2,657,089
|
)
|
$
|
242,322,386
|
December 31, 2016
|
Original or Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
||||||||||||
Investments available for sale:
|
||||||||||||||||
Fixed maturities
|
||||||||||||||||
U.S. Government and govt. agencies and authorities
|
$
|
9,058,210
|
$
|
74,581
|
$
|
(96,981
|
)
|
$
|
9,035,810
|
|||||||
U.S. special revenue and assessments
|
10,145,531
|
1,002,789
|
(14,043
|
)
|
11,134,277
|
|||||||||||
All other corporate bonds
|
151,392,119
|
17,234,691
|
(1,557,179
|
)
|
167,069,631
|
|||||||||||
170,595,860
|
18,312,061
|
(1,668,203
|
)
|
187,239,718
|
||||||||||||
Equity securities
|
37,014,712
|
15,214,862
|
(522,471
|
)
|
51,707,103
|
|||||||||||
Total
|
$
|
207,610,572
|
$
|
33,526,923
|
$
|
(2,190,674
|
)
|
$
|
238,946,821
|
Fixed Maturities Available for Sale
June 30, 2017
|
Amortized Cost
|
Estimated Fair Value
|
||||||
Due in one year or less
|
$
|
6,156,866
|
$
|
6,276,044
|
||||
Due after one year through five years
|
31,184,767
|
43,957,336
|
||||||
Due after five years through ten years
|
44,147,980
|
48,599,782
|
||||||
Due after ten years
|
86,599,346
|
90,559,466
|
||||||
Total
|
$
|
168,088,959
|
$
|
189,392,628
|
June 30, 2017
|
Less than 12 months
|
12 months or longer
|
Total
|
|||||||||||||||||||||
Fair value
|
Unrealized losses
|
Fair value
|
Unrealized losses
|
Fair value
|
Unrealized losses
|
|||||||||||||||||||
U.S. Government and govt. agencies and authorities
|
$
|
6,605,409
|
$
|
(71,452
|
)
|
$
|
-
|
$
|
-
|
$
|
6,605,409
|
$
|
(71,452
|
)
|
||||||||||
U.S. special revenue and assessments
|
979,770
|
(8,974
|
)
|
-
|
-
|
979,770
|
(8,974
|
)
|
||||||||||||||||
All other corporate bonds
|
18,527,248
|
(325,616
|
)
|
1,863,740
|
(128,767
|
)
|
20,390,988
|
(454,383
|
)
|
|||||||||||||||
Total fixed maturities
|
$
|
26,112,427
|
$
|
(406,042
|
)
|
$
|
1,863,740
|
(128,767
|
)
|
$
|
27,976,167
|
(534,809
|
)
|
|||||||||||
Equity securities
|
$
|
5,128,555
|
$
|
(2,122,280
|
)
|
$
|
-
|
$
|
-
|
$
|
5,128,555
|
$
|
(2,122,280
|
)
|
December 31, 2016
|
Less than 12 months
|
12 months or longer
|
Total
|
|||||||||||||||||||||
Fair value
|
Unrealized losses
|
Fair value
|
Unrealized losses
|
Fair value
|
Unrealized losses
|
|||||||||||||||||||
U.S. Government and govt. agencies and authorities
|
$
|
6,578,248
|
$
|
(96,981
|
)
|
$
|
0
|
$
|
0
|
$
|
6,578,248
|
$
|
(96,981
|
)
|
||||||||||
U.S. special revenue and assessments
|
974,250
|
(14,043
|
)
|
0
|
0
|
974,250
|
(14,043
|
)
|
||||||||||||||||
All other corporate bonds
|
50,161,487
|
(1,408,828
|
)
|
4,023,510
|
(148,351
|
)
|
54,184,997
|
(1,557,179
|
)
|
|||||||||||||||
Total fixed maturities
|
$
|
57,713,985
|
$
|
(1,519,852
|
)
|
$
|
4,023,510
|
(148,351
|
)
|
$
|
61,737,495
|
(1,668,203
|
)
|
|||||||||||
Equity securities
|
$
|
4,703,033
|
$
|
(522,471
|
)
|
$
|
0
|
$
|
0
|
$
|
4,703,033
|
$
|
(522,471
|
)
|
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||
As of June 30, 2017
|
||||||||||||
Fixed maturities
|
14
|
1
|
15
|
|||||||||
Equity securities
|
4
|
-
|
4
|
|||||||||
As of December 31, 2016
|
||||||||||||
Fixed maturities
|
25
|
3
|
28
|
|||||||||
Equity securities
|
3
|
-
|
3
|
Three Months Ended
|
||||||||
June 30,
|
||||||||
2017
|
2016
|
|||||||
Net unrealized gains (losses)
|
$
|
-
|
$
|
24,938
|
||||
Net realized gains (losses)
|
-
|
-
|
||||||
Net unrealized and realized gains (losses)
|
$
|
-
|
$
|
24,938
|
Six Months Ended
|
||||||||
June 30,
|
||||||||
2017
|
2016
|
|||||||
Net unrealized gains (losses)
|
$
|
(111,531
|
)
|
$
|
39,477
|
|||
Net realized gains (losses)
|
110,470
|
-
|
||||||
