UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation) |
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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:
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
The |
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 November 9, 2021, ICC Holdings, Inc. issued a press release containing financial information regarding its results of operations and financial condition for the period ended September 30, 2021. 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:
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Press release, dated November 9, 2021. |
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.
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| ICC HOLDINGS, INC. | |||
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Dated: November 9, 2021 |
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| By: | /s/ Arron K. Sutherland |
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| Arron K. Sutherland | |
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| President, Chief Executive Officer and Director | |
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Contact Info: Arron K. Sutherland, President and CEO |
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Illinois Casualty Company |
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(309) 732-0105 |
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arrons@ilcasco.com |
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225 20th Street, Rock Island, IL 61201 |
ICC Holdings, Inc. Reports 2021 Third Quarter and Nine Months Results
FOR IMMEDIATE RELEASE: 11/9/2021
Rock Island, IL – November 9, 2021 – 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 unaudited results for the nine months ended September 30, 2021.
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2021 – FINANCIAL RESULTS
Net earnings totaled $424,000, or $0.14 per share, for the third quarter of 2021, compared to net earnings of $404,000, or $0.13 per share, for the third quarter of 2020. The change in third quarter’s net earnings as compared to the same quarter last year was driven primarily by an increase in net premiums earned offset in part by a decrease in unrealized equity investment gains for those three months. For the nine months ended September 30, 2021, the Company reported net earnings of $2,149,000, or $0.71 per share, compared to a net loss of $787,000, or $0.26 per share, for the same period in 2020. The significant increase in net earnings reflects a healthy increase in premium earnings, decreased losses, and higher realized and unrealized gains from equity investments year-over-year. Book value per share increased to $22.27 at September 30, 2021, from $22.07 at December 31, 2020, as a result of current period positive and sustained growth in our core business operations.
Direct premiums written grew by $3,823,000, or 26.3%, to $18,357,000 for the third quarter of 2021 from $14,534,000 for the same period in 2020. For the nine months ended September 30, 2021, direct premiums written grew by $7,805,000, or 17.6%, to $52,045,000 compared to $44,240,000 for the same period in 2020. The third quarter’s growth closely mirrored the second quarter’s results. We continued to capitalize on the food and beverage industry’s rebound across the states we serve. Net premiums earned grew by 12.3% or $1,546,000 to $14,079,000 for the three months ended September 30, 2021, from $12,533,000 for the same period in 2020. Net premiums earned grew by 5.3% to $38,861,000 for the nine months ended September 30, 2021, from $36,922,000 for the same period in 2020. The increase in net premiums earned for each of the period comparisons reflects increased premium writings period-to-date in 2021.
For the third quarter of 2021, the Company ceded to reinsurers $2,798,000 of earned premiums, compared to $2,344,000 of earned premiums for the third quarter of 2020. For the nine months ended September 30, 2021, the Company ceded earned premiums of $8,087,000, compared to $7,905,000 for the same period in 2020. Current year’s cessions reflect typical claims experience without the impact of prior period’s reinstatement costs brought on by property catastrophe events.
Net realized investment gains net of other-than-temporary impairment losses were $287,000 for the third quarter of 2021 compared to losses of $59,000 for the same period in 2020. For the nine months ended September 30, 2021, net realized gains net of other-than-temporary impairment losses were $824,000, compared to losses of $402,000 for the same period in 2020. The current period gains are primarily attributed to a turnaround in the equity markets which were hampered in the prior period by economic challenges as a result of COVID-19. In addition, our investment portfolio’s ordinary rebalancing activities in the current period contributed to more favorable results.
Net investment income decreased by $77,000, or 8.5%, to $824,000 for the third quarter of 2021, as compared to $901,000 for the same period in 2020. For the nine months ended September 30, 2021, net investment income decreased $236,000, or 8.9%, to $2,409,000, from $2,645,000 for the same period in 2020. Our bond portfolio,
which is sensitive to interest rate changes, experienced a significant decrease in reinvestment rates during 2020 which is driving lower investment income in 2021.
Losses and settlement expenses decreased by $48,000, or 0.5%, to $8,815,000 for the third quarter of 2021, from $8,863,000 for the same period in 2020. Losses and settlement expenses decreased by $632,000, or 2.4%, to $25,282,000 for the nine months ended September 30, 2021, from $25,914,000 for the same period in 2020. The current period’s favorable claims activity reflects a significant decline in catastrophic events compared to 2020. Thus far, we have not paid any business interruption claims related to COVID-19.
