SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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

For the quarterly period ended June 30, ~~2020~~2021

For the transition period from _____________ to ____________

Commission File No. ~~0-16867~~000-16867

~~Registrant's~~Registrant’s telephone number, including area code: (217) 241-6300

Common Stock, stated value $.001 per share

Non-accelerated filer □

Smaller reporting company ⌧☒

Emerging growth company □☐

PART II. Other Information

Part 1. Financial Information.

Item 1. Financial Statements.

UTG, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

		June 30, 2020		December 31, 2019*			June 30, 2021		December 31, 2020*
ASSETS	ASSETS					ASSETS
Investments:
Investments available for sale:
Fixed maturities, at fair value (amortized cost $157,032,450 and $159,959,855)		$	176,585,699	$	171,629,373
Equity securities, at fair value (cost $31,796,340 and $32,578,862)			66,141,108		78,661,793
Fixed maturities, at fair value (amortized cost $131,085,585 and $146,017,864)							$	146,250,065	$	165,779,997
Equity securities, at fair value (cost $61,058,683 and $36,833,795)								121,154,900		78,075,187
Equity securities, at cost			14,417,247		10,919,247			14,543,343		14,389,189
Mortgage loans on real estate at amortized cost			13,097,827		8,223,286			13,985,960		20,802,365
Investment real estate			40,725,963		44,344,236			35,298,846		38,086,391
Notes receivable			19,654,162		19,487,458			23,100,967		17,682,296
Policy loans			8,709,100		8,803,876			8,483,130		8,590,524
Short-term investments			12,435,481		10,442,173
Total investments			351,766,587		352,511,442			362,817,211		343,405,949

Cash and cash equivalents			29,317,455		28,787,629			30,980,881		39,025,754
Accrued investment income			1,528,217		1,679,783			1,326,810		1,341,643
Reinsurance receivables:
Future policy benefits			25,437,203		25,655,161			25,043,878		25,267,920
Policy claims and other benefits			3,713,563		4,142,142			3,965,697		3,988,088
Cost of insurance acquired			4,473,896		4,846,321			3,743,626		4,101,471
Property and equipment, net of accumulated depreciation			387,828		427,736			310,322		348,170
Income tax receivable								803,265		0
Other assets			686,497		695,517			652,821		1,577,098
Total assets		$	417,311,246	$	418,745,731		$	429,644,511	$	419,056,093

LIABILITIES AND SHAREHOLDERS' EQUITY	LIABILITIES AND SHAREHOLDERS' EQUITY					LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Policy liabilities and accruals:
Future policyholder benefits		$	246,166,152	$	249,264,308		$	239,471,396	$	243,990,881
Policy claims and benefits payable			3,438,766		3,631,666			4,588,575		4,169,569
Other policyholder funds			409,612		404,177			353,451		365,761
Dividend and endowment accumulations			14,705,726		14,626,475			14,745,229		14,836,158
Income taxes payable			785,981		313,662			0		268,497
Deferred income taxes			11,552,261		13,222,604			15,960,900		12,995,714
Trading securities, at fair value (proceeds $652 and $11,246)								675		12,219
Other liabilities			6,081,601		5,785,933			5,059,652		5,275,803
Total liabilities			283,140,099		287,248,825			280,179,878		281,914,602

Shareholders' equity:
Common stock - no par value, stated value $0.001 per share. Authorized 7,000,000 shares - 3,270,515 and 3,277,830 shares outstanding			3,272		3,279
Common stock - 0 par value, stated value $0.001 per share. Authorized 7,000,000 shares - 3,173,009 and 3,175,564 shares outstanding								3,174		3,176
Additional paid-in capital			35,780,640		36,012,401			32,956,587		33,025,018
Retained earnings			82,712,737		85,979,678			104,035,750		88,068,284
Accumulated other comprehensive income			15,085,110		8,977,914			11,952,095		15,584,241
Total UTG shareholders' equity			133,581,759		130,973,272			148,947,606		136,680,719
Noncontrolling interests			589,388		523,634			517,027		460,772
Total shareholders' equity			134,171,147		131,496,906			149,464,633		137,141,491
Total liabilities and shareholders' equity		$	417,311,246	$	418,745,731		$	429,644,511	$	419,056,093

* Balance sheet audited at December 31, ~~2019~~.2020.

See accompanying notes.

Condensed Consolidated Statements of Operations (Unaudited)

See accompanying notes.

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

See accompanying notes.

Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity (Unaudited)

Comprehensive Income

See accompanying notes.

Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity (Unaudited)

Comprehensive Income

See accompanying notes.

Condensed Consolidated Statements of Cash Flows (Unaudited)

See accompanying notes.

Notes to Condensed Consolidated Financial Statements

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of ~~December 31, 2019~~,June 30, 2021, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods. The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020. The Company’s results of operations for the three and six months endedJune 30, ~~2020~~2021are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020~~ 2021 or for any other future period.

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

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, ~~2020~~,2021, Mr. Correll owns or controls directly and indirectly approximately ~~65.78%~~65.02% of UTG’s outstanding stock.

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

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

Note 2 – Recently Issued Accounting Standards

During the six months ended June 30, ~~2020~~,2021, there were no additions to or changes in the critical accounting policies disclosed in the ~~2019~~2020 Form 10-K.

Note 3 – Investments

Available for Sale Securities – Fixed Maturity Securities

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

Investments in available for sale securities are summarized as follows:

June 30, 2020 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities $ 44,793,626 $ 1,614,309 $ - $ 46,407,935
U.S. special revenue and assessments 14,361,765 1,524,448 - 15,886,213
All other corporate bonds 97,877,059 16,414,492 - 114,291,551
$ 157,032,450 $ 19,553,249 $ - $ 176,585,699

December 31, 2019	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2021										Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529	)	$	36,128,743	$	23,274,044	$	683,042	$	0	$	23,957,086
U.S. special revenue and assessments		14,371,263		832,100		-			15,203,363		11,546,895		1,013,220		0		12,560,115
All other corporate bonds		109,827,152		10,470,115		-			120,297,267		96,264,646		13,468,218		0		109,732,864
	$	159,959,855	$	11,705,047	$	(35,529	)	$	171,629,373	$	131,085,585	$	15,164,480	$	0	$	146,250,065

December 31, 2020	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	36,285,535	$	1,186,999	$	0		$	37,472,534
U.S. special revenue and assessments		11,556,980		1,382,164		0			12,939,144
All other corporate bonds		98,175,349		17,604,617		(411,647	)		115,368,319
	$	146,017,864	$	20,173,780	$	(411,647	)	$	165,779,997

The amortized cost and estimated market value of debt securities at June 30, ~~2020~~,2021, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale
June 30, 2020
Amortized Cost Fair Value
Due in one year or less $ 23,776,809 $ 24,205,154
Due after one year through five years 46,399,814 49,609,973
Due after five years through ten years 34,654,588 39,465,754
Due after ten years 25,468,466 30,241,655
Fixed maturities with no single maturity date 26,732,773 33,063,163
Total $ 157,032,450 $ 176,585,699

Fixed Maturities Available for Sale June 30, 2021	Amortized Cost		Fair Value
Due in one year or less	$	13,537,448	$	13,702,990
Due after one year through five years		42,747,908		45,774,071
Due after five years through ten years		25,688,722		29,045,145
Due after ten years		22,246,160		25,789,400
Fixed maturities with no single maturity date		26,865,347		31,938,459
Total	$	131,085,585	$	146,250,065

The fair value of investments with sustained gross unrealized losses at ~~June 30, 2020~~ ~~and~~ ~~December 31, 2019~~are as follows:

~~June 30, 2020~~

~~Less than 12 months~~

~~12 months or longer~~

~~Total~~

~~Fair value~~

~~Unrealized losses~~

~~Fair value~~

~~Unrealized losses~~

~~Fair value~~

~~Unrealized losses~~

~~All other corporate bonds~~

~~Total fixed maturities~~

June 30, 2021	Less than 12 months					12 months or longer				Total
	Fair value			Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
All other corporate bonds		$	0		0		0		0		0		$	0
Total fixed maturities		$	0		0		0		0		0		$	0

December 31, 2019 Less than 12 months 12 months or longer Total
Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses
U.S. Government and govt. agencies and authorities $ 6,059,380 (35,529 ) - - 6,059,380 $ (35,529 )
Total fixed maturities $ 6,059,380 (35,529 ) - - 6,059,380 $ (35,529 )

December 31, 2020	Less than 12 months						12 months or longer					Total
	Fair value			Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
All other corporate bonds		$	4,937		(63	)		0		(411,584	)		4,937		$	(411,647	)
Total fixed maturities		$	4,937		(63	)		0		(411,584	)		4,937		$	(411,647	)

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

	Less than 12 months	12 months or longer	Total	Less than 12 months		12 months or longer		Total
As of June 30, 2020
As of June 30, 2021
Fixed maturities	-	-	-		0		0		0
As of December 31, 2019
As of December 31, 2020
Fixed maturities	3	-	3		1		1		2

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

2020.

