123117 ICCH 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

February 20, 2018

Date of Report (Date of earliest event reported)

 

ICC Holdings, Inc.

(Exact name of registrant as specified in its charter)

 



 

 

 

 

Pennsylvania

 

1-681903

 

81-3359409

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Ident. No.)

 

 

 

 

 

225 20th Street, Rock Island, Illinois

 

61201

(Address of principal executive offices)

 

(Zip Code)

 

(309) 793-1700

Registrant’s telephone number, including area code

 

N/A

(Former name or former address, if changed since last report.)



 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).



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.  


 

 



Item 2.02Results of Operations and Financial Condition.



On February 20, 2018, ICC Holdings, Inc. issued a press release containing financial information regarding its results of operations and financial condition for the period ended December  31, 2017. A copy of the press release is furnished as part of this Current Report on Form 8-K and is attached hereto as Exhibit 99.1.



Item 9.01Financial Statements and Exhibits.



(d)Exhibits:

 



 

99.1

Press release, dated February 20, 2018.





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 hereunto duly authorized.

 



 

 

 

 

 

ICC HOLDINGS, INC.

 

 

 

Dated:  February  20, 2018

 

 

 

 

 

 

By:

/s/  Arron K. Sutherland

 

 

 

 

Arron K. Sutherland

 

 

 

President, Chief Executive Officer and

Director

 

 

 

 

 




 

EXHIBIT INDEX

 

oo

 

 

Exhibit Number

 

Description

 

 

 

99.1

 

Press release, dated November 2, 2017.






12.31.17 ICCH Earnings Release

Picture 2

Contact Info:Arron K. Sutherland, President and CEO 

Illinois Casualty Company

(309) 732-0105

arrons@ilcasco.com

225 20th Street, Rock Island, IL  61201



ICC Holdings, Inc. Reports 2017 Fourth Quarter and Year-End Results

FOR IMMEDIATE RELEASE: 02/20/2018



Rock Island, IL. – February 20, 2018 – 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 fourth quarter and year ended December  31, 2017.

FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2017 – FINANCIAL RESULTS

Net earnings totaled $452,000 or $0.14 per share for the quarter of 2017, compared to net earnings of $1,225,000 for the fourth quarter of 2016. For the year ended December 31, 2017, the Company reported net earnings of $717,000 or $0.23 per share, compared to $2,810,000 for the same period in 2016.

Direct premium written grew by $1,281,000, or 10.8%, to $13,143,000 for the fourth quarter of 2017 from $11,862,000 for the same period in 2016. For the year ended December  31, 2017, direct premiums grew by $2,639,000, or 5.2%, to $53,670,000 from $51,031,000 for the same period in 2016. Net premiums earned grew by 5.1% and 3.8%, respectively, for the fourth quarter and year ended December 31, 2017.

For the fourth quarter of 2017, the Company ceded to reinsurers $1,956,000 of earned premiums, compared to $1,939,000 of earned premiums for the fourth quarter of 2016. For the year ended December  31, 2017, the Company ceded $7,948,000 of earned premiums to reinsurers compared to $7,898,000 of earned premiums for the same period in 2016.

Net realized investment gains were $622,000 compared to net realized investment gains of $18,000 for the fourth quarter of 2017 and 2016, respectively. For the year ended December  31, 2017, net realized investment gains increased by $971,000 to $1,008,000 from $37,000 for the same period in 2016. These increases were a result of the Company liquidating assets to secure the funding used to purchase the ESOP shares in the first quarter of 2017 and liquidating an ETF position in the 4th quarter of 2017 to be in compliance with the Illinois Department of Insurance regulations. 

Net investment income increased by $248,000, or 46.4%, during the fourth quarter of 2017, as compared to the same period in 2016. For the year ended December  31, 2017, net investment income grew $664,000, or 33.7% to $2,632,000 from $1,968,000 for the same period in 2016. The growth in net investment income is primarily from the increase in the size of the available for sale securities portfolio.

