Results
UTG Inc.
03/25/2026 | Press release | Distributed by Public on 03/25/2026 11:55
Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)
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") for the years ended December 31, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this report.
Cautionary Statement Regarding Forward-Looking Statements
This report on Form 10-K 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, 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
We have identified the accounting policies below as critical to the understanding of our results of operations and our financial condition. The application of these critical accounting policies in preparing our consolidated financial statements requires Management to use significant judgments and estimates concerning future results or other developments including the likelihood, timing or amount of one or more future transactions or amounts. Actual results may differ from these estimates under different assumptions or conditions. On an on-going basis, we evaluate our estimates, assumptions and judgments based upon historical experience and various other information that we believe to be reasonable under the circumstances. For a detailed discussion of other significant accounting policies, see Note 1 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.
Future Policy Benefits- Because of the long-term nature of insurance contracts, the insurance company is liable for policy benefit payments that will be made in the future. The liability for future policy benefits is determined by standard actuarial procedures common to the life insurance industry. The accounting policies for determining this liability are disclosed in Note 1 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.
Valuation of Securities- The Company's investment portfolio consists of fixed maturities, equity securities, mortgage loans, notes receivable and real estate to provide funding of future policy contractual obligations.
Fixed Maturity Investments- The Company classifies its fixed maturity investments, which include bonds, as available for sale. Investments classified as available for sale are carried at fair value with unrealized gains and losses, net of deferred taxes, reflected directly in accumulated other comprehensive income. Premiums and discounts on debt securities purchased at other than par value are amortized and accreted, respectively, to interest income in the Consolidated Statements of Operations, using the constant yield method over the period to maturity. While the available-for-sale fixed maturity securities are generally expected to be held to maturity, they are classified as available-for-sale and are sold periodically to manage risk. Although all of the fixed maturity securities are classified as available-for-sale, the Company has the ability and intent to hold the securities until maturity. The Company has an evaluation process in place to monitor fixed maturity securities available for sale for credit loss. See Note 2 - Investments for further disclosure of the allowance for credit loss ("ACL").
Equity Securities at Fair Value- Investments in equity securities, which include common and preferred stocks, are reported at fair value with unrealized gains and losses reported as a component of net income (loss).
Equity Securities at Cost- These investments are reported at their cost basis, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
Mortgage Loans on Real Estate- Mortgage loans on real estate are reported at their unpaid principal balances, adjusted for amortization of premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The Company recognizes an ACL in earnings at time of purchase or origination based on expected lifetime credit loss on mortgage loans carried at amortized cost, in an amount that represents the portion of the amortized cost basis of such financing receivables, that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected. See Note 2 - Investments for further discussion of the ACL.
Investment Real Estate- Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line-basis for financial reporting purposes using estimated useful lives of 3 to 30 years. Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition, for a reasonable price, in comparison to its estimated fair value, is classified as held-for-sale. Real estate held-for-sale is stated at lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated.
Notes Receivable- Notes receivable 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. 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. The Company recognizes an ACL in earnings at time of purchase or origination based on expected lifetime credit loss on notes receivable carried at amortized cost, in an amount that represents the portion of the amortized cost basis of such financing receivables, that the Company does not expect to collect, resulting in notes receivable being presented at the net amount expected to be collected. See Note 2 - Investments for further discussion of the ACL.
Deferred Income Taxes - The provision for deferred income taxes is based on the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized by applying enacted statutory tax rates to temporary differences between amounts reported in the Consolidated Financial Statements and the tax basis of existing assets and liabilities. A valuation allowance is recognized for the portion of deferred tax assets that, in Management's judgment, is not likely to be realized.
Results of Operations
On a consolidated basis, the Company had net income attributable to common shareholders of approximately $17.1 million and $50.0 million in 2025 and 2024, respectively. In 2025, income before income taxes was approximately $21.9 million compared to $63.1 million in 2024. Total revenues were approximately $42.3 million in 2025 and $84.9 million in 2024.
One-time events, primarily reflected in realized gains, comprise a substantial portion of the net income and revenue reported by the Company during 2025 and 2024. The magnitude of realized investment gains and losses in a given year is a function of the timing of trades of investments relative to the markets themselves as well as the recognition of any impairments on investments. Future earnings will be significantly negatively impacted should earnings from these one-time items not be realizable in a future period. While Management believes there remain additional investments with such one-time earnings, when or if realized remains uncertain.
The Company reported a change in fair value of equity securities of approximately $21.6 million and $56.8 million for the years ended December 31, 2025 and 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.
Total benefits and other expenses paid in 2025 were approximately $20.5 million compared to $21.8 million in 2024.