Net unrealized and realized gains (losses)
|
$
|
(1,061
|
)
|
$
|
39,477
|
2017
|
2016
|
|||||||||||||||
Maximum rate
|
Minimum rate
|
Maximum rate
|
Minimum rate
|
|||||||||||||
Farm Loans
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
||||||||
Commercial Loans
|
8.00
|
%
|
4.00
|
%
|
8.00
|
%
|
4.00
|
%
|
||||||||
Residential Loans
|
8.00
|
%
|
3.94
|
%
|
8.00
|
%
|
3.94
|
%
|
June 30, 2017
Payment Frequency
|
Number of Loans
|
Carrying Value
|
||||||
No payments received
|
8
|
$
|
-
|
|||||
One-time payment received
|
1
|
-
|
||||||
Irregular payments received
|
2
|
20,834
|
||||||
Periodic payments received
|
5
|
2,119,854
|
||||||
Total
|
16
|
$
|
2,140,688
|
December 31, 2016
Payment Frequency
|
Number of Loans
|
Carrying Value
|
||||||
No payments received
|
8
|
$
|
-
|
|||||
One-time payment received
|
1
|
-
|
||||||
Irregular payments received
|
2
|
20,834
|
||||||
Periodic payments received
|
5
|
2,168,062
|
||||||
Total
|
16
|
$
|
2,188,896
|
June 30, 2017
|
December 31, 2016
|
|||||||
In good standing
|
$
|
16,237,810
|
$
|
16,388,477
|
||||
Overdue interest over 90 days
|
20,834
|
20,834
|
||||||
Restructured
|
55,827
|
60,827
|
||||||
In process of foreclosure
|
2,064,028
|
2,107,234
|
||||||
Total mortgage loans
|
$
|
18,378,499
|
$
|
18,577,372
|
||||
Total foreclosed loans during the year
|
$
|
-
|
$
|
735,000
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Fixed Maturities, available for sale
|
$
|
9,670,669
|
$
|
176,953,831
|
$
|
2,768,128
|
$
|
189,392,628
|
||||||||
Equity Securities, available for sale
|
18,087,741
|
7,250,795
|
27,591,222
|
52,929,758
|
||||||||||||
Total
|
$
|
27,758,410
|
$
|
184,204,626
|
$
|
30,359,350
|
$
|
242,322,386
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Fixed Maturities, available for sale
|
$
|
9,035,810
|
$
|
175,120,657
|
$
|
3,083,251
|
$
|
187,239,718
|
||||||||
Equity Securities, available for sale
|
19,360,394
|
6,553,410
|
25,793,299
|
51,707,103
|
||||||||||||
Trading Securities
|
2,500
|
-
|
-
|
2,500
|
||||||||||||
Total
|
$
|
28,398,704
|
$
|
181,674,067
|
$
|
28,876,550
|
$
|
238,949,321
|
||||||||
Liabilities
|
||||||||||||||||
Trading Securities
|
$
|
1,439
|
$
|
-
|
$
|
-
|
$
|
1,439
|
Fixed Maturities,
Available for Sale
|
Equity Securities,
Available for Sale
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
3,083,251
|
$
|
25,793,299
|
$
|
28,876,550
|
||||||
Total unrealized gains (losses):
|
||||||||||||
Included in realized gains (losses)
|
-
|
-
|
-
|
|||||||||
Included in other comprehensive income
|
702,310
|
(204,624
|
)
|
497,686
|
||||||||
Purchases
|
-
|
2,114,307
|
2,114,307
|
|||||||||
Sales
|
$
|
(1,017,433
|
)
|
$
|
(111,760
|
)
|
$
|
(1,129,193
|
)
|
|||
Balance at June 30, 2017
|
2,768,128
|
27,591,222
|
30,359,350
|
June 30, 2017
|
December 31, 2016
|
|||||||||||||||
Assets
|
Carrying Amount
|
Estimated Fair Value
|
Carrying Amount
|
Estimated Fair Value
|
||||||||||||
Mortgage loans on real estate
|
$
|
18,378,499
|
$
|
18,378,499
|
$
|
18,577,372
|
$
|
18,577,372
|
||||||||
Investment real estate
|
53,077,397
|
53,077,397
|
57,138,980
|
57,138,980
|
||||||||||||
Notes receivable
|
18,618,464
|
18,618,464
|
16,876,485
|
16,876,485
|
||||||||||||
Policy loans
|
9,764,728
|
9,764,728
|
10,070,134
|
10,070,134
|
||||||||||||
Cash and cash equivalents
|
12,506,426
|
12,506,426
|
15,156,548
|
15,156,548
|
Outstanding Principal Balance
|
||||||||||
Instrument
|
Issue Date
|
Maturity Date
|
June 30, 2017
|
December 31, 2016
|
||||||
Promissory Note:
|
||||||||||
SoftVest, LP
|
7/22/2016
|
7/22/2018
|
$
|
725,000
|
$
|
1,450,000
|
||||
SoftSearch Investment, L.P.
