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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________

(Mark One)

x

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

For the quarterly period ended June 30, 2021

or

¨

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

For transition period from                      to                     .

Commission File Number: 001-38046

ICC Holdings, Inc.

(Exact name of registrant as specified in its charter)

_______________________________

Pennsylvania

(State or other jurisdiction of
incorporation or organization)

 

81-3359409

(I.R.S. Employer
Identification No.)

 

225 20th Street, Rock Island, Illinois

(Address of principal executive offices)

 

61201

(Zip Code)

 

(309) 793-1700

(Registrant’s telephone number, including area code)

_______________________________

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

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ICCH

The NASDAQ Stock Market LLC

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

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

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

Large accelerated filer   ¨

Accelerated filer   ¨

Non-accelerated filer    x

Smaller reporting company   x

Emerging growth company x

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨     No x

The number of shares of the registrant’s common stock outstanding as of August 6, 2021 was 3,294,366.

 


Table of Contents

Page 

PART I

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020

3

Condensed Consolidated Statements of Earnings and Comprehensive Earnings for the Three-Month Periods Ended June 30, 2021 and 2020 (unaudited)

4

Condensed Consolidated Statements of Earnings and Comprehensive Earnings for the Six-Month Periods Ended June 30, 2021 and 2020 (unaudited)

5

Condensed Consolidated Statements of Stockholders Equity for the Six-Month Periods Ended June 30, 2021 and 2020 (unaudited)

6

Condensed Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 2021 and 2020 (unaudited)

7

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

34

Item 4.

Controls and Procedures

35

PART II

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3.

Default Upon Senior Securities

36

Item 4.

Mine Safety Disclosures

36

Item 5.

Other Information

36

Item 6.

Exhibits

37

Signatures 

38

 

~ 2 ~


PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of

June 30,

December 31,

2021

2020

(Unaudited)

Assets

Investments and cash:

Fixed maturity securities (amortized cost - $105,311,994 at 6/30/2021 and $98,753,027 at 12/31/2020)

$

110,849,488 

$

105,740,566 

Common stocks at fair value

20,013,057 

14,724,814 

Preferred stocks at fair value

1,685,275 

1,683,892 

Other invested assets

1,580,837 

1,772,867 

Property held for investment, at cost, net of accumulated depreciation of $408,351 at 6/30/2021 and $465,364 at 12/31/2020

5,003,116 

5,399,826 

Cash and cash equivalents

3,998,488 

6,598,842 

Total investments and cash

143,130,261 

135,920,807 

Accrued investment income

656,211 

660,793 

Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $150,000 at 6/30/2021 and 12/31/2020

24,859,066 

23,506,171 

Ceded unearned premiums

943,245 

860,905 

Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $0 at 6/30/2021 and 12/31/2020

15,917,703 

13,019,865 

Federal income taxes

193,911 

372,986 

Deferred policy acquisition costs, net

6,081,798 

5,429,620 

Property and equipment, at cost, net of accumulated depreciation of $6,038,689 at 6/30/2021 and $6,079,728 at 12/31/2020

3,080,594 

2,860,331 

Other assets

1,246,916 

1,307,794 

Total assets

$

196,109,705 

$

183,939,272 

Liabilities and Equity

Liabilities:

Unpaid losses and settlement expenses

$

63,858,229 

$

61,575,666 

Unearned premiums

33,400,351 

29,788,834 

Reinsurance balances payable

841,328 

371,195 

Corporate debt

18,460,329 

13,465,574 

Accrued expenses

3,863,743 

3,472,511 

Income taxes - deferred

1,194,709 

1,231,271 

Other liabilities

998,843 

1,290,532 

Total liabilities

122,617,532 

111,195,583 

Equity:

Common stock1

35,000 

35,000 

Treasury stock, at cost2

(3,108,653)

(3,153,838)

Additional paid-in capital

32,788,441 

32,780,436 

Accumulated other comprehensive earnings, net of tax

4,374,556 

5,520,091 

Retained earnings

41,864,722 

40,140,115 

Less: Unearned Employee Stock Ownership Plan shares at cost3

(2,461,893)

(2,578,115)

Total equity

73,492,173 

72,743,689 

Total liabilities and equity

$

196,109,705 

$

183,939,272 

1Par value $0.01; authorized: 2021 - 10,000,000 shares and 2020 – 10,000,000 shares; issued: 2021 – 3,500,000 shares and 2020 – 3,500,000 shares; outstanding: 2021 –3,294,623 and 2020 - 3,291,125 shares.

22021 –205,377 shares and 2020 –208,875 shares

32021 –246,189 shares and 2020 –257,811 shares

See accompanying notes to consolidated financial statements. 

