UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 AND 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
-------------
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. 0-16867
UNITED TRUST GROUP, INC.
(Exact name of registrant as specified in its charter)
ILLINOIS 37-1172848
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5250 SOUTH SIXTH STREET
P.O. BOX 5147
SPRINGFIELD, IL 62705
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (217) 241-6300
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 [X] No [ ]
The number of shares outstanding of the registrant's common stock as of July 31,
2000, was 4,175,066.
<PAGE>
UNITED TRUST GROUP, INC. AND SUBSIDIARIES
(The "Company")
TABLE OF CONTENTS
Part 1. Financial Information..............................................3
ITEM 1. FINANCIAL STATEMENTS.............................................3
Consolidated Balance Sheets as of
June 30, 2000 and December 31, 1999....................................3
Consolidated Statements of Operations for the
six and three months ended June 30, 2000 and 1999......................4
Consolidated Statement of Changes in Shareholders' Equity for the
Six Months ended June 30, 2000.........................................5
Consolidated Statements of Cash Flows for the
six months ended June 30, 2000 and 1999................................6
Notes to Consolidated Financial Statements..............................7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................15
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......19
PART II. OTHER INFORMATION................................................20
ITEM 1. LEGAL PROCEEDINGS...............................................20
ITEM 2. CHANGE IN SECURITIES............................................20
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................................20
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............20
ITEM 5. OTHER INFORMATION...............................................20
ITEM 6. EXHIBITS........................................................20
SIGNATURES..................................................................21
2
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
UNITED TRUST GROUP, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
June 30, December 31,
ASSETS 2000 1999
<S> <C> <C>
---------------- ---------------
Investments:
Fixed maturities at amortized cost
(market $126,211,407 and $142,675,019) $ 128,658,923 $ 144,751,111
Investments held for sale:
Fixed maturities, at market
(cost $50,327,514 and $31,415,026) 49,025,083 30,191,357
Equity securities, at market
(cost $3,454,076 and $2,886,315) 3,089,777 2,165,556
Mortgage loans on real estate at amortized cost 20,023,012 15,483,772
Investment real estate, at cost,
net of accumulated depreciation 15,128,210 15,552,165
Real estate acquired in satisfaction of debt 0 1,550,000
Policy loans 14,205,575 14,151,113
Other long-term investments 200,000 906,278
Short-term investments 2,150,683 2,230,267
---------------- ---------------
232,481,263 226,981,619
Cash and cash equivalents 14,230,155 21,027,804
Accrued investment income 3,566,383 3,459,761
Reinsurance receivables:
Future policy benefits 35,533,140 36,117,010
Policy claims and other benefits 3,760,834 3,806,382
Cost of insurance acquired 36,066,920 36,832,068
Deferred policy acquisition costs 4,554,516 5,127,536
Costs in excess of net assets purchased,
net of accumulated amortization 1,302,902 1,442,339
Property and equipment,
net of accumulated depreciation 2,900,092 3,034,702
Income taxes receivable, current 371,524 434,427
Other assets 804,612 896,880
---------------- ---------------
Total assets $ 335,572,341 $ 339,160,528
================ ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Policy liabilities and accruals:
Future policy benefits $ 243,109,962 $ 244,934,013
Policy claims and benefits payable 2,671,229 2,773,309
Other policyholder funds 1,527,516 1,627,341
Dividend and endowment accumulations 13,958,367 14,431,574
Income taxes payable:
Deferred 12,022,856 11,913,154
Notes payable 4,377,169 5,917,969
Other liabilities 4,628,198 5,169,128
---------------- ---------------
Total liabilities 282,295,297 286,766,488
---------------- ---------------
Minority interests in consolidated subsidiaries 9,040,216 9,017,368
---------------- ---------------
Shareholders' equity:
Common stock - no par value, stated value $.02 per share
Authorized 7,000,000 shares - 3,970,266 shares issued after
deducting treasury shares of 47,507 79,405 79,405
Additional paid-in capital 45,175,076 45,175,076
Accumulated deficit (99,396) (738,909)
Accumulated other comprehensive income (918,257) (1,138,900)
---------------- ---------------
Total shareholders' equity 44,236,828 43,376,672
---------------- ---------------
Total liabilities and shareholders' equity $ 335,572,341 $ 339,160,528
================ ===============
</TABLE>
See accompanying notes.
3
<PAGE>
UNITED TRUST GROUP, INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------------- ----------------- ----------------- -----------------
Revenues:
<S> <C> <C> <C> <C>
Premiums and policy fees $ 5,972,401 $ 6,655,438 $ 12,199,630 $ 13,702,568
Reinsurance premiums and policy fees (770,816) (950,168) (1,660,897) (1,989,787)
Net investment income 4,009,489 3,603,212 8,261,983 7,243,599
Realized investment gains and (losses), net 15,358 (355,998) 240,039 (339,655)
Other income 121,941 183,998 241,550 354,868
---------------- ----------------- ----------------- -----------------
9,348,373 9,136,482 19,282,305 18,971,593
Benefits and other expenses:
Benefits, claims and settlement expenses:
Life 5,620,313 5,647,567 12,079,261 11,805,334
Reinsurance benefits and claims (678,378) (737,789) (1,584,480) (1,483,034)
Annuity 310,977 355,583 607,926 701,161
Dividends to policyholders 250,029 303,685 519,749 660,664
Commissions and amortization of deferred
policy acquisition costs 422,250 636,137 1,136,682 1,506,497
Amortization of cost of insurance acquired 381,821 495,270 765,148 991,198
Operating expenses 1,732,641 1,882,088 4,560,559 3,962,993
Interest expense 142,663 161,455 275,626 359,332
---------------- ----------------- ----------------- -----------------
8,182,316 8,743,996 18,360,471 18,504,145
Income before income taxes, minority interest
and equity in earnings of investees 1,166,057 392,486 921,834 467,448
Income tax (expense) credit (331,526) (293,258) (175,923) (233,255)
Minority interest in income of
consolidated subsidiaries (147,624) (10,777) (106,398) (31,806)
Equity in earnings of investees 0 35,030 0 53,555
---------------- ----------------- ----------------- -----------------
Net income $ 686,907 $ 123,481 $ 639,513 $ 255,942
================ ================= ================= =================
Basic earnings per share from continuing
operations and net income $ 0.17 $ 0.05 $ 0.16 $ 0.10
================ ================= ================= =================
Diluted earnings per share from continuing
operations and net income $ 0.17 $ 0.05 $ 0.16 $ 0.10
================ ================= ================= =================
Basic weighted average shares outstanding 3,970,266 2,490,438 3,970,266 2,490,438
================ ================= ================= =================
Diluted weighted average shares outstanding 3,970,266 2,490,669 3,970,266 2,490,669
================ ================= ================= =================
</TABLE>
See accompanying notes.
