10-Q 1 utg22q3.htm UTG22Q3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2022

OR

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ____________

Commission File No. 000-16867

 
UTG, INC.
  
 
(Exact name of registrant as specified in its charter)
  
     
Delaware
  
20-2907892
(State or other jurisdiction of
  
(I.R.S. Employer
incorporation or organization)
  
Identification No.)
     
 
205 North Depot Street
  
 
Stanford, KY 40484
  
 
(Address of principal executive offices) (Zip Code)
  

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

Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Name of each exchange on which registered
       None
                             None

Securities registered pursuant to Section 12(g) of the Act:

Title of class
Common Stock, stated value $.001 per share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧  No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.  See the definitions of “large accelerated filer,” accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer □
Accelerated filer □
 
 
Non-accelerated filer □
Smaller reporting company ☒
 
 
 
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐    No ☒
 
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

The number of shares outstanding of the registrant’s common stock as of October 31, 2022 was 3,162,047.


UTG, Inc.
(The “Company”)

TABLE OF CONTENTS

Part I.   Financial Information
4
Item 1.  Financial Statements
4
Condensed Consolidated Balance Sheets
4
Condensed Consolidated Statements of Operations
5
Condensed Consolidated Statements of Comprehensive Income (Loss)
6
Condensed Consolidated Statements of Shareholders’ Equity
7
Condensed Consolidated Statements of Cash Flows
8
Notes to Condensed Consolidated Financial Statements
9
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
22
Item 4.  Controls and Procedures
29
 
Part II.  Other Information
 
29
Item 1.  Legal Proceedings
29
Item 1A. Risk Factors
29
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
29
Item 3.  Defaults Upon Senior Securities
29
Item 4.  Mine Safety Disclosures
29
Item 5.  Other Information
29
Item 6.  Exhibits
29
 
Signatures
 
30


Part 1.   Financial Information.
Item 1.  Financial Statements.

UTG, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

 
September 30, 2022
    
December 31, 2021*
  
ASSETS
  
Investments:
            
Investments available for sale:
            
Fixed maturities, at fair value (amortized cost $120,400,062 and $127,949,963)
  
$
109,977,965
    
$
140,963,881
  
    Equity securities, at fair value (cost $76,424,988 and $68,403,168)
    
141,130,095
      
122,229,121
  
Equity securities, at cost
    
13,683,343
      
14,543,343
  
Mortgage loans on real estate at amortized cost
    
29,504,939
      
29,183,562
  
Investment real estate
    
35,948,558
      
39,748,261
  
Notes receivable
    
19,609,019
      
17,722,976
  
Policy loans
    
7,215,150
      
7,390,497
  
Total investments
    
357,069,069
      
371,781,641
  
                 
Cash and cash equivalents
    
24,783,095
      
30,787,278
  
Accrued investment income
    
1,232,632
      
1,264,159
  
Reinsurance receivables:
                
Future policy benefits
    
24,385,124
      
24,740,562
  
Policy claims and other benefits
    
3,955,000
      
4,426,997
  
Cost of insurance acquired
    
2,870,240
      
3,386,501
  
Income tax receivable
    
0
      
975,373
  
Other assets
    
1,074,857
      
1,097,246
  
Total assets
  
$
415,370,017
    
$
438,459,757
  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
  
Liabilities:
                
Policy liabilities and accruals:
                
Future policyholder benefits
  
$
231,426,190
    
$
235,367,680
  
Policy claims and benefits payable
    
3,174,423
      
3,941,305
  
Other policyholder funds
    
325,249
      
345,248
  
Dividend and endowment accumulations
    
14,745,472
      
14,686,166
  
Income taxes payable
    
403,285
      
-
  
Deferred income taxes
    
11,295,176
      
13,680,396
  
Notes payable
    
8,000,000
      
24,000,000
  
Trading securities, at fair value (proceeds $0 and $2,202)
    