Losses and settlement expenses increased by $1,850,000, or 32.8%, to $7,483,000 for the fourth quarter of 2017, from $5,633,000 for the same period in 2016. Losses and settlement expenses increased by $4,665,000, or 19.2%, to $29,010,000 for the year ended December  31, 2017, from $24,345,000 for the same period in 2016.  The increase in losses and settlement expenses for the fourth quarter of 2017 is primarily due to an increase in fire losses and higher retention of property losses compared to the same period in 2016.

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 increased by $449,000, or 11.1%, to $4,500,000 for the fourth quarter of 2017 from $4,051,000 for the same period in 2016. Policy acquisition costs and other operating expenses increased by $1,450,000, or 9.1%, to $17,299,000 for the year ended December  31, 2017, from $15,849,000 for the same period in 2016. The increases in policy acquisition costs and other operating expenses during the three and twelve months ended December  31, 2017 are primarily driven by increases in the other operating expenses. This principally is due to additional costs associated with operating as a public company which did not occur in previous years.

Total assets increased by 24.7 % from $122,160,000 at December 31, 2016 to $152,334,000 at December 31, 2017, primarily as a result of our initial public offering completed during the first quarter of 2017.  Our investment portfolio, which consists of fixed maturity securities, common stocks, preferred stocks, and property held for investment, increased by 38.1% from $76,122,000 at December 31, 2016 to $105,133,000 at December 31, 2017, as a result of deploying the net proceeds from our completed initial public offering.

FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2017 – FINANCIAL RATIOS

The Company’s loss and settlement expense ratio (defined as loss and settlement expenses divided by net premiums earned) was 65.2% and 65.6% in the fourth quarter and year ended December  31, 2017, respectively, compared with 51.6% and 57.1% for the same periods in 2016, respectively.

The expense ratio (defined as the amortization of deferred policy acquisition costs and underwriting and administrative expenses divided by net premiums earned) was 39.2% and 39.1% in the fourth quarter and year ended December  31, 2017, respectively, compared with 37.1% and 37.2%  for the same periods in 2016, respectively.

The Company’s GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 104.5% and 104.7% in the fourth quarter and year ended December  31, 2017, respectively, compared to 88.7% and 94.3%  for the same periods in 2016, respectively.

MANAGEMENT COMMENTARY

“The Company continued to have strong results in the core liquor liability line and profitable workers’ compensation experience. However, the Company experienced an above normal frequency and severity of fire losses in comparison to previous years. Although financial results were not as favorable as we had anticipated, we saw significant improvements during the fourth quarter in comparison to the third quarter of 2017. The Company is optimistic that the trend marks a return to historical loss levels.

“Recent geographic expansion efforts into Colorado, Kansas, and Ohio generated strong, double-digit, top-line premium growth for the fourth quarter of 2017. The Company is committed to maintaining its traditional underwriting discipline throughout this growth phase.

“We are excited to report that 2018 is off to a record start in premium growth. This is further evidence of the success of our geographic expansion efforts. We anticipate this momentum will continue to build as we start quoting business in Michigan for the second quarter of 2018,” stated Arron Sutherland, President and Chief Executive Officer.



EARNINGS CONFERENCE CALL



The Company will hold a conference call on Wednesday, April 4th, 2018 at 1:30 CT to discuss results for the fourth quarter and year ended December 31, 2017.



Teleconference:

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



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, 2016. No undue reliance should be placed on any forward-looking statements.