Net Investment Gains (Losses)

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

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Realized gains:
Sales of fixed maturities	$	11,732		$	101,633		$	403,215		$	116,688		$	34,236		$	11,732		$	34,236		$	403,215
Sales of equity securities		1,832,593			2,765,915			8,615,617			2,765,915			3,006,835			646,351			3,019,207			988,558
Sales of real estate		-			2,678,207			-			3,776,850			1,247,193			0			1,383,252			0
Other		-			-			-			-			0			0			0			0
Total realized gains		1,844,325			5,545,755			9,018,832			6,659,453			4,288,264			658,083			4,436,695			1,391,773
Realized losses:
Sales of fixed maturities		(64,992	)		(111,459	)		(64,992	)		(111,459	)		0			(64,992	)		0			(64,992	)
Sales of equity securities		-			-			-			-			(803	)		(2,571,937	)		(4,188	)		(3,422,627	)
Sales of real estate		-			-			-			-			0			0			0			0
Other-than-temporary impairments		-			-			-			-			(411,584	)		0			(411,584	)		0
Other		-			(132,518	)		-			(132,518	)		0			0			0			0
Total realized losses		(64,992	)		(243,977	)		(64,992	)		(243,977	)		(412,387	)		(2,636,929	)		(415,772	)		(3,487,619	)
Net realized investment gains (losses)		1,779,333			5,301,778			8,953,840			6,415,476			3,875,877			(1,978,846	)		4,020,923			(2,095,846	)
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		12,946,281			97,148			(11,738,163	)		14,884,779			195,136			16,704,460			20,375,015			(688,477	)
Change in fair value of equity securities		12,946,281			97,148			(11,738,163	)		14,884,779			195,136			16,704,460			20,375,015			(688,477	)
Net investment gains (losses)	$	14,725,614		$	5,398,926		$	(2,784,323	)	$	21,300,255		$	4,071,013		$	14,725,614		$	24,395,938		$	(2,784,323	)
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	6,595,986		$	3,925,070		$	8,068,851		$	8,859,921		$	2,505,067		$	6,595,986		$	(4,975,001	)	$	8,068,851
Net increase (decrease)	$	6,595,986		$	3,925,070		$	8,068,851		$	8,859,921		$	2,505,067		$	6,595,986		$	(4,975,001	)	$	8,068,851

Other-Than-Temporary Impairments

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary. The factors considered by Management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company’s intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates. If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Operations.

Management regularly reviews its real estate portfolio in comparison to appraisal valuations and current market conditions for indications of other-than-temporary impairments. If a decline in value is judged by Management to be other-than-temporary, a loss is recognized by a charge to other-than-temporary impairment losses in the Condensed Consolidated Statements of Operations.

The Company recognized an other-than-temporary impairment of $(411,584) on one fixed maturity security during the second quarter of 2021. The other-than-temporary impairment was recognized due to the length of time the investment remained in an unrealized loss position. The Company did not recognize any other-than-temporary impairments during the six month ~~periods~~period ended June 30, ~~2020~~ or ~~2019~~.2020.

Cost Method Investments

The Company held equity investments with an aggregate cost of $~~14,417,247~~$14,543,343 and $~~10,919,247~~$14,389,189 at June 30, ~~2020~~2021 and December 31, ~~2019~~,2020, respectively. These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments. Based on ~~Management's~~Management’s evaluation of the expected cash flow of the investments, and the ~~Company's~~Company’s ability and intent to hold the investments for a reasonable period of time, the Company does not deem an other-than-temporary impairment necessary at June 30, ~~2020~~.2021.

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, 2021 was $0 and $675, respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2020 was $0 and $12,219, 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:

	Three Months Ended
	June 30,
	2021		2020
Net unrealized gains (losses)	$	950	$	0
Net realized gains (losses)		18,304		0
Net unrealized and realized gains (losses)	$	19,254	$	0

	Six Months Ended
	June 30,
	2021			2020
Net unrealized gains (losses)	$	(1,784	)	$	0
Net realized gains (losses)		7,350			0
Net unrealized and realized gains (losses)	$	5,566		$	0

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 six months ended June 30, ~~2020~~2021 and ~~2019~~,2020, the Company acquired $~~5,098,138~~$747,941 and $~~4,014,455~~$5,098,138 in mortgage loans, respectively. FSNB services the majority of the Company’s mortgage loan portfolio. The Company pays FSNB a ~~.25%~~0.25% servicing fee on these loans and a one-time fee at loan origination of ~~.50%~~0.50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During ~~2020~~2021 and ~~2019~~,2020, the maximum and minimum lending rates for mortgage loans were:

	2020		2019		2021						2020
	Maximum rate	Minimum rate	Maximum rate	Minimum rate	Maximum rate			Minimum rate			Maximum rate			Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%		5.00	%		4.50	%		4.50	%		4.50	%
Commercial Loans	7.50%	4.24%	7.50%	4.82%		5.25	%		4.10	%		5.25	%		4.24	%
Residential Loans	5.50%	5.50%	8.00%	8.00%		4.95	%		4.95	%		4.95	%		4.95	%

Most mortgage loans are first position loans. Loans issued are generally limited to no more than 80% of the appraised value of the property.

The Company has in place a monitoring system to provide Management with information regarding potential troubled loans. Letters are sent to each mortgagee when the loan becomes 30 days or more delinquent. Management is provided with a monthly listing of loans that are 60 days or more past due along with a brief description of what steps are being taken to resolve the delinquency. All loans 90 days or more past due are placed on a non-performing status and classified as delinquent loans. Quarterly, coinciding with external financial reporting, the Company reviews each delinquent loan and determines how each delinquent loan should be classified. Management believes the current internal controls surrounding the mortgage loan selection process provide a quality portfolio with minimal risk of foreclosure and/or negative financial impact.

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers’ ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices. Interest accruals are analyzed based on the likelihood of repayment. In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

A mortgage loan reserve is established and adjusted based on ~~Management's~~Management’s quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value. The mortgage loan reserve was $0$0 at June 30, ~~2020~~2021 and December 31, ~~2019~~.2020.

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

	June 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
In good standing	$	13,097,827	$	8,223,286	$	11,905,187	$	18,704,351
Overdue interest over 90 days						2,080,773		2,098,014
Total mortgage loans	$	13,097,827	$	8,223,286	$	13,985,960	$	20,802,365

Investment Real Estate

~~Investment~~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~~held-for-investment for ~~sale is reported at~~impairment and tests for recoverability whenever events or changes in circumstances indicate the ~~lower of cost or fair~~carrying value less cost to sell. Investment Real estate acquired through foreclosure, consisting of properties obtained through foreclosure proceedings or acceptance of a deed in lieu of foreclosure, is reported on an individual asset basis atmay not be recoverable. During the ~~lower of cost or fair value, less disposal costs. Fair value is determined~~six months ended June 30, 2021, 0 impairments were recognized 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~~investment real estate.

Note 4 - Fair Value Measurements of the ~~loan balance at the time of foreclosure over~~Condensed Consolidated Financial Statements provides further information regarding the fair value of ~~the~~financial instruments that are not measured at fair value. The investment real estate ~~held as collateral~~owned by the Company is ~~recognized and charged to the Consolidated Statements of Operations. Based upon Management’s evaluation~~included in this portion of the Note 4 - Fair Value Measurements disclosure.

The following table provides an allocation of the Company’s investment real estate ~~acquired through foreclosure, additional expense is recorded when necessary in an amount sufficient to reflect any declines in estimated fair value.~~by type:

	June 30, 2021		December 31, 2020
Raw land	$	11,050,401	$	11,727,103
Commercial		2,710,224		3,530,064
Residential		3,279,519		2,797,648
Land, minerals and royalty interests		18,258,702		20,031,576
Total investment real estate	$	35,298,846	$	38,086,391

The ~~Company's~~Company’s investment real estate portfolio includes ~~ownerships~~ownership in oil and gas royalties. As of June 30, ~~2020~~2021 and December 31, ~~2019~~,2020, investments in oil and gas royalties represented ~~45%~~52% and ~~44%~~48%, respectively, of the total investment real estate portfolio. See Note 9 – Concentrations of Credit Risk of the Condensed Consolidated Financial Statements for additional information regarding the allocation of the oil and gas investment real estate holdings by industry type.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the six months ended June 30, ~~2020~~2021 and ~~2019~~,2020, the Company acquired $0$1,402,593 and $~~1,408,021~~$0 of investment real estate, respectively.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was $0.$0. Interest accruals are analyzed based on the likelihood of repayment. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. During the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 the Company acquired $~~3,500,000~~$6,000,000 and $~~7,528,188~~$3,500,000 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 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.

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.

~~Dung~~During the six months ended June 30, ~~2020~~2021 and ~~2019~~,2020, the Company acquired $~~6,000,000~~$0 and $0,$7,890,228, respectively, in short-term investments.

Note 4 – Fair Value Measurements

~~The Company measures its assets~~Fair Value Measurements on a Recurring Basis

Assets and liabilities recorded at fair value ~~on a recurring basis utilizing valuation techniques based upon observable~~in the Condensed Consolidated Balance Sheets are measured and ~~unobservable inputs. The framework establishes~~classified in accordance with a fair value hierarchy consisting of three levels based ~~upon~~on the ~~transparency~~observability of information used in measuring the fair value of assets or liabilities as of the measurement date. Observable inputs reflect market data obtained from independent sources and unobservable inputs reflect the Company’s expectations. The levels of the hierarchy are defined as follows:valuation inputs:

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

Level 2 – Valuation methodologies include quoted prices for similar assets and liabilities in active markets or quoted prices for identical, quoted prices for identical or similar assets or liabilities in markets that are not active, or the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability.

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

The following table presents ~~the fair value measurements of the Company’s~~information about assets and liabilities measured at fair value ~~in the Condensed Consolidated Balance Sheet~~ on a recurring basis asand indicates the level of ~~June 30, 2020~~ ~~and~~ ~~December 31, 2019~~.the fair value measurement based on the observability of the inputs used:

June 30, 2021	Level 1			Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	23,957,086		$	0	$	0	$	0	$	23,957,086
U.S. special revenue and assessments		0			12,560,115		0		0		12,560,115
Corporate securities		0			109,732,864		0		0		109,732,864
Total fixed maturities		23,957,086			122,292,979		0		0		146,250,065
Equity securities:
Common stocks		46,025,180			15,350,400		3,970,854		55,027,440		120,373,874
Preferred stocks		0			31,026		750,000		0		781,026
Total equity securities		46,025,180			15,381,426		4,720,854		55,027,440		121,154,900
Total financial assets	$	69,982,266		$	137,674,405	$	4,720,854	$	55,027,440	$	267,404,965

Liabilities
Trading securities	$	(675	)	$	0	$	0	$	0	$	(675	)

December 31, 2020	Level 1			Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	37,472,534		$	0	$	0	$	0	$	37,472,534
U.S. special revenue and assessments		0			12,939,144		0		0		12,939,144
Corporate securities		0			115,368,319		0		0		115,368,319
Total fixed maturities		37,472,534			128,307,463		0		0		165,779,997
Equity securities:
Common stocks		28,477,005			15,922,869		3,161,120		30,496,625		78,057,619
Preferred stocks		0			17,568		0		0		17,568
Total equity securities		28,477,005			15,940,437		3,161,120		30,496,625		78,075,187
Total financial assets	$	65,949,539		$	144,247,900	$	3,161,120	$	30,496,625	$	243,855,184

Liabilities
Trading securities	$	(12,219	)	$	0	$	0	$	0	$	(12,219	)

December 31, 2019 Level 1 Level 2 Level 3 Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities
$
36,128,743
$
-
$
- $ 36,128,743
U.S. special revenue and assessments - 15,203,363 - 15,203,363
Corporate securities - 120,297,267 - 120,297,267
Total fixed maturities 36,128,743 135,500,630 - 171,629,373
Equity securities:
Common stocks 29,888,281 14,258,750 34,514,762 78,661,793
Total equity securities 29,888,281 14,258,750 34,514,762 78,661,793
Total financial assets $ 66,017,024 $ 149,759,380 $ 34,514,762 $ 250,291,166

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. ~~The Company had~~ no ~~liabilities measured and reported at fair value as of~~ ~~June 30, 2020~~ ~~and~~ ~~December 31, 2019~~. There have been no significant changes in the valuation techniques utilized by the Company for the six months ended June 30, ~~2020~~.2021.