4
<PAGE>
UNITED TRUST GROUP, INC.
AND SUBSIDIARIES
Consolidated Statement of Changes in Shareholders' Equity
For the Six Months ended June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Common stock
Balance, beginning of year $ 79,405
Issued during year 0
Purchase treasury shares 0
------------------
Balance, end of period 79,405
------------------
Additional paid-in capital
Balance, beginning of year 45,175,076
Issued during year 0
Purchase treasury shares 0
------------------
Balance, end of period 45,175,076
------------------
Retained earnings (accumulated deficit)
Balance, beginning of year (738,909)
Net income (loss) 639,513 $ 639,513
------------------ ------------------
Balance, end of period (99,396)
------------------
Accumulated other comprehensive income
Balance, beginning of year (1,138,900)
Other comprehensive income
Unrealized appreciation of securities 220,643 220,643
------------------ ------------------
Comprehensive income $ 860,156
==================
Balance, end of period (918,257)
------------------
Total shareholders' equity, end of period $ 44,236,828
==================
</TABLE>
See accompanying notes.
5
<PAGE>
UNITED TRUST GROUP, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
2000 1999
------------- --------------
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities:
<S> <C> <C>
Net income $ 639,513 $ 255,942
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Amortization/accretion of fixed maturities 98,534 283,021
Realized investment (gains) losses, net (240,039) 339,655
Policy acquisition costs deferred (214,000) (385,000)
Amortization of deferred policy acquisition costs 787,020 958,326
Amortization of cost of insurance acquired 765,148 991,198
Amortization of costs in excess of net
assets purchased 45,000 45,000
Depreciation 259,043 261,941
Minority interest 106,398 31,806
Equity in earnings of investees 0 (53,555)
Change in accrued investment income (106,622) (245,696)
Change in reinsurance receivables 629,418 204,056
Change in policy liabilities and accruals (1,499,979) (1,696,571)
Charges for mortality and administration of
universal life and annuity products (5,183,335) (5,399,734)
Interest credited to account balances 3,129,102 3,284,367
Change in income taxes payable 172,605 87,188
Change in indebtedness (to) from affiliates, net 0 (1,288)
Change in other assets and liabilities, net (448,212) (499,108)
------------- --------------
Net cash used in operating activities (1,060,406) (1,538,452)
Cash flows from investing activities: Proceeds from investments sold and
matured:
Fixed maturities held for sale 0 630,000
Fixed maturities sold 0 0
Fixed maturities matured 15,990,081 19,420,359
Mortgage loans 2,813,047 3,026,853
Real estate 2,478,790 2,092,874
Policy loans 1,445,277 1,636,161
Other long-term investments 840,066 0
Short-term 235,000 383,780
------------- --------------
Total proceeds from investments sold and matured 23,802,261 27,190,027
Cost of investments acquired:
Fixed maturities held for sale (18,858,793) (27,497,142)
Fixed maturities 0 (1,643,873)
Equity securities (567,761) (161,256)
Mortgage loans (7,352,287) (2,733,106)
Real estate (388,717) (356,563)
Policy loans (1,499,739) (1,610,128)
Other long-term investments (133,788) 0
Short-term (155,416) (1,502,210)
------------- --------------
Total cost of investments acquired (28,956,501) (35,504,278)
Purchase of property and equipment (51,086) (113,764)
------------- --------------
Net cash used in investing activities (5,205,326) (8,428,015)
Cash flows from financing activities:
Policyholder contract deposits 6,627,480 7,412,179
Policyholder contract withdrawals (5,572,431) (5,842,154)
Purchase of stock of affiliates (46,166) 0
Payments of principal on notes payable (1,540,800) (2,715,395)
------------- --------------
Net cash used in financing activities (531,917) (1,145,370)
------------- --------------
Net decrease in cash and cash equivalents (6,797,649) (11,111,837)
Cash and cash equivalents at beginning of period 21,027,804 26,378,463
------------- --------------
Cash and cash equivalents at end of period $ 14,230,155 $ 15,266,626
============= ==============
</TABLE>
See accompanying notes.
6
<PAGE>
UNITED TRUST GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements have been prepared by United
Trust Group, Inc. ("UTG") and its consolidated subsidiaries ("Company") pursuant
to the rules and regulations of the Securities and Exchange Commission. Although
the Company believes the disclosures are adequate to make the information
presented not be misleading, it is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial statements and
the notes thereto presented in the Company's Annual Report on Form 10-K filed
with the Securities and Exchange Commission for the year ended December 31,
1999.
The information furnished reflects, in the opinion of the Company, all
adjustments (which include only normal and recurring accruals) necessary for a
fair presentation of the results of operations for the periods presented.
Operating results for interim periods are not necessarily indicative of
operating results to be expected for the year or of the Company's future
financial condition.
At June 30, 2000, the parent, significant subsidiaries and affiliates of United
Trust Group, Inc. were as depicted on the following organizational chart.