~ 3 ~


ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)

 

For the Three-Months Ended

June 30,

2021

2020

Net premiums earned

$

12,732,807

$

11,374,746

Net investment income

783,718

908,550

Net realized investment gains (losses)

349,906

(438,619)

Net unrealized gains on equity securities

728,819

2,709,763

Other income

91,318

69,069

Consolidated revenues

14,686,568

14,623,509

Losses and settlement expenses

8,664,280

9,208,484

Policy acquisition costs and other operating expenses

5,047,023

4,254,266

Interest expense on debt

58,014

56,721

General corporate expenses

196,133

125,335

Total expenses

13,965,450

13,644,806

Earnings before income taxes

721,118

978,703

Total income tax expense

158,450

196,738

Net earnings

$

562,668

$

781,965

Other comprehensive earnings, net of tax

1,080,987

3,524,729

Comprehensive earnings

$

1,643,655

$

4,306,694

Earnings per share:

Basic:

Basic net earnings per share

$

0.18

$

0.26

Diluted:

Diluted net earnings per share

$

0.18

$

0.26

Weighted average number of common shares outstanding:

Basic

3,051,010

3,029,693

Diluted

3,064,455

3,036,116

See accompanying notes to consolidated financial statements.

~ 4 ~


ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)

 

For the Six-Months Ended

June 30,

2021

2020

Net premiums earned

$

24,781,520

$

24,388,735

Net investment income

1,585,124

1,743,950

Net realized investment gains (losses)

536,615

(342,987)

Net unrealized gains (losses) on equity securities

1,605,135

(979,584)

Other income

138,034

119,267

Consolidated revenues

28,646,428

24,929,381

Losses and settlement expenses

16,466,986

17,050,566

Policy acquisition costs and other operating expenses

9,514,601

9,019,240

Interest expense on debt

111,716

92,049

General corporate expenses

360,117

299,756

Total expenses

26,453,420

26,461,611

Earnings (loss) before income taxes

2,193,008

(1,532,230)

Total income tax expense (benefit)

468,401

(340,899)

Net earnings (loss)

$

1,724,607

$

(1,191,331)

Other comprehensive (loss) earnings, net of tax

(1,145,535)

1,813,883

Comprehensive earnings

$

579,072

$

622,552

Earnings per share:

Basic:

Basic net earnings (loss) per share

$

0.57

$

(0.39)

Diluted:

Diluted net earnings (loss) per share

$

0.57

$

(0.39)

Weighted average number of common shares outstanding:

Basic

3,037,738

3,019,788

Diluted

3,051,183

3,026,210

See accompanying notes to consolidated financial statements.

~ 5 ~


ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Common stock

Treasury stock

Unearned ESOP

Additional paid-in capital

Retained
earnings

Accumulated
other
comprehensive
earnings (loss)

Total equity

Balance, January 1, 2020

$

35,000

$

(3,146,576)

$

(2,812,485)

$

32,703,209

$

36,608,750

$

2,953,936

$

66,341,834

Purchase of treasury stock

(15,958)

(15,958)

Net (loss)

(1,191,331)

(1,191,331)

Other comprehensive earnings, net of tax

1,813,883

1,813,883

Restricted stock unit expense

143,380

1

(61,959)

81,421

ESOP compensation expense

116,545

22,391

138,936

Balance, June 30, 2020

$

35,000

$

(3,019,154)

$

(2,695,940)

$

32,663,641

$

35,417,419

$

4,767,819

$

67,168,785

 

Common stock

Treasury stock

Unearned ESOP

Additional paid-in capital

Retained
earnings

Accumulated
other
comprehensive
earnings (loss)

Total equity

Balance, January 1, 2021

$

35,000

$

(3,153,838)

$

(2,578,115)

$

32,780,436

$

40,140,115

$

5,520,091

$

72,743,689

Purchase of treasury stock

(92,414)

(92,414)

Net earnings

1,724,607

1,724,607

Other comprehensive loss, net of tax

(1,145,535)

(1,145,535)

Restricted stock unit expense

137,599

1

(50,386)

87,213

ESOP compensation expense

116,222

58,391

174,613

Balance, June 30, 2021

$

35,000

$

(3,108,653)

$

(2,461,893)

$

32,788,441

$

41,864,722

$

4,374,556

$

73,492,173

1Amount represents restricted stock units that have fully vested in the period

See accompanying notes to consolidated financial statements.

~ 6 ~


ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six-Month Periods Ended June 30,

2021

2020

Cash flows from operating activities:

Net earnings (loss)

$

1,724,607

$

(1,191,331)

Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities

Net realized investment (gains) losses

(536,615)

342,987

Net unrealized (gains) losses on equity securities

(1,605,135)

979,584

Depreciation

321,015

338,409

Deferred income tax