Available for Sale Securities

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

Equity Securities at Fair Value

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

~~The Level~~ 3 ~~securities include certain~~Equity Securities at Net Asset Value

Certain equity securities ~~with unobservable inputs. The Company computed~~carried at fair value, ofwhich do not have readily determinable fair values, use net asset value (“NAV”) and are excluded from the fair value hierarchy. These investments are generally not readily redeemable by the investee. See Note 7 – Commitments and Contingencies for additional information regarding unfunded commitments.

Trading Securities

Trading securities are recorded at fair value. They are classified as Level 3 ~~equity investments~~1 and utilize fair value measurements based ~~on a review of current financial information, earnings trends and similar companies~~upon quoted market prices.

Change in ~~the same industries.~~

Level 3 ~~Reconciliation~~

Recurring Fair Value Measurements

The following table ~~provides reconciliations for~~presents the changes in Level 3 assets and liabilities measured at fair value on a recurring ~~basis. Transfers into~~basis, and ~~out of~~the realized and unrealized gains (losses) related to the Level 3 ~~are recognized~~assets and liabilities.

	Equity Securities at Fair Value			Equity Securities at Net Asset Value		Total
Balance at December 31, 2020	$	3,161,120		$	30,496,625	$	33,657,745
Realized gains (losses)		756,307			0		756,307
Unrealized gains (losses)		(243,123	)		7,543,329		7,300,206
Purchases		1,802,857			16,987,486		18,790,343
Sales		(756,307	)		0		(756,307	)
Balance at June 30, 2021	$	4,720,854		$	55,027,440	$	59,748,294

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above. As a result, the unrealized gains (losses) on instruments held at June 30, 2021 and December 31, 2020 may include changes in fair value that were attributable to both observable and unobservable inputs.

Quantitative Information About Level 3 Fair Value Measurements

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

Financial Assets	Fair Value at June 30, 2021		Fair Value at December 31, 2020		Valuation Technique
Equities	$	55,027,440	$	30,496,625	Net Asset Value
Equities		4,720,854		3,161,120	Pricing Model
Total	$	59,748,294	$	33,657,745

Uncertainty of Fair Value Measurements

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

Fixed Maturities,
Available for Sale
Equity Securities Total
Balance at December 31, 2019 $ - $ 34,514,762 $ 34,514,762
Total unrealized gain or (losses):
Included in net income (loss) - (139,588 ) (139,588 )
Included in other comprehensive income - - -
Purchases - 3,082,007 3,082,007
Sales - (10,450,468 ) (10,450,468 )
Balance at June 30, 2020 $ - $ 27,006,713 $ 27,006,713

June 30, 2020 December 31, 2019
Change in fair value of equity securities included in net income (loss) relating to assets held
$
(139,588 )
$
6,461,670

reporting date.

Equity Securities at Fair Value

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

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

Investment Company	Fair Value at June 30, 2021		Unfunded Commitments		Redemption Frequency		Redemption Notice Period
Common Stocks
Growth Equity
Redeemable	$	29,081,716	$	0	Quarterly		45 days
Non-Redeemable		25,945,724		6,378,944		n/a		n/a
Total	$	55,027,440	$	6,378,944

Investment Company	Fair Value at December 31, 2020		Unfunded Commitments		Redemption Frequency		Redemption Notice Period
Common Stocks
Growth Equity
Redeemable	$	21,713,727	$	0	Quarterly		45 days
Non-Redeemable		8,782,898		6,856,072		n/a		n/a
Total	$	30,496,625	$	6,856,072

Fair Value Measurements on a Nonrecurring ~~Measurements~~Basis

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Condensed Consolidated Financial Statements. The Company did not recognize any re-measurements or impairments of financial instruments at June 30, 2021 or December 31, 2020.

Fair Value Information About Financial Instruments Not Measured at Fair Value

The following table presents the carrying ~~values~~amount and estimated fair values ~~of certain~~ of the Company’s financial instruments not ~~recorded~~measured at fair value inand indicates the ~~Consolidated Balance Sheets are shown below. Because~~level in the fair value ~~for all Consolidated Balance Sheet items are not required to be disclosed,~~hierarchy of the ~~aggregate~~estimated fair value ~~amounts presented below are not reflective~~measurement based on the observability of the ~~underlying value of the Company.~~inputs used:

	Carrying		Estimated								Carrying		Estimated
June 30, 2020	Amount		Fair Value		Level 1		Level 2		Level 3
Equity securities, at cost	$	14,417,247		14,417,247		-		-		14,417,247
June 30, 2021											Amount		Fair Value		Level 1		Level 2		Level 3
Common stock, at cost											$	5,860,000		5,860,000		0		0		5,860,000
Preferred stock, at cost												8,683,343		8,683,343		0		0		8,683,343
Mortgage loans on real estate		13,097,827		12,934,172		-		-		12,934,172		13,985,960		13,985,960		0		0		13,985,960
Investment real estate		40,725,963		85,158,424		-		-		85,158,424		35,298,846		80,069,238		0		0		80,069,238
Notes receivable		19,654,162		23,313,608		-		-		23,313,608		23,100,967		23,111,132		0		0		23,111,132
Policy loans		8,709,100		8,709,100		-		-		8,709,100		8,483,130		8,483,130		0		0		8,483,130
Short term investments		12,435,481		12,435,481		12,435,481		-		-
Cash and cash equivalents		29,317,455		29,317,455		29,317,455		-		-

	Carrying		Estimated								Carrying		Estimated
December 31, 2019	Amount		Fair Value		Level 1		Level 2		Level 3
Equity securities, at cost	$	10,919,247		10,919,247		-		-		10,919,247
December 31, 2020											Amount		Fair Value		Level 1		Level 2		Level 3
Common stock, at cost											$	5,860,000		5,860,000		0		0		5,860,000
Preferred stock, at cost												8,529,189		8,529,189		0		0		8,529,189
Mortgage loans on real estate		8,223,286		7,531,094		-		-		7,531,094		20,802,365		20,802,365		0		0		20,802,365
Investment real estate		44,344,236		85,158,424		-		-		85,158,424		38,086,391		82,689,332		0		0		82,689,332
Notes receivable		19,487,458		19,332,472		-		-		19,332,472		17,682,296		17,709,894		0		0		17,709,894
Policy loans		8,803,876		8,803,876		-		-		8,803,876		8,590,524		8,590,524		0		0		8,590,524
Short term investments		10,442,173		10,442,173		10,442,173		-		-
Cash and cash equivalents		28,787,629		28,787,629		28,787,629		-		-

The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange. The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts.

The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 3 within the fair value hierarchy.

A portion of the mortgage loans balance consists of discounted mortgage loans. The Company has historically purchased non-performing discounted mortgage loans at a deep discount through an auction process led by the Federal Government. In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company. Accordingly, the Company records its investment in the discounted loans at its original purchase price, which Management believes approximates fair value. The inputs used to measure the fair value of our discounted mortgage loans are classified as Level 3 within the fair value hierarchy.

Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell. The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by Management. The inputs used to measure the fair value of our investment real estate are classified as Level 3 within the fair value hierarchy.

The fair values of notes receivable are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of the notes receivable are classified as Level 3 within the fair value ~~hierarchy.~~

hierarchy.

Policy loans are carried at the aggregate unpaid principal balances in the Condensed Consolidated Balance Sheets which approximate fair value, and earn interest at rates ranging from 4% to 8%. Individual policy liabilities in all cases equal or exceed outstanding policy loan balances. The inputs used to measure the fair value of our policy loans are classified as Level 3 within the fair value hierarchy.

The carrying amount of cash and cash equivalents in the Condensed Consolidated Balance Sheets approximates fair value given the highly liquid nature of the instruments. The inputs used to measure the fair value of our cash and cash equivalents are classified as Level 1 within the fair value hierarchy.

The carrying amount of short term investments in the Condensed Consolidated Balance Sheets approximates fair value. The inputs used to measure the fair value of our short term investments are classified as Level 3 within the fair value hierarchy.

Note 5 – Credit Arrangements

Instrument Issue Date Maturity Date
Revolving
Credit Limit
December 31, 2019 Borrowings Repayments June 30, 2020
Lines of Credit:
UTG 11/20/2013 11/20/2020 $ 8,000,000 - - - -
UG 6/2/2015 5/7/2021 10,000,000 - - - -

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2020		Borrowings	Repayments	June 30, 2021
Lines of Credit:
UTG	11/20/2013	11/20/2021	$	8,000,000		0	0	0	$	0
UG	6/2/2015	5/6/2022		10,000,000		0	0	0		0

The UTG line of credit carries interest at a fixed rate of ~~4.040%~~3.750% and is payable ~~monthly~~.monthly. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.

During May of ~~2020,~~2021, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $~~12,549,410~~.

$12,129,569.

