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ICC Holdings, Inc. Reports 2018 Second Quarter and Six Month Results

ROCK ISLAND, Ill., July 30, 2018 /PRNewswire/ -- ICC Holdings, Inc. (NASDAQ: ICCH) (the Company), parent company of Illinois Casualty Company, a regional, multi-line property and casualty insurance company focusing exclusively on the food and beverage industry, today reported preliminary, unaudited results for the second quarter and six months ended June 30, 2018.

ICC Holdings, Inc. Logo (PRNewsfoto/ICC Holdings, Inc.)

SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2018 – FINANCIAL RESULTS

Net earnings totaled $39,000 or $0.01 per share for the second quarter of 2018, compared to a net loss of $235,000 or $0.07 per share for the second quarter of 2017. For the six months ended June 30, 2018, the Company reported net earnings of $715,000 or $0.23 per share, compared to $614,000 or $0.19 per share for the same period in 2017.

Direct premiums written grew by $2,203,000, or 15.9%, to $16,024,000 for the second quarter of 2018 from $13,821,000 for the same period in 2017. For the six months ended June 30, 2018, direct premiums written grew by $4,002,000, or 15.2%, to $30,412,000 from $26,410,000 for the same period in 2017. Net premiums earned grew by 7.2% to $11,485,000 for the second quarter of 2018 from $10,711,000 for the same period in 2017. Net premiums earned grew by 5.7% to $22,782,000 for the six months ended June 30, 2018, from $21,549,000 for the same period in 2017.

For the second quarter of 2018, the Company ceded to reinsurers $2,732,000 of earned premiums, compared to $1,938,000 of earned premiums for the second quarter of 2017. For the six months ended June 30, 2018, the Company ceded $4,980,000 of earned premiums to reinsurers compared to $3,941,000 of earned premiums for the same period in 2017.  

Net realized investment losses were $30,000 compared to $57,000 for the second quarter of 2018 and 2017, respectively. For the six months ended June 30, 2018, net realized investment gains increased by $684,000 to $1,072,000 from $388,000 for the same period in 2017. The six months ended June 30, 2018, increase is a result of the Company liquidating common stock securities as a result of changing equity managers during the first quarter of 2018.

Net investment income decreased by $4,000, or 0.6%, during the second quarter of 2018, as compared to the same period in 2017. For the six months ended June 30, 2018, net investment income grew $227,000, or 19.6% to $1,388,000 from $1,161,000 for the same period in 2017. The growth in net investment income for the six months ended June 30, 2018 was primarily due to an increase in interest earned compared to the same period of 2017.

Losses and settlement expenses increased by $927,000, or 13.5%, to $7,791,000 for the second quarter of 2018, from $6,864,000 for the same period in 2017. Loss and settlement expenses increased by $2,322,000, or 17.2% to $15,786,000 for the six months ended June 30, 2018, from $13,464,000 for the same period in 2017. The increase in losses and settlement expenses for the second quarter and six months ended June 30, 2018, is primarily due to BOP liability losses in the state of Missouri combined with weaker worker compensation results.

Policy acquisition costs are costs incurred to issue policies, which include commissions, premium taxes, underwriting reports, and underwriter compensation costs. The Company offsets the direct commissions it pays with ceded commissions it receives from reinsurers. Other operating expenses consist primarily of information technology costs, accounting and internal control salaries, as well as audit and legal expenses. Policy acquisition costs and other operating expenses decreased by $560,000, or 11.9%, to $4,160,000 for the second quarter of 2018 from $4,720,000 for the same period in 2017. Policy acquisition costs and other operating expenses decreased by $158,000, or 1.9%, to $8,297,000 for the six months ended June 30, 2018 from $8,455,000 for the same period in 2017.The decrease in policy acquisition costs and other operating expenses during the second quarter and six months ended June 30, 2018, are primarily driven by a decrease in agency contingent commission.

Total assets increased by 0.0% from $152,335,000 at December 31, 2017, to $152,398,000 at June 30, 2018. Our investment portfolio, which consists of fixed maturity securities, common stocks, preferred stocks, and property held for investment, increased by 0.7% from $105,133,000 at December 31, 2017, to $105,920,000 at June 30, 2018.

SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2018 – FINANCIAL RATIOS

The Company's loss and settlement expense ratio (defined as loss and settlement expenses divided by net premiums earned) was 67.8% and 69.3% in the second quarter and six months ended June 30, 2018, respectively, compared with 64.1% and 62.5% in the same periods of 2017, respectively.