In summary, the Company's basis for future revenue is expected to come from the following primary sources: 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.
Revenues
Premiums and policy fee revenues, net of reinsurance premiums and policy fees, declined approximately 9% when comparing 2025 to 2024. The Company writes very little new business. Unless the Company acquires a new company or a block of in-force business, Management expects premium revenue to continue to decline on the existing block of business at a rate consistent with prior experience. The Company's average persistency rate for all policies in-force for 2025 and 2024 was approximately 96.5% and 96.6%, respectively. Persistency is a measure of insurance in-force retained in relation to the previous year. A positive impact on premium income is the consistency of the lapse percentage. Persistency of the business has been consistent over the last several years. The lapse percentages were 3.5% and 3.4% for 2025 and 2024, respectively.
The following table summarizes the Company's investment performance for the years ended December 31:
|
2025
|
2024
|
|||
|
Net investment income
|
$
|
13,854,123
|
$
|
16,093,592
|
|
Net realized investment gains
|
1,814,100
|
6,456,126
|
||
|
Change in fair value of equity securities
|
21,577,231
|
56,839,751
|
The following table reflects net investment income of the Company for the years ended December 31:
|
2025
|
2024
|
|||
|
Fixed maturities, available for sale
|
$
|
2,648,796
|
$
|
2,652,249
|
|
Fixed maturities, held to maturity
|
156,812
|
167,536
|
||
|
Equity securities
|
4,233,549
|
4,233,674
|
||
|
Mortgage loans
|
913,464
|
952,084
|
||
|
Real estate
|
7,790,732
|
8,958,452
|
||
|
Notes receivable
|
1,083,074
|
1,341,095
|
||
|
Policy loans
|
379,638
|
412,701
|
||
|
Cash and cash equivalents
|
1,537,566
|
1,668,712
|
||
|
Short-term investments
|
72,696
|
661,962
|
||
|
Total consolidated investment income
|
18,816,327
|
21,048,465
|
||
|
Investment expenses
|
(4,962,204)
|
(4,954,873)
|
||
|
Consolidated net investment income
|
$
|
13,854,123
|
$
|
16,093,592
|
Net investment income represented 73% and 74% of the Company's revenue before net investment gains (losses) as of December 31, 2025 and 2024, respectively. When comparing current and prior year results, net investment income was comparable in most of the investment categories outside of the real estate and cash and short term investment portfolios.
In the second half of 2024, the Federal Open Market Committee ("FOMC") cut the interest rate 3 times for a total of 1% making the rate 4.50%. The rate was cut again in September, October, and December 2025 making the current rate 3.75%. The company anticipates a similar decline in earnings on cash balances and any new investments that are acquired as investments mature.
The earnings reported by the cash and short term investments represented 12% and 14% of the total consolidated net investment income reported by the Company during 2025 and 2024. The decrease in earnings in this category is the result of a combination of higher cash and short term holdings in 2024 and from decreased interest rates received from banks and other deposit institutions due to FOMC rate changes. With the 2024 and 2025 rate declines of 1.75% through December 31, 2025, the Company anticipates experiencing a similar decline in earnings on cash balances going forward.
Earnings from the real estate portfolio represented 56% of the total consolidated net investment income for the years ended December 31, 2025 and 2024. Earnings were down about $1.2 million when comparing current year and prior year results.
During 2024, the Company received $1.3 million of income from timber sales as compared to $0 in the current year. Included in the 2025 and 2024 real estate income is approximately $3.8 million and $3.6 million of income from oil and gas royalty distributions, respectively. Income from oil and gas royalties represented approximately 49% and 41% of the real estate income for 2025 and 2024, respectively.
The following table reflects net realized investment gains (losses) for the years ended December 31:
|
2025
|
2024
|
|||
|
Fixed maturities available for sale
|
$
|
$
|
-
|
|
|
Equity securities
|
2,491,868
|
7,190,262
|
||
|
Real estate
|
46,846
|
166,020
|
||
|
Short term investments
|
(7)
|
|||
|
Equity securities - OTTI
|
(725,032)
|
(900,149)
|
||
|
Consolidated net realized investment gains
|
1,814,100
|
6,456,126
|
||
|
Change in fair value of equity securities - held
|
21,577,231
|
52,025,699
|
||
|
Change in fair value of equity securities - sold
|
4,814,052
|
|||
|
Total change in fair value of equity securities
|
21,577,231
|
56,839,751
|
||
|
Net investment gains
|
$
|
23,391,331
|
$
|
63,295,877
|
Realized investment gains are the result of one-time events and are expected to vary from year to year.