0
      
1,116
  
Other liabilities
    
6,828,681
      
5,193,039
  
Total liabilities
    
276,198,476
      
297,214,950
  
                 
Shareholders' equity:
                
Common stock - no par value, stated value $0.001 per share.  Authorized 7,000,000 shares - 3,163,011 and 3,166,669 shares outstanding
    
3,164
      
3,167
  
Additional paid-in capital
    
32,662,157
      
32,780,587
  
Retained earnings
    
114,210,320
      
97,731,347
  
Accumulated other comprehensive income (loss)
    
(8,261,301
)
    
10,253,151
  
Total UTG shareholders' equity
    
138,614,340
      
140,768,252
  
Noncontrolling interests
    
557,201
      
476,555
  
Total shareholders' equity
    
139,171,541
      
141,244,807
  
Total liabilities and shareholders' equity
  
$
415,370,017
    
$
438,459,757
  

* Balance sheet audited at December 31, 2021.

See accompanying notes.


UTG, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

 
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
    
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
Revenue:
                        
Premiums and policy fees
  
$
2,025,092
    
$
2,274,672
    
$
6,333,796
    
$
6,870,216
  
Ceded reinsurance premiums and policy fees
    
(676,460
)
    
(725,156
)
    
(2,044,259
)
    
(2,013,691
)
Net investment income
    
6,266,722
      
2,134,293
      
15,166,276
      
6,176,319
  
Other income
    
88,035
      
92,998
      
243,071
      
282,203
  
      Revenue before net investment gains (losses)
    
7,703,389
      
3,776,807
      
19,698,884
      
11,315,047
  
Net investment gains (losses):
                                
Other-than-temporary impairments
    
0
      
18,129
      
0
      
(393,455
)
Other realized investment gains, net
    
1,900,458
      
127,775
      
6,759,716
      
4,560,282
  
Change in fair value of equity securities
    
7,097,738
      
(9,380,710
)
    
14,462,029
      
10,994,305
  
      Total net investment gains (losses)
    
8,998,196
      
(9,234,806
)
    
21,221,745
      
15,161,132
  
Total revenue
    
16,701,585
      
(5,457,999
)
    
40,920,629
      
26,476,179
  
                                 
Benefits and other expenses:
                                
Benefits, claims and settlement expenses:
                                
Life
    
3,343,438
      
4,974,295
      
11,613,356
      
12,994,904
  
Ceded reinsurance benefits and claims
    
(486,899
)
    
(904,913
)
    
(1,228,489
)
    
(1,891,579
)
Annuity
    
252,079
      
246,362
      
771,309
      
739,455
  
Dividends to policyholders
    
63,632
      
68,243
      
236,724
      
242,527
  
Commissions and amortization of deferred policy acquisition costs
    
(34,352
)
    
(37,464
)
    
(86,311
)
    
(94,372
)
Amortization of cost of insurance acquired
    
172,087
      
178,383
      
516,261
      
536,228
  
Operating expenses
    
2,733,470
      
1,777,102
      
7,551,131
      
5,614,635
  
Interest expense
    
36,748
      
0
      
72,028
      
0
  
Total benefits and other expenses
    
6,080,203
      
6,302,008
      
19,446,009
      
18,141,798
  
                                 
Income (loss) before income taxes
    
10,621,382
      
(11,760,007
)
    
21,474,620
      
8,334,381
  
Income tax expense (benefit)
    
2,542,701
      
(2,762,312
)
    
4,915,001
      
1,308,355
  
                                 
Net income (loss)
    
8,078,681
      
(8,997,695
)
    
16,559,619
      
7,026,026
  
                                 
Net income attributable to noncontrolling interests
    
(26,825
)
    
(14,577
)
    
(80,646
)
    
(70,832
)
                                 
Net income (loss) attributable to common shareholders
  
$
8,051,856
    
$
(9,012,272
)
  
$
16,478,973
    
$
6,955,194
  
                                 
Amounts attributable to common shareholders
                                
Basic income (loss) per share
  
$
2.54
    
$
(2.84
)
  
$
5.20
    
$
2.19
  
                                 
Diluted income (loss) per share
  
$
2.54
    
$
(2.84
)
  
$
5.20
    
$
2.19
  
                                 
Basic weighted average shares outstanding
    
3,165,842
      
3,169,328
      
3,169,704
      
3,173,755
  
                                 
Diluted weighted average shares outstanding
    
3,165,842
      
3,169,328
      
3,169,704
      
3,173,755
  


See accompanying notes.



