UTGN 10-K & 10-Q changes, risk factors and insider trading

The Company reported a change in fair value of equity securities of approximately $56.8$21.6 million and $(2.9)$56.8 million for the years ended December 31, 20242025 and 2023,2024, respectively. This line item is material to the results reported in the Consolidated Statements of Operations. This line item can also be extremely volatile, reflecting changes in the stock market. 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.

Net investment income represented 74%73% and 71%74% of the Company’s revenue before net investment gains (losses) as of December 31, 20242025 and 2023,2024, respectively. IncomeWhen fromcomparing current and prior year results, net investment income was comparable in most of the fixedinvestment maturities,categories equityoutside securities,of andthe real estate portfoliosand represented 76%cash and 77%,short respectively, of the grossterm investment income reported by the Company for 2024 and 2023.portfolios.

The earnings reported by the cash and short term investments represented 14%12% and 11%14% of the total consolidated net investment income reported by the Company during 20242025 and 2023.2024. The increasedecrease in earnings in this category is the result of a combination of higher cash and short term holdings in 2024 and from increaseddecreased interest rates received from banks and other deposit institutions due to FOMC rate changes. With the three2024 and 2025 rate declines inof 20241.75% movingthrough itDecember down31, 1.00%,2025, the Company anticipates experiencing a similar decline in earnings on cash balances going forward.

Realized gains and losses from equity securities represent the difference between the fair value at the beginning of the reporting period and the fair value at the time of sale. The total gains from equity securities sold in 20242025 were approximately $12.0$2.5 million, of which $7.2all $2.5 million is being reported as gains from equity securities and $4.8 million is reported as a component of the change in the fair value of equity securities. The gains were the result of selling several equity securities holdings.

The total gains from equity securities sold in 20232024 were approximately $2.9$12.0 million, of which $812,035$7.2 million is being reported as gains from equity securities and $2.0$4.8 million is reported as a component of the change in the fair value of equity securities. The gains were the result of selling one largeseveral equity securities holding and several other small holdings.

The Company reported a change in fair value of equity securities of approximately $56.8$21.6 million and $(2.9)$56.8 million for the years ended December 31, 20242025 and 2023,2024, respectively. This line item is material to the results reported in the Consolidated Statements of Operations, and this line item can also be extremely volatile. 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 less of a concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

In 2025 and 2024, the Company saw mostly positive results in its equity investments. Equity investments, primarily in the oil and gas industry, represent almost all the unrealized gains reported in 20242025 and unrealized losses reported in 2023.2024. Periodic pull backs and rallies are expected by management. Management believes its current equity investments continue to be solid investments for the Company and have further growth potential; however, changes in market conditions could cause volatility in market prices. In 2023, the Company saw negative results in its equity investments. However, most all the negative results occurred in the first quarter of 2023.

In 2025 and 2024, the Company recognized an other-than-temporary impairment of $725,032 and $900,149 on an equity security.security, respectively. The other-than-temporary impairmentimpairments recognized during 2025 and 2024 waswere taken as a result of Management’s assessment and determination of value of the investment. The investment was written down to better reflect its current expected value.

Operating expenses increaseddecreased approximately 13%4% or $1.1 million$400,000 in 20242025 as compared to that of the same period in 2023.2024. When comparing 20242025 and 20232024 expenses, there is one expense item that comprises the majority of the increase,decrease, charitable contributions. Charitable expense was approximately $690,000$300,000 moreless when comparing 20242025 and 2023.2024. Charitable expense fluctuates based on reported taxable income of the Company. Expenses in the remaining categories were comparable between years.

As mentioned above in the Overview section of the Management Discussion and Analysis, UTG has a strong philanthropic program. The Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor. Charitable contributions made by the Company are expected to vary from year to year depending on the earnings of the Company. In 2024,2025, the Company paid approximately $1.3$1.0 million in charitable donations as compared to $582,000$1.3 million in 2023.2024.