Organizational Chart
United Trust Group, Inc. ("UTG") is the ultimate controlling company. UTG owns
81% of First Commonwealth Corporation ("FCC"), 100% of Roosevelt Equity
Corporation ("REC") and 100% of North Plaza of Somerset, Inc. ("NORTH PLAZA").
FCC owns 100% of Universal Guaranty Life Insurance Company ("UG"). UG owns 87%
of Appalachian Life Insurance Company ("APPL") and APPL owns 100% of Abraham
Lincoln Insurance Company ("ABE").
7
<PAGE>
2. INVESTMENTS
As of June 30, 2000, fixed maturities and fixed maturities held for sale
represented 76% of total invested assets. As prescribed by the various state
insurance department statutes and regulations, the insurance companies'
investment portfolio is required to be invested in investment grade securities
to provide ample protection for policyholders. The Company does not invest in
so-called "junk bonds" or derivative investments. The liabilities of the
insurance companies are predominantly long term in nature and therefore, the
companies invest primarily in long term fixed maturity investments. The Company
has analyzed its fixed maturity portfolio and reclassified certain securities
which may be sold prior to maturity as investments held for sale. The
investments held for sale are carried at market value. Management has the intent
and ability to hold its fixed maturity portfolio to maturity and as such carries
these securities at amortized cost. As of June 30, 2000, the carrying value of
fixed maturity securities in default as to principal or interest was immaterial
in the context of consolidated assets or shareholders' equity.
3. Notes Payable
At June 30, 2000 and December 31, 1999, the Company had $4,377,169 and
$5,917,969 long-term debt outstanding, respectively. The debt is comprised of
the following components:
06/30/00 12/31/99
------------- -------------
Senior debt $ 0 $ 25,000
Subordinated 10 yr. Notes 0 840,000
Subordinated 20 yr. Notes 1,817,169 1,817,169
Convertible notes 2,560,000 2,560,000
Convertible debentures 0 675,800
------------- -------------
$ 4,377,169 $ 5,917,969
============= =============
A. Subordinated debt
The subordinated debt was incurred June 16, 1992 as a part of the acquisition of
the now dissolved Commonwealth Industries Corporation, (CIC). The 20-year notes
bear interest at the rate of 8 1/2% per annum payable semi-annually with a lump
sum principal payment due June 16, 2012.
B. Convertible notes
On July 31, 1997, UTG issued convertible notes for cash in the amount of
$2,560,000 to seven individuals, all officers or employees of UTG. The notes
bear interest at a rate of 1% over prime, with interest payments due quarterly
and principal due upon maturity as of July 31, 2004. The conversion price of the
notes are graded from $12.50 per share for the first three years, increasing to
$15.00 per share for the next two years and increasing to $20.00 per share for
the last two years. On March 1, 1999, First Southern Bancorp, Inc., an affiliate
of First Southern Funding, LLC, acquired all the outstanding convertible notes
from the original holders. Pursuant to an agreement, First Southern Bancorp,
Inc. converted the notes to common stock on July 31, 2000.
8
<PAGE>
Scheduled principal reductions on the Company's debt for the next five years is
as follows:
Year Amount
2000 $ 0
2001 0
2002 0
2003 0
2004 2,560,000
4. CAPITAL STOCK TRANSACTIONS
A. Stock option plan
UII had a stock option plan, which was assumed by UTG through a merger with UII,
under which certain directors, officers and employees may be issued options to
purchase up to 31,500 shares of common stock at $13.07 per share. Options become
exercisable at 25% annually beginning one year after date of grant and expire
generally in five years. At the September 21, 1999 board meeting, the Directors
of UTG voted to discontinue this stock option plan, leaving options for 20,576
shares ungranted and therefore ultimately forfeited. At December 31, 1999,
options for 451 shares were exercisable. At March 31, 2000 options for 430
shares previously granted expired, leaving 21 shares exercisable.
A summary of the status of UTG's stock option plan for the periods ended June
30, 2000 and December 31, 1999 and changes during the periods ending on those
dates is presented below.
<TABLE>
<CAPTION>
06/30/00 12/31/99
------------------------------ -------------------------------
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C>
Outstanding at beginning of period 451 $13.07 451 $13.07
Granted 0 0.00 0 0.00
Exercised 0 0.00 0 0.00
Forfeited 430 $13.07 0 0.00
------------- --------------- ------------- ----------------
Outstanding at end of period 21 $13.07 451 $13.07
============= =============== ============= ================
</TABLE>
The following information applies to options outstanding at June 30, 2000:
Number Outstanding 21
Exercise Price $13.07
Remaining contractual life 1/4 year
On January 15, 1991 UII adopted an additional nonqualified stock option plan,
assumed by UTG through the UII merger, under which certain employees and sales
personnel may be granted options. The plan provides for the granting of up to
42,000 options at an exercise price of $.47 per share. The options generally
expire five years from the date of grant. At the September 21, 1999 board
meeting, the Directors of UTG voted to discontinue this stock option plan,
leaving options for 30,149 shares ungranted and therefore ultimately forfeited.
A total of 11,620 option shares have been exercised through March 31, 2000, all
prior to July 1999 merger of UII into UTG. At March 31, 2000, options for the
remaining 231 shares granted expired, ending this stock option plan.
A summary of the status of UTG's stock option plan for the periods ended June
30, 2000 and December 31, 1999 and changes during the periods ending on those
dates is presented below.