UTG, Inc.

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

 
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
    
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
Net income (loss)
  
$
8,078,681
    
$
(8,997,695
)
  
$
16,559,619
    
$
7,026,026
  
                                 
Other comprehensive income (loss):
                                
                                 
Unrealized holding gains (losses) arising during period, pre-tax
    
(7,122,856
)
    
(1,186,410
)
    
(23,436,431
)
    
(6,161,411
)
Tax (expense) benefit on unrealized holding gains (losses) arising during the period
    
1,495,712
      
249,146
      
4,921,563
      
1,293,896
  
Unrealized holding gains (losses) arising during period, net of tax
    
(5,627,144
)
    
(937,264
)
    
(18,514,868
)
    
(4,867,515
)
                                 
Less reclassification adjustment for (gains) losses included in net income
    
0
      
(39,762
)
    
527
      
337,586
  
Tax expense (benefit) for gains included in net income (loss)
    
0
      
8,350
      
(111
)
    
(70,893
)
Reclassification adjustment for (gains) losses included in net income, net of tax
    
0
      
(31,412
)
    
416
      
266,693
  
Subtotal: Other comprehensive income (loss), net of tax
    
(5,627,144
)
    
(968,676
)
    
(18,514,452
)
    
(4,600,822
)
                                 
Comprehensive income (loss)
    
2,451,537
      
(9,966,371
)
    
(1,954,833
)
    
2,425,204
  
                                 
Less comprehensive income attributable to noncontrolling interests
    
(26,825
)
    
(14,577
)
    
(80,646
)
    
(70,832
)
                                 
Comprehensive income (loss) attributable to UTG, Inc.
  
$
2,424,712
    
$
(9,980,948
)
  
$
(2,035,479
)
  
$
2,354,372
  


See accompanying notes.



UTG, Inc.
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

Three Months Ended September 30, 2022
  
Common Stock
    
Additional Paid-In Capital
    
Retained Earnings
    
Accumulated Other
Comprehensive Income
    
Noncontrolling Interest
    
Total Shareholders’ Equity
  
                                     
Balance at June 30, 2022
  
$
3,170
    
$
32,854,050
    
$
106,158,464
    
$
(2,634,157
)
  
$
530,976
    
$
136,912,503
  
Common stock issued during year
    
0
      
0
      
0
      
0
      
0
      
0
  
Treasury shares acquired
    
(6
)
    
(191,893
)
    
0
      
0
      
0
      
(191,899
)
Net income (loss) attributable to common shareholders
    
0
      
0
      
8,051,856
      
0
      
0
      
8,051,856
  
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes
    
0
      
0
      
0
      
(5,627,144
)
    
0
      
(5,627,144
)
Contributions
    
0
      
0
      
0
      
0
      
0
      
0
  
Distributions
    
0
      
0
      
0
      
0
      
(600
)
    
(600
)
Gain attributable to noncontrolling interest
    
0
      
0
      
0
      
0
      
26,825
      
26,825
  
Balance at September 30, 2022
  
$
3,164
    
$
32,662,157
    
$
114,210,320
    
$
(8,261,301
)
  
$
557,201
    
$
139,171,541
  

Nine Months Ended September 30, 2022
  
Common Stock
    
Additional Paid-In Capital
    
Retained Earnings
    
Accumulated Other
Comprehensive Income
    
Noncontrolling Interest
    
Total Shareholders’ Equity
  
                                     
Balance at December 31, 2021
  
$
3,167
    
$
32,780,587
    
$
97,731,347
    
$
10,253,151
    
$
476,555
    
$
141,244,807
  
Common stock issued during year
    
18
      
486,779
      
0
      
0
      
0
      
486,797
  
Treasury shares acquired
    
(21
)
    
