[x]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2018
|
|
or
|
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from _____________ to ______________
|
UTG, INC.
|
||
(Exact name of registrant as specified in its charter)
|
||
Delaware
|
20-2907892
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
205 North Depot Street, Stanford, KY
|
40484
|
|
(Address of principal executive offices)
|
(Zip code)
|
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
Title of each class
|
Name of each exchange on which registered
|
None
|
None
|
PART I
|
4
|
Item 1. Business
|
4
|
Item 1A. Risk Factors
|
8
|
Item 1B. Unresolved Staff Comment
|
8
|
Item 2. Properties
|
8
|
Item 3. Legal Proceedings
|
9
|
Item 4. Mine Safety Disclosures
|
9
|
PART II
|
9
|
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
9
|
Item 6. Selected Financial Data
|
10
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
10
|
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
|
19
|
Item 8. Financial Statements and Supplementary Data
|
19
|
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
|
45
|
Item 9A. Controls and Procedures
|
45
|
Item 9B. Other Information
|
46
|
PART III
|
46
|
Item 10. Directors, Executive Officers and Corporate Governance
|
46
|
Item 11. Executive Compensation
|
50
|
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
51
|
Item 13. Certain Relationships and Related Transactions, and Director Independence
|
53
|
Item 14. Principal Accounting Fees and Services
|
54
|
PART IV
|
55
|
Item 15. Exhibits and Financial Statement Schedules
|
55
|
Rating
|
2018
|
|
Investment Grade
|
||
AAA
|
6%
|
|
AA+
|
26%
|
|
AA
|
2%
|
|
AA-
|
18%
|
|
A+
|
6%
|
|
A
|
10%
|
|
A-
|
10%
|
|
BBB+
|
8%
|
|
BBB
|
8%
|
|
BBB-
|
4%
|
|
Below Investment Grade
|
2%
|
|
100%
|
Average
|
|||||||||
Carrying
|
Average
|
Average
|
|||||||
Investments
|
Value
|
Maturity
|
Yield
|
||||||
Fixed maturities held for sale
|
$
|
169,758,005
|
9.94 years
|
4.28
|
%
|
||||
Equity securities
|
69,315,795
|
Not applicable
|
2.35
|
%
|
|||||
Mortgage loans
|
13,191,794
|
7.56 years
|
9.36
|
%
|
|||||
Investment real estate
|
51,511,564
|
Not applicable
|
5.38
|
%
|
|||||
Notes receivable
|
21,360,664
|
Not applicable
|
4.59
|
%
|
|||||
Policy loans
|
9,381,682
|
Not applicable
|
6.90
|
%
|
|||||
Cash, cash equivalents and short term
|
22,792,181
|
On demand
|
1.64
|
%
|
|||||
Total investments
|
$
|
357,311,685
|
4.17
|
%
|
Mortgage Loans
|
Amount
|
% of Total
|
||||||
Farm – all other
|
$
|
357,372
|
4
|
%
|
||||
Commercial – all other
|
8,694,606
|
95
|
%
|
|||||
Residential – all other
|
17,133
|
1
|
%
|
|||||
Total
|
$
|
9,069,111
|
100
|
%
|
Mortgage Loans
|
Real Estate
|
||
Alabama
|
6%
|
0%
|
|
Arizona
|
21%
|
0%
|
|
California
|
0%
|
1%
|
|
Florida
|
3%
|
13%
|
|
Georgia
|
33%
|
14%
|
|
Kentucky
|
19%
|
21%
|
|
New Jersey
|
1%
|
0%
|
|
South Carolina
|
1%
|
4%
|
|
Tennessee
|
0%
|
3%
|
|
Texas
|
0%
|
25%
|
|
West Virginia
|
16%
|
19%
|
|
Total
|
100%
|
100%
|
2018
|
2017
|
|||||||
Period
|
High
|
Low
|
High
|
Low
|
||||
First quarter
|
25.20
|
22.95
|
18.25
|
17.00
|
||||
Second quarter
|
28.25
|
24.00
|
21.75
|
17.50
|
||||
Third quarter
|
34.00
|
26.00
|
21.00
|
18.85
|
||||
Fourth quarter
|
33.00
|
31.00
|
28.00
|
19.25
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
Maximum Number of Shares That May Yet Be Purchased Under the Program
|
Approximate Dollar Value That May Yet Be Purchased Under the Program
|
||||||||||||||||
Oct. 1 through Oct. 31, 2018
|
1,062
|
$
|
33.00
|
1,062
|
N/A
|
$
|
2,212,572
|
|||||||||||||
Nov. 1 through Nov. 30, 2018
|
1,404
|
$
|
32.50
|
1,404
|
N/A
|
$
|
2,166,942
|
|||||||||||||
Dec. 1 through Dec. 31, 2018
|
1,398
|
$
|
32.24
|
798
|
N/A
|
$
|
2,121,872
|
|||||||||||||
Total
|
3,864
|
3,264
|
2018
|
2017
|
|||||||
Net investment income
|
$
|
11,202,668
|
$
|
11,700,998
|
||||
Net investment gains (losses) (1)
|
22,456,835
|
9,117,125
|
||||||
Change in net unrealized investment gains (losses) on available-for-sale securities
|
(7,744,899
|
)
|
17,174,126
|
(1)
|
Effective January 1, 2018, the Company adopted ASU No. 2016-01 and equity securities are no longer classified as available-for-sale
with unrealized gains and losses recognized in other comprehensive income, rather, changes in fair value of equity securities are now recognized in net income. Prior periods have not been restated to conform to the current presentation.
See Note 1 of the notes to consolidated financial statements.
|
2018
|
2017
|
|||||||
Fixed maturities
|
$
|
7,273,157
|
$
|
8,685,698
|
||||
Equity securities
|
1,628,649
|
1,213,922
|
||||||
Trading securities
|
0
|
(1,061
|
)
|
|||||
Mortgage loans
|
1,234,115
|
1,191,865
|
||||||
Real estate
|
2,771,348
|
1,990,844
|
||||||
Notes receivable
|
979,742
|
1,322,675
|
||||||
Policy loans
|
646,993
|
664,116
|
||||||
Cash and cash equivalents
|
355,276
|
23,445
|
||||||
Short-term
|
18,159
|
1,263
|
||||||
Total consolidated investment income
|
14,907,439
|
15,092,767
|
||||||
Investment expenses
|
(3,704,771
|
)
|
(3,391,769
|
)
|
||||
Consolidated net investment income
|
$
|
11,202,668
|
$
|
11,700,998
|
2018
|
2017
|
|||||||
Fixed maturities available for sale
|
$
|
10,751,955
|
$
|
3,877,454
|
||||
Equity securities
|
0
|
2,902,278
|
||||||
Real estate
|
1,588,122
|
3,099,554
|
||||||
Mortgage loans – OTTI
|
0
|
(72,161
|
)
|
|||||
Real estate – OTTI
|
(300,000
|
)
|
(690,000
|
)
|
||||
Consolidated net realized investment gains
|
12,040,077
|
9,117,125
|
||||||
Change in fair value of equity securities
|
10,416,758
|
0
|
||||||
Net investment gains
|
$
|
22,456,835
|
$
|
9,117,125
|
2018
|
As a % of Total Investments
|
As a % of Total Assets
|
||||||||||
Fixed maturities
|
$
|
160,960,784
|
48
|
%
|
41
|
%
|
||||||
Equity securities
|
79,783,099
|
24
|
%
|
20
|
%
|
|||||||
Mortgage loans
|
9,069,111
|
3
|
%
|
2
|
%
|
|||||||
Real estate
|
52,518,577
|
16
|
%
|
13
|
%
|
|||||||
Notes receivable
|
23,717,312
|
7
|
%
|
6
|
%
|
|||||||
Policy loans
|
9,204,222
|
2
|
%
|
3
|
%
|
|||||||
Total investments
|
$
|
335,253,105
|
100
|
%
|
85
|
%
|
2017
|
As a % of Total Investments
|
As a % of Total Assets
|
||||||||||
Fixed maturities
|
$
|
178,555,225
|
53
|
%
|
44
|
%
|
||||||
Equity securities
|
58,848,491
|
18
|
%
|
15
|
%
|
|||||||
Mortgage loans
|
17,314,477
|
5
|
%
|
4
|
%
|
|||||||
Real estate
|
50,504,550
|
15
|
%
|
12
|
%
|
|||||||
Notes receivable
|
19,004,016
|
6
|
%
|
5
|
%
|
|||||||
Policy loans
|
9,559,142
|
3
|
%
|
2
|
%
|
|||||||
Total investments
|
$
|
333,785,901
|
100
|
%
|
82
|
%
|
Page No.