 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets





 

 

 

 

 

 

 

 

 

 

 

 

 



 

As of



 

December 31,

 

December 31,



 

2017

 

2016



 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

 

Investments and cash:

 

 

 

 

 

 

Available for sale securities, at fair value

 

 

 

 

 

 

Fixed maturity securities (amortized cost - $87,773,047 at

 

$

89,605,073 

 

$

64,134,023 

12/31/2017 and $62,929,091 at 12/31/2016)

 

 

 

 

 

 

Common stocks¹ (cost - $7,631,180 at

 

 

8,534,109 

 

 

6,982,547 

12/31/2017 and $6,311,708 at 12/31/2016)

 

 

 

 

 

 

Preferred stocks (cost - $3,783,311 at

 

 

3,867,429 

 

 

2,798,413 

12/31/2017 and $2,925,434 at 12/31/2016)

 

 

 

 

 

 

Property held for investment, at cost, net of accumulated depreciation of

 

 

3,126,566 

 

 

2,207,424 

$271,144 at 12/31/2017 and $50,948 at 12/31/2016

 

 

 

 

 

 

Cash and cash equivalents

 

 

6,876,519 

 

 

4,376,847 

Total investments and cash

 

 

112,009,696 

 

 

80,499,254 

Accrued investment income

 

 

687,453 

 

 

524,156 

Premiums and reinsurance balances receivable, net of allowances for

 

 

18,637,108 

 

 

17,479,487 

uncollectible amounts of $50,000 at 12/31/2017 and 12/31/2016

 

 

 

 

 

 

Ceded unearned premiums

 

 

274,972 

 

 

270,751 

Reinsurance balances recoverable on unpaid losses and settlement expenses,

 

 

10,405,989 

 

 

12,114,998 

net of allowances for uncollectible amounts of $0 at 12/31/2017 and 12/31/2016

 

 

 

 

 

 

Current federal income taxes

 

 

573,147 

 

 

149,252 

Net deferred federal income taxes

 

 

349,257 

 

 

888,254 

Federal income taxes

 

 

922,404 

 

 

1,037,506 

Deferred policy acquisition costs, net

 

 

4,592,415 

 

 

4,162,927 

Property and equipment, at cost, net of accumulated depreciation of

 

 

3,503,903 

 

 

3,719,535 

$3,303,454 at 12/31/2017 and $4,308,247 at 12/31/2016

 

 

 

 

 

 

Other assets

 

 

1,301,421 

 

 

2,351,347 

Total assets

 

$

152,335,361 

 

$

122,159,961 

Liabilities and Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Unpaid losses and settlement expenses

 

$

51,074,126 

 

$

52,817,254 

Unearned premiums

 

 

26,555,582 

 

 

24,777,712 

Reinsurance balances payable

 

 

327,483 

 

 

109,790 

Corporate debt

 

 

4,339,208 

 

 

3,786,950 

Accrued expenses

 

 

4,265,089 

 

 

4,827,042 

Other liabilities

 

 

1,663,415 

 

 

2,241,003 

Total liabilities

 

 

88,224,903 

 

 

88,559,751 

Equity:

 

 

 

 

 

 

Common stock2  

 

 

35,000 

 

 

 —

Additional paid-in capital

 

 

32,333,290 

 

 

 —

Accumulated other comprehensive earnings, net of tax

 

 

2,227,069 

 

 

1,154,175 

Retained earnings

 

 

32,796,319 

 

 

32,446,035 

Less: Unearned Employee Stock Ownership Plan shares at cost3

 

 

(3,281,220)

 

 

 —

Total equity

 

 

64,110,458 

 

 

33,600,210 

Total liabilities and equity

 

$

152,335,361 

 

$

122,159,961 



1Common stock securities consist of exchange trade funds (ETF) made up primarily of Dividends Select and the S&P 500

2Par value $0.01; authorized: 2017 - 10,000,000 shares and 2016 - 0 shares; issued: 2017 - 3,500,000 and 2016 - 0 shares;

outstanding: 2017 - 3,171,878 and 2016 - 0 shares.