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~~UTG’s common stock. At a meeting of the Board of Directors in ~~June~~September of ~~2019,~~2020, the Board of Directors of UTG authorized the repurchase of up to an additional ~~$2.5~~$1.5 million of ~~UTG's~~UTG’s common stock, for a total repurchase of up to ~~$18.5~~$20 million of ~~UTG's~~UTG’s common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited. During the six months endedJune 30, ~~2020,~~2021, the Company repurchased ~~13,979~~8,849 shares through the stock repurchase program for ~~$450,057.~~$238,971. Through June 30, ~~2020,~~2021, UTG has spent ~~$15,223,153~~$18,325,220 in the acquisition of ~~1,183,337~~1,291,114 shares under this program.

During ~~2020~~,2021, the Company issued ~~6,664~~6,294 shares of stock to management and employees as compensation at a cost of $~~218,289~~.$170,538. 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 six months ended June 30, ~~2020~~2021 and ~~2019~~,2020, diluted earnings per share were the same as basic earnings per share since the Company had no0 dilutive instruments outstanding.

Note 7 – Commitments and Contingencies

The insurance industry has experienced a number of civil jury verdicts which have been returned against life and health insurers in the jurisdictions in which the Company does business involving the ~~insurers'~~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~~insurer’s financial strength. Mandatory assessments may be partially recovered through a reduction in future premium tax in some states. The Company does not believe such assessments will be materially different from amounts already provided for in the condensed consolidated financial statements, though the Company has no control over such assessments.

The following table represents the total funding commitments and the unfunded commitment as of June 30, ~~2020~~2021 related to certain investments:

	Total Funding Commitment		Unfunded Commitment		Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		20,000		500,000		13,000
Sovereign's Capital, LP Fund II		1,000,000		158,596		1,000,000		109,033
Sovereign's Capital, LP Fund III		3,000,000		2,137,079		3,000,000		1,033,840
Macritchie Storage II, LP		7,000,750		2,100,407		7,000,750		1,656,075
Garden City Companies, LLC		2,000,000		1,956,688		2,000,000		1,872,425
Carrizo Springs Music, LLC		2,500,000		2,296,875		5,000,000		2,252,211
Modern Distributors, Inc.		7,200,000		3,700,000		7,200,000		3,700,000
Legacy Venture X, LLC						3,000,000		2,760,000
QCC Investment Co., LLC						1,500,000		150,000

During 2006, the Company committed to invest in RLF III, LLC (“RLF”), which makes land-based investments in undervalued assets. RLF makes capital calls as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign’s Capital, LP Fund I (“Sovereign’s”), which invests in companies in emerging markets. Sovereign’s makes capital calls to investors as funds are needed.

During 2015, the Company committed to invest in Sovereign’s Capital, LP Fund II (“Sovereign’s II”), which invests in companies in emerging markets. Sovereign’s II makes capital calls to investors as funds are needed.

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

During 2018, the Company committed to fund a mortgage loan for Macritchie Storage II, LP ~~("Macritchie"~~(“Macritchie”). Macritchie makes draw requests on the loan as funds are needed to fund the construction project.

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

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

During 2020, the Company committed to fund a collateral loan for Modern Distributors, Inc. (“Modern Distributors”). Modern Distributors makes draw requests on the loan as funds are needed to fund a construction project.

During 2020, the Company committed to invest in Legacy Venture X, LLC (“Legacy Venture X”), which is a fund of funds. Legacy Venture X makes capital calls to its investors as funds are needed.

During 2021, the Company committed to invest in QCC Investment Co., LLC (“QCC”). The funds are being utilized to purchase a manufacturing entity. QCC makes capital calls to its investors as funds are needed.

Note 8 – Other Cash Flow Disclosures

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

	Three Months Ended						Three Months Ended
	June 30,						June 30,
	2020			2019			2021			2020
Interest		$	-		$	-		$	0		$	0
Federal income tax			2,110,000			1,106,000			0			2,110,000

	Six Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2021			2020
Interest		$	-		$	-		$	0		$	0
Federal income tax			2,110,000			1,106,000			1,202,000			2,110,000

Note 9 – Concentrations of Credit Risk

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

Because UTG serves primarily individuals located in ~~four~~4 states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas. As of June 30, ~~2020~~2021 and ~~2019~~ 2020, approximately 52% and 55%, respectively, of the Company’s total direct premium was collected from Illinois, Ohio, Texas and West Virginia. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to ~~$125,000~~$125,000 per life. Life insurance ceded represented ~~20%~~21% and ~~21%~~20% of total life insurance in force at June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Insurance ceded represented 36% ~~and 34%~~ of premium income for the six months ended June 30, ~~2020~~2021 and ~~2019, respectively~~2020. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately ~~18%~~24% and ~~25%~~20% of the ~~Company's~~Company’s total invested assets as of June 30, ~~2020~~2021 and December 31, ~~2019~~,2020, respectively. The following table provides an allocation of the oil and gas investments by type.

June 30, 2020 December 31, 2019
Land, mineral, and royalty interests $
63,724,044
$ 80,182,100
Transportation - 3,812,565
Exploration 1,222,760 2,824,810
Total $
64,946,804
$ 86,819,475

June 30, 2021	Land, Minerals & Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,292,850	$	1,292,850
Equity securities, at fair value		62,439,697		0		62,439,697
Investment real estate		18,258,702		0		18,258,702
Notes receivable		6,000,000		0		6,000,000
Total	$	86,698,399	$	1,292,850	$	87,991,249

December 31, 2020	Land, Minerals & Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,268,670	$	1,268,670
Equity securities, at fair value		41,551,468		0		41,551,468
Investment real estate		20,031,576		0		20,031,576
Notes receivable		6,000,000		0		6,000,000
Total	$	67,583,044	$	1,268,670	$	68,851,714

20At June 30, 2021 and December 31, 2020, the Company owned 2 equity securities that represented approximately 56% and 47%, respectively, of the total investments associated with the oil and gas industry.

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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is Management’s discussion and analysis of the financial condition and results of operations of UTG, Inc. and its subsidiaries (collectively with the Parent, the “Company”). The following discussion of the financial condition and results of operations of the Company should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements of the Company and the related Notes thereto appearing in the Company’s annual report on Form 10-K for the year endedDecember 31, ~~2019~~2020, as filed with the Securities and Exchange Commission, and our unaudited Condensed Consolidated Financial Statements and related Notes thereto appearing elsewhere in this quarterly report.

Cautionary Statement Regarding Forward-Looking Statements

This report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. We have based our forward-looking statements on our current expectations and projections about future events. Our forward-looking statements include information about possible or assumed future results of operations. All statements, other than statements of historical facts, included or incorporated by reference in this report that address activities, events or developments that we expect or anticipate may occur in the future, including such things as the growth of our business and operations, our business strategy, competitive strengths, goals, plans, future capital expenditures and references to future successes may be considered forward-looking statements. Also, when we use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “probably,” or similar expressions, we are making forward-looking statements.

Numerous risks and uncertainties may impact the matters addressed by our forward-looking statements, any of which could negatively and materially affect our future financial results and performance.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and, therefore, the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this report, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. In light of these risks, uncertainties and assumptions, any forward-looking event discussed in this report may not occur. Our forward-looking statements speak only as of the date made, and we undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments, unless the securities laws require us to do so.

Overview

UTG, Inc., a Delaware corporation, is a life insurance holding company. The Company’s dominant business is individual life insurance, which includes the servicing of existing insurance policies ~~in force,~~in-force, the acquisition of other companies in the life insurance business, the acquisition of blocks of business and the administration and processing of life insurance business for other entities.

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

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ significantly from those estimates. The Company has identified certain estimates that involve a higher degree of judgment and are subject to a significant degree of variability. The Company’s critical accounting policies and the related estimates considered most significant by Management are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~.2020. Management has identified the accounting policies related to cost of insurance acquired, assumptions and judgments utilized in determining if declines in fair values of investments are other-than-temporary, and valuation methods for investments that are not actively traded as those, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company’s Condensed Consolidated Financial Statements and this Management’s Discussion and Analysis.

During the six months ended June 30, ~~2020~~,2021, there were no additions to or changes in the critical accounting policies disclosed in the ~~2019~~2020 Form 10-K.

Results of Operations

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

On a consolidated basis, the Company reported net income attributable to common shareholders’ of approximately $16.0 million for the six-month period ended June 30, 2021 and net income attributable to common shareholders’ of approximately $1.8 million for the three-month period ended June 30, 2021.

For the six-month period ended June 30, 2020, the Company reported a net loss attributable to common shareholders’ of approximately $(3.3) million ~~for the~~ ~~six-month period~~ ~~ended~~ ~~June 30, 2020~~and net income attributable to common shareholders’ of approximately $11.7 million for the three-month period ended June 30, ~~2020~~. The variance in the first and second quarter 2020 earnings are driven by the change in the unrealized gains (losses) reported by the Company. During the first quarter of 2020, the Company reported approximately $24.7 million of unrealized losses due to the change in the fair value of equity securities. During the second quarter of 2020, the Company experienced a partial rebound in the performance of its equity securities and recognized a change in the fair value of its equity securities of approximately $13 million.2020.

Revenues

For the six-month period ended June 30, ~~2019~~,2021, the ~~Company reported net income attributable to common shareholders’ of approximately $14.4 million and net income attributable to common shareholders’ of approximately $2.7 million for the~~ ~~three-month period~~ ~~ended~~ ~~June 30, 2019~~.

~~Revenues~~

~~The~~ Company reported total revenues of approximately ~~$6.6~~$31.9 million ~~for the six months ended June 30, 2020, a decrease~~an increase of approximately ~~$24.3~~$25.3 million aswhen compared to the same period in ~~2019~~. 2020. The variance in total revenues from the prior year to the current year is mainly attributable to the change in ~~the~~ fair value of equity securities ~~between~~during the periods. The Company reported total revenues of approximately ~~$19.5~~$7.8 million for the three months ended June 30, ~~2020, an increase~~2021, a decrease of approximately ~~$9.7~~$11.7 million aswhen compared to the three-month period ended June 30, ~~2019~~.2020. For the quarter the ~~fluctuations are~~fluctuation is also largely related to the change in the fair value of equity securities between the ~~periods that is reported as a component of total revenue on the Condensed Consolidated Statements of Operations.~~periods.