9
<PAGE>
<TABLE>
<CAPTION>
06/30/00 12/31/99
------------------------------ -------------------------------
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C>
Outstanding at beginning of period 231 $0.47 231 $0.47
Granted 0 0.00 0 0.00
Exercised 0 0.00 0 0.00
Forfeited 231 0.47 0 0.00
------------- --------------- ------------- ----------------
Outstanding at end of period 0 $0.00 231 $0.47
============= =============== ============= ================
</TABLE>
B. DEFERRED COMPENSATION PLAN
UTG and FCC established a deferred compensation plan during 1993 pursuant to
which an officer or agent of FCC or affiliates of UTG, could defer a portion of
their income over the next two and one-half years in return for a deferred
compensation payment payable at the end of seven years in the amount equal to
the total income deferred plus interest at a rate of approximately 8.5% per
annum and a stock option to purchase shares of common stock of UTG. At the
beginning of the deferral period an officer or agent received an immediately
exercisable option to purchase 2,300 shares of UTG common stock at $17.50 per
share for each $25,000 ($10,000 per year for two and one-half years) of total
income deferred. The option expires on December 31, 2000. A total of 105,000
options were granted in 1993 under this plan. As Of June 30, 2000, no options
were exercised. During 2000, the Company paid deferred compensation owed
totaling $1,166,400. At June 30, 2000 and December 31, 1999, the Company held a
liability of $116,999 and $1,283,399, respectively, relating to this plan. At
June 30, 2000, UTG common stock had a market price of $6.375 per share.
<TABLE>
<CAPTION>
06/30/00 12/31/99
------------------------------ -------------------------------
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C>
Outstanding at beginning of period 105,000 $17.50 105,000 $17.50
Granted 0 0.00 0 0.00
Exercised 0 0.00 0 0.00
Forfeited 0 0.00 0 0.00
------------- --------------- ------------- ----------------
Outstanding at end of period 105,000 $17.50 105,000 $17.50
============= =============== ============= ================
</TABLE>
The following information applies to deferred compensation plan stock options
outstanding at June 30, 2000:
Number outstanding 105,000
Exercise price $17.50
Remaining contractual life 1/2 year
C. CONVERTIBLE NOTES
On July 31, 1997, UTG issued convertible notes for cash in the amount of
$2,560,000 to seven individuals, all officers or employees of UTG. The notes
bear interest at a rate of 1% over prime, with interest payments due quarterly
and principal due upon maturity of July 31, 2004. The conversion price of the
notes are graded from $12.50 per share for the first three years, increasing to
$15.00 per share for the next two years and increasing to $20.00 per share for
the last two years. As of June 30, 2000, the notes were convertible into 204,800
shares of UTG common stock with no conversion privileges having been exercised.
At June 30, 2000, UTG common stock had a market price of $6.375 per share. On
March 1, 1999, First Southern Bancorp, Inc., an affiliate of First
10
<PAGE>
Southern Funding, LLC, acquired all the outstanding UTG convertible notes from
the original holders. Pursuant to an agreement, First Southern Bancorp, Inc.
converted the notes to common stock on July 31, 2000.
D. SHARES ACQUIRED BY FSF AND AFFILIATES WITH OPTIONS GRANTED
On November 20, 1998, First Southern Funding LLC, a Kentucky corporation,
("FSF") and affiliates acquired 929,904 shares of common stock of UTG from UTG
and certain UTG shareholders. As consideration for the shares, FSF paid UTG
$10,999,995 and certain shareholders of UTG $999,990 in cash.
At the time of the stock acquisition above, UTG also granted, for nominal
consideration, an irrevocable, exclusive option to FSF to purchase up to
1,450,000 shares of UTG common stock for a purchase price in cash equal to
$15.00 per share, with such option to expire on July 1, 2001. UTG had a market
price per share of $9.50 at the date of grant of the option. The option shares
under this option are to be reduced by two shares for each share of UTG common
stock that FSF or its affiliates purchases from UTG shareholders in private or
public transactions after the execution of the option agreement. The option is
additionally limited to a maximum when combined with shares owned by FSF of 51%
of the issued and outstanding shares of UTG after giving effect to any shares
subject to the option.
As of June 30, 2000, no options were exercised. At June 30, 2000, UTG common
stock had a market value of $6.375 per share.
<TABLE>
<CAPTION>
06/30/00 12/31/99
------------------------------ -------------------------------
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C>
Outstanding at beginning of period 166,104 $15.00 1,450,000 $15.00
Granted 0 0.00 0 0.00
Exercised 0 0.00 0 0.00
Forfeited 105,651 15.00 1,283,896 15.00
------------- --------------- ------------- ----------------
Outstanding at end of period 60,453 $15.00 166,104 $15.00
============= =============== ============= ================
</TABLE>
The following information applies to options outstanding at June 30, 2000:
Number outstanding 60,453
Exercise price $ 15.00
Remaining contractual life 1 year
11
<PAGE>
5. EARNINGS PER SHARE
The following is a reconciliation of the numerators and denominators of the
basic and diluted EPS computations as presented on the income statement.
<TABLE>
<CAPTION>
For the Six Months ended June 30, 2000
--------------- ------ ------------------ ---- -----------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
--------------- ------------------ -----------------
<S> <C> <C> <C>
Basic EPS
Income available to common shareholders $ 639,513 3,970,266 $ 0.16
=================
Effect of Dilutive Securities 0 0
--------------- ------------------
Diluted EPS
Income available to common shareholders and $
assumed conversions 639,513 3,970,266 $ 0.16
=============== ================== =================
For the Three Months ended June 30, 2000
--------------- ------ ------------------ ---- -----------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
--------------- ------------------ -----------------
Basic EPS
Income available to common shareholders $ 686,907 3,970,266 $ 0.17
=================
Effect of Dilutive Securities 0 0
--------------- ------------------
Diluted EPS
Income available to common shareholders and $
assumed conversions 686,907 3,970,266 $ 0.17
=============== ================== =================
For the Six Months ended June 30, 1999
--------------- ------ ------------------ ---- -----------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
--------------- ------------------ -----------------
Basic EPS
Income available to common shareholders $ 255,942 2,490,438 $ 0.10
=================
Effect of Dilutive Securities 0 231
--------------- ------------------
Diluted EPS
Income available to common shareholders and $
assumed conversions 255,942 2,490,669 $ 0.10
=============== ================== =================
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
For the Three Months ended June 30, 1999
--------------- ------ ------------------ ---- -----------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
--------------- ------------------ -----------------
<S> <C> <C> <C>
Basic EPS
Income available to common shareholders $ 123,481 2,490,438 $ 0.05
=================
Effect of Dilutive Securities 0 231
--------------- ------------------
Diluted EPS
Income available to common shareholders and $
assumed conversions 123,481 2,490,669 $ 0.05
=============== ================== =================
</TABLE>
UTG had stock options outstanding at June 30, 2000 and December 31, 1999 in the
amount of 21 and 451 at an option price of $13.07, 60,453 and 166,104 at an
option price of $15.00, 105,000 and 105,000 at an option price of $17.50, and
204,800 and 204,800 at an option price of $12.50, which are not included in the
computation of dilutive earnings per share, since the exercise price was greater
than the average market price of the common shares.