The expense ratio (defined as the amortization of deferred policy acquisition costs and underwriting and administrative expenses divided by net premiums earned) was 36.2% and 36.4% in the second quarter and six months ended June 30, 2018, respectively, compared to 44.1% and 39.2% in the same periods of 2017, respectively.

The Company's GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 104.0% and 105.7% in the second quarter and six months ended June 30, 2018, respectively, compared to 108.2% and 101.7% in the same periods of 2017, respectively.

MANAGEMENT COMMENTARY

"Successful geographic expansion continues to produce strong premium growth. The Company is happy to report results trending in a positive direction for the second quarter of 2018 as detailed above. Income from underwriting operations increased by $370,000 for the second quarter compared to the first quarter of 2018. While our year-to-date combined ratio is still higher than target, we are pleased to see the positive momentum build in the second quarter of 2018. We remain focused on profitable growth and successful expansion while adhering to our core value of underwriting discipline and continue to concentrate on cost saving measures in order to reduce expense levels," stated Arron Sutherland, President and Chief Executive Officer.   

EARNINGS CONFERENCE CALL

The Company will hold a conference call on Tuesday, August 21st, 2018, at 1:30 CT to discuss results for the second quarter and six months ended June 30, 2018.

Teleconference and Webcast:

Dial-in information for the call is 866-595-5224 (toll-free domestic) or 636-812-6497.

Participant code: 9569088

ABOUT ICC HOLDINGS, INC.

ICC Holdings, Inc. is a vertically integrated company created to facilitate the growth, expansion and diversification of its subsidiaries in order to maximize value to its stakeholders.  The group of companies consolidated under ICC Holdings, Inc. engages in diverse, yet complementary business activities, including property and casualty insurance, real estate, and information technology.

The Company's common shares trade on the NASDAQ Capital Market under the ticker symbol "ICCH". For more information about ICC Holdings, visit http://ir.iccholdingsinc.com.

FORWARD-LOOKING STATEMENTS

This press release, and oral statements made regarding the subjects of this release, contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, or the Reform Act, which may include, but are not limited to, statements regarding the Company's, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, including statements identified by words such as "believe," "plan," "seek," "expect," "intend," "estimate," "anticipate," "will," and similar expressions. All statements addressing operating performance, events, or developments that the Company expects or anticipates will occur in the future, including statements relating to revenue and profit growth, product and segment expansion, regulatory approval in connection with expansion, and market share, as well as statements expressing optimism or pessimism about future operating results, are forward-looking statements within the meaning of the Reform Act. The forward-looking statements are based on management's current views and assumptions regarding future events and operating performance, and are inherently subject to significant business, economic, and competitive uncertainties and contingencies and changes in circumstances, many of which are beyond the Company's control. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

Although the Company does not make forward-looking statements unless it believes it has a reasonable basis for doing so, the Company cannot guarantee their accuracy. The foregoing factors, among others, could cause actual results to differ materially from those described in these forward-looking statements. For a list of other factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," including "Forward-Looking Information," set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. No undue reliance should be placed on any forward-looking statements.

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets


















As of



June 30,


December 31,



2018


2017

Assets



(Unaudited)




Investments and cash:







Available for sale securities, at fair value







Fixed maturity securities (amortized cost - $89,975,510 at


$

89,694,843


$

89,605,073

6/30/2018 and $87,773,047 at 12/31/2017)







Common stocks¹ (cost - $13,100,640 at 6/30/2018 and $7,631,180 at 12/31/2017)



12,907,136



8,534,109

Preferred stocks (cost - $66,675 at 6/30/2018 and $3,783,311 at 12/31/2017)



65,650



3,867,429

Other invested assets



139,200



Property held for investment, at cost, net of accumulated depreciation of $172,791 at 6/30/2018 and $50,948 at 12/31/2017



3,112,608



3,126,566

Cash and cash equivalents



4,055,577



6,876,519

Total investments and cash



109,975,014



112,009,696

Accrued investment income



668,230



687,453

Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $50,000 at 6/30/2018 and 12/31/2017



21,433,743



19,013,262

Ceded unearned premiums



685,736



274,972

Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $0 at 6/30/2018 and 12/31/2017