The Company’s total investments represented 84%88% and 83%84% of the Company’s total assets as of December 31, 20242025 and 2023,2024, respectively. Fixed maturities and equity securities, at fair value,securities consistently represented a substantial portion, 79% and 73%,84%, of the total investments during 20242025 and 2023,2024, respectively. The overall investment mix, as a percentage of total investments, remained fairly consistent when comparing the respective investments held as of December 31, 20242025 and 2023.2024.

As of December 31, 2024,2025, the carrying value of fixed maturity securities in default as to principal or interest was immaterial in the context of consolidated assets, shareholders’ equity or results from operations. To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as "investments available-for-sale". Investments available-for-sale are carried at market value, with changes in market value charged directly to the other comprehensive income component of shareholders' equity. Changes in the market value of available for sale securities resulted in net unrealized gains (losses) of approximately $1.6 million and $(222,000) and $1.6 million as of December 31, 20242025 and 2023,2024, respectively. The variance in the net unrealized gains and losses is the result of normal market fluctuations mainly related to changes in interest rates in the marketplace.

UTG is a holding company that has no day-to-day operations of its own. Cash flows from UTG’s insurance subsidiary, UG, are used to pay costs associated with maintaining the Company in good standing with states in which it does business and purchasing outstanding shares of UTG stock. UTG's cash flow is dependent on management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances. As of December 31, 20242025 and 2023,2024, substantially all of the consolidated shareholders’ equity represents net assets of its subsidiaries. In 2025 and 2024, the Parent company received no dividends from its insurance subsidiary and received $2 million in 2023.subsidiary. Certain restrictions exist on the payment of dividends from the insurance subsidiary to the Parent company. For further information regarding the restrictions on the payment of dividends by the insurance subsidiary, see Note 910 – Shareholders’ Equity in the Notes to the Consolidated Financial Statements. Although these restrictions exist, dividend availability from the insurance subsidiary has historically been sufficient to meet the cash flow needs of the Parent company.

During October of 2024,2025, the Federal Home Loan Bank approved the renewal of UG’s Cash Management Advance Application (“CMA”). The CMA is a source of overnight liquidity utilized to address the day-to-day cash needs of a Company. The CMA gives the company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $21.4$21.8 million as of December 31, 2024.2025. DuringThe Company has no outstanding borrowings on the fourthCMA quarterat ofDecember 2023,31, the2025 Companynor borrowedhad $19any millionborrowing andactivity plannedduring to utilize the funds for investing activities. During the first quarter of 2024, the Company repaid the entire outstanding principal balance.2025.

During 2024 and 2023,2025, the Company’s investing activities used net cash of approximately $6.9 million and provided net cash of approximately $26.5 million andin $6.9 million, respectively.2024. The Company recognized proceeds of approximately $71.8$36.0 million and $79.6$71.8 million from investments sold and matured in 20242025 and 2023,2024, respectively. The Company used approximately $(45.342.9) million and $(72.745.3) million to acquire investments during 20242025 and 2023,2024, respectively. The net cash provided by or used in investing activities is expected to vary from year to year depending on market conditions and management’s ability to find and negotiate favorable investment contracts.

Net cash used in financing activities was approximately $(20.91.3) million and $(1.220.9) million during 20242025 and 2023,2024, respectively. As of December 31, 20242025 and 2023,2024, the Company had $0 and $19 million, respectively, in debt outstanding with third parties.

The Company had $0 and $19 million of debt outstanding as of December 31, 20242025 and 2023,2024, respectively.

The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG’s common stock. At a meeting of the Board of Directors in DecemberMarch of 2024,2025, the Board of Directors of UTG authorized the repurchase of up to an additional $2 million of UTG’s common stock, for a total repurchase of $24$26 million of UTG’s common stock in the open market or in privately negotiated transactions since inception of the program. 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 20244,2025, the Company repurchased 23,96118,449 shares through the stock repurchase program for $648,152.$782,812. Through December 31, 20244,2025, UTG has spent $20,839,555$21,622,367 in the acquisition of 1,380,8201,399,269 shares under this program.