6. Commitments and Contingencies
The insurance industry has experienced a number of civil jury verdicts which
have been returned against life and health insurers in the jurisdictions in
which the Company does business involving the insurers' sales practices, alleged
agent misconduct, failure to properly supervise agents, and other matters. Some
of the lawsuits have resulted in the award of substantial judgments against the
insurer, including material amounts of punitive damages. In some states, juries
have substantial discretion in awarding punitive damages in these circumstances.
Under the insurance guaranty fund laws in most states, insurance companies doing
business in a participating state can be assessed up to prescribed limits for
policyholder losses incurred by insolvent or failed insurance companies.
Although the Company cannot predict the amount of any future assessments, most
insurance guaranty fund laws currently provide that an assessment may be excused
or deferred if it would threaten an insurer's financial strength. Mandatory
assessments may be partially recovered through a reduction in future premium tax
in some states. The Company does not believe such assessments will be materially
different from amounts already provided for in the financial statements.
The State of Florida began an investigation of industrial life insurance
policies in the fall of 1999 regarding policies with race-based premiums. This
investigation has quickly spread to other states and to other types of small
face amount policies and was expanded to consider the fairness of premiums for
all small policies including policies which did not have race-based premiums.
The NAIC historically has defined a "small face amount policy" as one with a
face amount of $15,000 or less. Under current reviews, some states have
increased this amount to policies of $25,000 or less. These states are
attempting to force insurers to refund "excess premiums" to insureds or
beneficiaries of insureds based on the recent American General settlement. This
issue has become very complex and may become a political "hot potato". The
Company's insurance subsidiaries have no race-based premium products, but do
have policies with face amounts under the above-scrutinized limitations. The
outcome of this issue could be dramatic on the insurance industry as a whole as
well as the Company itself. The Company will continue to monitor developments
regarding this matter to determine to what extent, if any, the Company may be
exposed.
Congress recently passed the Gramm-Leach-Bliley Financial Services Modernization
Act, which requires financial institutions, including all insurers, to take
certain steps to enhance privacy protections of nonpublic personal information
for consumers. The new law is one of the most sweeping systems of privacy
protection and regulation ever imposed in our nation's history. It requires
financial companies to tell consumers how their financial information is
protected, and what a company's financial information sharing practices are,
both within a corporate family and with unrelated third parties. Companies must
inform their customers of their privacy policies and practices at the start of
their business relationship, and then at least once a year for the duration of
the relationship. Companies also
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must disclose the types of information that are shared. The privacy protections
under the act become effective November 13, 2000. Financial institutions will
have until July 1, 2001, to establish and implement privacy policies. The
Company has been monitoring developments regarding this new act and analyzing
options and requirements to determine the best method to comply with these new
requirements.
The Company and its subsidiaries are named as defendants in a number of legal
actions arising primarily from claims made under insurance policies. Those
actions have been considered in establishing the Company's liabilities.
Management is of the opinion that the settlement of those actions will not have
a material adverse effect on the Company's financial position or results of
operations.
7. Other Cash Flow Disclosure
On a cash basis, the Company paid $285,389 and $301,651 in interest expense
during the first six months of 2000 and 1999, respectively. The Company paid
$6,500 and $429,000 in federal income tax during the first six months of 2000
and 1999, respectively.
8. CONCENTRATION OF CREDIT RISK
The Company maintains cash balances in financial institutions that at times may
exceed federally insured limits. The Company maintains its primary operating
cash accounts with First Southern National Bank, an affiliate of First Southern
Funding, LLC, the largest shareholder of UTG. One of these accounts holds
approximately $5,000,000 for which there are no pledges or guarantees outside
FDIC insurance limits. The Company has not experienced any losses in such
accounts and believes it is not exposed to any significant credit risk on cash
and cash equivalents.
9. ACCOUNTING AND LEGAL DEVELOPMENTS
The FASB has issued SFAS 133 entitled, Accounting for Derivative Instruments and
Hedging Activities, which is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. SFAS 137 was subsequently issued to defer the
effective date of SFAS 133 to be effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. SFAS 133 requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain conditions are
met, a derivative may be specifically designated as a specific type of exposure
hedge. The accounting for changes in the fair value of a derivative depends on
the intended use of the derivative and the resulting designation. The adoption
of SFAS 133 had no material effect on our financial position or results of
operations, since the Company has no derivative or hedging type investments.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The purpose of this section is to discuss and analyze the Company's consolidated
results of operations, financial condition and liquidity and capital resources.
This analysis should be read in conjunction with the consolidated financial
statements and related notes that appear elsewhere in this report. The Company
reports financial results on a consolidated basis. The consolidated financial
statements include the accounts of UTG and its subsidiaries at June 30, 2000.