|
7/22/2016
|
7/22/2018
|
725,000
|
1,450,000
|
Instrument
|
Issue Date
|
Maturity Date
|
Revolving Credit Limit
|
December 31, 2016
|
Borrowings
|
Repayments
|
June 30, 2017
|
|||||||||||||||
Lines of Credit:
|
||||||||||||||||||||||
UTG
|
11/20/2013
|
11/20/2017
|
$
|
8,000,000
|
$
|
-
|
-
|
-
|
$
|
-
|
||||||||||||
UG
|
6/2/2015
|
5/10/2018
|
10,000,000
|
-
|
-
|
-
|
-
|
Total Funding
Commitment
|
Unfunded
Commitment
|
|||||||
RLF III, LLC
|
$
|
4,000,000
|
$
|
398,120
|
||||
Sovereign's Capital, LP Fund I
|
500,000
|
33,642
|
||||||
UGLIC, LLC
|
1,600,000
|
120,000
|
||||||
Sovereign's Capital, LP Fund II
|
1,000,000
|
456,064
|
||||||
Barton Springs Music, LLC
|
2,500,000
|
1,339,063
|
||||||
Master Mineral Holdings II, LP
|
4,122,167
|
556,286
|
Three Months Ended
|
||||||||
June 30,
|
||||||||
2017
|
2016
|
|||||||
Interest
|
$
|
-
|
$
|
-
|
||||
Federal income tax
|
115,000
|
735,000
|
Six Months Ended
|
||||||||
June 30,
|
||||||||
2017
|
2016
|
|||||||
Interest
|
$
|
-
|
$
|
-
|
||||
Federal income tax
|
115,000
|
735,000
|
Three Months Ended
|
Six Months Ended
|
|||||||
June 30,
|
June 30,
|
|||||||
2017
|
2016
|
2017
|
2016
|
|||||
Fixed maturities available for sale
|
$
|
2,096,562
|
$
|
2,354,484
|
$
|
4,218,439
|
$
|
4,637,567
|
Equity securities
|
213,780
|
484,906
|
595,643
|
700,862
|
||||
Trading securities
|
0
|
24,938
|
(1,061)
|
39,477
|
||||
Mortgage loans
|
369,624
|
151,941
|
597,684
|
1,252,774
|
||||
Real estate
|
542,190
|
562,633
|
1,011,448
|
1,126,929
|
||||
Notes receivable
|
48,805
|
232,394
|
369,516
|
941,581
|
||||
Policy loans
|
193,406
|
219,655
|
348,759
|
265,118
|
||||
Cash and cash equivalents
|
1,386
|
5,996
|
3,966
|
9,560
|
||||
Total consolidated investment income
|
3,465,753
|
4,036,947
|
7,144,394
|
8,973,868
|
||||
Investment expenses
|
(649,336)
|
(826,466)
|
(1,291,493)
|
(1,744,896)
|
||||
Consolidated net investment income
|
$
|
2,816,417
|
$
|
3,210,481
|
$
|
5,852,901
|
$
|
7,228,972
|
*31.1
|
Certification of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as
required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
*31.2
|
Certification of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
*32.1
|
Certificate of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
*32.2
|
Certificate of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
**101
|
Interactive Data File
|
Date:
|
August 10, 2017
|
|
By
|
/s/ James P. Rousey
|
|
|
|
|
James P. Rousey
|
|
|
|
|
President and Director
|
Date:
|
August 10, 2017
|
|
By
|
/s/ Theodore C. Miller
|
|
|
|
|
Theodore C. Miller
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
Exhibit 31.1
CERTIFICATIONS
|
|||||||
I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of UTG, Inc., certify that:
|
|||||||
1.
|
I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
|
||||||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||||
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
|
||||||
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||||||
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||||||
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||||||
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
||||||
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
||||||
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
||||||
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
|
||||||
Date:
|
August 10, 2017
|
By:
|
/s/ Jesse T. Correll
|
Chairman of the Board and
|
|||
Chief Executive Officer
|
Exhibit 31.2
CERTIFICATIONS
|
||||||||
I, Theodore C. Miller, Senior Vice President, Corporate Secretary and Chief Financial Officer of UTG, Inc., certify that:
|
||||||||
1.
|
I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
|
|||||||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|||||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|||||||
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
|
|||||||
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|||||||
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||||||
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|||||||
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|||||||
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|||||||
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||||||
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
|
|||||||
Date:
|
August 10, 2017
|
By:
|
/s/ Theodore C. Miller
|
Senior Vice President, Corporate Secretary and
|
|||
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company
|
Date:
|
August 10, 2017
|
By:
|
/s/ Jesse T. Correll
|
Jesse T. Correll
|
|||
Chairman of the Board and
|
|||
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company
|
Date:
|
August 10, 2017
|
By:
|
/s/ Theodore C. Miller
|
Theodore C. Miller
|
|||
Senior Vice President, Corporate Secretary and
|
|||
Chief Financial Officer
|
Document and Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2017 |
Jul. 31, 2017 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | UTG INC | |
Entity Central Index Key | 0000832480 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 3,347,611 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) |
Jun. 30, 2017 |
Dec. 31, 2016 |
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Investments available for sale: | ||
Fixed maturities, amortized cost | $ 168,088,959 | $ 170,595,860 |
Equity securities, cost | 38,166,461 | 37,014,712 |
Trading securities, cost | 0 | 70,690 |
Liabilities: | ||
Trading Securities, Proceeds | $ 0 | $ 181,159 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, stated value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 7,000,000 | 7,000,000 |
Common stock, outstanding (in shares) | 3,349,736 | 3,349,927 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
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Revenues: | ||||
Premiums and policy fees | $ 2,670,468 | $ 3,040,968 | $ 5,373,222 | $ 5,815,731 |
Ceded reinsurance premiums and policy fees | (843,636) | (736,897) | (1,570,290) | (1,504,198) |
Net investment income | 2,816,417 | 3,210,481 | 5,852,901 | 7,228,972 |
Other income | 95,578 | 110,351 | 211,537 | 295,547 |
Revenues before realized gains (losses) | 4,738,827 | 5,624,903 | 9,867,370 | 11,836,052 |
Realized investment gains (losses), net: | ||||
Other-than-temporary impairments | 0 | 0 | 0 | 0 |
Other realized investment gains, net | 1,042,751 | 655,564 | 544,060 | 4,067,797 |
Total realized investment gains (losses), net | 1,042,751 | 655,564 | 544,060 | 4,067,797 |
Total revenue | 5,781,578 | 6,280,467 | 10,411,430 | 15,903,849 |
Benefits, claims and settlement expenses: | ||||
Life | 4,860,950 | 5,567,327 | 9,828,602 | 11,382,479 |
Ceded Reinsurance benefits and claims | (703,666) | (910,789) | (989,776) | (1,506,070) |
Annuity | 294,813 | 298,677 | 538,210 | 627,576 |
Dividends to policyholders | 107,914 | 121,555 | 221,200 | 249,234 |
Commissions and amortization of deferred policy acquisition costs | (41,103) | (39,176) | (77,084) | (71,942) |
Amortization of cost of insurance acquired | 209,777 | 218,246 | 419,553 | 436,492 |
Operating expenses | 1,758,608 | 1,904,102 | 3,804,665 | 3,678,339 |
Total benefits and other expenses | 6,487,293 | 7,159,942 | 13,745,370 | 14,796,108 |
Income (loss) before income taxes | (705,715) | (879,475) | (3,333,940) | 1,107,741 |
Income tax (expense) benefit | 196,624 | 307,193 | 710,214 | (492,487) |
Net income (loss) | (509,091) | (572,282) | (2,623,726) | 615,254 |
Net (income) loss attributable to noncontrolling interests | (45,632) | (140,540) | 95,602 | (45,973) |
Net income (loss) attributable to common shareholders | $ (554,723) | $ (712,822) | $ (2,528,124) | $ 569,281 |
Amounts attributable to common shareholders': | ||||
Basic income (loss) per share (in dollars per share) | $ (0.17) | $ (0.19) | $ (0.75) | $ 0.15 |
Diluted income (loss) per share (in dollars per share) | $ (0.17) | $ (0.19) | $ (0.75) | $ 0.15 |
Basic weighted average shares outstanding (in shares) | 3,355,850 | 3,673,545 | 3,353,416 | 3,686,968 |
Diluted weighted average shares outstanding (in shares) | 3,355,850 | 3,673,545 | 3,353,416 | 3,686,968 |
Basis of Presentation |
6 Months Ended |