(605,209
)
    
0
      
0
      
0
      
(605,230
)
Net income (loss) attributable to common shareholders
    
0
      
0
      
16,478,973
      
0
      
0
      
16,478,973
  
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes
    
0
      
0
      
0
      
(18,514,452
)
    
0
      
(18,514,452
)
Contributions
    
0
      
0
      
0
      
0
      
0
      
0
  
Distributions
    
0
      
0
      
0
      
0
      
0
      
0
  
Gain attributable to noncontrolling interest
    
0
      
0
      
0
      
0
      
80,646
      
80,646
  
Balance at September 30, 2022
  
$
3,164
    
$
32,662,157
    
$
114,210,320
    
$
(8,261,301
)
  
$
557,201
    
$
139,171,541
  

See accompanying notes.



UTG, Inc.
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

Three Months Ended September 30, 2021
  
Common Stock
    
Additional Paid-In Capital
    
Retained Earnings
    
Accumulated Other
Comprehensive Income
    
Noncontrolling Interest
    
Total Shareholders’ Equity
  
                                     
Balance at June 30, 2021
  
$
3,174
    
$
32,956,587
    
$
104,035,750
    
$
11,952,095
    
$
517,027
    
$
149,464,633
  
Common stock issued during year
    
0
      
0
      
0
      
0
      
0
      
0
  
Treasury shares acquired
    
(6
)
    
(155,735
)
    
0
      
0
      
0
      
(155,741
)
Net income attributable to common shareholders
    
0
      
0
      
(9,012,272
)
    
0
      
0
      
(9,012,272
)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes
    
0
      
0
      
0
      
(968,676
)
    
0
      
(968,676
)
Contributions
    
0
      
0
      
0
      
0
      
0
      
0
  
Distributions
    
0
      
0
      
0
      
0
      
0
      
0
  
Gain attributable to noncontrolling interest
    
0
      
0
      
0
      
0
      
14,577
      
14,577
  
Balance at September 30, 2021
  
$
3,168
    
$
32,800,852
    
$
95,023,478
    
$
10,983,419
    
$
531,604
    
$
139,342,521
  

Nine Months Ended September 30, 2021
  
Common Stock
    
Additional Paid-In Capital
    
Retained Earnings
    
Accumulated Other
Comprehensive Income
    
Noncontrolling Interest
    
Total Shareholders’ Equity
  
                                     
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
      
170,531
      
0
      
0
      
0
      
170,538
  
Treasury shares acquired
    
(15
)
    
(394,697
)
    
0
      
0
      
0
      
(394,712
)
Net income attributable to common shareholders
    
0
      
0
      
6,955,194
      
0
      
0
      
6,955,194
  
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes
    
0
      
0
      
0
      
(4,600,822
)
    
0
      
(4,600,822
)
Contributions
    
0
      
0
      
0
      
0
      
0
      
0
  
Distributions
    
0
      
0
      
0
      
0
      
0
      
0
  
Gain attributable to noncontrolling interest
    
0
      
0
      
0
      
0
      
70,832
      
70,832
  
Balance at September 30, 2021
  
$
3,168
    
$
32,800,852
    
$
95,023,478
    
$
10,983,419
    
$
531,604
    
$
139,342,521
  


See accompanying notes.