Total shareholders’ equity was approximately $210.6$232.7 million and $161.7$216.8 million as of December 31, 20242025 and 2023,2024, respectively. Total shareholders' equity increased approximately 30%7% in 20242025 as compared to 2023.2024. The increase is primarily attributable to net income from operations. As of December 31, 20242025 and 2023,2024, the Company reported accumulated other comprehensive lossincome of approximately $(2.9)$1.9 million and $(2.7)$2.6 million, respectively.

During the three-monthssix-months ended MarchJune 31,30, 2026, there were no additions to or changes in the critical accounting policies disclosed in the 2025 Form 10-K.

On a consolidated basis, the Company reported net income attributable to common shareholders of approximately $23.4$29.8 and $13.011.3 million for the six-month period ended June 30, 2026 and 2025, respectively. The Company reported net income (loss) attributable to common shareholders of approximately $6.3 and ($1.6) million for the three-month period ended MarchJune 31,30, 2026 and 2025, respectively.

For the three-monthsix-month period ended MarchJune 31,30, 2026, the Company reported total revenues of approximately $36.5 $50.4 million and for the same period in 2025 total revenues of approximately $21.9$25.3 million. The million.Company reported total revenues of approximately $13.9 million and $3.4 million for the three-month period ended June 30, 2026 and 2025, respectively.

The variance in total revenue between firstsecond quarter 2026 and 2025 is primarily the result of realized gains and the change in the fair value of equity securities. The Company reported a firstsecond quarter 2026 gain in the change in the fair value of equity securities of approximately $28.2$2.3 million and a year-to-date 2026 gain of approximately $30.5 million. In 2025, the Company reported reported a firstsecond quarter gainloss in the change in the fair value of equity securities securitiesof approximately $1.3 million and a year-to-date 2025 gain of approximately $16.3$15.0 million. The stock markets have experienced volatility in recent periods, which in general, should always be expected.

The Company reported revenue before net investment gains of approximately $4.7$10.5 million and $4.6$9.2 million for the three-month-periodsix-month-period ended MarchJune 31,30, 2026 and 2025, respectively. The Company reported $5.7 million and $4.6 million, respectively, of revenue before net investment gains (losses) for the second quarter of 2026 and 2025, respectively. The 2026 net investment income results are comparable to 2025 for firstsecond quarter.quarter and year-to-date.

Net investment income represented 70%77% and 67%71% of the Company's revenue before net investment gains as of MarchJune, 31,30, 2026 and 2025, respectively. For the second quarter ended June 30, net investment income represented 82% and 76% of revenue before net investment gains (losses) for 2026 and 2025, respectively. When comparing current and prior year results, net investment income was comparable in most of the investment categories outside of the mortgage loans and equity securities investment portfolio. portfolios.

The earnings reported by the equitymortgage securitiesloan investments represented 33%6% and 17%5% of the total consolidated investment income reported by the Company during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. TheIn second increasequarter in earnings in this category is mainly2026, the resultCompany of a single equity security in the oil & gas industry producingoriginated a one-timenew large mortgage loan that caused dividendthis of $420,000.increase.

The following table reflects net investment gains (losses):

In 2026, the sale of fourfive equity securities represents allthe majority of the realized investment gains from equity securities.securities year-to-date with one of these sales being in the second quarter. Most of these sales are related to the oil/gas industry and the information technology industry.

The Company reported a year-to-date 2026 change in the fair value of equity securities of approximately $28.2$30.5 million, and a second quarter gain of approximately $2.3 million. In 2025, The Company reported a year-to-date change in the fair value of equity securities of approximately $15.0 million, and a $16.3second quarter loss of approximately $1.3 million. This line item is material to the results reported in the Condensed Consolidated Statements of Operations, and this line item can also be extremely volatile, as it reflects changes in the stock market. Of the 2026 change in fair value of equity securities, approximately $18.3$17.1 million is attributable to a single equity security holding related to the oil and gas industry. While these results can be material and volatile, most of the equity holdings of the Company were acquired with a long-term view, thus making these intermediate changes in value of less concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

The Company reported total benefits and other expenses of approximately $6.8$12.6 million and $5.1$10.5 million for the threesix month period ended MarchJune 31,30, 2026 and 2025, respectively. For the three month period ended June 30, 2026 and 2025, the Company reported total benefits and other expenses of approximately $5.9 million and $5.4 million, respectively. Benefits, claims and settlement expenses represented approximately 63%57% and 56% 59% of the Company's total expenses for the three six month periods ended MarchJune 31,30, 2026 and 2025, respectively. The other major expense category of the Company is operating expenses, which represented approximately 35%41% and 41%39% of the Company's total expenses for the threesix month periods ended MarchJune 31,30, 2026 and 2025, respectively.