|
|
UTG, Inc. and Consolidated Subsidiaries
|
|
Report of Independent Registered Public Accounting Firm
|
20
|
Consolidated Balance Sheets
|
21
|
Consolidated Statements of Operations
|
22
|
Consolidated Statements of Comprehensive Income
|
23
|
Consolidated Statements of Shareholders’ Equity
|
24
|
Consolidated Statements of Cash Flows
|
25
|
Notes to Consolidated Financial Statements
|
26
|
ASSETS
|
||||||||
2018
|
2017
|
|||||||
Investments:
|
||||||||
Investments available for sale:
|
||||||||
Fixed maturities, at fair value (amortized cost $160,895,869 and $159,912,511)
|
$
|
160,960,784
|
$
|
178,555,225
|
||||
Equity securities, at fair value (cost $0 and $35,712,633)
|
0
|
58,848,491
|
||||||
Equity securities, at fair value (cost $34,885,107 and $0)
|
67,664,482
|
0
|
||||||
Equity securities, at cost
|
12,118,617
|
0
|
||||||
Mortgage loans on real estate at amortized cost
|
9,069,111
|
17,314,477
|
||||||
Investment real estate, net
|
52,518,577
|
50,504,550
|
||||||
Notes receivable
|
23,717,312
|
19,004,016
|
||||||
Policy loans
|
9,204,222
|
9,559,142
|
||||||
Total investments
|
335,253,105
|
333,785,901
|
||||||
Cash and cash equivalents
|
20,150,162
|
25,434,199
|
||||||
Accrued investment income
|
2,119,882
|
2,990,721
|
||||||
Reinsurance receivables:
|
||||||||
Future policy benefits
|
26,117,936
|
26,488,346
|
||||||
Policy claims and other benefits
|
4,053,882
|
3,882,047
|
||||||
Cost of insurance acquired
|
5,622,227
|
6,428,292
|
||||||
Property and equipment, net of accumulated depreciation
|
688,567
|
1,118,826
|
||||||
Income taxes receivable
|
279,333
|
549,851
|
||||||
Other assets
|
1,263,242
|
5,766,901
|
||||||
Total assets
|
$
|
395,548,336
|
$
|
406,445,084
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Policy liabilities and accruals:
|
||||||||
Future policy benefits
|
$
|
253,852,368
|
$
|
259,469,205
|
||||
Policy claims and benefits payable
|
4,267,481
|
3,777,175
|
||||||
Other policyholder funds
|
372,072
|
408,790
|
||||||
Dividend and endowment accumulations
|
14,608,838
|
14,601,645
|
||||||
Deferred income taxes
|
9,113,480
|
10,996,404
|
||||||
Other liabilities
|
6,257,387
|
6,760,347
|
||||||
Total liabilities
|
288,471,626
|
296,013,566
|
||||||
Shareholders' equity:
|
||||||||
Common stock - no par value, stated value $0.001 per share. Authorized 7,000,000 shares -
3,295,870 and 3,333,377 shares issued and outstanding
|
3,296
|
3,333
|
||||||
Additional paid-in capital
|
36,567,865
|
37,536,164
|
||||||
Retained earnings
|
69,708,901
|
39,040,456
|
||||||
Accumulated other comprehensive income
|
62,495
|
32,952,338
|
||||||
Total UTG shareholders' equity
|
106,342,557
|
109,532,291
|
||||||
Noncontrolling interest
|
734,153
|
899,227
|
||||||
Total shareholders' equity
|
107,076,710
|
110,431,518
|
||||||
Total liabilities and shareholders' equity
|
$
|
395,548,336
|
$
|
406,445,084
|
2018
|
2017
|
|||||||
Revenue:
|
||||||||
Premiums and policy fees
|
$
|
10,076,351
|
$
|
10,413,346
|
||||
Ceded reinsurance premiums and policy fees
|
(2,862,701
|
)
|
(2,955,989
|
)
|
||||
Net investment income
|
11,202,668
|
11,700,998
|
||||||
Other income
|
400,034
|
458,663
|
||||||
Revenues before net investment gains (losses)
|
18,816,352
|
19,617,018
|
||||||
Net investment gains (losses):
|
||||||||
Other-than-temporary impairments
|
(300,000
|
)
|
(762,161
|
)
|
||||
Other realized investment gains, net
|
12,340,077
|
9,879,286
|
||||||
Change in fair value of equity securities
|
10,416,758
|
0
|
||||||
Total net investment gains
|
22,456,835
|
9,117,125
|
||||||
Total revenues
|
41,273,187
|
28,734,143
|
||||||
Benefits and other expenses:
|
||||||||
Benefits, claims and settlement expenses:
|
||||||||
Life
|
16,751,922
|
17,428,286
|
||||||
Ceded reinsurance benefits and claims
|
(2,610,586
|
)
|
(1,893,986
|
)
|
||||
Annuity
|
1,044,397
|
975,196
|
||||||
Dividends to policyholders
|
390,368
|
370,847
|
||||||
Commissions
|
(147,922
|
)
|
(145,722
|
)
|
||||
Amortization of cost of insurance acquired
|
806,065
|
839,105
|
||||||
Operating expenses
|
8,531,113
|
7,854,301
|
||||||
Total benefits and other expenses
|
24,765,357
|
25,428,027
|
||||||
Income before income taxes
|
16,507,830
|
3,306,116
|
||||||
Income tax expense (benefit)
|
3,907,536
|
(1,507,016
|
)
|
|||||
Net income
|
12,600,294
|
4,813,132
|
||||||
Net income attributable to noncontrolling interest
|
(209,177
|
)
|
(2,983
|
)
|
||||
Net income attributable to common shareholders
|
$
|
12,391,117
|
$
|
4,810,149
|
||||
Amounts attributable to common shareholders:
|
||||||||
Basic income per share
|
$
|
3.75
|
$
|
1.44
|
||||
Diluted income per share
|
$
|
3.75
|
$
|
1.44
|
||||
Basic weighted average shares outstanding
|
3,307,448
|
3,346,774
|
||||||
Diluted weighted average shares outstanding
|
3,307,448
|
3,346,774
|
2018
|
2017
|
|||||||
Net income
|
$
|
12,600,294
|
$
|
4,813,132
|
||||
Other comprehensive income (loss):
|
||||||||
Unrealized holding gains (losses) arising during period, pre-tax
|
(7,744,899
|
)
|
17,174,126
|
|||||
Tax (expense) benefit on unrealized holding gains (losses) arising during the period
|
1,626,429
|
(6,010,944
|
)
|
|||||
Deferred tax adjustment from tax rate change
|
0
|
5,842,290
|
||||||
Unrealized holding gains (losses) arising during period, net of tax
|
(6,118,470
|
)
|
17,005,472
|
|||||
Less reclassification adjustment for gains included in net income
|
(10,751,955
|
)
|
(6,779,732
|
)
|
||||
Tax expense for gains included in net income
|
2,257,911
|
2,372,906
|
||||||
Reclassification adjustment for gains included in net income, net of tax
|
(8,494,044
|
)
|
(4,406,826
|
)
|
||||
Subtotal: Other comprehensive income (loss), net of tax
|
(14,612,514
|
)
|
12,598,646
|
|||||
Comprehensive income (loss)
|
(2,012,220
|
)
|
17,411,778
|
|||||
Less comprehensive income attributable to noncontrolling interests
|
(209,177
|
)
|
(2,983
|
)
|
||||
Comprehensive income (loss) attributable to UTG, Inc.