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Jun. 30, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation The accompanying Condensed Consolidated Balance Sheet as of December 31, 2016, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods. The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The Company’s results of operations for the three and six month periods ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or for any other future period. This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll. Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company. FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”). Banking activities are conducted through multiple locations within south-central and western Kentucky. Mr. Correll is Chief Executive Officer and Chairman of the Board of Directors of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates. At June 30, 2017, Mr. Correll owns or controls directly and indirectly approximately 63.94% 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. |
Recently Issued Accounting Standards |
6 Months Ended |
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Jun. 30, 2017 | |
Recently Issued Accounting Standards [Abstract] | |
Recently Issued Accounting Standards | Note 2 – Recently Issued Accounting Standards During the six months ended June 30, 2017, there were no additions to or changes in the critical accounting policies disclosed in the 2016 Form 10-K. |
Investments |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Note 3 – Investments Available for Sale Securities – Fixed Maturity and Equity Securities The Company’s insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment. Investments in available for sale securities are summarized as follows:
The amortized cost and estimated market value of debt securities at June 30, 2017, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
The fair value of investments with sustained gross unrealized losses at June 30, 2017 and December 31, 2016 are as follows:
Additional information regarding investments in an unrealized loss position is as follows:
Substantially all of the unrealized losses on fixed maturities available for sale and equity securities at June 30, 2017 and December 31, 2016 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of June 30, 2017 and December 31, 2016. Other-Than-Temporary Impairments The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary. The factors considered by Management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company’s intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates. If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Operations. Equity securities may experience other-than-temporary impairments in the future based on the prospects for full recovery in value in a reasonable period of time and the Company’s ability and intent to hold the security to recovery. If a decline in fair value is judged by Management to be other-than-temporary or Management does not have the intent or ability to hold a security, a loss is recognized by a charge to other-than-temporary impairment losses in the Condensed Consolidated Statements of Operations. Management regularly reviews its real estate portfolio in comparison to appraisal valuations and current market conditions for indications of other-than-temporary impairments. If a decline in value is judged by Management to be other-than-temporary, a loss is recognized by a charge to other-than-temporary impairment losses in the Consolidated Statements of Operations. Based on Management's review of the investment portfolio, the Company did not record any losses for other-than-temporary impairments in the Condensed Consolidated Statements of Operations for the six-month period ended June 30, 2017 and 2016. Trading Securities Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Condensed Consolidated Statements of Operations. Trading securities include exchange-traded equities and exchange-traded options. Trading securities carried as liabilities are securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale. The fair value of derivatives included in trading security assets and trading security liabilities as of June 30, 2017 was $0 and $0, respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2016 was $2,500 and $(1,439), respectively. Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only. Trading revenue charged to net investment income from trading securities was:
Mortgage Loans The Company, from time to time, acquires mortgage loans through participation agreements with FSNB. FSNB has been able to provide the Company with additional expertise and experience in underwriting commercial and residential mortgage loans, which provide more attractive yields than the traditional bond market. The Company is able to receive participations from FSNB for three primary reasons: 1) FSNB has already reached its maximum lending limit to a single borrower, but the borrower is still considered a suitable risk; 2) the interest rate on a particular loan may be fixed for a long period that is more suitable for UG given its asset-liability structure; and 3) FSNB’s loan growth might at times outpace its deposit growth, resulting in FSNB participating such excess loan growth rather than turning customers away. For originated loans, the Company’s Management is responsible for the final approval of such loans after evaluation. Before a new loan is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control. These criteria include, but are not limited to, a credit report, personal financial information such as outstanding debt, sources of income, and personal equity. Once the loan is approved, the Company directly funds the loan to the borrower. The Company bears all risk of loss associated with the terms of the mortgage with the borrower. Approximately 12% of the mortgage loan portfolio consists of discounted commercial mortgage loans as of June 30, 2017 and December 31, 2016. The Company began purchasing discounted commercial mortgage loans in 2009. Management has extensive background and experience in the analysis and valuation of commercial real estate. The discounted loans are available through the FDIC’s sale of assets of closed banks and from banks wanting to reduce their loan portfolios. The loans are available on a loan by loan bid process. Once a loan has been acquired, contact is made with the appropriate individuals to begin a dialog with a goal of determining the borrower’s willingness to work together. There are generally three paths a discounted loan will take: the borrowers pay as required; a settlement is reached with the loan being paid off at a discounted value; or the loan is foreclosed. During 2017 and 2016, the Company acquired $305,000 and $6,935,273 in mortgage loans, respectively, including both regular participation mortgage loans as well as discounted mortgage loans. FSNB services the majority of the Company’s mortgage loan portfolio. The Company pays FSNB a .25% servicing fee on these loans and a one-time fee at loan origination of .50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan. During 2017 and 2016, the maximum and minimum lending rates for mortgage loans were:
Most mortgage loans are first position loans. Loans issued are generally limited to no more than 80% of the appraised value of the property. The Company has in place a monitoring system to provide Management with information regarding potential troubled loans. Letters are sent to each mortgagee when the loan becomes 30 days or more delinquent. Management is provided with a monthly listing of loans that are 60 days or more past due along with a brief description of what steps are being taken to resolve the delinquency. All loans 90 days or more past due are placed on a non-performing status and classified as delinquent loans. Quarterly, coinciding with external financial reporting, the Company reviews each delinquent loan and determines how each delinquent loan should be classified. Management believes the current internal controls surrounding the mortgage loan selection process provide a quality portfolio with minimal risk of foreclosure and/or negative financial impact. Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers’ ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices. Given the uncertainty of the current market, Management has taken a conservative approach with the discounted mortgage loans and has classified all discounted mortgage loans held as non-accrual. In such status, the Company is not recording any accrued interest income nor is it recording any accrual of discount on the loans held. The Company records repayments on loans as discount accrual when the loan basis has been paid in full. On the remainder of the mortgage loan portfolio, interest accruals are analyzed based on the likelihood of repayment. In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. A mortgage loan reserve is established and adjusted based on Management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value. The Company acquired the discounted mortgage loans at below contract value, and believes that it will fully recover its carrying value upon disposal, therefore no reserve for delinquent loans is deemed necessary. Those not currently paying are being vigorously worked by Management. The current discounted commercial mortgage loan portfolio has an average price of 32% of face value as of June 30, 2017 and December 31, 2016. Management has determined that this deep discount provides a financial cushion or built in allowance for any of the loans that are not currently performing within the portfolio of loans purchased. The mortgage loan reserve was $0 at June 30, 2017 and December 31, 2016. The following table summarizes the number of loans held in the discounted mortgage loan portfolio and the carrying value of the loans:
The following table summarizes the mortgage loan holdings of the Company for the periods ended:
Investment Real Estate Real estate acquired through foreclosure, consisting of properties obtained through foreclosure proceedings or acceptance of a deed in lieu of foreclosure, is reported on an individual asset basis at the lower of cost or fair value, less disposal costs. Fair value is determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources. When properties are acquired through foreclosure, any excess of the loan balance at the time of foreclosure over the fair value of the real estate held as collateral is recognized and charged to the Consolidated Statements of Operations. Based upon Management’s evaluation of the real estate acquired through foreclosure, additional expense is recorded when necessary in an amount sufficient to reflect any declines in estimated fair value. Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Consolidated Statements of Operations. Notes Receivable Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of June 30, 2017 and December 31, 2016 was $0. Interest accruals are analyzed based on the likelihood of repayment. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control. Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party. Similar to the mortgage loans, FSNB services several of the notes receivable. The Company, and the participants in the notes, share in the risk of loss associated with the terms of the note with the borrower, based upon their ownership percentage in the note. The Company has in place a monitoring system to provide Management with information regarding potential troubled loans. |
Fair Value Measurements |
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Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Note 4 – Fair Value Measurements The Company measures its assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets based on the framework set forth in the GAAP fair value accounting guidance. The framework establishes a fair value hierarchy of three levels based upon the transparency of information used in measuring the fair value of assets or liabilities as of the measurement date. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three categories. Level 1 – Valuation is based upon quoted prices for identical assets or liabilities in active markets that the Company is able to access. Level 1 fair value is not subject to valuation adjustments. Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active. In addition, the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value. Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company determines the existence of an active market for an asset or liability based on its judgment as to whether transactions for the asset or liability occur in such market with sufficient frequency and volume to provide reliable pricing information. If the Company concludes that there has been a significant decrease in the volume and level of activity for an investment in relation to normal market activity for such investment, adjustments to transactions and quoted prices are made to estimate fair value. The inputs used in the valuation techniques employed by the Company are provided by nationally recognized pricing services, external investment managers and internal resources. To assess these inputs, the Company’s review process includes, but is not limited to, quantitative analysis including benchmarking, initial and ongoing evaluations of methodologies used by external parties to calculate fair value, and ongoing evaluations of fair value estimates based on the Company’s knowledge and monitoring of market conditions. The Company periodically reviews the pricing service provider’s policies and procedures for valuing securities. The assumptions underlying the valuations from external service providers, including unobservable inputs, are generally not readily available as this information is often deemed proprietary. Accordingly, the Company is unable to obtain comprehensive information regarding these assumptions and methodologies. The Company’s investments in fixed maturity securities available for sale, equity securities available for sale and trading securities assets and liabilities are carried at fair value. The following are the Company’s methodologies and valuation techniques for assets and liabilities measured at fair value. Fixed maturities available for sale mainly consist of U.S. treasury securities and corporate debt securities. The Company employs a market approach to the valuation of securities where there are sufficient market transactions involving identical or comparable assets. If sufficient market data is not available for identical or comparable assets, the Company uses an income approach to valuation. The majority of the financial instruments included in fixed maturity securities available for sale are evaluated utilizing observable inputs; accordingly, they are categorized in either Level 1 or Level 2 of the fair value hierarchy. However, in instances where significant inputs utilized in valuation of the securities are unobservable, the securities are categorized in Level 3 of the fair value hierarchy. Corporate securities primarily include fixed rate corporate bonds. Inputs utilized in connection with the Company’s valuation techniques relating to this class of securities include recently executed transactions, market price quotations, benchmark yields and issuer spreads. Corporate securities are categorized in Level 2 of the fair value hierarchy. U.S. treasury securities are based on quoted prices in active markets and are generally categorized in Level 1 of the fair value hierarchy. Equity securities available for sale consist of common and preferred stocks mainly in private equity investments, financial institutions and insurance companies. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy. For the equity securities in which quoted market prices are not available, the transaction price is used as the best estimate of fair value at inception. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected exit values. The Company performs ongoing reviews of the underlying investments. The reviews consist of the evaluations of expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy. Securities designated as trading securities consist of exchange traded equities and exchange traded options. These securities are primarily valued at quoted active market prices, and are therefore categorized as Level 1 in the fair value hierarchy. The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of June 30, 2017.