When comparing first quarteryear-to-date 2026 and 2025 results, life benefits, claims and settlement expenses were up approximately $1.4$1.1 million. Policy claims vary from period to period and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.

Investments are the largest asset group of the Company. The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment. The below table reflects, by investment category, the investments held by the Company as of MarchJune 31,30, 2026, and December 31, 2025:

The Company’s total investments represented 85%86% and 88% of the Company’s total assets as of MarchJune 31,30, 2026, and December 31, 2025, respectively. Fixed maturities and equity securities at fair value consistently represented a substantial portion, 82%81% and 79%, of the total investments during 2026 and 2025, respectively. The overall investment mix, as a percentage of total investments, remained fairly consistent when comparing the respective investments held as of MarchJune 31,30, 2026 and December 31, 2025.

As of MarchJune 31,30, 2026, the carrying value of fixed maturity securities in default as as to principal or interest was immaterial in the context of consolidated assets, assets, shareholders’ equity or results from operations. To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as "investments available for sale". Investments available for sale are carried at market value, with changes in market value charged directly to the other comprehensive component of shareholders' equity. Changes in the market value of available for sale securities resulted in net unrealized gains (losses) of approximately $(328,000349,000) and $1.6 million as of MarchJune 31,30, 2026 and 2025, respectively. The variance in the net unrealized gains and losses is the result of normal market fluctuations mainly related to changes in interest rates in the marketplace.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 39%37% and 35% of the Company’s total invested assets as of MarchJune 31,30, 2026 and December 31, 2025, respectively. See Note 10 – Concentrations for more details related to our oil and gas concentrations.

UTG is a holding company that has no day-to-day operations of its own. Cash flows from UTG’s insurance subsidiary, UG, are used to pay costs associated with maintaining the Company in good standing with states in which it does business and purchasing outstanding shares of UTG stock. UTG's cash flow is dependent on management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances. As of MarchJune 31,30, 2026, and December 31, 2025, substantially all of the consolidated shareholders’ equity represents net assets of its subsidiaries. As of MarchJune 31,30, 2026, the Parent company has received no dividends from its insurance subsidiary. Certain restrictions exist on the payment of dividends from the insurance subsidiary to the Parent company. For further information regarding the restrictions on the payment of dividends by the insurance subsidiary, see Note 7 – Shareholders’ Equity in the Notes to the Consolidated Financial Statements. Although these restrictions exist, dividend availability from the insurance subsidiary has historically been sufficient to meet the cash flow needs of the Parent company.

During October of 2025, the Federal Home Loan Bank approved the renewal of UG’s Cash Management Advance Application (“CMA”). The CMA is a source of overnight liquidity utilized to address the day-to-day cash needs of a Company. The CMA gives the company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $21.7 million as of MarchJune 31,30, 2026. The Company has no outstanding borrowings on the CMA at MarchJune 31,30, 2026 nor had any borrowing activity during 2026.

Net cash used in financing activities was approximately $930,000$1,192,000 and $229,000$134,000 during 2026 and 2025, respectively. As of MarchJune 31,30, 2026 and 2025, the Company had no debt outstanding with third parties.

The Company had cash and cash equivalents of approximately $46.8$42.6 million and $30.5 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively. The Company has a portfolio of marketable fixed maturity securities that could be sold, if an unexpected event were to occur. These securities had a fair value of approximately $72.2$72.1 million at MarchJune 31,30, 2026. 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.

Total shareholders' equity increased by approximately 10%13% as of MarchJune 31,30, 2026, compared to December 31, 2025. The increase is mainly attributable to an increase in retained earnings, which is the result of the current year net income reported by the Company.