|
$
|
(2,221,397
|
)
|
$
|
17,408,795
|
Year ended December 31, 2018
|
Common Stock
|
Additional Paid-In Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Income
|
Noncontrolling Interest
|
Total Shareholders' Equity
|
||||||||||||||||||
Balance at December 31, 2017
|
$
|
3,333
|
$
|
37,536,164
|
$
|
39,040,456
|
$
|
32,952,338
|
$
|
899,227
|
$
|
110,431,518
|
||||||||||||
Adoption of Accounting Standards Update No 2016-01 (Note 1)
|
0
|
0
|
18,277,328
|
(18,277,328
|
)
|
0
|
0
|
|||||||||||||||||
3,333
|
37,536,164
|
57,317,784
|
14,675,010
|
899,227
|
110,431,518
|
|||||||||||||||||||
Common stock issued during year
|
13
|
360,799
|
0
|
0
|
0
|
360,812
|
||||||||||||||||||
Treasury shares acquired and retired
|
(50
|
)
|
(1,329,098
|
)
|
0
|
0
|
0
|
(1,329,148
|
)
|
|||||||||||||||
Net income attributable to common shareholders
|
0
|
0
|
12,391,117
|
0
|
0
|
12,391,117
|
||||||||||||||||||
Unrealized holding loss on securities net of noncontrolling interest and reclassification
adjustment and taxes
|
0
|
0
|
0
|
(14,612,515
|
)
|
0
|
(14,612,515
|
)
|
||||||||||||||||
Contributions
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||||
Distributions
|
0
|
0
|
0
|
0
|
(374,252
|
)
|
(374,252
|
)
|
||||||||||||||||
Gain attributable to noncontrolling interest
|
0
|
0
|
0
|
0
|
209,178
|
209,178
|
||||||||||||||||||
Balance at December 31, 2018
|
$
|
3,296
|
$
|
36,567,865
|
$
|
69,708,901
|
$
|
62,495
|
$
|
734,153
|
$
|
107,076,710
|
Year ended December 31, 2017
|
Common Stock
|
Additional Paid-In Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Income
|
Noncontrolling Interest
|
Total Shareholders' Equity
|
||||||||||||||||||
Balance at January 1, 2017
|
$
|
3,350
|
$
|
37,878,712
|
$
|
34,230,307
|
$
|
20,353,692
|
$
|
1,835,781
|
$
|
94,301,842
|
||||||||||||
Common stock issued during year
|
13
|
261,474
|
0
|
0
|
0
|
261,487
|
||||||||||||||||||
Treasury shares acquired and retired
|
(30
|
)
|
(604,022
|
)
|
0
|
0
|
0
|
(604,052
|
)
|
|||||||||||||||
Net income attributable to common shareholders
|
0
|
0
|
4,810,149
|
0
|
0
|
4,810,149
|
||||||||||||||||||
Unrealized holding loss on securities net of noncontrolling interest and reclassification
adjustment and taxes
|
0
|
0
|
0
|
12,598,646
|
0
|
12,598,646
|
||||||||||||||||||
Contributions
|
0
|
0
|
0
|
0
|
0
|
-
|
||||||||||||||||||
Distributions
|
0
|
0
|
0
|
0
|
(939,537
|
)
|
(939,537
|
)
|
||||||||||||||||
Gain attributable to noncontrolling interest
|
0
|
0
|
0
|
0
|
2,983
|
2,983
|
||||||||||||||||||
Balance at December 31, 2017
|
$
|
3,333
|
$
|
37,536,164
|
$
|
39,040,456
|
$
|
32,952,338
|
$
|
899,227
|
$
|
110,431,518
|
2018
|
2017
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income attributable to common shares
|
$
|
12,391,117
|
$
|
4,810,149
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Amortization (accretion) of investments
|
(142,519
|
)
|
94,608
|
|||||
Other-than-temporary impairments
|
300,000
|
762,161
|
||||||
Realized investment gains, net
|
(12,340,077
|
)
|
(9,879,286
|
)
|
||||
Change in fair value of equity securities
|
(10,416,758
|
)
|
0
|
|||||
Unrealized trading (gains) losses included in income
|
0
|
111,531
|
||||||
Realized trading (gains) losses included in income
|
0
|
(110,470
|
)
|
|||||
Amortization of cost of insurance acquired
|
806,065
|
839,105
|
||||||
Depreciation
|
1,067,297
|
701,809
|
||||||
Net income attributable to noncontrolling interest
|
209,177
|
2,983
|
||||||
Charges for mortality and administration of universal life and annuity products
|
(6,602,846
|
)
|
(6,636,270
|
)
|
||||
Interest credited to account balances
|
4,221,969
|
4,346,943
|
||||||
Change in accrued investment income
|
870,839
|
(117,871
|
)
|
|||||
Change in reinsurance receivables
|
198,575
|
556,891
|
||||||
Change in policy liabilities and accruals
|
(2,237,947
|
)
|
(2,794,247
|
)
|
||||
Change in income taxes receivable (payable)
|
270,518
|
673,831
|
||||||
Change in other assets and liabilities, net
|
5,985,699
|
(6,560,115
|
)
|
|||||
Net cash provided by (used in) operating activities
|
(5,418,891
|
)
|
(13,198,248
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Proceeds from investments sold and matured:
|
||||||||
Fixed maturities available for sale
|
66,408,611
|
29,744,619
|
||||||
Equity securities
|
2,169,989
|
7,479,886
|
||||||
Mortgage loans
|
8,878,073
|
1,840,610
|
||||||
Real estate
|
14,341,204
|
13,014,387
|
||||||
Notes receivable
|
6,783,702
|
2,170,322
|
||||||
Policy loans
|
1,599,896
|
1,951,222
|
||||||
Short-term investments
|
7,549,076
|
0
|
||||||
Total proceeds from investments sold and matured
|
107,730,551
|
56,201,046
|
||||||
Cost of investments acquired:
|
||||||||
Fixed maturities available for sale
|
(56,940,883
|
)
|
(15,615,699
|
)
|
||||
Equity securities
|
(12,687,839
|
)
|
(3,275,532
|
)
|
||||
Mortgage loans
|
(91,954
|
)
|
(360,531
|
)
|
||||
Real estate
|
(15,704,151
|
)
|
(4,226,106
|
)
|
||||
Notes receivable
|
(11,496,998
|
)
|
(4,297,853
|
)
|
||||
Policy loans
|
(1,244,976
|
)
|
(1,440,230
|
)
|
||||
Short-term investments
|
(7,549,076
|
)
|
0
|
|||||
Total cost of investments acquired
|
(105,715,877
|
)
|
(29,215,951
|
)
|
||||
Purchase of property and equipment
|
0
|
0
|
||||||
Net cash provided by (used in) investing activities
|
2,014,674
|
26,985,095
|
||||||
Cash flows from financing activities:
|
||||||||
Policyholder contract deposits
|
4,696,980
|
4,812,703
|
||||||
Policyholder contract withdrawals
|
(5,234,212
|
)
|
(4,139,797
|
)
|
||||
Payments of principal on notes payable/line of credit
|
0
|
(2,900,000
|
)
|
|||||
Purchase of treasury stock
|
(1,329,148
|
)
|
(604,052
|
)
|
||||
Issuance of stock
|
360,812
|
261,487
|
||||||
Noncontrolling contributions/(distributions) of consolidated subsidiary
|
(374,252
|
)
|
(939,537
|
)
|
||||
Net cash provided by (used in) financing activities
|
(1,879,820
|
)
|
(3,509,196
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