The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of December 31, 2016.
The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.
The Level 3 securities include collateralized debt obligations of trust preferred securities issued by banks and insurance companies and certain equity securities with unobservable inputs. The Company computed fair value of Level 3 equity investments based on a review of current financial information, earnings trends and similar companies in the same industries. There were no transfers in or out of Level 3 as of June 30, 2017. Transfers occur when there is a lack of observable market information. Certain assets are not carried at fair value on a recurring basis, including investments such as mortgage loans and policy loans. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements. The carrying values and estimated fair values of certain of the Company’s financial instruments not recorded at fair value in the Consolidated Balance Sheets are shown below. Because the fair value for all Consolidated Balance Sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.
The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange. The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts. The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 3 within the fair value hierarchy. A portion of the mortgage loans balance consists of discounted mortgage loans. The Company has been purchasing non-performing discounted mortgage loans at a deep discount through an auction process led by the Federal Government. In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company. Accordingly, the Company records its investment in the discounted loans at its original purchase price, which Management believes approximates fair value. The inputs used to measure the fair value of our discounted mortgage loans are classified as Level 3 within the fair value hierarchy. Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell. The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by Management. The inputs used to measure the fair value of our investment real estate are classified as Level 3 within the fair value hierarchy. Notes receivable are carried at their unpaid principal balances, which approximates fair value. The inputs used to measure the fair value of the loans are classified as Level 3 within the fair value hierarchy. Policy loans are carried at the aggregate unpaid principal balances in the Condensed Consolidated Balance Sheets which approximate fair value, and earn interest at rates ranging from 4% to 8%. Individual policy liabilities in all cases equal or exceed outstanding policy loan balances. The inputs used to measure the fair value of our policy loans are classified as Level 3 within the fair value hierarchy. The carrying amount of cash and cash equivalents in the Consolidated Balance Sheets approximates fair value given the highly liquid nature of the instruments. The inputs used to measure the fair value of our cash and cash equivalents are classified as Level 1 within the fair value hierarchy. The carrying amount of short term investments in the Consolidated Balance Sheets approximates fair value. The inputs used to measure the fair value of our short term investments are classified as Level 3 within the fair value hierarchy. The carrying value is a reasonable estimate of fair value for notes payable subject to floating rates of interest. The fair value of notes payable with fixed rate borrowings is determined based on the borrowing rates currently available to the Company for loans with similar terms and average maturities. The inputs used to measure the fair value of our notes payable are classified as Level 2 within the fair value hierarchy. |
Credit Arrangements |
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Credit Arrangements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Arrangements | Note 5 – Credit Arrangements At June 30, 2017 and December 31, 2016, the Company had the following outstanding debt:
The UTG line of credit carries interest at a fixed rate of 3.75% and is payable monthly. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company (“UG”). The Company is currently in the process of renewing this line of credit. During May of 2017, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company is currently in the process of renewing the CMA. On July 22, 2016, the Company entered in to an agreement to acquire 300,000 shares of its outstanding common stock from a shareholder that owned approximately 8% of the Company’s outstanding common stock. The acquisition was made under the Company’s stock buy-back program. As part of this transaction, two promissory notes totaling $2.9 million were issued. The notes require principal payments of one half of the note value to be paid one year from the date of purchase and the other one half to be paid two years from the date of purchase. The notes bear interest at 0%. During April of 2017, the Company paid $725,000 on the outstanding principal balance of each promissory note. |
Shareholders' Equity |
6 Months Ended |
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Jun. 30, 2017 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | Note 6 – Shareholders’ Equity Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock. At a meeting of the Board of Directors on June 15, 2016, the Board of Directors of UTG authorized the repurchase of up to an additional $2 million of UTG’s common stock and on July 14, 2016, the Board of Directors again increased the amount available by an additional $4.5 million, for a total repurchase of $14.5 million. Repurchased shares are available for future issuance for general corporate purposes. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited. During the six month period ended June 30, 2017, the Company repurchased approximately 11,500 shares through the stock repurchase program for approximately $206,000. Through June 30, 2017, UTG has spent approximately $12.1 million in the acquisition of approximately 1,070,000 shares under this program. During 2017, the Company issued approximately 11,000 shares of stock to management as compensation. These awards are determined at the discretion of the Board of Directors Earnings Per Share Calculations Earnings per share are based on the weighted average number of common shares outstanding during each period. For the three and six months ended June 30, 2017 and 2016, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding. |
Commitments and Contingencies |