Cautionary Statement Regarding Forward-Looking Statements
Any forward-looking statement contained herein or in any other oral or written
statement by the company or any of its officers, directors or employees is
qualified by the fact that actual results of the company may differ materially
from any such statement due to the following important factors, among other
risks and uncertainties inherent in the company's business:
1. Prevailing interest rate levels, which may affect the ability of the
company to sell its products, the market value of the company's investments
and the lapse ratio of the company's policies, notwithstanding product
design features intended to enhance persistency of the company's products.
2. Changes in the federal income tax laws and regulations which may affect the
relative tax advantages of the company's products.
3. Changes in the regulation of financial services, including bank sales and
underwriting of insurance products, which may affect the competitive
environment for the company's products.
4. Other factors affecting the performance of the company, including, but not
limited to, market conduct claims, insurance industry insolvencies, stock
market performance, and investment performance.
Results of Operations
(a) Revenues
Premiums and policy fee revenues, net of reinsurance premiums and policy fees,
decreased 10% when comparing the first six months of 2000 to 1999 and decreased
9% for the second quarter comparison. The Company currently writes little new
traditional business, consequently, traditional premiums will decrease as the
amount of traditional business in-force decreases. Collected premiums on
universal life and interest sensitive products is not reflected in premiums and
policy revenues because Generally Accepted Accounting Principles ("GAAP")
requires that premiums collected on these types of products be treated as
deposit liabilities rather than revenue. Unless the Company acquires a block of
in-force business or marketing changes its focus to traditional business,
premium revenue will continue to decline.
Net investment income increased 14% when comparing the first six months of 2000
to 1999 and increased 11% for the second quarter comparison. During 2000, the
Company received $552,000 in the first quarter and $80,000 in the second quarter
in investment earnings from a joint venture real estate development project that
is in its latter stages. The Company expects to receive a small amount of income
from this property's final disposition. The earnings from this activity
represent approximately 9% of the increase in investment income from the
previous six-month period.
The national prime rate has risen during 2000 and is 1.75% higher at June 30,
2000 than it was at June 30, 1999. This results in higher earnings on short-term
funds as well as on longer-term investments acquired. In 1999, the Company began
investing more of its funds in mortgage loans. This is the result of its
affiliation with First Southern Funding and its affiliates ("FSF"), which
includes a bank, First Southern National Bank ("FSNB"). FSNB has been able to
provide the Company with additional expertise and experience in underwriting
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<PAGE>
commercial and residential mortgage loans, which provide more attractive yields
than the traditional bond market while maintaining high quality and low risk.
During 2000, the Company issued approximately $7,352,000 in new mortgage loans.
All but $80,000 of these new loans were generated through FSNB and its personnel
and funded by the Company through participation agreements with FSNB. FSNB
services the loans covered by these participation agreements. The Company pays
FSNB a .25% servicing fee on these loans and a one time fee at loan origination
of .50% of the original loan amount to cover costs incurred by FSNB relating to
the processing and establishment of the loan. The Company anticipates continuing
to primarily invest in mortgage loans for the short period.
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. The minimum
interest spread between earned and credited rates is 1% on the "Century 2000"
universal life insurance product, which currently is the Company's primary sales
product. The Company monitors investment yields, and when necessary adjusts
credited interest rates on its insurance products to preserve targeted interest
spreads. It is expected that monitoring of the interest spreads by management
will provide the necessary margin to adequately provide for associated costs on
the insurance policies the Company currently has in force and will write in the
future. At the March 1999 Board of Directors meeting, the Board lowered
crediting rates one-half percent on all products that could be lowered. This
adjustment was in response to continued declines in interest rates in the
marketplace. The change will result in interest crediting reductions of
approximately $600,000 per year. Policy interest crediting rate changes become
effective on an individual policy basis on the next policy anniversary.
Therefore, it takes a full year from the time the change is determined for the
full impact of such change to be realized.
(b) Expenses
Benefits, claims and settlement expenses net of reinsurance benefits and claims,
are comparable in 2000 to 1999. Death benefit claims were $411,000 greater than
the prior six month period. Policy claims vary from year to year and therefore,
fluctuations in mortality are to be expected and are not considered unusual by
management. The increase in death benefit claims was offset by lower reserve
increases on interest sensitive business in force than the previous year due to
the reduction in interest crediting rates approved by the Board of Directors of
the respective insurance subsidiaries in March of 1999. Reserves continue to
increase on in-force policies as the age of the insureds increases.
Operating expenses increased 15% in 2000 compared to 1999 for the first six
month period and decreased 8% for the second quarter comparison. At the March
27, 2000 Board of Directors meeting, United Trust Group, Inc. and each of its
affiliates accepted the resignation of Larry E. Ryherd as Chairman of the Board
of Directors and Chief Executive Officer. Mr. Ryherd had 28 months remaining on
an employment contract with the Company at the end of March 2000. No settlement
or resolution among the parties involved has been reached as to the remaining
period of Mr. Ryherd's contract. As such, a charge of $933,333 was incurred in
first quarter 2000 for the remainder of this contract. Additionally, the Company
accrued $125,000 in expenses in the first quarter 2000 related to severance
costs from the termination of three employees. Exclusive of the above accruals,
operating expenses declined 12% from the prior year six months primarily as the
result of lower salary and related employee costs. In March of 1999, the Company
determined it could no longer continue to support its fixed costs relating to
new business in light of the declining new business trend and no indication it
would reverse any time soon. It was determined these fixed costs should be
reduced to be commensurate with the level of new sales production activity then
being experienced. As such, in March 1999, seven employees of the Company
(approximately 8% of the total staff) were terminated due to lack of business
activity. In the fourth quarter of 1999, the Company transferred the policy
administration functions of its insurance subsidiary APPL from Huntington, West
Virginia to its Springfield, Illinois location. APPL policy administration was
then converted to the same computer system used to administer the other
insurance subsidiaries.