Policy acquisition costs and other operating expenses increased by $721,000, or 15.3%, to $5,443,000 for the third quarter of 2021 from $4,722,000 for the same period in 2020. These costs also increased by $1,215,000, or 8.8%, to $14,957,000 for the nine months ended September 30, 2021, from $13,742,000 for the same period in 2020. Contingent commissions, a key component of policy acquisition costs, are the primary driver for the increased costs and are directly correlated with our positive written premium growth in 2021.
Total assets increased by 6.2% from $183,939,000 at December 31, 2020, to $195,306,000 at September 30, 2021. Our investment portfolio, which consists of fixed income securities, common stocks, preferred stock, property held for investment, and other invested assets, increased by 8.0% from $129,322,000 at December 31, 2020, to $139,680,000 at September 30, 2021.
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2021 – FINANCIAL RATIOS
The Company’s losses and settlement expense ratio (defined as losses and settlement expenses divided by net premiums earned) was 62.6% and 65.1% for the third quarter and nine months ended September 30, 2021, respectively, compared with 70.7% and 70.2% for the same periods of 2020, respectively.
The expense ratio (defined as the amortization of deferred policy acquisition costs and underwriting and administrative expenses divided by net premiums earned) was 38.7% and 38.5% for the third quarter and nine months ended September 30, 2021, respectively, compared to 37.7% and 37.2% for the same periods of 2020, respectively.
The Company’s GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 101.3% and 103.5% for the third quarter and nine months ended September 30, 2021, respectively, compared to 108.4% and 107.4% for the same periods of 2020, respectively.
MANAGEMENT COMMENTARY
“We are very pleased to share, once again, positive results for the third quarter of 2021. These past nine months are a testament to the Company’s disciplined and strategic underwriting, loss control, and claims operations.
“Favorable premium growth reported in prior quarters continued into the third quarter and reflects year-to-date growth in every state within our market. Our premium writings have outpaced our claims, an outcome that speaks to the Company’s front-end commitment to write quality insurance risks. The combination of healthy operations and unrealized equity investment gains continues to support favorable earnings per share.
“The positivity we’ve experienced this year is fueling exciting initiatives on the horizon. Our sights are set on finishing this year strong and setting the stage for new business growth in 2022,” stated Arron Sutherland, President and Chief Executive Officer.
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; future responses to and effects of the COVID-19 pandemic, as well the distribution and effectiveness of COVID-19 vaccines, including their effects on our business operations and claims activity; new theories of liability; judicial, legislative, regulatory and other governmental developments, including, but not limited to, liability related to business interruption claims related to COVID-19; litigation tactics and developments; 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, 2020. No undue reliance should be placed on any forward-looking statements.
ICC Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
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As of |
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September 30, |
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December 31, |
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2021 |
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2020 |
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(Unaudited) |
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Assets |
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Investments and cash: |
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Fixed maturity securities (amortized cost of $103,846,072 at 9/30/2021 and $98,753,027 at 12/31/2020) |
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$ |
108,521,574 |
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$ |
105,740,566 |
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Common stocks at fair value |
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22,066,048 |
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14,724,814 |
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Preferred stocks at fair value |
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1,803,285 |
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1,683,892 |
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Other invested assets |
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1,837,430 |
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1,772,867 |
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Property held for investment, at cost, net of accumulated depreciation of $427,818 at 9/30/2021 and $465,364 at 12/31/2020 |
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5,451,710 |
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5,399,826 |
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Cash and cash equivalents |
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2,639,480 |
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6,598,842 |
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Total investments and cash |
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142,319,527 |
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135,920,807 |
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Accrued investment income |
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713,585 |
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660,793 |
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Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $150,000 at 9/30/2021 and 12/31/2020 |
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26,162,183 |
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23,506,171 |
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Ceded unearned premiums |
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957,508 |
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860,905 |
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Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $0 at 9/30/2021 and 12/31/2020 |
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14,476,233 |
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13,019,865 |
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Federal income taxes |
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104,751 |
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372,986 |
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Deferred policy acquisition costs, net |
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6,284,156 |
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5,429,620 |
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Property and equipment, at cost, net of accumulated depreciation of $6,113,613 at 9/30/2021 and $6,079,728 at 12/31/2020 |
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3,085,985 |
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2,860,331 |
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Other assets |
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1,202,170 |
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1,307,794 |
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Total assets |
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$ |
195,306,098 |
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$ |
183,939,272 |
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Liabilities and Equity |
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Liabilities: |
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Unpaid losses and settlement expenses |
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$ |
61,290,612 |
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$ |
61,575,666 |
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Unearned premiums |
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34,920,950 |
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29,788,834 |
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Reinsurance balances payable |
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1,176,193 |
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371,195 |
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Corporate debt |
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18,458,022 |
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13,465,574 |
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Accrued expenses |
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4,246,487 |
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3,472,511 |
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Income taxes - deferred |
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964,625 |
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1,231,271 |
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Other liabilities |
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878,347 |
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1,290,532 |
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Total liabilities |
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121,935,236 |
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111,195,583 |
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Equity: |
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Common stock1 |
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35,000 |
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35,000 |
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Treasury stock, at cost2 |
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(3,119,646) |