(5,284,037
|
)
|
10,277,651
|
|||||
Cash and cash equivalents at beginning of year
|
25,434,199
|
15,156,548
|
||||||
Cash and cash equivalents at end of year
|
$
|
20,150,162
|
$
|
25,434,199
|
December 31, 2018
|
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
|
$
|
25,649,410
|
$
|
149,006
|
$
|
(138,222
|
)
|
$
|
25,660,194
|
|||||||
U.S. special revenue and assessments
|
16,350,486
|
334,300
|
(4,406
|
)
|
16,680,380
|
|||||||||||
All other corporate bonds
|
118,895,973
|
2,569,287
|
(2,845,050
|
)
|
118,620,210
|
|||||||||||
Total
|
$
|
160,895,869
|
$
|
3,052,593
|
$
|
(2,987,678
|
)
|
$
|
160,960,784
|
December 31, 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
|
$
|
2,679,325
|
$
|
33,802
|
$
|
(73,530
|
)
|
$
|
2,639,597
|
|||||||
U.S. special revenue and assessments
|
9,012,232
|
620,789
|
0
|
9,633,021
|
||||||||||||
All other corporate bonds
|
148,220,954
|
18,359,816
|
(298,163
|
)
|
166,282,607
|
|||||||||||
159,912,511
|
19,014,407
|
(371,693
|
)
|
178,555,225
|
||||||||||||
Equity securities (1)
|
35,712,633
|
23,648,201
|
(512,343
|
)
|
58,848,491
|
|||||||||||
Total
|
$
|
195,625,144
|
$
|
42,662,608
|
$
|
(884,036
|
)
|
$
|
237,403,716
|
Fixed Maturities Available for Sale
December 31, 2018
|
Amortized
Cost
|
Estimated
Fair Value
|
||||||
Due in one year or less
|
$
|
6,498,249
|
$
|
6,537,005
|
||||
Due after one year through five years
|
43,015,419
|
44,106,710
|
||||||
Due after five years through ten years
|
60,011,083
|
60,985,500
|
||||||
Due after ten years
|
51,371,118
|
49,331,569
|
||||||
Total
|
$
|
160,895,869
|
$
|
160,960,784
|
December 31, 2018
|
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
|
$
|
6,429,700
|
(49,904
|
)
|
$
|
1,592,679
|
(88,318
|
)
|
$
|
8,022,379
|
(138,222
|
)
|
||||||||||||
U.S. special revenue and assessments
|
4,023,920
|
(4,406
|
)
|
0
|
0
|
4,023,920
|
(4,406
|
)
|
||||||||||||||||
All other corporate bonds
|
49,270,729
|
(2,033,507
|
)
|
15,337,739
|
(811,543
|
)
|
64,608,468
|
(2,845,050
|
)
|
|||||||||||||||
Total fixed maturities
|
$
|
59,724,349
|
(2,087,817
|
)
|
$
|
16,930,418
|
(899,861
|
)
|
$
|
76,654,767
|
(2,987,678
|
)
|
December 31, 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
|
$
|
0
|
0
|
$
|
1,604,987
|
(73,530
|
)
|
$
|
1,604,987
|
(73,530
|
)
|
|||||||||||||
All other corporate bonds
|
9,732,635
|
(91,757
|
)
|
11,164,317
|
(206,406
|
)
|
20,896,952
|
(298,163
|
)
|
|||||||||||||||
Total fixed maturities
|
$
|
9,732,635
|
(91,757
|
)
|
$
|
12,769,304
|
(279,936
|
)
|
$
|
22,501,939
|
(371,693
|
)
|
||||||||||||
Equity securities (1)
|
$
|
4,130,260
|
(270,774
|
)
|
$
|
1,526,868
|
(241,569
|
)
|
$
|
5,657,128
|
(512,343
|
)
|
Less than 12 months
|
12 months or longer
|
Total
|
|||
As of December 31, 2018
|
|||||
Fixed maturities
|
30
|
10
|
40
|
||
As of December 31, 2017
|
|||||
Fixed maturities
|
6
|
6
|
12
|
||
Equity securities (1)
|
2
|
2
|
4
|
2018
|
2017
|
|||||||
Net unrealized gains (losses)
|
$
|
0
|
$
|
(111,531
|
)
|
|||
Net realized gains (losses)
|
0
|
110,470
|
||||||
Net unrealized and realized gains (losses)
|
$
|
0
|
$
|
(1,061
|
)
|
2018
|
2017
|
||||||
Maximum
rate
|
Minimum
rate
|
Maximum
rate
|
Minimum
rate
|
||||
Farm loans
|
5.00 %
|
5.00 %
|
5.00 %
|
5.00 %
|
|||
Commercial loans
|
7.50 %
|
4.00 %
|
7.50 %
|
4.00 %
|
|||
Residential loans
|
8.00 %
|
8.00 %
|
8.00 %
|
4.00 %
|
2018
|
2017
|
|||||||
In good standing
|
$
|
7,169,272
|
$
|
15,310,941
|
||||
Overdue interest over 90 days
|
1,899,839
|
0
|
||||||
Restructured
|
0
|
0
|
||||||
In process of foreclosure
|
0
|
2,003,536
|
||||||
Total mortgage loans
|
$
|
9,069,111
|
$
|
17,314,477
|
||||
Total foreclosed loans during the year
|
$
|
0
|
$
|
0
|
2018
|
2017
|
|||||||
Fixed maturities
|
$
|
7,273,157
|
$
|
8,685,698
|
||||
Equity securities
|
1,628,649
|
1,213,922
|
||||||
Trading securities
|
0
|
(1,061
|
)
|
|||||
Mortgage loans
|
1,234,115
|
1,191,865
|
||||||
Real estate
|
2,771,348
|
1,990,844
|
||||||
Notes receivable
|
979,742
|
1,322,675
|
||||||
Policy loans
|
646,993
|
664,116
|
||||||
Cash and cash equivalents
|
355,276
|
23,445
|
||||||
Short-term
|
18,159
|
1,263
|
||||||
Total consolidated investment income
|
14,907,439
|
15,092,767
|
||||||
Investment expenses
|
(3,704,771
|
)
|
(3,391,769
|
)
|
||||
Consolidated net investment income
|
$
|
11,202,668
|
$
|
11,700,998
|
2018
|
2017
|
|||||||
Realized gains on available-for-sale investments:
|
||||||||
Sales of fixed maturities
|
$
|
11,708,320
|
$
|
3,950,014
|
||||
Sales of equity securities (1)
|
0
|
2,902,278
|
||||||
Sales of real estate
|
1,588,122
|
3,622,519
|
||||||
Other
|
0
|
0
|
||||||
Total realized gains
|
13,296,442
|
10,474,811
|
||||||
Realized losses on available-for-sale investments:
|
||||||||
Sales of fixed maturities
|
(956,365
|
)
|
(72,560
|
)
|
||||
Sales of equity securities (1)
|
0
|
0
|
||||||
Sales of real estate
|
0
|
(522,965
|
)
|
|||||
Other-than-temporary impairments
|
(300,000
|
)
|
(762,161
|
)
|
||||
Other
|
0
|
0
|
||||||
Total realized losses
|
(1,256,365
|
)
|
(1,357,686
|
)
|
||||
Net realized investment gains (losses)
|
12,040,077
|
9,117,125
|
||||||
Change in fair value of equity securities: (1)
|
||||||||
Realized gains (losses) on equity securities sold during the period (1)
|
0
|
0
|
||||||
Change in fair value of equity securities held at the end of the period
|
10,416,758
|
0
|
||||||
Change in fair value of equity securities (1)
|
10,416,758
|
0
|
||||||
Net investment gains (losses)
|
$
|
22,456,835
|
$
|
9,117,125
|
||||
Change in net unrealized gains (losses) on available-for-sale investments included in other
comprehensive income:
|
||||||||
Fixed maturities
|
$
|
(7,744,899
|
)
|
$
|
3,470,929
|
|||
Equity securities (1)
|
0
|
13,703,197
|
||||||
Net increase (decrease)
|
$
|
(7,744,899
|
)
|
$
|
17,174,126
|
2018
|
2017
|
|||||||
Other than temporary impairments:
|
||||||||
Real estate
|
$
|
300,000
|
$
|
690,000
|