Interest expense decreased 23% in the first six months of 2000 compared to 1999
and decreased 12% for the second quarter results. The Company continues its plan
to repay all of its outstanding debt. Of the remaining debt, approximately 58.5%
has a variable interest rate tied to the national prime rate. The national prime
rate has been increasing over the past year, resulting in increased interest
costs on these loans. During the second quarter of 2000, the Company repaid
$1,540,800 of its debt.
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<PAGE>
(c) Net income
The Company had a net income of $639,513 for the first six months of 2000
compared to $255,942 in 1999 and net income of $686,907 for second quarter 2000
compared to $123,481 for second quarter 1999. Increased investment earnings
primarily relating to the Company's joint venture real estate development
project partially offset by expense accruals relating to the employment
agreement of Mr. Ryherd and severance of terminated employees resulted in the
improvement in net income from the previous year.
Financial Condition
The financial condition of the Company has changed very little since December
31,1999. Total shareholder's equity increased approximately $860,000 as of June
30, 2000 compared to December 31, 1999.
Investments represent approximately 69% and 67% of total assets at June 30, 2000
and December 31, 1999, respectively. Accordingly, investments are the largest
asset group of the Company. The Company's insurance subsidiaries are regulated
by insurance statutes and regulations as to the type of investments that they
are permitted to make and the amount of funds that may be used for any one type
of investment. In light of these statutes and regulations, and the Company's
business and investment strategy, the Company generally seeks to invest in high
quality low risk investments. During the second quarter of 2000, the Company
invested primarily in mortgage loans. These loans were generated through its
indirect affiliation with First Southern National Bank ("FSNB"). FSNB has been
able to provide the Company with additional expertise and experience in
underwriting commercial and residential mortgage loans, which provide more
attractive yields than the traditional bond market while maintaining high
quality and low risk. During 2000, the Company issued approximately $7,352,000
in new mortgage loans. All but $80,000 of these new loans were generated through
FSNB and its personnel and funded by the Company through participation
agreements with FSNB. Most of these loans have balloon or maturity dates within
three to seven years of issue. At June 30, 2000, mortgage loans represented
approximately 8.6% of total invested assets.
The liabilities are predominantly long-term in nature and therefore, the Company
invests in long-term fixed maturity investments that are reported in the
financial statements at their amortized cost. The Company has the ability and
intent to hold these investments to maturity; consequently, the Company does not
expect to realize any significant loss from these investments. The Company does
not own any derivative investments or "junk bonds". As of June 30, 2000, the
carrying value of fixed maturity securities in default as to principal or
interest was immaterial in the context of consolidated assets or shareholders'
equity. The Company has identified securities it may sell and classified them as
"investments held for sale". Investments held for sale are carried at market,
with changes in market value charged directly to shareholders' equity. To
provide additional flexibility and liquidity, the Company has categorized all
fixed maturity investments acquired in 1999 and 2000 as available for sale.
Securities originally classified as available for sale have since matured, thus
reducing the amount of securities carried in this category. It was determined it
would be in the Company's best financial interest to classify these new
purchases as available for sale to provide additional liquidity.
Liquidity and Capital Resources
The Company has three principal needs for cash - the insurance companies'
contractual obligations to policyholders, the payment of operating expenses and
the servicing of its long-term debt. Cash and cash equivalents as a percentage
of total assets were 4% and 6% as of June 30, 2000, and December 31, 1999,
respectively. Fixed maturities as a percentage of total invested assets were 76%
and 77% as of June 30, 2000 and December 31, 1999, respectively.
Future policy benefits are primarily long-term in nature and therefore, the
Company's investments are predominantly in long-term fixed maturity investments
such as bonds and mortgage loans which provide sufficient return to cover these
obligations. The Company has the ability and intent to hold these investments to
maturity; consequently, the Company's investment in long-term fixed maturities
is reported in the financial statements at their amortized cost. To provide
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<PAGE>
additional flexibility and liquidity, the Company has categorized all fixed
maturity investments acquired in 1999 and 2000 as available for sale.
Many of the Company's products contain surrender charges and other features
which reward persistency and penalize the early withdrawal of funds. With
respect to such products, surrender charges are generally sufficient to cover
the Company's unamortized deferred policy acquisition costs with respect to the
policy being surrendered.
Cash used in operating activities was $(1,060,406) and $(1,538,452) in 2000 and
1999, respectively. The net cash used in operating activities plus net
policyholder contract deposits after the payment of policyholder withdrawals
equaled $(5,357) in 2000 and $31,573 in 1999. Management utilizes this
measurement of cash flows as an indicator of the performance of the Company's
insurance operations, since reporting regulations require cash inflows and
outflows from universal life insurance products to be shown as financing
activities when reporting on cash flows.
Cash used in investing activities was $(5,205,326) and $(8,428,015), for 2000
and 1999, respectively. The most significant aspect of cash used in investing
activities are the fixed maturity transactions. Fixed maturities account for 65%
and 82% of the total cost of investments acquired in 2000 and 1999,
respectively. The Company has not directed its investable funds to so-called
"junk bonds" or derivative investments. During the second quarter of 2000, the
Company invested primarily in mortgage loans. These loans were generated through
its indirect affiliation with First Southern National Bank ("FSNB"). FSNB has
been able to provide the Company with additional expertise and experience in
underwriting commercial and residential mortgage loans, which provide more
attractive yields than the traditional bond market while maintaining high
quality and low risk. During 2000, the Company issued approximately $7,352,000
in new mortgage loans. All but $80,000 of these new loans were generated through
FSNB and its personnel and funded by the Company through participation
agreements with FSNB. Most of these loans have balloon or maturity dates within
three to seven years of issue.
Net cash used in financing activities was $(531,917) and $(1,145,370) for 2000
and 1999, respectively. Policyholder contract deposits decreased 11% in 2000
compared to 1999. Policyholder contract withdrawals decreased 5% in 2000
compared to 1999.
At June 30, 2000, the Company had a total of $4,377,169 in long-term debt
outstanding. The Company continues its plan to eliminate its outside debt.