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Commitments and Contingencies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Note 7 – Commitments and Contingencies The insurance industry has experienced a number of civil jury verdicts which have been returned against life and health insurers in the jurisdictions in which the Company does business involving the insurers' sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters. Some of the lawsuits have resulted in the award of substantial judgments against the insurer, including material amounts of punitive damages. In some states, juries have substantial discretion in awarding punitive damages in these circumstances. In the normal course of business, the Company is involved from time to time in various legal actions and other state and federal proceedings. Management is of the opinion that the ultimate disposition of the matters will not have a materially adverse effect on the Company’s results of operations or financial position. Under the insurance guaranty fund laws in most states, insurance companies doing business in a participating state can be assessed up to prescribed limits for policyholder losses incurred by insolvent or failed insurance companies. Although the Company cannot predict the amount of any future assessments, most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer's financial strength. Mandatory assessments may be partially recovered through a reduction in future premium tax in some states. The Company does not believe such assessments will be materially different from amounts already provided for in the condensed consolidated financial statements, though the Company has no control over such assessments. Within the Company’s trading accounts, certain trading securities carried as liabilities represent securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale. All trading securities were settled during the first quarter of 2017. The following table represents the total funding commitments and the unfunded commitment as of June 30, 2017 related to certain investments:
During 2006, the Company committed to invest in RLF III, LLC (“RLF”), which makes land-based investments in undervalued assets. RLF makes capital calls as funds are needed for continued land purchases. During 2012, the Company committed to invest in Sovereign’s Capital, LP Fund I (“Sovereign’s”), which invests in companies in emerging markets. Sovereign’s makes capital calls to investors as funds are needed. During 2014, the Company committed to invest in UGLIC, LLC, which purchases real estate tax receivables. UGLIC, LLC makes capital calls as funds are needed for additional purchases. During 2015, the Company committed to invest in Sovereign’s Capital, LP Fund II (“Sovereign’s II”), which invests in companies in emerging markets. Sovereign’s II makes capital calls to investors as funds are needed. During 2016, the Company made a commitment to invest in Barton Springs Music, LLC (“Barton”), which invests in music royalties. Barton makes capital calls to its investors as funds are needed to acquire the royalty rights. During 2016, the Company made a commitment to invest in Master Mineral Holdings II, LP (“MMH”), which purchases land for leasing opportunities to those looking to harvest natural resources. MMH makes capital calls to its investors as funds are needed for continued land purchases. |
Other Cash Flow Disclosures |
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Other Cash Flow Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Cash Flow Disclosures | Note 8 – Other Cash Flow Disclosures On a cash basis, the Company paid the following expenses:
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Concentrations of Credit Risk |
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Jun. 30, 2017 | |
Concentrations of Credit Risk [Abstract] | |
Concentrations of Credit Risk | Note 9 – Concentrations of Credit Risk The Company maintains cash balances in financial institutions that at times may exceed federally insured limits. The Company maintains its primary operating cash accounts with First Southern National Bank, an affiliate of the largest shareholder of UTG, Mr. Jesse Correll, the Company’s CEO and Chairman. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Basis of Presentation (Policies) |
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Jun. 30, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | The accompanying Condensed Consolidated Balance Sheet as of December 31, 2016, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods. The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The Company’s results of operations for the three and six month periods ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or for any other future period. |
Recently Issued Accounting Standards (Policies) |
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Jun. 30, 2017 | |
Recently Issued Accounting Standards [Abstract] | |
Recently Issued Accounting Standards | During the six months ended June 30, 2017, there were no additions to or changes in the critical accounting policies disclosed in the 2016 Form 10-K. |
Investments (Tables) |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available for Sale Securities | Investments in available for sale securities are summarized as follows:
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Debt Securities by Contractual Maturity | The amortized cost and estimated market value of debt securities at June 30, 2017, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Fair Value of Investments with Sustained Gross Unrealized Losses | The fair value of investments with sustained gross unrealized losses at June 30, 2017 and December 31, 2016 are as follows:
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Securities in Continuous Unrealized Loss Position | Additional information regarding investments in an unrealized loss position is as follows:
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Trading Revenue Charged to Investment Income from Trading Securities | Trading revenue charged to net investment income from trading securities was:
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Maximum and Minimum Lending Rates for Mortgage Loans | During 2017 and 2016, the maximum and minimum lending rates for mortgage loans were:
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Loans Held in Discounted Mortgage Loan Portfolio | The following table summarizes the number of loans held in the discounted mortgage loan portfolio and the carrying value of the loans:
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Mortgage Loans | The following table summarizes the mortgage loan holdings of the Company for the periods ended:
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Fair Value Measurements (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of June 30, 2017.
The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of December 31, 2016.
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Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis | The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.
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Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value | The carrying values and estimated fair values of certain of the Company’s financial instruments not recorded at fair value in the Consolidated Balance Sheets are shown below. Because the fair value for all Consolidated Balance Sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.