||||
Mortgage loans
|
0
|
72,161
|
||||||
Total other than temporary impairments
|
$
|
300,000
|
$
|
762,161
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Fixed Maturities, available for sale
|
$
|
25,660,194
|
$
|
134,865,746
|
$
|
434,844
|
$
|
160,960,784
|
||||||||
Equity Securities
|
27,634,283
|
10,557,031
|
29,473,168
|
67,664,482
|
||||||||||||
Total
|
$
|
53,294,477
|
$
|
145,422,777
|
$
|
29,908,012
|
$
|
228,625,266
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Fixed Maturities, available for sale
|
$
|
2,639,597
|
$
|
175,437,239
|
$
|
478,389
|
$
|
178,555,225
|
||||||||
Equity Securities, available for sale (1)
|
20,436,225
|
7,756,435
|
30,655,831
|
58,848,491
|
||||||||||||
Total
|
$
|
23,075,822
|
$
|
183,193,674
|
$
|
31,134,220
|
$
|
237,403,716
|
Fixed Maturities,
Available for Sale
|
Equity Securities (1)
|
Total
|
||||||||||
Balance at December 31, 2017
|
$
|
478,389
|
$
|
30,655,831
|
$
|
31,134,220
|
||||||
Transfers in to Level 3
|
0
|
0
|
0
|
|||||||||
Transfer out of Level 3
|
0
|
(5,118,600
|
)
|
(5,118,600
|
)
|
|||||||
Total unrealized gain (losses):
|
||||||||||||
Included in net income (loss)
|
0
|
4,633,751
|
4,633,751
|
|||||||||
Included in other comprehensive income
|
0
|
0
|
0
|
|||||||||
Purchases
|
0
|
1,505,250
|
1,505,250
|
|||||||||
Sales
|
(43,545
|
)
|
(2,203,064
|
)
|
(2,246,609
|
)
|
||||||
Balance at December 31, 2018
|
$
|
434,844
|
$
|
29,473,168
|
$
|
29,908,012
|
December 31, 2018
|
December 31, 2017
|
|||||||
Change in fair value of equity securities included in net income (loss) relating to assets held
|
$
|
4,633,751
|
$
|
0
|
December 31, 2018
|
December 31, 2017
|
|||||||||||||||
Assets
|
Carrying
Amount
|
Estimated
Fair
Value
|
Carrying
Amount
|
Estimated
Fair
Value
|
||||||||||||
Equity securities
|
$
|
12,118,617
|
$
|
12,118,617
|
$
|
0
|
$
|
0
|
||||||||
Mortgage loans on real estate
|
9,069,111
|
9,069,111
|
17,314,477
|
17,314,477
|
||||||||||||
Investment real estate
|
52,518,577
|
52,518,577
|
50,504,550
|
50,504,550
|
||||||||||||
Notes receivable
|
23,717,312
|
23,717,312
|
19,004,016
|
19,004,016
|
||||||||||||
Policy loans
|
9,204,222
|
9,204,222
|
9,559,142
|
9,559,142
|
||||||||||||
Cash and cash equivalents
|
20,150,162
|
20,150,162
|
25,434,199
|
25,434,199
|
2018
|
2017
|
|||||||
Premiums Earned
|
Premiums Earned
|
|||||||
Direct
|
$
|
10,074,892
|
$
|
10,407,434
|
||||
Assumed
|
1,459
|
5,912
|
||||||
Ceded
|
(2,862,701
|
)
|
(2,955,989
|
)
|
||||
Net Premiums
|
$
|
7,213,650
|
$
|
7,457,357
|
2018
|
2017
|
|||||||
Cost of insurance acquired, beginning of year
|
$
|
6,428,292
|
$
|
7,267,397
|
||||
Interest accretion
|
866,339
|
967,032
|
||||||
Amortization
|
(1,672,404
|
)
|
(1,806,137
|
)
|
||||
Net amortization
|
(806,065
|
)
|
(839,105
|
)
|
||||
Cost of insurance acquired, end of year
|
$
|
5,622,227
|
$
|
6,428,292
|
Interest
Accretion
|
Amortization
|
Net
Amortization
|
|||
2019
|
769,612
|
1,545,518
|
775,906
|
||
2020
|
676,503
|
1,421,353
|
744,850
|
||
2021
|
587,120
|
1,302,090
|
714,970
|
||
2022
|
501,324
|
1,189,672
|
688,348
|
||
2023
|
418,722
|
1,079,979
|
661,257
|
2018
|
2017
|
|||||||
Current tax
|
$
|
1,922,542
|
$
|
751,377
|
||||
Deferred tax
|
1,984,994
|
(2,258,393
|
)
|
|||||
Income tax expense (benefit)
|
$
|
3,907,536
|
$
|
(1,507,016
|
)
|
2018
|
2017
|
|||||||
Tax computed at statutory rate
|
$
|
3,466,644
|
$
|
1,157,141
|
||||
Changes in taxes due to:
|
||||||||
Non-controlling interest
|
(43,927
|
)
|
(1,044
|
)
|
||||
Small company deduction
|
0
|
(591,074
|
)
|
|||||
Dividend received deduction
|
(170,690
|
)
|
(90,698
|
)
|
||||
Tax rate change
|
0
|
(1,488,646
|
)
|
|||||
Other
|
655,509
|
(492,695
|
)
|
|||||
Income tax expense (benefit)
|
$
|
3,907,536
|
$
|
(1,507,016
|
)
|
2018
|
2017
|
|||||||
Investments
|
$
|
6,939,758
|
$
|
8,166,343
|
||||
Cost of insurance acquired
|
1,180,668
|
1,349,941
|
||||||
Management/consulting fees
|
(15,724
|
)
|
(27,202
|
)
|
||||
Future policy benefits
|
(1,670,814
|
)
|
281,576
|
|||||
Deferred gain on sale of subsidiary
|
1,387,490
|
1,387,490
|
||||||
Other assets (liabilities)
|
65,573
|
59,095
|
||||||
Reserves adjustment
|
1,426,205
|
0
|
||||||
Federal tax DAC
|
(199,676
|
)
|
(220,839
|
)
|
||||
Deferred tax liability
|
$
|
9,113,480
|
$
|
10,996,404
|
Instrument
|
Issue Date
|
Maturity Date
|
Revolving Credit Limit
|
December 31, 2017
|
Borrowings
|
Repayments
|
December 31, 2018
|
|||||||||||||||
Lines of Credit:
|
||||||||||||||||||||||
UTG
|
11/20/2013
|
11/20/2019
|
$
|
8,000,000
|
$
|
0
|
0
|
0
|
$
|
0
|
||||||||||||
UG
|
6/2/2015
|
5/10/2019
|
10,000,000
|
0
|
0
|
0
|
0
|
Total Funding
Commitment
|
Unfunded
Commitment
|
|||||||
RLF III, LLC
|
$
|
4,000,000
|
$
|
398,120
|
||||
Sovereign’s Capital, LP Fund I
|
500,000
|
24,493
|
||||||
Sovereign's Capital, LP Fund II
|
1,000,000
|
240,566
|
||||||
Sovereign's Capital, LP Fund III
|
1,000,000
|
900,000
|
||||||
Master Mineral Holdings III, LP
|
4,000,000
|
1,700,000
|
||||||
Barton Springs Music, LLC
|
2,000,000
|
1,158,500
|
2018
|
2017
|
||
Basic weighted average shares outstanding
|
3,307,448
|
3,346,774
|
|
Weighted average dilutive options outstanding
|
0
|
0
|
|
Diluted weighted average shares outstanding
|
3,307,448
|
3,346,774
|
2018
|
2017
|
|||||||
Net income (loss)
|
$
|
6,166,411
|
$
|
5,356,483
|
||||
Capital and surplus
|
60,024,931
|
54,717,987
|
2018
|
2017
|
|||||||
Interest
|
$
|
0
|
$
|
0
|
||||
Federal income tax
|
1,592,000
|
165,000
|
Randall L. Attkisson
|
Committee Chairman
|
Joseph A. Brinck, II
|
|
Thomas E. Harmon
|
|
Gabriel J. Molnar
|
Name, Age
|
Position with the Company, Business Experience and Other Directorships
|
Randall L. Attkisson, 73
|
Director of UTG since 1999; Director of First Southern Bancorp, Inc., a bank holding company, since 1986; Board Chairman of Metro
Leadership Foundation since 2014; and Partner of Bluegrass Financial Holdings Subs/Affiliates since 2008.