The Company reported revenue before net investment gains of approximately ~~$9.4~~$7.5 million and ~~$9.6~~$9.4 million for the ~~six months~~six-months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Revenue before net investment gains decreased ~~only slightly~~ when comparing the current year and prior year results and is due to ~~minor~~ decreases in ~~premium and policy fee revenue.~~real estate income. For the ~~three months~~three-months ended June 30, ~~2020,~~2021, the Company reported revenue before net investment gains and losses of ~~$4.8~~$3.8 million, updown from ~~$4.4~~$4.8 million from the same period in ~~2019.~~2020. The ~~increase~~decrease between periods is largely attributable to real estate ~~investment~~ income.

Premium and policy fee revenues, net of reinsurance, were comparable for the ~~six-month period~~ssix-months ended June 30, ~~2020~~2021 and ~~2019~~.June 30, 2020. Premium and policy fee revenues, net of reinsurance, represented ~~36%~~was $3.3 million and ~~38% of~~$3.4 million for the ~~Company’s revenues before net investment gains (losses) as of~~ six-months ended June 30, ~~2020~~2021 and ~~2019~~,2020, respectively. Premium and policy fee revenues, net of reinsurance, represented was $1.6 million and $1.7 million for the three-months ended June 31, 2021, and 2020, respectively. The decline in premiums is not unusual as the ~~Company is not actively marketing~~company writes minimal new business.

The ~~Company reported total net~~following table summarizes our investment gains (losses) of approximately $14.7 million and $(2.7) million for the three and six-month periods ended June 30, 2020, respectively. For the three and six month periods ended June 30, 2020, the Company reported approximately $1.8 million and $9 million, respectively, in net realized investment gains comprised mainly from the sale of equity securities. Also, in the total net investment gains are unrealized gains (losses) related to the change in the fair value of equity securities. The Company reported unrealized equity gains (losses) of $12.9 million and $(11.7) million for the three and six-months ended June 30, 2020 and $97,000 and $14.9 million for the three and six-months ended June 30, 2019.performance.

	Three Months Ended						Six Months Ended							Three Months Ended				Six Months Ended
	June 30,						June 30,							June 30,				June 30,
	2020			2019			2020				2019			2021		2020		2021		2020
Net investment income		$	3,021,654		$	2,701,709		$	5,851,840			$	5,813,733	$	2,082,359	$	3,021,654	$	4,042,026	$	5,851,840
Net investment gains (losses)		$	14,725,614		$	5,398,926		$	(2,784,323	)		$	21,300,255	$	4,071,013	$	14,725,614	$	24,395,938	$	(2,784,323)
Change in net unrealized investment gains (losses) on available-for-sale securities, pre-tax		$	6,595,986		$	3,925,070		$	8,068,851			$	8,859,921	$	195,136	$	16,704,460	$	20,375,015	$	(688,477)

The Company holds certain investments that have been negatively impacted by ongoing market reactions to the pandemic. These investments primarily relate to marketable equity securities, particularly in the area of oil and gas. The drop in the markets in March, resulted in estimated unrealized losses of approximately $(24.7) million for the three months ending March 31, 2020. For the three months ended June 30, 2020, the Company experienced a partial rebound on these investments of approximately $13 million in unrealized gains.

The Company recognized and disclosed in prior filings that a pullback in the stock market, particularly in the oil and gas arena, could slow these gains or even result in future-period unrealized losses. Management believes these equity investments continue to be solid investments for the Company and have further growth potential. However, current market conditions remain volatile and Management anticipates the Company will experience significant fluctuations in this line item in future periods.

The following table reflects net investment income of the Company:

	Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
	2020			2019			2020			2019				2021		2020		2021		2020

Fixed maturities available for sale	$	1,312,095		$	1,336,569		$	2,721,419		$	2,926,554		$	1,176,332	$	1,312,095	$	2,379,814	$	2,721,419
Equity securities		188,824			146,438			944,226			969,332			273,353		188,824		570,952		944,226
Trading securities		-			111,693			-			-			5,566		0		19,254		0
Mortgage loans		159,285			166,992			245,084			285,604			111,817		159,285		381,621		245,084
Real estate		1,635,847			629,888			2,242,504			1,259,634			778,605		1,635,847		1,333,329		2,242,504
Notes receivable		336,712			515,504			538,933			950,659			299,999		336,712		493,870		538,933
Policy loans		166,708			169,464			304,678			311,016			163,705		166,708		296,499		304,678
Short term		46,836			41,731			53,174			83,640
Cash and cash equivalents		4,132			4,767			103,080			4,222			0		4,132		0		103,080
Short-term														586		46,836		1,148		53,174
Total consolidated investment income		3,850,439			3,123,046			7,153,098			6,790,661			2,809,963		3,850,439		5,476,487		7,153,098
Investment expenses		(828,785	)		(421,337	)		(1,301,258	)		(976,928	)		(727,604)		(828,785)		(1,434,461)		(1,301,258)
Consolidated net investment income	$	3,021,654		$	2,701,709		$	5,851,840		$	5,813,733		$	2,082,359	$	3,021,654	$	4,042,026	$	5,851,840

Net investment income represented ~~63%~~54% and ~~61%~~62% of the ~~Company’s~~Company's revenue before net investment gains (losses) as of June 30, 2021 and June 30, 2020, respectively. When comparing current and ~~2019, respectively. The Company reported~~prior year results, net investment income was comparable in a majority of the investment categories. Investment income earned by the fixed maturities, equity securities, and real estate investment portfolios represented approximately ~~$5.9 million~~78% and 83% of the total consolidated investment income for the ~~six-month period ended~~ ~~June 30, 2020~~, comparable to 2019 net investment income. For the three month period ended June 30, 2020, net investment income increased approximately 12%, compared to the same quarter in 2019. When comparing the three and six months ended June 30, ~~2020~~2021 and ~~2019~~,2020, respectively. These categories represented approximately 79% and 81% of the total consolidated investment income for the three-months ended June 30, 2021, and 2020, respectively.

In March 2020, with the onset of the pandemic in America, financial markets became jittery experiencing a significant drop in the major market indices. In response, the Federal Reserve dropped interest rates to near zero. This action resulted in a drop in all other interest rates in the marketplace. While this increased the fair value of the Company’s current fixed income holdings, it made finding investments to acquire with any type of historic yield nearly impossible. The stock markets have experienced a rebound since that time; however, interest rates remain at historic low levels with short term rates at or near zero. Longer term bonds have experienced rate increases later in 2020 and into early 2021, but still remain below recent historic rates. Should rates remain at these levels, it will become increasingly more difficult for the Company to maintain its historic net investment income levels as existing investments mature and are replaced with lower yielding investments.

Income from ~~investing activities~~the fixed maturities investment portfolio represented 43% and 38% of the total consolidated investment income for the six-months ended June 30, 2021 and 2020, respectively. When comparing earnings from the fixed maturities portfolio for the six-months ended June 30, 2021 and 2020 income was down approximately 13% or $342,000. Fixed maturities continue to represent the largest investment type and asset class owned by the Company.

Income from the fixed maturities investment portfolio represented 42% and 34% of the total consolidated investment income for the three-months ended June 30, 2021 and 2020, respectively. When comparing earnings from the fixed maturities portfolio for the three-months ended June 30, 2021 and 2020 income was down approximately 10% or $136,000. Fixed maturities continue to represent the largest investment type and asset class owned by the Company.

Earnings from the equity securities investment portfolio represented approximately 10% and 13% of the total consolidated investment income report by the Company during the six-months ended June 30, 2021 and 2020, respectively. Income from the equity securities portfolio was down approximately 40% or $373,000 when comparing 2021 and 2020 results. This decrease is primarily due to the company partially selling their holdings in a specific dividend paying security during 2020. Income from the equity securities portfolio was comparable infor the ~~majority of the investment categories, with the largest variance being found in~~three-months ended June 30, 2021 and 2020.

The earnings reported by the real estate investment portfolio represented 24% and ~~notes receivable categories.~~

31% of the total consolidated investment income reported by the Company during the six-months ended June 30, 2021 and 2020, respectively. Earnings from the real estate investment portfolio were down approximately 41% or $909,000 when comparing 2021 and 2020 results.

The earnings reported by the real estate investment portfolio represented 28% and 42% of the total consolidated investment income reported by the Company during the three-months ended June 30, 2021 and 2020, respectively. Earnings from the real estate investment portfolio were down approximately 52% or $857,000 when comparing 2021 and 2020 results. The variance between current and prior year results is primarily due to a one-time distribution from a specific real estate investment of approximately $1.1 million during the second quarter of 2020.The earnings from the real estate investment portfolio are expected to vary depending on the real estate activities ~~of the subsidiaries~~ and the potential distributions that ~~will~~may occur. ~~For~~

The following table reflects net realized investment gains (losses):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2021		2020		2021		2020
Other-than-temporary impairments	$	(411,584)	$	0	$	(411,584)	$	0
Fixed maturities available for sale		34,236		(53,260)		34,236		338,223
Equity securities		3,006,032		(1,925,586)		3,015,019		(2,434,069)
Real estate		1,247,193		0		1,383,252		0
Consolidated net realized investment gains		3,875,877		(1,978,846)		4,020,923		(2,095,846)
Change in fair value of equity securities		195,136		16,704,460		20,375,015		(688,477)
	$	4,071,013	$	14,725,614	$	24,395,938	$	(2,784,323)

Realized investment gains are the six-months ended June 30, 2020, real estate earnings were up approximately 78% compared to the same period in 2019. The difference was attributable to a one-time earnings event that was received in second quarter 2020. Excluding this one-time event in 2020, real estate income was comparable between periods.

~~For the six-months ended June 30, 2020, notes receivable income is down approximately 43% compared to June 30, 2019. The decrease is a~~ result of ~~fewer average outstanding notes receivable,~~one-time events and ~~consequently, a reduction in interest income.~~are expected to vary from year to year.