8,287,587



10,029,834

Federal income taxes



1,492,828



922,405

Deferred policy acquisition costs, net



5,090,527



4,592,415

Property and equipment, at cost, net of accumulated depreciation of $4,815,812 at 6/30/2018 and $4,896,042 at 12/31/2017



3,474,335



3,503,904

Other assets



1,289,712



1,301,420

Total assets


$

152,397,712


$

152,335,361

Liabilities and Equity







Liabilities:







Unpaid losses and settlement expenses


$

51,387,881


$

51,074,126

Unearned premiums



29,298,437



26,555,582

Reinsurance balances payable



943,686



327,483

Corporate debt



3,489,056



4,339,208

Accrued expenses



2,940,084



4,274,002

Other liabilities



1,922,410



1,663,415

Total liabilities



89,981,554



88,233,816

Equity:







Common stock2



35,000



35,000

Additional paid-in capital



32,418,807



32,333,290

Accumulated other comprehensive earnings, net of tax



(375,404)



2,227,069

Retained earnings



33,502,434



32,787,406

Less: Unearned Employee Stock Ownership Plan shares at cost3



(3,164,679)



(3,281,220)

Total equity



62,416,158



64,101,545

Total liabilities and equity


$

152,397,712


$

152,335,361


1At June 30, 2018, common stock securities consist entirely of individual common stocks. At December 31, 2017, common stock consisted of exchange trade funds (ETF) made up primarily of Dividends Select and the S&P 500.500

2Par value $0.01; authorized: 2018 - 10,000,000 shares and 2017 – 10,000,000 shares; issued: 2018 - 3,500,000 and 2017 – 3,500,000 shares; outstanding: 2018 - 3,183,532 and 2017 – 3,171,878 shares.

32018 – 316,468 shares and 2017 – 328,122 shares

 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)


















For the Three-Months Ended



June 30,



2018


2017

Net premiums earned


$

11,485,071


$

10,710,758

Net investment income



685,492



688,963

Net realized investment losses



(29,930)



(3)

Other-than-temporary impairment losses





(57,316)

Other income



(507)



64,722

Consolidated revenues



12,140,126



11,407,124

Losses and settlement expenses



7,790,587



6,864,258

Policy acquisition costs and other operating expenses



4,160,071



4,720,298

Interest expense on debt



27,621



57,229

General corporate expenses



133,806



128,905

Total expenses



12,112,085



11,770,690

Earnings (loss) before income taxes



28,041



(363,566)

Total income tax benefit



(11,159)



(128,443)

Net earnings (loss)


$

39,200


$

(235,123)








Other comprehensive (loss) earnings, net of tax



(35,396)



542,427

Comprehensive earnings


$

3,804


$

307,304








Earnings (loss) per share:







Basic:







Basic net earnings per share


$

0.01


$

(0.07)

Diluted:







Diluted net earnings per share


$

0.01


$

(0.07)








Weighted average number of common shares outstanding:







Basic



3,179,669



3,153,876

Diluted



3,180,679



3,153,876

 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)


















For the Six-Months Ended



June 30,



2018


2017

Net premiums earned


$

22,782,015


$

21,548,864

Net investment income



1,388,376



1,161,287

Net realized investment gains



1,072,200



444,778

Other-than-temporary impairment losses





(57,316)

Other income



56,171



148,980

Consolidated revenues



25,298,762



23,246,593

Losses and settlement expenses



15,786,436



13,463,642

Policy acquisition costs and other operating expenses



8,297,422



8,454,950

Interest expense on debt



75,782



109,539

General corporate expenses



270,056



268,120

Total expenses



24,429,696



22,296,251

Earnings before income taxes



869,066



950,342

Total income tax expense



154,039



336,421

Net earnings


$

715,027


$

613,921








Other comprehensive (loss) earnings, net of tax



(2,602,473)



596,908

Comprehensive (loss) earnings


$

(1,887,446)


$

1,210,829








Earnings per share:







Basic:







Basic net earnings per share


$

0.23


$

0.19

Diluted:







Diluted net earnings per share


$

0.23


$

0.19








Weighted average number of common shares outstanding:







Basic



3,174,324



3,151,946

Diluted



3,175,334



3,151,946

 

Contact Info:   

Arron K. Sutherland, President and CEO 


Illinois Casualty Company


(309) 732-0105


arrons@ilcasco.com


225 20th Street, Rock Island, IL  61201

 

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SOURCE ICC Holdings, Inc.