|
Joseph A. Brinck, II, 63
|
Director of UTG since 2003; CEO of Stelter & Brinck, LTD, a full service combustion engineering and manufacturing company from
1983 to present; Salesman at Stelter & Brinck, LTD from 1979 to 1983; President of Superior Thermal, LTD from 1990 to present; President of Sanctity of Life Foundation since 2001 and Vice President of Ruah Woods Ministry since 2009.
|
Jesse T. Correll, 62
|
Chairman and CEO of UTG and Universal Guaranty Life Insurance Company since 2000; Director of UTG since 1999; Chairman, President of
First Southern Bancorp, Inc. since 1988; CEO of First Southern Bancorp, Inc. from 1988-2016; Manager and President of First Southern Funding, LLC since 1992; President, Director of The River Foundation since 1990; Board member of Crown
Financial Ministries from 2004 to 2009; Friends of the Good Samaritans since 2005; Generous Giving from 2006 to 2009 and the National Christian Foundation since 2006.
|
Preston H. Correll, 38
|
Founder of Marksbury Farm Market based in Bryantsville, Kentucky. He also owns and operates St. Asaph Farm in Stanford, Kentucky and
focuses on sustainable farming and raising natural meat. He spent a year and a half in India working with the Good Samaritans ministry and now serves on the board of the Friends of the Good Samaritans. Director of UTG, Inc. since December
2018.
|
John M. Cortines, 30
|
Chief Operating Officer of Generous Giving. A native of Texas, John began his career as a Petroleum Engineer, most recently with
Chevron. While studying at Harvard Business School, John began a journey of discovery on the intersection of faith and wealth which culminated in a decision to leave behind a lucrative post-MBA job to work, speak, and write full-time on
generosity. Director of UTG, Inc. since December 2018.
|
Thomas F Darden, II, 64
|
Founder and CEO of Cherokee, and investment company that invests in both private equity and venture capital. Beginning in 1984 Mr.
Darden served for 16 years as the Chairman of Cherokee Sanford Group, a brick manufacturing and soil remediation company. From 1981 to 1983 he was a consultant with Bain & Company in Boston. From 1977 to 1978 he worked as an
environmental planner for the Korea Institute of Science and Technology in Seoul, where he was a Henry Luce Foundation Scholar. Mr. Darden is on the Boards of Shaw University, the Institute for the Environment at the University of North
Carolina and the Board of Governors of the Research Triangle Institute. Mr. Darden Earned a Masters in Regional Planning from the University of North Carolina, a Juris Doctor from the Yale Law School and a Bachelor of Arts from the
University of North Carolina where he was a Morehead Scholar. Director of UTG, Inc. since June 2018.
|
Howard L. Dayton, Jr., 75
|
In 1985, Mr. Dayton founded Crown Ministries in Longwood, Florida. Crown Ministries merged with Christian Financial Concepts in
September 2000 to form Crown Financial Ministries, the world’s largest financial ministry. He served as Chief Executive Officer from 1985 to 2007 and in 2009 founded Compass - Finances God’s Way. Mr. Dayton is a graduate of Cornell
University. He developed The Caboose, a successful railroad-themed restaurant in Orlando, FL in 1969. In 1972 he began his commercial real estate development career, specializing in office development in the Central Florida area. He has
authored five popular small group studies, produced several video series, and was the host for the nationally syndicated radio programs MoneyWise
and HeyHoward. Asbury University named their business school the Howard Dayton School of Business. Mr. Dayton became a
Director of UTG, Inc. in December 2005.
|
Thomas E. Harmon, 64
|
Director of UTG and Universal Guaranty Life Insurance Company since March 2016. Mr. Harmon is the owner and President of Harmon
Foods, Inc., a chain of retail supermarkets, for the past 40 years. Mr. Harmon has been active in many charitable organizations over the years, most recently serving as a Board Member with Amigos En Cristo Ministries, an organization
serving one of the most disadvantaged parts of the world – Juarez, Mexico.
|
Gabriel J. Molnar, 32
|
Director of UTG, Inc. since June 2017; CFO of Capstone Realty, Inc. since 2014; Analyst for Procter & Gamble in 2013; Sr.
Associate for Price Waterhouse Coopers from 2009 to 2012. Currently holds a CPA license, in addition to a real estate sales license in Kentucky.
|
Peter L. Ochs, 67
|
Mr. Ochs is founder of Capital III, a private equity investment firm located in Wichita, Kansas. Capital III provides impact
investment capital and management with investments in manufacturing, real estate, energy, and education with a geographical focus on the US and Latin America. Prior to founding Capital III, Mr. Ochs spent 8 years in the commercial banking
industry. Mr. Ochs graduated from the University of Kansas with a degree in business and finance. He currently serves on the boards of UTG, Inc., the American Independence Funds, and Trinity Academy.
|
James P. Rousey, 60
|
President of UTG and Universal Guaranty Life Insurance Company since September 2006; Director of UTG and Universal Guaranty Life
Insurance Company since September 2001; Chief Executive Officer of First Southern Bancorp, Inc. since 2016; Chair of ACLI Forum 500 from 2015-2016; Member of Board of Governors of ACLI from November 2014 to November 2017; Regional CEO and
Director of First Southern National Bank from 1988 to 2001. Board Member with the Illinois Fellowship of Christian Athletes from 2001-2005; Board Member with Contact Ministries from 2007-2011; Board Member with Amigos En Cristo, Inc. from
2007-2009; Advisory Board Member with Natalie’s Sister since January 2018.
|
Jesse T. Correll
|
Chairman of the Board and Chief Executive Officer
|
James P. Rousey
|
President
|
Name, Age
|
Position with UTG and Business Experience
|
Theodore C. Miller, 56
|
Corporate Secretary of UTG, Inc. and Universal Guaranty Life Insurance Company since December 2000; Senior Vice President and Chief
Financial Officer since July 1997; Vice President since October 1992 and Treasurer from October 1992 to December 2003; Vice President and Controller of certain affiliated companies from 1984 to 1992; Vice President and Treasurer of certain
affiliated companies from 1992 to 1997; Senior Vice President and Chief Financial Officer of subsidiary companies since 1997; Corporate Secretary of subsidiary companies since 2000; and Chief Financial Officer and Corporate Secretary of
First Southern Bancorp, Inc. and First Southern National Bank since 2016.
|
Douglas P. Ditto, 63
|
Vice President of UTG, Inc. and Universal Guaranty Life Insurance Company since June 2009; Chief Investment Officer from 2009 to
2012; Assistant Vice President from June 2003 to June 2009; Executive Vice President of First Southern Bancorp, Inc. since March 1985.