UTG, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

 
Nine Months Ended
 
September 30,
  
September 30,
 
2022
  
2021
Cash flows from operating activities:
          
Net income (loss)
$
16,559,619
  
$
7,026,026
Adjustments to reconcile net income to net cash used in operating activities:
          
Amortization (accretion) of investments
  
24,741
    
55,737
Other-than-temporary impairments
  
0
    
393,455
Realized investment gains (losses), net
  
(6,759,716)
    
(4,560,282)
Change in fair value of equity securities
  
(14,462,029)
    
(10,994,305)
Unrealized trading (gains) losses included in income
  
0
    
(1,329)
Realized trading (gains) losses included in income
  
13,283
    
(20,360)
Amortization of cost of insurance acquired
  
516,261
    
536,228
Depreciation and depletion
  
1,635,706
    
1,862,637
Stock-based compensation
  
486,797
    
170,538
Charges for mortality and administration of universal life and annuity products
  
(4,480,817)
    
(4,791,098)
Interest credited to account balances
  
2,831,885
    
2,940,521
Change in accrued investment income
  
31,527
    
299,159
Change in reinsurance receivables
  
827,435
    
(171,403)
Change in policy liabilities and accruals
  
(3,074,992)
    
(3,774,549)
Change in income taxes receivable (payable)
  
1,378,658
    
(1,433,348)
Change in other assets and liabilities, net
  
4,194,376
    
2,240,191
Net cash used in operating activities
  
(277,266)
    
(10,222,182)
           
Cash flows from investing activities:
          
Proceeds from investments sold and matured:
          
Fixed maturities available for sale
  
8,628,136
    
18,581,107
Equity securities
  
10,735,510
    
5,306,206
Trading securities
  
17,983
    
29,283
Mortgage loans
  
1,443,119
    
7,758,199
Real estate
  
11,387,025
    
5,973,637
Notes receivable
  
3,984,614
    
1,372,154
Policy loans
  
903,696
    
1,588,854
Total proceeds from investments sold and matured
  
37,100,083
    
40,609,440
Cost of investments acquired:
          
Fixed maturities available for sale
  
(1,112,505)
    
(20,000)
Equity securities
  
(12,540,638)
    
(26,353,197)
Trading securities
  
(32,382)
    
(16,133)
Mortgage loans
  
(1,755,496)
    
(3,305,354)
Real estate
  
(4,236,603)
    
(5,507,777)
Notes receivable
  
(5,870,657)
    
(7,840,000)
Policy loans
  
(728,348)
    
(838,053)
Total cost of investments acquired
  
(26,276,629)
    
(43,880,514)
Net cash provided by (used in) investing activities
  
10,823,454
    
(3,271,074)
           
Cash flows from financing activities:
          
Policyholder contract deposits
  
3,455,489
    
3,303,536
Policyholder contract withdrawals
  
(3,400,630)
    
(4,327,607)
Proceeds from notes payable/line of credit
  
19,500,000
    
0
Payments of principal on notes payable/line of credit
  
(35,500,000)
    
0
Purchase of treasury stock
  
(605,230)
    
(394,712)
   Non controlling contributions (distributions) of consolidated subsidiary
  
0
    
0
Net cash used in financing activities
  
(16,550,371)
    
(1,418,783)
Net increase (decrease) in cash and cash equivalents
  
(6,004,183)
    
(14,912,039)
Cash and cash equivalents at beginning of period
  
30,787,278
    
39,025,754
Cash and cash equivalents at end of period
$
24,783,095
  
$
24,113,715

See accompanying notes.


UTG, Inc.

Notes to Condensed Consolidated Financial Statements
 (Unaudited)

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of September 30, 2022, 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, 2021.  The Company’s results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 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 2020, 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 regularly.  While the worst of the disruption appears to be behind us, there remains uncertainty should a new variant again appear. The Company cannot at this time predict the ultimate impact the pandemic or recurrence of such, may 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 September 30, 2022, Mr. Correll owns or controls directly and indirectly approximately 65.46% 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 nine months ended September 30, 2022, there were no additions to or changes in the critical accounting policies disclosed in the 2021 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:

September 30, 2022
  
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
  
$
21,313,155
    
$
0
    
$
(1,198,869
)
  
$
20,114,286
  
U.S. special revenue and assessments
    
7,536,507
      
0
      
(392,137
)
    