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Credit Arrangements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Arrangements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Promissory Notes | At June 30, 2017 and December 31, 2016, the Company had the following outstanding debt:
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Lines of Credit |
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Commitments and Contingencies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Funding Commitments and Unfunded Commitment | The following table represents the total funding commitments and the unfunded commitment as of June 30, 2017 related to certain investments:
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Other Cash Flow Disclosures (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Cash Flow Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses Paid on a Cash Basis | On a cash basis, the Company paid the following expenses:
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Basis of Presentation (Details) |
6 Months Ended |
---|---|
Jun. 30, 2017 | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership in subsidiary bank | 100.00% |
Related Party Disclosure [Line Items] | |
Ownership or control of outstanding common stock directly or indirectly | 63.94% |
Investments, Debt Securities by Contractual Maturity (Details) - USD ($) |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Amortized cost of debt securities, by contractual maturity [Abstract] | ||
Due in one year or less | $ 6,156,866 | |
Due after one year through five years | 31,184,767 | |
Due after five years through ten years | 44,147,980 | |
Due after ten years | 86,599,346 | |
Original or amortized cost | 168,088,959 | $ 170,595,860 |
Estimated fair value of debt securities, by contractual maturity [Abstract] | ||
Due in one year or less | 6,276,044 | |
Due after one year through five years | 43,957,336 | |
Due after five years through ten years | 48,599,782 | |
Due after ten years | 90,559,466 | |
Estimated fair value | $ 189,392,628 | $ 187,239,718 |
Investments, Other-than-Temporary Impairments (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
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Other than Temporary Impairment Losses, Investments, Available-for-sale Securities [Abstract] | ||
Other than temporary impairments: | $ 0 | $ 0 |
Investments, Trading Securities (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
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Trading Securities [Abstract] | |||||
The fair value of derivatives included in trading security assets | $ 0 | $ 0 | $ 2,500 | ||
The fair value of derivatives included in trading security liabilities | 0 | 0 | $ (1,439) | ||
Net unrealized gains (losses) | 0 | $ 24,938 | (111,531) | $ 39,477 | |
Net realized gains (losses) | 0 | 0 | 110,470 | 0 | |
Net unrealized and realized gains (losses) | $ 0 | $ 24,938 | $ (1,061) | $ 39,477 |
Fair Value Measurements, Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value (Details) - USD ($) |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|---|
Carrying Amount [Member] | |||||
Assets [Abstract] | |||||
Mortgage loans on real estate | $ 18,378,499 | $ 18,577,372 | |||
Investment real estate | 53,077,397 | 57,138,980 | |||
Notes receivable | 18,618,464 | 16,876,485 | |||
Policy loans | 9,764,728 | 10,070,134 | |||
Cash and cash equivalents | 12,506,426 | 15,156,548 | |||
Estimated Fair Value [Member] | |||||
Assets [Abstract] | |||||
Mortgage loans on real estate | 18,378,499 | 18,577,372 | |||
Investment real estate | 53,077,397 | 57,138,980 | |||
Notes receivable | 18,618,464 | 16,876,485 | |||
Policy loans | 9,764,728 | 10,070,134 | |||
Cash and cash equivalents | 12,506,426 | 15,156,548 | |||
Mortgage loans on real estate | 18,378,499 | 18,577,372 | |||
Investment real estate | 53,077,397 | 57,138,980 | |||
Policy loans | 9,764,728 | 10,070,134 | |||
Cash and cash equivalents | $ 15,156,548 | $ 12,506,426 | $ 15,156,548 | $ 14,033,579 | $ 11,822,615 |
Minimum [Member] | |||||
Liabilities [Abstract] | |||||
Policy loan interest rate | 4.00% | ||||
Maximum [Member] | |||||
Liabilities [Abstract] | |||||
Policy loan interest rate | 8.00% |
Shareholders' Equity (Details) - USD ($) |
6 Months Ended | 13 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2017 |
Jul. 14, 2016 |
Jun. 15, 2016 |
|
Stock Repurchase Program [Abstract] | ||||
Stock repurchase program authorized amount | $ 14,500,000 | $ 14,500,000 | ||
Additional amount approved | $ 4,500,000 | $ 2,000,000 | ||
Treasury stock shares acquired (in shares) | 11,500 | |||
Amount paid to repurchase shares during the year | $ 206,000 | |||
Treasury stock, shares, acquired (in shares) | $ 12,100,000 | |||
Number of common stock acquired (in shares) | 1,070,000 | 1,070,000 | ||
Number of shares issued to management (in shares) | 11,000 |
Commitments and Contingencies (Details) |
Jun. 30, 2017
USD ($)
|
---|---|
RLF III, LLC [Member] | |
Investment Commitment [Line Items] | |
Total Funding Commitment | $ 4,000,000 |
Unfunded Commitment | 398,120 |
Sovereign's Capital, LP Fund I [Member] | |
Investment Commitment [Line Items] | |
Total Funding Commitment | 500,000 |
Unfunded Commitment | 33,642 |
UGLIC, LLC [Member] | |
Investment Commitment [Line Items] | |
Total Funding Commitment | 1,600,000 |
Unfunded Commitment | 120,000 |
Sovereigns Capital LP Fund II [Member] | |
Investment Commitment [Line Items] | |
Total Funding Commitment | 1,000,000 |
Unfunded Commitment | 456,064 |
Barton Springs Music, LLC [Member] | |
Investment Commitment [Line Items] | |
Total Funding Commitment | 2,500,000 |
Unfunded Commitment | 1,339,063 |
Master Mineral Holdings II, LP [Member] | |
Investment Commitment [Line Items] | |
Total Funding Commitment | 4,122,167 |
Unfunded Commitment | $ 556,286 |
Other Cash Flow Disclosures (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Other Cash Flow Disclosures [Abstract] | ||||
Interest | $ 0 | $ 0 | $ 0 | $ 0 |
Federal income tax | $ 115,000 | $ 735,000 | $ 115,000 | $ 735,000 |
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