~~During 2019,~~In the December 31, 2020 Form 10-K filing, the Company disclosed that we received an offer to purchase investments in certain music royalties held in the form of equity ~~investments. As~~securities. We continued to report on these transactions in the MD&A of the Company's 2020 quarterly Form 10-Q filings. The reported gain (loss) changed throughout 2020 as additional proceeds were received. The sales agreements contained holdback provisions for a ~~result~~portion of the sales price. Under the terms of the holdback, certain performance results must be achieved during 2020 to release additional sales proceeds to the sellers. At the time of closing, it was determined it was more likely than not that the royalty interests would not perform at the levels necessary to receive the holdback funds. Performance was reviewed throughout the year, and was better than anticipated, resulting in the holdback proceeds being released to the seller. A portion of this ~~event,~~transaction flows through change in the ~~Company elected to change its valuation methodology from using discounted cash flow models to estimate~~ fair value ~~to marking~~of equity securities and will be further discussed below.

Realized gains and losses from equity securities represent the ~~investment to the offer price to estimate~~difference between the fair ~~value. The change in methodology resulted in recording an unrealized gain on investment~~value at the beginning of ~~approximately $3.3 million during~~ the ~~year ended December 31, 2019. The investments were then sold during~~reporting period and the first quarter of 2020. The Company recognized a gain of approximately $4.1 million on the sale. The 2020 net income is unaffected by the sale as the realized gain is offset by the unrealized gain reversalfair value at the time of sale. The Company reported net realized gains of approximately $3 million for the three and six-month periods ended June 30, 2021. The sale of one equity security represented approximately $2.2 million of the realized gains on equity securities for the six-months ended June 30, 2021. The Company sold 2,500 shares of this common stock associated with the oil and gas industry. During the six-months ended June 30, 2021, the Company also reported additional gains of approximately $756,000 from the sales of the music royalties.

The Company reported a change in fair value of equity securities of approximately $20.4 million and $(0.7) million for the six-months ended June 30, 2021, and 2020, respectively. This line item is material to the results reported in the Condensed Consolidated Statements of Operations. While the six-months ended June 30, 2021 reflected very positive results, the onset of the pandemic in March 2020 resulted in the stock market taking a major downward swing. At June 30, 2020, the Company reflected a loss on this line of approximately $(0.7) million. While these results can be material and volatile, most of the equity holdings of the Company were acquired with a long-term view, thus making these intermediate changes in value of less concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

While the Company has seen significant positive results on its equity investments so far this year, a pull back or downward market adjustment could slow these gains or even result in losses in future periods. Management believes its current equity investments continue to be solid investments for the Company and have further growth potential; however, changes in market conditions could cause volatility in market prices.

In summary, the Company’s basis for future revenue ~~growth~~ is expected to come from the following primary sources: ~~conservation~~Conservation of business currently in-force, the maximization of investment earnings and the acquisition of other companies or policy blocks in the life insurance business. Management has placed a significant emphasis on the development of these revenue sources to enhance these opportunities.

Expenses

The Company reported total benefits and other expenses of approximately ~~$10.7~~$11.8 million for the ~~six month~~six-month period ended June 30, ~~2020, a decrease~~2021, an increase of approximately 11% from the same period in ~~2019. For the three month period ended~~ ~~June 30, 2020, total benefits and other expenses decreased approximately 17%, compared to the same quarter in~~ ~~2019~~.2020. Benefits, claims and settlement expenses represented approximately 65% and 62% of the ~~Company’s~~Company's total expenses for the ~~three and six month~~six-month periods ended June 30, 2021 and 2020, respectively. The other major expense category of the Company is operating expenses, which represented approximately 32% and 35% of the ~~Company’s~~Company's total expenses for the ~~three and six month~~six-month periods ended June 30, 2021 and 2020, respectively.

The Company reported total benefits and other expenses of approximately $5.7 million for the three-month period ended June 30, 2021, an increase of approximately 9% from the same period in 2020. Benefits, claims and settlement expenses represented approximately 66% and 64% of the Company's total expenses for the three-month periods ended June 30, 2021 and 2020, respectively. The other major expense category of the Company is operating expenses, which represented approximately 30% and 32% of the Company's total expenses for the three-month periods ended June 30, 2021 and 2020, respectively.

Life benefits, claims and settlement expenses, net of reinsurance benefits and claims ~~decreased~~were up approximately ~~13%~~16% or $1,000,000 when comparing the six months ended June 30, 2021 and 2020. The same expense line items are up approximately 11% or $370,000 when comparing the three months ended June 30, 2021 and 2020. Policy claims vary from period to period and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.

Early in the ~~six month~~COVID-19 pandemic, the Company implemented a process to monitor death claims resulting from COVID-19. During the six-months ended June 30, 2021, the Company incurred total death benefits of approximately $600,000 with COVID-19 listed as the cause of death. The average death benefit of these policies was $8,800. The Company will continue to monitor COVID-19 death claims. Management noted a considerable decline in COVID claims during the second quarter of 2021.

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

The short-term impact of policy surrenders is negligible since a reserve for future policy benefits payable is held which is, at a minimum, equal to and generally greater than the cash surrender value of a policy. The benefit of fewer policy surrenders is primarily received over a longer time period through the retention of the Company’s asset base. The surrender process has been impacted by temporary state rulings that were implemented as a result of COVID-19 and in some cases did not allow life insurance companies to lapse policies temporarily during 2020.

Operating expenses increased approximately 4% in the six-month period ended June 30, ~~2020~~,2021 as compared to the same period in ~~2019. For~~2020. Overall, expenses were comparable in all of the ~~three months~~major expense categories. Operating expenses increased approximately 2% in the three-month period ended June 30, ~~2020, life benefits, claims and settlement expenses, net of reinsurance benefits and claims, decreased approximately 22%,~~2021, as compared to the same ~~quarter~~period in ~~2019~~.2020. Overall expenses were comparable in all of the major expense categories.

As mentioned above in the Overview section of the Management Discussion and Analysis, UTG has a strong philanthropic program. The ~~decrease is not considered unusual by Management as fluctuations in mortality are~~Company generally allocates a portion of its earnings to be ~~expected.~~used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor. Charitable contributions made by the Company are expected to vary from year to year depending on the earnings of the Company.

Net amortization of cost of insurance acquired decreased approximately 4% ~~during the three month~~when comparing current and ~~six month periods ended~~ ~~June 30, 2020~~ ~~compared to the same period in~~ ~~2019~~.prior year activity. Cost of insurance acquired is established when an insurance company is acquired or when the Company acquires a block of in-force business. The Company assigns a portion of its cost to the right to receive future profits from insurance contracts existing at the date of the acquisition. Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The interest rates may vary due to risk analysis performed at the time of acquisition on the business acquired. The Company utilizes a 12% discount rate on the remaining unamortized business. The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised. Amortization of cost of insurance acquired is particularly sensitive to changes in interest rate spreads and persistency of certain blocks of insurance in-force. This expense is expected to decrease, unless the Company acquires a new block of business.

Operating expenses decreased by 5% for the three-month period ended June 30, 2020 compared to that of the same period in 2019. For the six-months ended June 30, 2020 operating expenses decreased by 6% compared to that of the same period in 2019. Overall, expenses were comparable in all of the major expense categories.

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

Financial Condition

Investment Information

Investments represent approximately 84% and 82% of total assets at June 30, ~~2020~~2021 and December 31, ~~2019~~.2020, respectively. Accordingly, investments are the largest asset group of the Company. The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments that it is permitted to make and the amount of funds that may be used for any one type of investment. In light of these statutes and regulations, the majority of the ~~Company’s~~Company's investment portfolio is invested in a diverse set of securities.

As of June 30, ~~2020~~,2021, the carrying value of fixed maturity securities in default as to principal or interest was immaterial in the context of consolidated assets, ~~shareholders’~~shareholders' equity or results from operations. To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as "investments available for sale". Investments ~~available for sale~~available-for-sale are carried at market, with changes in market value charged directly to shareholders' equity. Changes in the market value of available for sale securities resulted in a net unrealized loss of approximately $(3.9) million and net unrealized gains of ~~$6.6 million and $8.1~~approximately $6.4 million for the ~~three and~~ six-month periods ended June 30, 2021 and 2020,, respectively. The variance in the net unrealized gains and losses is the result of normal market fluctuations and lower interest rates.

Capital Resources

Total ~~shareholders’~~shareholders' equity increased by approximately 2%9% as of June 30, ~~2020~~2021 compared to December 31, ~~2019~~.2020. The increase is mainly attributable to an increase in ~~total shareholders’ equity~~retained earnings, which is ~~a combination~~the result of the current year net ~~loss~~income reported ~~for~~by the ~~period of $(3.3) million and an increase of $6.1 million of accumulated other comprehensive income.~~Company.

The ~~Company’s~~Company's investments are predominately in fixed maturity investments such as ~~bonds.~~bonds, which provide sufficient return to cover future obligations. The Company carries all of its fixed maturity holdings as available for sale, which are reported in the Condensed Consolidated Financial Statements at their market value.

Liquidity

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

Parent Company Liquidity - UTG is a holding company that has no day-to-day operations of its own. Cash flows from UTG’s insurance subsidiary, UG, are used to pay costs associated with maintaining the Company in good standing with states in which it does business and purchasing outstanding shares of UTG stock. UTG's cash ~~equivalents represented 7%~~flow is dependent on management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances. As of ~~total assets as of~~ June 30, ~~2020~~2021, substantially all of the consolidated shareholders’ equity represents net assets of its subsidiaries. During the second quarter of 2021, UG paid UTG a dividend of $3 million. During the third quarter of 2021, UG paid UTG a dividend of $1 million. Certain restrictions exist on the payment of dividends from the insurance subsidiary to the Parent company. Although these restrictions exist, dividend availability from the insurance subsidiary has historically been sufficient to meet the cash flow needs of the Parent company.

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

UG is an Ohio domiciled insurance company, which requires notification within five business days to the insurance commissioner following the declaration of any ordinary dividend and at least ten calendar days prior to payment of such dividend. Ordinary dividends are defined as the greater of: a) prior year statutory net income or b) 10% of statutory capital and surplus. For the year ended December 31, ~~2019. Fixed maturities, as~~2020, UG had statutory net income of approximately $6.3 million. At December 31, 2020 UG's statutory capital and surplus amounted to approximately $70.6 million. Extraordinary dividends (amounts in excess of ordinary dividend limitations) require prior approval of the insurance commissioner and are not restricted to a ~~percentage~~specific calculation. During 2020, UG paid UTG ordinary dividends of ~~total assets, were approximately 42%~~$4 million. During the second quarter of 2021, UG paid UTG a dividend of $3 million and ~~41% as~~a $1 million dividend in the third quarter of 2021. UTG used the dividends received during 2020 and 2021 to purchase outstanding shares of UTG stock and for general operations of the Company.