|
Name and Principal position
|
Year
|
Salary
|
Bonus
|
Stock Awards (2)
|
All Other Compensation
|
Total
|
|||||||||||||||||||
Jesse T. Correll
Chief Executive Officer
|
2018
|
$
|
176,250
|
$
|
0
|
$
|
140,000
|
$
|
6,386
|
(1
|
)
|
$
|
322,636
|
||||||||||||
2017
|
$
|
175,000
|
$
|
0
|
$
|
109,988
|
$
|
7,000
|
(1
|
)
|
$
|
291,988
|
|||||||||||||
James P. Rousey
President
|
2018
|
$
|
95,000
|
$
|
115,000
|
$
|
0
|
$
|
1,912
|
(1
|
)
|
$
|
211,912
|
||||||||||||
2017
|
$
|
190,000
|
$
|
90,000
|
$
|
0
|
$
|
3,990
|
(1
|
)
|
$
|
283,990
|
|||||||||||||
Douglas P. Ditto
Vice President
|
2018
|
$
|
138,750
|
$
|
0
|
$
|
90,000
|
$
|
5,420
|
(1
|
)
|
$
|
234,170
|
||||||||||||
2017
|
$
|
127,308
|
$
|
0
|
$
|
70,000
|
$
|
5,092
|
(1
|
)
|
$
|
202,400
|
(1)
|
All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan.
|
(2)
|
Stock awards in the form of an annual bonus of 9,200 and 10,285 shares were issued in 2018 and 2017 respectively.
|
Name
|
Fees Earned or Paid in Cash
|
Stock Awards
(2)
|
All Other Compensation
(1)
|
Total
|
||||||||||||
Jesse T. Correll Chief Executive Officer
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||
James P. Rousey President
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||
Randall L. Attkisson Director
|
$
|
0
|
$
|
15,000
|
$
|
0
|
$
|
15,000
|
||||||||
Joseph A. Brinck, II Director (3)
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||
Preston H. Correll Director
|
$
|
0
|
$
|
5,000
|
$
|
0
|
$
|
5,000
|
||||||||
John M. Cortines Director
|
$
|
0
|
$
|
5,000
|
$
|
0
|
$
|
5,000
|
||||||||
Brian J. Crall Director
Until June 2018
|
$
|
0
|
$
|
5,000
|
$
|
109,000
|
$
|
114,000
|
||||||||
Thomas F. Darden II Director
|
$
|
0
|
$
|
10,000
|
$
|
0
|
$
|
10,000
|
||||||||
Howard L. Dayton Director
|
$
|
0
|
$
|
15,000
|
$
|
7,500
|
$
|
22,500
|
||||||||
Thomas E. Harmon Director
|
$
|
0
|
$
|
15,000
|
$
|
0
|
$
|
15,000
|
||||||||
Gabriel J. Molnar Director
|
$
|
0
|
$
|
15,000
|
$
|
0
|
$
|
15,000
|
||||||||
Peter L. Ochs Director
|
$
|
0
|
$
|
12,500
|
$
|
0
|
$
|
12,500
|
Title
|
Amount
|
Percent
|
|
of
|
Name and Address
|
and Nature of
|
Of
|
Class
|
of Beneficial Owner (2)
|
Beneficial Ownership
|
Class (1)
|
Common
|
Jesse T. Correll
|
127,577
|
(3)(6)
|
3.9%
|
Stock, no
|
First Southern Bancorp, Inc.
|
1,406,785
|
(3)(4)(6)
|
42.6%
|
par value
|
First Southern Funding, LLC
|
346,032
|
(3)(4)(6)(7)
|
10.5%
|
First Southern Holdings, LLC
|
1,201,876
|
(3)(4)(6)
|
36.4%
|
|
Estate of Ward F. Correll
|
271,059
|
(5)(6)
|
8.2%
|
|
WCorrell, Limited Partnership
|
72,750
|
(3)(6)
|
2.2%
|
|
Cumberland Lake Shell, Inc.
|
257,501
|
(5)(6)
|
7.8%
|
(1) The percentage of shares owned is based on 3,299,925 shares of Common Stock outstanding as of February 28, 2019.
|
(2) The address for each of Jesse Correll, First Southern Bancorp, Inc. (“FSBI”), First Southern Funding, LLC (“FSF”), First Southern
Holdings, LLC (“FSH”), and WCorrell, Limited Partnership (“WCorrell LP”), is 205 North Depot Street, Stanford, Kentucky 40484. The address for the Estate of Ward F. Correll is P O Box 328, 99 Lancaster Street, Stanford, KY 40484 and
Cumberland Lake Shell, Inc. (“CLS”) is P.O. Box 430, 150 Railroad Drive, Somerset, Kentucky 42502. The majority of the shares of CLS are owned by the Estate of Ward F. Correll.
|
(3) The share ownership of Jesse Correll listed includes 54,827 shares of Common Stock owned by him individually. The share
ownership of Mr. Correll also includes 72,750 shares of Common Stock held by WCorrell, Limited Partnership, a limited partnership in which Jesse Correll serves as managing general partner and as such, has sole voting and dispositive power
over the shares held by the entity.
In addition, by virtue of his ownership of voting securities of FSF and FSBI, and in turn, their ownership of 100% of the outstanding
membership interests of FSH (the holder of 1,201,876 shares of Common Stock), Mr. Correll may be deemed to beneficially own the total number of shares of Common Stock owned by FSH, and may be deemed to share with FSH the right to vote and
to dispose of such shares. Mr. Correll owns approximately 71% of the outstanding membership interests of FSF; he owns directly approximately 45%, companies he controls own approximately 15%, and he has the power to vote but does not own an
additional 2% of the outstanding voting stock of FSBI. FSBI and FSF in turn own 99% and 1%, respectively, of the outstanding membership interests of FSH.
|
(4) The share ownership of FSBI consists of 204,909 shares of Common Stock held by FSBI directly and 1,201,876 shares of Common Stock
held by FSH of which FSBI is a 99% member and FSF is a 1% member. As a result, FSBI may be deemed to share the voting and dispositive power over the shares held by FSH.
|
(5) Includes 257,501 shares of Common Stock held by CLS, of which outstanding voting shares are owned by the Estate of Ward F.
Correll.
|
(6) According to the Schedule 13D, as amended, filed November 21, 2018, Jesse Correll, FSBI, FSF and FSH, have agreed in principle to
act together for the purpose of acquiring or holding equity securities of UTG. In addition, because of their relationship with these Reporting Persons, the Estate of Ward F. Correll, Kirk Correll, Cumberland Lake Shell, Inc. and WCorrell
Limited Partnership may also be deemed to be members of this group. Therefore, each may be deemed to have acquired beneficial ownership of the equity securities of UTG beneficially owned by each of the Reporting Persons.
|
(7) Includes 4,035 shares in street name.
|
Title of
|
Name and Address of
|
Amount and Nature of
|
Percent of
|
Class
|
Beneficial Owner
|
Beneficial Ownership
|
Class (1)
|
UTG’s
|
Randall L. Attkisson
|
Louisville, KY
|
3,953
|
*
|
|
Common
|
Joseph A. Brinck, II
|
Cincinnati, OH
|
15,021
|
*
|
|
Stock, no
|
Jesse T. Correll
|
Stanford, KY
|
2,151,453
|
(2)
|
65.2%
|
Par value
|
Preston H. Correll
|
Stanford, KY
|
153
|
*
|
|
John M. Cortines
|
Oviedo, FL
|
153
|
*
|
||
Thomas F. Darden, II
|
Raleigh, NC
|
60,772
|
1.8%
|
||
Howard L. Dayton, Jr.
|
Sanford, FL
|
8,471
|
(3)
|
*
|
|
Douglas P. Ditto
|
Danville, KY
|
27,885
|
(4)
|
*
|
|
Thomas E. Harmon
|
Springfield, IL
|
1,410
|
*
|
||
Theodore C. Miller
|
Stanford, KY
|
12,292
|
*
|
||
Gabriel J. Molnar
|
Louisville, KY
|
741
|
*
|
||
Peter L. Ochs
|
Valley Center, KS
|
5,545
|
(5)
|
*
|
|
James P. Rousey
|
Hustonville, KY
|
10,515
|
(6)
|
*
|
|
All Directors and executive officers as a group (eleven in number)
|
2,300,380
|
69.6%
|
(1) The percentage of outstanding shares for UTG is based on 3,299,925 shares of Common Stock outstanding as of February 28, 2019.