During second quarter 2000, the Company repaid $1,540,800 of its debt. Pursuant
to the terms of an agreement with FSF, $2,560,000 of debt was converted to
equity on July 31, 2000.
Since UTG is a holding company, funds required to meet its debt service
requirements and other expenses are primarily provided by its subsidiaries. On a
parent only basis, UTG's cash flow is dependent on its earnings received on
notes receivable from FCC. At June 30, 2000, substantially all of the
consolidated shareholders equity represents net assets of its subsidiaries. Cash
requirements of UTG primarily relate to servicing its long-term debt. The
Company's insurance subsidiaries have maintained adequate statutory capital and
surplus and have not used surplus relief or financial reinsurance, which have
come under scrutiny by many state insurance departments. The payment of cash
dividends to shareholders is not legally restricted. However, insurance company
dividend payments are regulated by the state insurance department where the
insurance company is domiciled. UTG is the ultimate parent of UG through
ownership of FCC. UG can not pay a dividend directly to UTG due to the ownership
structure. Please refer to Note 1 of the Notes to the Consolidated Financial
Statements. UG's dividend limitations are described below without effect of the
ownership structure.
Ohio domiciled insurance companies require five days prior notification to the
insurance commissioner for the payment of an ordinary dividend. Ordinary
dividends are defined as the greater of: a) prior year statutory earnings or b)
10% of statutory capital and surplus. For the year ended December 31, 1999, UG
had a statutory gain from operations of $3,535,018. At December 31, 1999, UG's
statutory capital and surplus amounted to $15,022,234. Extraordinary dividends
(amounts in excess of ordinary dividend limitations) require prior approval of
the insurance commissioner and are not restricted to a specific calculation. UG
paid an ordinary dividend of $2,000,000 to FCC on May 2, 2000.
The Company is not aware of any litigation that will have a material adverse
effect on the financial position of the Company. In addition, the Company does
not believe that the regulatory initiatives currently under consideration by
various regulatory agencies will have a material adverse impact on the Company.
The Company is not aware of any material pending or threatened regulatory action
with respect to the Company or any of its subsidiaries. The Company does not
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<PAGE>
believe that any insurance guaranty fund assessments will be materially
different from amounts already provided for in the financial statements.
Management believes the overall sources of liquidity available will be
sufficient to satisfy its financial obligations.
Accounting and Legal Developments
The FASB has issued SFAS 133 entitled, Accounting for Derivative Instruments and
Hedging Activities, which is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. SFAS 137 was subsequently issued to defer the
effective date of SFAS 133 to be effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. SFAS 133 requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain conditions are
met, a derivative may be specifically designated as a specific type of exposure
hedge. The accounting for changes in the fair value of a derivative depends on
the intended use of the derivative and the resulting designation. The adoption
of SFAS 133 had no material effect on our financial position or results of
operations, since the Company has no derivative or hedging type investments.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market risk relates, broadly, to changes in the value of financial instruments
that arise from adverse movements in interest rates, equity prices and foreign
exchange rates. The Company is exposed principally to changes in interest rates
which affect the market prices of its fixed maturities available for sale and
its variable rate debt outstanding. The Company's exposure to equity prices and
foreign currency exchange rates is immaterial.
Interest rate risk
The Company could experience economic losses if it were required to liquidate
fixed income securities available for sale during periods of rising and/or
volatile interest rates. The Company attempts to mitigate its exposure to
adverse interest rate movements through a staggering of the maturities of its
fixed maturity investments and through maintaining cash and other short term
investments to assure sufficient liquidity to meet its obligations and to
address reinvestment risk considerations.
Tabular presentation
The following table provides information about the Company's long term debt that
is sensitive to changes in interest rates. The table presents principal cash
flows and related weighted average interest rates by; expected maturity dates.
The Company has no derivative financial instruments or interest rate swap
contracts.
<TABLE>
<CAPTION>
June 30, 2000
Expected maturity date
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000 2001 2002 2003 2004 Thereafter Total Fair value
Long term debt
Fixed rate 0 0 0 0 0 1,817,169 1,817,169 1,588,565
Avg. int. rate 0 0 0 0 0 8.50% 8.50%
Variable rate 0 0 0 0 2,560,000 0 2,560,000 2,560,000
Avg. int. rate 0 0 0 0 10.50% 0 10.50%
</TABLE>
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<PAGE>
PART II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS.
NONE
ITEM 2. CHANGE IN SECURITIES.
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its annual meeting of shareholders on June 5, 2000, and the
only matter voted on at that meeting was the following:
The election of the following directors who will serve until their successors
are elected and qualified, or their earlier death or resignation:
BROKER
DIRECTOR FOR WITHHELD NON-VOTES
John S. Albin 2,928,285 805 0
Randall L. Attkisson 2,393,394 338,383 197,313
John W. Collins 2,928,141 949 0
Robert E. Cook 2,928,063 1,027 0
Jesse T. Correll 2,379,250 338,317 211,523
Ward F. Correll 2,392,889 338,888 197,313
James E. Melville 2,911,534 3,346 14,210
Luther C. Miller 2,928,400 690 0
Millard V. Oakley 2,379,406 338,161 211,523
Robert V. O'Keefe 2,927,789 1,301 0
Robert W. Teater 2,928,429 661 0
ITEM 5. OTHER INFORMATION.
NONE
ITEM 6. EXHIBITS
The Company hereby incorporates by reference the exhibits as reflected in the
Index to Exhibits of the Company's Form 10-K for the year ended December 31,
1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED TRUST GROUP, INC.
(Registrant)
Date: August 9, 2000 By /s/ James E. Melville
James E. Melville
President, Chief Operating Officer
and Director
Date: August 9, 2000 By /s/ Theodore C. Miller
Theodore C. Miller
Senior Vice President
and Chief Financial Officer
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