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 2025 were approximately $2.5 million, of which all $2.5 million is being reported as gains from equity securities. The gains were the result of selling several equity securities holdings.
The total gains from equity securities sold in 2024 were approximately $12.0 million, of which $7.2 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 Company reported a change in fair value of equity securities of approximately $21.6 million and $56.8 million for the years ended December 31, 2025 and 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 2025 and 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 2025 and 2024, the Company recognized an other-than-temporary impairment of $725,032 and $900,149 on an equity security, respectively. The other-than-temporary impairments recognized during 2025 and 2024 were 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.
During 2025, the Company sold one small parcel of property in Kentucky which makes up all of the realized gains in Real Estate. During 2024, the Company sold several real estate land parcels in Kentucky and one small parcel in Illinois which makes up the $166,020 gain reported.
In summary, the Company's basis for future revenue is expected to come from the following primary sources: 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 $20.5 million and $21.8 million for the years ended December 31, 2025 and 2024, respectively. Benefits, claims and settlement expenses represented approximately 55% and 56% of the Company's total expenses for 2025 and 2024, respectively. The other major expense category of the Company is operating expenses, which represented 44% and 42% of the Company's total expenses for 2025 and 2024, respectively.
Life benefits, claims and settlement expenses, net of reinsurance benefits, were down approximately 7% when comparing 2025 and 2024. Policy claims vary from year to year and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.
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.
Overall, the Company's persistency for business in-force remained relatively steady at 96.5% in 2025 compared to 96.6% in 2024. The Company's actual experience for earned interest, persistency, and mortality varies from the assumptions applied to pricing and for determining premiums. Accordingly, differences between the Company's actual experience and those assumptions applied may affect the profitability of the Company. Interest crediting rates on adjustable rate policies have been reduced to their guaranteed minimum rates, and as such, cannot be lowered any further.
Operating expenses decreased approximately 4% or $400,000 in 2025 as compared to that of the same period in 2024. When comparing 2025 and 2024 expenses, there is one expense item that comprises the majority of the decrease, charitable contributions. Charitable expense was approximately $300,000 less when comparing 2025 and 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 2025, the Company paid approximately $1.0 million in charitable donations as compared to $1.3 million in 2024.
Net amortization of cost of insurance acquired decreased approximately 3% when comparing current and 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.
Management continues to place significant emphasis on expense monitoring and cost containment. Maintaining administrative efficiencies directly impacts net income.
Financial Condition
Investment Information
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 following table reflects, by investment category, the investments held by the Company as of December 31:
|
2025
|
As a % of Total Investments
|
As a % of Total Assets
|
|||||
|
Fixed maturities, available for sale
|
$
|
73,159,589
|
17%
|
15%
|
|||
|
Equity securities, at fair value
|
265,704,230
|
62%
|
54%
|
||||
|
Equity securities, at cost
|
20,510,250
|
5%
|
4%
|
||||
|
Mortgage loans
|
14,402,304
|
3%
|
3%
|
||||
|
Real estate
|
33,087,699
|
8%
|
7%
|
||||
|
Notes receivable
|
8,708,417
|
2%
|
2%
|
||||
|
Policy loans
|
5,361,164
|
1%
|
1%
|
||||
|
Short-term investments
|
9,808,824
|
2%
|
2%
|
||||
|
Total investments
|
$
|
430,742,477
|
100%
|
88%
|
|
2024
|
As a % of Total Investments
|
As a % of Total Assets
|
|||||
|
Fixed maturities, available for sale
|
$
|
76,480,086
|
19%
|
16%
|
|||
|
Fixed maturities, held to maturity
|
2,500,000
|
1%
|
1%
|
||||
|
Equity securities, at fair value
|
234,506,227
|
59%
|
49%
|
||||
|
Equity securities, at cost
|
21,203,393
|
5%
|
4%
|
||||
|
Mortgage loans
|
16,277,981
|
4%
|
3%
|
||||
|
Real estate
|
28,615,602
|
7%
|
6%
|
||||
|
Notes receivable
|
12,672,175
|
3%
|
3%
|
||||
|
Policy loans
|
5,692,565
|
1%
|
1%
|
||||
|
Short-term investments
|
1,954,687
|
1%
|
1%
|
||||
|
Total investments
|
$
|
399,902,716
|
100%
|
84%
|
The Company's investments are generally managed to match related insurance and policyholder liabilities. The comparison of investment return with insurance or investment product crediting rates establishes an interest spread. Interest crediting rates on adjustable rate policies have been reduced to their guaranteed minimum rates, and as such, cannot be lowered any further. Policy interest crediting rate changes and expense load changes become effective on an individual policy basis on the next policy anniversary. Therefore, it takes a full year from the time the change was determined for the full impact of such change to be realized. If interest rates decline in the future, the Company will not be able to lower rates and both net investment income and net income will be impacted negatively.
