Investments

3 Months Ended

Mar. 31, 2026

Investments [Abstract]

Investments

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:

		Original or Amortized		Gross Unrealized		Gross Unrealized
March 31, 2026		Cost		Gains		Losses			Fair Value
U.S. Government and govt. agencies and authorities	$	22,843,918	$	23,851	$	(159,801	)	$	22,707,968
U.S. special revenue and assessments		7,514,694		0		(99,155	)		7,415,539
All other corporate bonds		43,972,364		89,444		(2,011,050	)		42,050,758
Total fixed maturities, at fair value	$	74,330,976	$	113,295	$	(2,270,006	)	$	72,174,265

		Original or Amortized		Gross Unrealized		Gross Unrealized
December 31, 2025		Cost		Gains		Losses			Fair Value
U.S. Government and govt. agencies and authorities	$	22,839,422	$	60,190	$	(148,886	)	$	22,750,726
U.S. special revenue and assessments		7,516,321		0		(62,399	)		7,453,922
All other corporate bonds		44,545,247		148,195		(1,738,501	)		42,954,941
Total fixed maturities, at fair value	$	74,900,990	$	208,385	$	(1,949,786	)	$	73,159,589

The amortized cost and estimated market value of fixed maturity securities at March 31, 2026, by contractual maturity, is shown below.

March 31, 2026		Amortized Cost		Fair Value
Due in one year or less	$	26,613,198	$	26,514,612
Due after one year through five years		25,184,612		25,021,098
Due after five years through ten years		7,960,994		7,498,425
Due after ten years		14,572,172		13,140,130
Total	$	74,330,976	$	72,174,265

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 March 31, 2026 and December 31, 2025.

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

March 31, 2026	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	$	5,667,112	$	(36,513	)	$	6,987,201	$	(123,288	)	$	12,654,313	$	(159,801	)
U.S. special revenue and assessments		0		0			7,415,539		(99,155	)		7,415,539		(99,155	)
All other corporate bonds		2,059,175		(13,172	)		33,390,720		(1,997,878	)		35,449,895		(2,011,050	)
Total fixed maturities	$	7,726,287	$	(49,685	)	$	47,793,460	$	(2,220,321	)	$	55,519,747	$	(2,270,006	)

December 31, 2025	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	$	996,280	$	(2,040	)	$	8,663,797	$	(146,846	)	$	9,660,077	$	(148,886	)
U.S. special revenue and assessments		0		0			7,453,922		(62,399	)		7,453,922		(62,399	)
All other corporate bonds		0		0			34,265,250		(1,738,501	)		34,265,250		(1,738,501	)
Total fixed maturities	$	996,280	$	(2,040	)	$	50,382,969	$	(1,947,746	)	$	51,379,249	$	(1,949,786	)

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

	Less than 12 months	12 months or longer	Total
As of March 31, 2026
Fixed maturities	6	27	33
As of December 31, 2025
Fixed maturities	1	29	30

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 March 31, 2026 and December 31, 2025 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. At March 31, 2026, 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 March 31, 2026.

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

Net unrealized losses included in accumulated 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  March 31, 2026 and December 31, 2025:

		March 31, 2026			December 31, 2025
Unrealized appreciation (depreciation) on available-for-sale securities	$	(2,156,711	)	$	(1,741,400	)
Deferred income taxes		452,909			365,693
Net unrealized appreciation (depreciation) on available-for-sale securities	$	(1,703,802	)	$	(1,375,707	)

Cost Method Equity Investments

The Company held equity investments with an aggregate cost of $13,664,543 and $20,510,250 at March 31, 2026 and December 31, 2025, 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 three months ended March 31, 2026 and 2025, the Company acquired $441,906 and $675,112 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 2026 and 2025, the maximum and minimum lending rates for mortgage loans were:

	2026					2025
		Maximum rate		Minimum rate			Maximum rate		Minimum rate
Farm Loans		8.00	%	8.00	%		8.00	%	8.00	%
Commercial Loans		10.00	%	4.40	%		10.00	%	4.40	%
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:

		March 31, 2026		December 31, 2025
In good standing	$	13,625,829	$	14,402,304
Total mortgage loans	$	13,625,829	$	14,402,304

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

		March 31, 2026			December 31, 2025
Farm	$	311,780		$	311,780
Commercial		12,152,977			12,928,334
Residential		1,371,072			1,382,190
Total mortgage loans		13,835,829			14,622,304
Less allowance for credit losses		(210,000	)		(220,000	)
Total mortgage loans, net	$	13,625,829		$	14,402,304

There were no past due loans as of March 31, 2026 and December 31, 2025.

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 three months ended March 31, 2026 and 2025 the Company acquired $0 and $1,318,133 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:

		March 31, 2026			December 31, 2025
Notes receivable	$	8,387,713		$	8,843,417
Less allowance for credit losses		(130,000	)		(135,000	)
Total notes receivable, net	$	8,257,713		$	8,708,417

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 ACL 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 ACL 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 March 31, 2026 and December 31, 2025 was $25,000 and $30,000, 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.

Allowance for Credit Loss - Summary of Activity

The following is a summary of activity related to the allowance for credit loss:

	Allowance For Credit Losses
		Mortgage		Notes		Unfunded
		Loans		Receivable		Commitments			Total
January 1, 2025	$	235,000		195,000		50,000		$	480,000
2025 Change in allowance		(15,000	)	(60,000	)	(20,000	)		(95,000	)
December 31, 2025		220,000		135,000		30,000			385,000
2026 Change in allowance		(10,000	)	(5,000	)	(5,000	)		(20,000	)
March 31, 2026	$	210,000		130,000		25,000		$	365,000

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 three months ended March 31, 2026, no impairments were recognized on the investment real estate.

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

		March 31, 2026		December 31, 2025
Raw land	$	16,754,842	$	16,754,842
Commercial		6,200,264		6,245,872
Residential		1,889,084		1,897,744
Land, minerals and royalty interests		7,749,062		8,189,241
Total investment real estate	$	32,593,252	$	33,087,699

The Company’s investment real estate portfolio includes ownership in oil and gas royalties. As of March 31, 2026 and December 31, 2025, investments in oil and gas royalties represented 29% and 30%, respectively, of the total investment real estate portfolio.  See Note 10 – Concentrations 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 three months ended March 31, 2026 and 2025, the Company acquired $0 and $465,800 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 the three months ended March 31, 2026 and 2025, the Company acquired $0 of short-term investments, respectively.

Net Investment Gains (Losses)

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

	Three Months Ended
	March 31,
		2026			2025
Realized gains:
Sales of fixed maturities	$	42,178		$	0
Sales of equity securities		3,506,615			975,769
Total realized gains		3,548,793			975,769
Realized losses:
Total realized losses		0			0
Net realized investment gains		3,548,793			975,769
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		28,213,466			16,290,482
Change in fair value of equity securities		28,213,466			16,290,482
Net investment gains	$	31,762,259		$	17,266,251
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	(415,310	)	$	922,207
Net increase (decrease)	$	(415,310	)	$	922,207