7,144,370
  
All other corporate bonds
    
91,550,400
      
90,639
      
(8,921,730
)
    
82,719,309
  
   
$
120,400,062
    
$
90,639
    
$
(10,512,736
)
  
$
109,977,965
  

December 31, 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
  
$
25,312,358
    
$
355,623
    
$
(17,078
)
  
$
25,650,903
  
U.S. special revenue and assessments
    
7,540,867
      
982,668
      
0
      
8,523,535
  
All other corporate bonds
    
95,096,738
      
11,692,705
      
0
      
106,789,443
  
   
$
127,949,963
    
$
13,030,996
    
$
(17,078
)
  
$
140,963,881
  

The amortized cost and estimated market value of debt securities at September 30, 2022, 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
September 30, 2022
  
Amortized Cost
    
Fair Value
  
Due in one year or less
  
$
8,496,905
    
$
8,416,295
  
Due after one year through five years
    
44,881,107
      
42,688,475
  
Due after five years through ten years
    
17,950,439
      
17,078,456
  
Due after ten years
    
22,053,354
      
18,865,205
  
Fixed maturities with no single maturity date
    
27,018,257
      
22,929,534
  
Total
  
$
120,400,062
    
$
109,977,965
  

The fair value of investments with sustained gross unrealized losses are as follows:

September 30, 2022
  
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
  
$
20,114,286
      
(1,198,869
)
    
0
      
0
      
20,114,286
    
$
(1,198,869
)
U.S. Special Revenue and Assessments
    
7,144,370
      
(392,137
)
    
0
      
0
      
7,144,370
      
(392,137
)
All other corporate bonds
    
78,415,980
      
(8,921,730
)
    
0
      
0
      
78,415,980
      
(8,921,730
)
Total fixed maturities
  
$
105,674,636
      
(10,512,736
)
    
0
      
0
      
105,674,636
    
$
(10,512,736
)

December 31, 2021
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
  
$
4,042,825
      
(17,078
)
    
0
      
0
      
4,042,825
    
$
(17,078
)
Total fixed maturities
  
$
4,042,825
      
(17,078
)
    
0
      
0
      
4,042,825
    
$
(17,078
)

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

 
Less than 12 months
    
12 months or longer
    
Total
  
As of September 30, 2022
                  
Fixed maturities
    
58
      
0
      
58
  
As of December 31, 2021
                        
Fixed maturities
    
3
      
0
      
3
  

Substantially all of the unrealized losses on fixed maturities at September 30, 2022 and December 31, 2021 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  September 30, 2022 and December 31, 2021.

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
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
Realized gains:
                        
Sales of fixed maturities
  
$
0
    
$
21,631
    
$
4,683
    
$
55,867
  
Sales of equity securities
    
1,485,872
      
19,344
      
1,883,453
      
3,038,551
  
Sales of real estate
    
449,133
      
104,204
      
5,020,973
      
1,487,456
  
Total realized gains
    
1,935,005
      
145,179
      
6,909,109
      
4,581,874
  
Realized losses:
                                
Sales of fixed maturities
    
0
      
0
      
(5,210
)
    
0
  
Sales of equity securities
    
0
      
(17,404
)
    
(109,636
)
    
(21,592
)
Sales of real estate
    
(34,547
)
    
0
      
(34,547
)
    
0
  
 Other-than-temporary impairments
    
0
      
18,129
      
0
      
(393,455
)
Total realized losses
    
(34,547
)
    
725
      
(149,393
)
    
(415,047
)
Net realized investment gains (losses)
    
1,900,458
      
145,904
      
6,759,716
      
4,166,827
  
Change in fair value of equity securities:
                                
Change in fair value of equity securities held at the end of the period
    
7,097,738
      
(9,380,710
)
    
14,462,029
      
10,994,305
  
Change in fair value of equity securities
    
7,097,738
      
(9,380,710
)
    
14,462,029
      
10,994,305
  
Net investment gains (losses)
  
$
8,998,196
    
$
(9,234,806
)