Short-Term Borrowings - An additional source of liquidity to the Parent company and its subsidiaries is the line of credit facilities extended to them. As of June 30, ~~2020~~2021, the Company and ~~December 31, 2019, respectively.~~its subsidiaries had available $18 million in line of credit facilities. The Company did not utilize its available credit facilities during 2020 or so far in 2021. For additional information regarding the line of credit facilities, see Note 5 – Credit Arrangements in the Notes to the Condensed Consolidated Financial Statements.

The Company ~~currently has access~~expects to have readily available funds for ~~operating liquidity. UTG has an $8 million revolving~~the foreseeable future to conduct its operations and to maintain target capital ratios in the insurance subsidiary through internally generated cash flow and the credit ~~note with Illinois National Bank. At~~ ~~June 30, 2020~~,facilities. In the unlikely event that more liquidity is needed, the Company ~~had no outstanding borrowings against the UTG line of credit. UG has~~could generate additional funds through such sources as a ~~$10 million line of~~short-term credit ~~with the Federal Home Loan Bank. At June 30, 2020, the Company had no outstanding borrowings against the UG line of credit.~~facility and intercompany borrowing.

Future policy benefits are primarily long-term in nature and therefore, the Company's investments are predominantly long-term and provide sufficient return to cover these obligations. Many of the Company's products contain surrender charges and other features that reward persistency and penalize the early withdrawal of funds.

~~Net cash~~Cash used in operating activities was approximately $6.3 million and $4.9 million ~~and $4.7 million for~~in the ~~six-months~~six-month periods ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Sources of operating cash flows of the Company, as with most insurance entities, is comprised primarily of premiums received on life insurance products and income earned on investments. Uses of operating cash flows consist primarily of payments of benefits to policyholders and beneficiaries and operating expenses. The Company has not marketed any significant new products for several years. As such, premium revenues continue to decline. Management anticipates future cash flows from operations to remain similar to historic trends.

~~Net cash provided by~~During the six-month period ended June 30, 2021, the Company's investing activities ~~was~~used net cash of approximately ~~$5.7 million and $10.9 million for~~$850,000. During the six-month period ended June 30, 2020, the Company's investing activities provided net cash of approximately $5.7 million. The Company recognized proceeds of approximately $32.8 million and ~~2019,~~$42.1 million from investments sold and matured during the six-month periods ended June 30, 2021 and 2020, respectively. The Company used approximately $33.6 million and $36.4 million to acquire investments during the six-month periods ended June 30, 2021 and 2020, respectively. The net cash provided by investing activities is expected to vary from ~~quarter~~year to ~~quarter~~year depending on market conditions and management’s ability to find and negotiate favorable investment contracts.

~~UTG is a holding Company that has no day-to-day operations of its own. Funds required to meet its expenses~~Net cash used in financing activities was approximately $903,000 and ~~general costs associated with maintaining~~$285,000 during the Company in good standing with states in which it does business are primarily provided by its subsidiaries. On a parent only basis, UTG's cash flow is dependent on Management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances. At ~~June 30, 2020~~, substantially all of the consolidated shareholders’ equity represented net assets of its subsidiary. The Company's insurance subsidiary has maintained adequate statutory capital and surplus. The payment of cash dividends to shareholders by UTG is not legally restricted. However, the state insurance department regulates insurance Company dividend payments where the Company is domiciled. No dividends were paid to shareholders in ~~2019~~ ~~or the~~ ~~six months~~six-month periods ended June 30, 2021 and 2020,. respectively. As of June 30, 2021 and December 31, 2020, the Company had no debt outstanding with third parties.

~~UG is~~The Company had cash and cash equivalents of approximately $31.0 million and $39.0 million as of June 30, 2021 and December 31, 2020, respectively. The Company has a portfolio of marketable fixed maturity securities that could be sold, if an ~~Ohio domiciled insurance company, which requires notification within five business days~~unexpected event were to occur. These securities had a fair value of approximately $146.3 million and $165.8 million at June 30, 2021 and December 31, 2020, respectively. However, the strong cash flows from investing activities, investment maturities and the availability of the line of credit facilities make it unlikely that the Company would need to sell securities for liquidity purposes. See Note 3 – Investments in the Notes to the ~~insurance commissioner following~~Condensed Consolidated Financial Statements for detailed disclosures regarding the ~~declaration~~Company’s investment portfolio.

Management believes the overall sources of ~~any ordinary dividend and at least ten calendar days prior~~liquidity available will be sufficient to ~~payment of such dividend. Ordinary dividends are defined as the greater of: a) prior year statutory net income or b) 10% of statutory capital and surplus. For the year ended~~ ~~December 31, 2019, UG had statutory net income of approximately $8.3 million. At~~ ~~December 31, 2019~~ UG’s statutory capital and surplus amounted to approximately $66 million. Extraordinary dividends (amounts in excess of ordinary dividend limitations) require prior approval of the insurance commissioner and are not restricted to a specific calculation. During ~~2019~~, UG paid UTG ordinary dividends of $6 million. During the second quarter of 2020, UG paid UTG an ordinary dividend of $1 million. UTG used the dividends received during 2019 and 2020 to purchase outstanding shares of UTG stock and for general operations of the Company.satisfy its financial obligations.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to Management, including the principal executive officer and principal financial officer, allowing timely decisions regarding required disclosure. Under the supervision and with the participation of our Management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE

ITEM 1A. RISK FACTORS

NONE

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4. MINE SAFETY DISCLOSURES

NONE

ITEM 5. OTHER INFORMATION

NONE

ITEM 6. EXHIBITS

Exhibit Number	Description
*31.1	Certification of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of Theodore C. Miller, Chief Financial Officer and Senior Vice President ~~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 and Senior Vice President ~~and Corporate Secretary~~ of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**101	Interactive Data File

* Filed herewith

SIGNATURES

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

UTG, INC.

(Registrant)

Date:	August ~~11, 2020~~13, 2021	By	/s/ James P. Rousey
			James P. Rousey
			President and Director

Date:	August ~~11, 2020~~13, 2021	By	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President and Chief Financial Officer

	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~~North Depot Street
	~~STANFORD,~~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. Financial Information	34
Item 1. Financial Statements	34
Condensed Consolidated Balance Sheets	34
Condensed Consolidated Statements of Operations	45
Condensed Consolidated Statements of Comprehensive Income (Loss)	56
Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity	67
Condensed Consolidated Statements of Cash Flows	89
Notes to Condensed Consolidated Financial Statements	910
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21 23
Item 4. Controls and Procedures	2629
PART II. Other Information	2730
Item 1. Legal Proceedings	2730
Item 1A. Risk Factors	2730
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2730
Item 3. Defaults Upon Senior Securities	2730
Item 4. Mine Safety Disclosures	2730
Item 5. Other Information	2730
Item 6. Exhibits	2730
Signatures	2831

	Three Months Ended						Six Months Ended							Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,				June 30,			June 30,			June 30,			June 30,
	2020			2019			2020			2019				2021			2020			2021			2020
Revenue:
Premiums and policy fees	$	2,379,976		$	2,431,489		$	4,735,731		$	4,934,694			$	2,296,481		$	2,379,976		$	4,595,544		$	4,735,731
Ceded reinsurance premiums and policy fees		(690,036	)		(813,256	)		(1,370,476	)		(1,330,311	)			(696,061	)		(690,036	)		(1,288,535	)		(1,370,476	)
Net investment income		3,021,654			2,701,709			5,851,840			5,813,733				2,082,359			3,021,654			4,042,026			5,851,840
Other income		93,772			95,919			152,814			159,757				94,470			93,772			189,205			152,814
Revenue before net investment gains (losses)		4,805,366			4,415,861			9,369,909			9,577,873				3,777,249			4,805,366			7,538,240			9,369,909
Net investment gains (losses):
Other-than-temporary impairments															(411,584	)		0			(411,584	)		0
Other realized investment gains, net		1,779,333			5,301,778			8,953,840			6,415,476				4,287,461			(1,978,846	)		4,432,507			(2,095,846	)
Change in fair value of equity securities		12,946,281			97,148			(11,738,163	)		14,884,779				195,136			16,704,460			20,375,015			(688,477	)
Total net investment gains (losses)		14,725,614			5,398,926			(2,784,323	)		21,300,255		��		4,071,013			14,725,614			24,395,938			(2,784,323	)
Total revenue		19,530,980			9,814,787			6,585,586			30,878,128				7,848,262			19,530,980			31,934,178			6,585,586

Benefits and other expenses:
Benefits, claims and settlement expenses:
Life		3,422,177			4,590,885			6,962,538			8,018,085				4,025,758			3,422,177			8,020,609			6,962,538
Ceded reinsurance benefits and claims		(353,168	)		(607,539	)		(988,111	)		(1,082,161	)			(577,515	)		(353,168	)		(986,666	)		(988,111	)
Annuity		259,049			307,369			491,537			505,039				255,538			259,049			493,093			491,537
Dividends to policyholders		92,005			96,053			186,320			199,652				86,476			92,005			174,284			186,320
Commissions and amortization of deferred policy acquisition costs		(28,559	)		(38,577	)		(63,676	)		(63,119	)			(30,754	)		(28,559	)		(56,908	)		(63,676	)
Amortization of cost of insurance acquired		186,212			193,976			372,425			387,953				179,102			186,212			357,845			372,425
Operating expenses		1,703,606			1,789,951			3,690,298			3,934,340				1,734,156			1,703,606			3,837,533			3,690,298
Total benefits and other expenses		5,281,322			6,332,118			10,651,331			11,899,789				5,672,761			5,281,322			11,839,790			10,651,331