The Company's total investments represented 88% and 84% of the Company's total assets as of December 31, 2025 and 2024, respectively. Fixed maturities and equity securities consistently represented a substantial portion, 84%, of the total investments during 2025 and 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, 2025 and 2024.
As of December 31, 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) as of December 31, 2025 and 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.
Management continues to view the Company's investment portfolio with utmost priority. Significant time has been spent internally researching the Company's risk and communicating with outside investment advisors about the current investment environment and ways to ensure preservation of capital and mitigate losses. Management has put extensive efforts into evaluating the investment holdings. Additionally, members of the Company's Board of Directors and investment committee have been solicited for advice and provided with information. Management reviews the Company's entire portfolio on a security level basis to be sure all understand our holdings, potential risks and underlying credit supporting the investments. Management intends to continue its close monitoring of its bond holdings and other investments for possible deterioration or market condition changes. Future events may result in Management's determination that certain current investment holdings may need to be sold which could result in gains or losses in future periods.
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 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, 2025 and 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. 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 10 - 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.
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.
Short-Term Borrowings
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 $21.8 million as of December 31, 2025. The Company has no outstanding borrowings on the CMA at December 31, 2025 nor had any borrowing activity during 2025.
Consolidated Liquidity
Cash used in operating activities was approximately $6.5 million and $1.6 million in 2025 and 2024, 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 with the exception of fluctuations in reinsurance premiums. Management anticipates future cash flows from operations to remain similar to historic trends.
During 2025, the Company's investing activities used net cash of approximately $6.9 million and provided net cash of approximately $26.5 million in 2024. The Company recognized proceeds of approximately $36.0 million and $71.8 million from investments sold and matured in 2025 and 2024, respectively. The Company used approximately $(42.9) million and $(45.3) million to acquire investments during 2025 and 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 $(1.3) million and $(20.9) million during 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company had $0 in debt outstanding with third parties.
The Company had cash and cash equivalents of approximately $30.5 million and $45.3 million as of December 31, 2025 and 2024, 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 $73.2 million and $76.5 million at December 31, 2025 and 2024, 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 2 - Investments in the Notes to the Consolidated Financial Statements for detailed disclosures regarding the Company's investment portfolio.
Management believes the overall sources of liquidity available will be sufficient to satisfy its financial obligations.
Capital Resources
The Company's capital structure consists of available short-term debt, long-term debt and shareholders' equity. A complete analysis and description of the short-term and long-term debt issues available as of December 31, 2025 and 2024 are presented in Note 8 - Credit Arrangements in the Notes to the Consolidated Financial Statements.
The Company had $0 of debt outstanding as of December 31, 2025 and 2024, respectively.
The NAIC's risk-based capital requirements require insurance companies to calculate and report information under a risk-based capital formula. The risk-based capital (RBC) formula measures the adequacy of statutory capital and surplus in relation to investment and insurance risks such as asset quality, mortality and morbidity, asset and liability matching and other business factors. The RBC formula is used by state insurance regulators as an early warning tool to identify, for the purpose of initiating regulatory action, insurance companies that potentially are inadequately capitalized.
At December 31, 2025, UG has a ratio of approximately 5.06, which is 506% of the authorized control level. Accordingly, the Company meets the RBC requirements.
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 March of 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 $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 2025, the Company repurchased 18,449 shares through the stock repurchase program for $782,812. Through December 31, 2025, UTG has spent $21,622,367 in the acquisition of 1,399,269 shares under this program.
Total shareholders' equity was approximately $232.7 million and $216.8 million as of December 31, 2025 and 2024, respectively. Total shareholders' equity increased approximately 7% in 2025 as compared to 2024. The increase is primarily attributable to net income from operations. As of December 31, 2025 and 2024, the Company reported accumulated other comprehensive income of approximately $1.9 million and $2.6 million, respectively.
New Accounting Pronouncements
See Note 1 - Summary of Significant Account Policies in the Notes to the Consolidated Financial Statements for information regarding new accounting pronouncements.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements, financing activities or other relationships with unconsolidated entities or other persons.
Contractual Obligations
As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K, the Company has elected to comply with certain scaled disclosure reporting obligations, and therefore does not have to provide the information required by this item.
UTG Inc. published this content on March 25, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 25, 2026 at 17:55 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]