32017   328,122 shares and 2016 - 0 shares


 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)









 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three-Months Ended



 

December 31,



 

2017

 

2016

Net premiums earned

 

$

11,472,959 

 

$

10,916,774 

Net investment income

 

 

783,077 

 

 

534,933 

Net realized investment (losses) gains

 

 

621,632 

 

 

18,144 

Other-than-temporary impairment losses

 

 

 —

 

 

 —

Other income

 

 

127,480 

 

 

150,527 

Consolidated revenues

 

 

13,005,148 

 

 

11,620,378 

Losses and settlement expenses

 

 

7,482,790 

 

 

5,633,473 

Policy acquisition costs and other operating expenses

 

 

4,499,708 

 

 

4,050,633 

Interest expense on debt

 

 

51,030 

 

 

85,910 

General corporate expenses

 

 

103,449 

 

 

127,801 

Total expenses

 

 

12,136,977 

 

 

9,897,817 

(Loss) earnings before income taxes

 

 

868,171 

 

 

1,722,561 

Income tax expense:

 

 

 

 

 

 

Current

 

 

379,844 

 

 

453,867 

Deferred

 

 

36,701 

 

 

43,832 

Total income tax (benefit) expense

 

 

416,545 

 

 

497,699 

Net (loss) earnings

 

$

451,626 

 

$

1,224,862 



 

 

 

 

 

 

Other comprehensive earnings, net of tax

 

 

178,306 

 

 

(1,288,656)

Comprehensive (loss) earnings

 

$

629,932 

 

$

(63,794)



 

 

 

 

 

 

(Loss) earnings per share1:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Basic net (loss) earnings per share

 

 

$            0.14

 

 

$            0.39

Diluted:

 

 

 

 

 

 

Diluted net (loss) earnings per share

 

 

$            0.14

 

 

$            0.39



 

 

 

 

 

 

Weighted average number of common shares outstanding2:

 

 

 

 

 

 

Basic

 

 

3,167,344 

 

 

3,150,000 

Diluted

 

 

3,167,344 

 

 

3,150,000 



1The unaudited pro forma earnings per share for the three months ended December  31, 2016 is provided as a basis for comparison of current period earnings.

2Weighted average number of common shares outstanding for the three months ended December  31, 2016 is based on the resulting shares from the initial public offering that was completed in March 2017.






























 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)









 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Twelve-Months Ended



 

December 31,



 

2017

 

2016

Net premiums earned

 

$

44,213,271 

 

$

42,611,365 

Net investment income

 

 

2,632,498 

 

 

1,967,938 

Net realized investment gains

 

 

1,064,577 

 

 

249,923 

Other-than-temporary impairment losses

 

 

(57,316)

 

 

(212,731)

Other income

 

 

325,127 

 

 

254,447 

Consolidated revenues

 

 

48,178,157 

 

 

44,870,942 

Losses and settlement expenses

 

 

29,009,833 

 

 

24,344,551 

Policy acquisition costs and other operating expenses

 

 

17,298,787 

 

 

15,848,547 

Interest expense on debt

 

 

225,379 

 

 

226,095 

General corporate expenses

 

 

555,109 

 

 

464,383 

Total expenses

 

 

47,089,108 

 

 

40,883,576 

Earnings before income taxes

 

 

1,089,049 

 

 

3,987,366 

Income tax expense:

 

 

 

 

 

 

Current

 

 

197,200 

 

 

986,066 

Deferred

 

 

175,085 

 

 

190,903 

Total income tax (benefit) expense

 

 

372,285 

 

 

1,176,969 

Net earnings

 

$

716,764 

 

$

2,810,397 



 

 

 

 

 

 

Earnings per share1:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Basic net earnings per share

 

 

$            0.23

 

 

$            0.89

Diluted:

 

 

 

 

 

 

Diluted net earnings per share

 

 

$            0.23

 

 

$            0.89



 

 

 

 

 

 

Weighted average number of common shares outstanding2:

 

 

 

 

 

 

Basic

 

 

3,158,163 

 

 

3,150,000 

Diluted

 

 

3,158,163 

 

 

3,150,000 



1The unaudited pro forma earnings per share for the twelve months ended December 31, 2016 is provided as a basis for comparison of current period earnings.

2Weighted average number of common shares outstanding for the twelve months ended December  31, 2016 is based on the resulting shares from the initial public offering that was completed in March 2017.