|
(2) The share ownership of Mr. Jesse Correll includes 54,827 shares of Common Stock owned by him individually, 204,909 shares of
Common Stock held by FSBI and 346,032 shares of Common Stock owned by FSF. The share ownership of Mr. Correll also includes 72,750 shares of Common Stock held by WCorrell, Limited Partnership, a limited partnership in which Mr. Correll
serves as managing general partner. Mr. Correll has sole voting and dispositive power over the shares held by these entities. In addition, by virtue of his ownership of voting securities of FSF and FSBI, and in turn, their ownership of
100% of the outstanding membership interests of FSH (the holder of 1,201,876 shares of Common Stock), Mr. Correll may be deemed to beneficially own the total number of shares of Common Stock owned by FSH, and may be deemed to share with FSH
the right to vote and to dispose of such shares. Mr. Correll owns approximately 71% of the outstanding membership interests of FSF; he owns directly approximately 45%, companies he controls own approximately 15%, and he has the power to
vote but does not own an additional 2% of the outstanding voting stock of FSBI. FSBI and FSF in turn own 99% and 1%, respectively, of the outstanding membership interests of FSH.
On July 14, 2016, Jesse T Correll was qualified as co-executor of the Estate of Ward F Correll who died April 21, 2016. The share
ownership of Mr. Correll also included 13,558 shares of Common Stock held by the Estate of Ward F. Correll and 257,501 shares of Common Stock held by Cumberland Lake Shell, Inc.
|
(3) Includes 473 shares held in street name.
|
(4) Includes 1,600 shares held in a retirement account and 800 shares in street name.
|
(5) Includes 2,000 shares held in a trust for benefit of named individual.
|
(6) Includes 2,077 shares held in street name.
|
(a)
|
The following documents are filed as a part of the report:
|
(1)
|
Financial Statements:
|
Included in Part II, Item 8 of this Report.
|
|
(2)
|
Financial Statement Schedules
|
The financial statement schedules have been omitted as they are deemed inapplicable or not required by Regulation S-X.
|
(a)(3) & (b)
|
Exhibits
The following are exhibits to this report, and if incorporated by reference, we have indicated the document previously filed with the
SEC in which the exhibit was included:
|
Exhibit
Number
|
Description
|
3.1
|
Certificate of Incorporation of the Registrant and all amendments thereto [Incorporated by
reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 3.1].
|
3.2
|
By-Laws for the Registrant and all amendments thereto [Incorporated by reference to the Registrant’s form 10-K,
for the year ended December 31, 2013 originally filed as Exhibit 3.2].
|
4.1
|
UTG’s Agreement pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K with respect to long-term debt instruments [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 4.1].
|
10.1
|
Amendment to Reinsurance Agreement between Universal Guaranty Life Insurance Company and Optimum Re Insurance Company originally with Business Men’s Assurance Company of America. [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2015 originally filed as Exhibit 10.2].
|
10.2
|
Reinsurance Agreement between Universal Guaranty Life Insurance Company and Swiss RE originally with Life Reassurance Corporation of America. [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2015 originally filed as Exhibit 10.3].
|
10.3
|
Assumption Reinsurance Agreement between Universal Guaranty Life Insurance Company and Park Avenue Life Insurance Company formerly known as First International Life Insurance Company. [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2015 originally filed as Exhibit 10.4].
|
10.5
|
Commercial pledge agreement dated November 20, 2012, between UTG, Inc. and Illinois National Bank.
[Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2012 originally filed as Exhibit 10.20].
|
10.6
|
Administrative Services and Cost Sharing Agreement dated as of January 1, 2007 between UTG, Inc. and Universal Guaranty Life Insurance Company [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 10.11].
|
10.7
|
Agreement regarding Mortgage Loans by and between First Southern National Bank and Universal Guaranty Life Insurance Company [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 10.12].
|
10.8
|
Universal Guaranty Participation Agreement-Purchased Loan [Incorporated by reference to the
Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 10.13].
|
10.9
|
Universal Guaranty Participation Agreement-Originated Loan [Incorporated by reference to the
Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 10.14].
|
10.10
|
Management Data, Inc. Software License Agreement [Incorporated by reference to the Registrant’s form
10-K, for the year ended December 31, 2014 originally filed as Exhibit 10.16].
|
10.12
|
Aircraft Joint Ownership Agreement by and among Bandyco, LLC, First Southern National Bank and UTG, Inc. dated August 11, 2014 [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2014 originally filed as Exhibit 10.18].
|
10.13*
|
Promissory Note dated November 20, 2018, between UTG, Inc. and Illinois National Bank.
|
10.14
|
Shared Services Agreement between UTG, Inc. and FSNB effective January 1, 2017.
|
10.15*
|
Amendment #1 to the Shared Services Agreement between UTG, Inc. and FSNB effective January 1, 2018
|
10.16*
|
Amendment #2 to the Shared Services Agreement between UTG, Inc. and FSNB effective September 1, 2018.
|
10.17*
|
Amendment #3 to the Shared Services Agreement between UTG, Inc. and FSNB effective January 1, 2019.
|
14.1
|
Code of Ethics and Business Conduct [Incorporated by reference to the Registrant’s form 10-K, for the
year ended December 31, 2013 originally filed as Exhibit 14.1].
|
14.2
|
Code of Ethical Conduct for Senior Financial Officers [Incorporated by reference to the Registrant’s
form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 14.2].
|
*21.1
|
List of Subsidiaries of the Registrant.
|
*31.1
|
Certificate 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
|
Certificate 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.
|
*99.1
|
|
99.2
|
Whistleblower Policy [Incorporated by reference to the Registrant’s form 10-K, for the year ended
December 31, 2013 originally filed as Exhibit 99.2].
|
99.3
|
Compensation Committee Charter. [Incorporated by reference to the Registrant’s form 10-K, for
the year ended December 31, 2015 originally filed as Exhibit 99.3].
|
99.4
|
Investment Committee Charter. [Incorporated by reference to the Registrant’s form 10-K, for the
year ended December 31, 2015 originally filed as Exhibit 99.4].
|
*101
|
Interactive Data File
|
UTG, Inc.
|
||||||||
By:
|
/s/ Jesse T. Correll
|
|||||||
Jesse T. Correll
|
||||||||
Chairman and Chief Executive Officer and Director
|
||||||||
By:
|
/s/ Theodore C. Miller
|
|||||||
Theodore C. Miller
|
||||||||
Senior Vice President, Chief Financial Officer and Secretary
|
||||||||
(principal financial and accounting officer)
|
By: /s/ Randall L. Attkisson
|
By: /s/ Howard L. Dayton
|
|
Randall L. Attkisson
Director
|
Howard L. Dayton
Director
|
|
By:
|
By: /s/ Thomas E. Harmon
|
|
Joseph A. Brinck
Director
|
Thomas E. Harmon
Director
|
|
By: /s/ Jesse T. Correll
|
By: /s/ Gabriel J. Molnar
|
|
Jesse T. Correll
Chairman of the Board, Chief Executive Officer and Director
|
Gabriel J. Molnar
Director
|
|
By: /s/ Preston H. Correll
|
By: /s/ Peter L. Ochs
|
|
Preston H. Correll
Director
|
Peter L. Ochs
Director
|
|
By: /s/ John M. Cortines
|
By: /s/ James P. Rousey
|
|
John M. Cortines
Director
|
James P. Rousey
President and Director
|
|
By: /s/ Thomas F. Darden II
|
By: /s/ Theodore C. Miller
|
|
Thomas F. Darden II
Director
|
Theodore C. Miller
Corporate Secretary and Chief Financial Officer
|