Income (loss) before income taxes		14,249,658			3,482,669			(4,065,745	)		18,978,339				2,175,501			14,249,658			20,094,388			(4,065,745	)
Income tax (benefit) expense		2,504,024			662,831			(864,558	)		4,359,889				350,499			2,504,024			4,070,667			(864,558	)

Net income (loss)		11,745,634			2,819,838			(3,201,187	)		14,618,450				1,825,002			11,745,634			16,023,721			(3,201,187	)

Net income attributable to noncontrolling interests		(33,514	)		(107,780	)		(65,754	)		(261,513	)			(26,502	)		(33,514	)		(56,255	)		(65,754	)

Net income (loss) attributable to common shareholders	$	11,712,120		$	2,712,058		$	(3,266,941	)	$	14,356,937			$	1,798,500		$	11,712,120		$	15,967,466		$	(3,266,941	)

Amounts attributable to common shareholders
Basic income (loss) per share	$	3.58		$	0.82		$	(1.00	)	$	4.36			$	0.57		$	3.58		$	5.03		$	(1.00	)

Diluted income (loss) per share	$	3.58		$	0.82		$	(1.00	)	$	4.36			$	0.57		$	3.58		$	5.03		$	(1.00	)

Basic weighted average shares outstanding		3,272,715			3,290,617			3,273,395			3,293,940				3,175,027			3,272,715			3,176,012			3,273,395

Diluted weighted average shares outstanding		3,272,715			3,290,617			3,273,395			3,293,940				3,175,027			3,272,715			3,176,012			3,273,395

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,			June 30,			June 30,			June 30,			June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Net income (loss)	$	11,745,634		$	2,819,838		$	(3,201,187	)	$	14,618,450		$	1,825,002		$	11,745,634		$	16,023,721		$	(3,201,187	)

Other comprehensive income (loss):

Unrealized holding gains (losses) arising during period, pre-tax		6,595,986			3,925,070			8,068,851			8,859,921			2,505,067			6,595,986			(4,975,001	)		8,068,851
Tax (expense) benefit on unrealized holding gains (losses) arising during the period		(1,385,157	)		(824,264	)		(1,694,459	)		(1,860,583	)		(526,064	)		(1,385,157	)		1,044,750			(1,694,459	)
Unrealized holding gains (losses) arising during period, net of tax		5,210,829			3,100,806			6,374,392			6,999,338			1,979,003			5,210,829			(3,930,251	)		6,374,392

Less reclassification adjustment for (gains) losses included in net income		53,260			9,826			(338,223	)		(5,229	)		377,348			53,260			377,348			(338,223	)
Tax expense (benefit) for gains included in net income (loss)		(11,185	)		(2,064	)		71,027			1,098			(79,243	)		(11,185	)		(79,243	)		71,027
Reclassification adjustment for (gains) losses included in net income, net of tax		42,075			7,762			(267,196	)		(4,131	)		298,105			42,075			298,105			(267,196	)
Subtotal: Other comprehensive income (loss), net of tax		5,252,904			3,108,568			6,107,196			6,995,207			2,277,108			5,252,904			(3,632,146	)		6,107,196

Comprehensive income (loss)		16,998,538			5,928,406			2,906,009			21,613,657			4,102,110			16,998,538			12,391,575			2,906,009

Less comprehensive income attributable to noncontrolling interests		(33,514	)		(107,780	)		(65,754	)		(261,513	)		(26,502	)		(33,514	)		(56,255	)		(65,754	)

Comprehensive income (loss) attributable to UTG, Inc.	$	16,965,024		$	5,820,626		$	2,840,255		$	21,352,144		$	4,075,608		$	16,965,024		$	12,335,320		$	2,840,255

Large accelerated filer □	Accelerated filer □

Non-accelerated filer □	Smaller reporting company ⌧☒

	Emerging growth company □☐

Three Months Ended June 30, 2020	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Three Months Ended June 30, 2021																Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders’ Equity

Balance at March 31, 2020	$	3,276		$	35,903,350		$	71,000,617	$	9,832,206	$	555,874	$	117,295,323
Balance at March 31, 2021																$	3,178		$	33,065,925		$	102,237,250	$	9,674,987	$	490,525	$	145,471,865
Common stock issued during year		1			16,739			-		-		-		16,740			1			16,772			0		0		0		16,773
Treasury shares acquired		(5	)		(139,449	)		-		-		-		(139,454	)		(5	)		(126,110	)		0		0		0		(126,115	)
Net income (loss) attributable to common shareholders		-			-			11,712,120		-		-		11,712,120			0			0			1,798,500		0		0		1,798,500
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-			-			-		5,252,904		-		5,252,904			0			0			0		2,277,108		0		2,277,108
Contributions		-			-			-		-		-		-			0			0			0		0		0		0
Distributions		-			-			-		-		-		-			0			0			0		0		0		0
Gain attributable to noncontrolling interest		-			-			-		-		33,514		33,514			0			0			0		0		26,502		26,502
Balance at June 30, 2020	$	3,272		$	35,780,640		$	82,712,737	$	15,085,110	$	589,388	$	134,171,147
Balance at June 30, 2021																$	3,174		$	32,956,587		$	104,035,750	$	11,952,095	$	517,027	$	149,464,633

Six Months Ended June 30, 2020	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Six Months Ended June 30, 2021																	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income			Noncontrolling Interest		Total Shareholders’ Equity

Balance at December 31, 2019	$	3,279		$	36,012,401		$	85,979,678		$	8,977,914	$	523,634	$	131,496,906
Balance at December 31, 2020																	$	3,176		$	33,025,018		$	88,068,284	$	15,584,241		$	460,772	$	137,141,491
Common stock issued during year		7			218,282			-			-		-		218,289			7			170,531			0		0			0		170,538
Treasury shares acquired		(14	)		(450,043	)		-			-		-		(450,057	)		(9	)		(238,962	)		0		0			0		(238,971	)
Net income (loss) attributable to common shareholders		-			-			(3,266,941	)		-		-		(3,266,941	)		0			0			15,967,466		0			0		15,967,466
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-			-			-			6,107,196		-		6,107,196			0			0			0		(3,632,146	)		0		(3,632,146	)
Contributions		-			-			-			-		-		-			0			0			0		0			0		0
Distributions		-			-			-			-		-		-			0			0			0		0			0		0
Gain attributable to noncontrolling interest		-			-			-			-		65,754		65,754			0			0			0		0			56,255		56,255
Balance at June 30, 2020	$	3,272		$	35,780,640		$	82,712,737		$	15,085,110	$	589,388	$	134,171,147
Balance at June 30, 2021																	$	3,174		$	32,956,587		$	104,035,750	$	11,952,095		$	517,027	$	149,464,633

Three Months Ended June 30, 2019	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Three Months Ended June 30, 2020																Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders’ Equity

Balance at March 31, 2019	$	3,297		$	36,585,277		$	81,353,780	$	3,949,134	$	642,136	$	122,533,624
Balance at March 31, 2020																$	3,276		$	35,903,350		$	71,000,617	$	9,832,206	$	555,874	$	117,295,323
Common stock issued during year		1			16,735			-		-		-		16,736			1			16,739			0		0		0		16,740
Treasury shares acquired		(12	)		(348,945	)		-		-		-		(348,957	)		(5	)		(139,449	)		0		0		0		(139,454	)
Net income attributable to common shareholders		-			-			2,712,058		-		-		2,712,058			0			0			11,712,120		0		0		11,712,120
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-			-			-		3,108,568		-		3,108,568			0			0			0		5,252,904		0		5,252,904
Contributions		-			-			-		-		-		-			0			0			0		0		0		0
Distributions		-			-			-		-		-		-			0			0			0		0		0		0
Gain attributable to noncontrolling interest		-			-			-		-		107,780		107,780			0			0			0		0		33,514		33,514
Balance at June 30, 2019	$	3,286		$	36,253,067		$	84,065,838	$	7,057,702	$	749,916	$	128,129,809
Balance at June 30, 2020																$	3,272		$	35,780,640		$	82,712,737	$	15,085,110	$	589,388	$	134,171,147

Six Months Ended June 30, 2019	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest			Total Shareholders' Equity
Six Months Ended June 30, 2020																	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders’ Equity

Balance at December 31, 2018	$	3,296		$	36,567,865		$	69,708,901	$	62,495	$	734,153		$	107,076,710
Balance at December 31, 2019																	$	3,279		$	36,012,401		$	85,979,678		$	8,977,914	$	523,634	$	131,496,906
Common stock issued during year		7			246,527			-		-		-			246,534			7			218,282			0			0		0		218,289
Treasury shares acquired		(17	)		(561,325	)		-		-		-			(561,342	)		(14	)		(450,043	)		0			0		0		(450,057	)
Net income attributable to common shareholders		-			-			14,356,937		-		-			14,356,937			0			0			(3,266,941	)		0		0		(3,266,941	)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-			-			-		6,995,207		-			6,995,207			0			0			0			6,107,196		0		6,107,196
Contributions		-			-			-		-		-			-			0			0			0			0		0		0
Distributions		-			-			-		-		(245,750	)		(245,750	)		0			0			0			0		0		0
Gain attributable to noncontrolling interest		-			-			-		-		261,513			261,513			0			0			0			0		65,754		65,754
Balance at June 30, 2019	$	3,286		$	36,253,067		$	84,065,838	$	7,057,702	$	749,916		$	128,129,809
Balance at June 30, 2020																	$	3,272		$	35,780,640		$	82,712,737		$	15,085,110	$	589,388	$	134,171,147

	Fixed Maturities, Available for Sale		Equity Securities			Total
Balance at December 31, 2019	$	-	$	34,514,762		$	34,514,762
Total unrealized gain or (losses):
Included in net income (loss)		-		(139,588	)		(139,588	)
Included in other comprehensive income		-		-			-
Purchases		-		3,082,007			3,082,007
Sales		-		(10,450,468	)		(10,450,468	)
Balance at June 30, 2020	$	-	$	27,006,713		$	27,006,713

	June 30, 2020		December 31, 2019
Land, mineral, and royalty interests	$	63,724,044	$	80,182,100
Transportation		-		3,812,565
Exploration		1,222,760		2,824,810
Total	$	64,946,804	$	86,819,475