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(3,153,838) |
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Additional paid-in capital |
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32,875,761 |
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32,780,436 |
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Accumulated other comprehensive earnings, net of tax |
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3,693,581 |
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5,520,091 |
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Retained earnings |
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42,288,985 |
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40,140,115 |
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Less: Unearned Employee Stock Ownership Plan shares at cost3 |
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(2,402,819) |
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(2,578,115) |
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Total equity |
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73,370,862 |
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72,743,689 |
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Total liabilities and equity |
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$ |
195,306,098 |
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$ |
183,939,272 |
1Par value $0.01; authorized: 2021 – 10,000,000 shares and 2020 – 10,000,000 shares; issued: 2021 – 3,500,000 shares and 2020 – 3,500,000 shares; outstanding: 2021 –3,293,961 and 2020 –3,291,125 shares
22021 –206,039 shares and 2020 –208,875 shares
32021 –240,282 shares and 2020 –257,811 shares
ICC Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)
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For the Three-Months Ended |
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September 30, |
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2021 |
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2020 |
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Net premiums earned |
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$ |
14,079,395 |
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$ |
12,532,967 |
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Net investment income |
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823,912 |
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900,950 |
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Net realized investment gains (losses) |
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287,455 |
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(59,333) |
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Net unrealized (losses) gains on equity securities |
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(212,136) |
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981,779 |
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Other income (loss) |
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58,590 |
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(36,333) |
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Consolidated revenues |
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15,037,216 |
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14,320,030 |
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Losses and settlement expenses |
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8,814,522 |
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8,863,053 |
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Policy acquisition costs and other operating expenses |
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5,442,542 |
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4,722,485 |
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Interest expense on debt |
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62,379 |
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58,724 |
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General corporate expenses |
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171,105 |
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171,860 |
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Total expenses |
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14,490,548 |
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13,816,122 |
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Earnings before income taxes |
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546,668 |
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503,908 |
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Total income tax expense |
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122,405 |
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99,919 |
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Net earnings |
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$ |
424,263 |
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$ |
403,989 |
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Other comprehensive (loss) earnings, net of tax |
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(680,975) |
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440,838 |
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Comprehensive (loss) earnings |
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$ |
(256,712) |
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$ |
844,827 |
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Earnings per share: |
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Basic: |
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Basic net earnings per share |
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$ |
0.14 |
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$ |
0.13 |
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Diluted: |
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Diluted net earnings per share |
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$ |
0.14 |
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$ |
0.13 |
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Weighted average number of common shares outstanding: |
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Basic |
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3,068,199 |
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3,030,571 |
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Diluted |
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3,083,867 |
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3,039,658 |
ICC Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)
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For the Nine-Months Ended |
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September 30, |
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2021 |
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2020 |
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Net premiums earned |
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$ |
38,860,915 |
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$ |
36,921,702 |
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Net investment income |
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2,409,036 |
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2,644,900 |
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Net realized investment gains (losses) |
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824,070 |
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(402,320) |
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Net unrealized gains on equity securities |
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1,392,999 |
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2,195 |
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Other income |
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196,624 |
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82,934 |
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Consolidated revenues |
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43,683,644 |
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39,249,411 |
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Losses and settlement expenses |
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25,281,508 |
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25,913,619 |
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Policy acquisition costs and other operating expenses |
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14,957,143 |
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13,741,725 |
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Interest expense on debt |
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174,095 |
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150,773 |
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General corporate expenses |
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531,222 |
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471,616 |
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Total expenses |
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40,943,968 |
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40,277,733 |
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Earnings (loss) before income taxes |
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2,739,676 |
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(1,028,322) |
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Total income tax expense (benefit) |
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590,806 |
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(240,980) |
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Net earnings (loss) |
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$ |
2,148,870 |
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$ |
(787,342) |
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Other comprehensive (loss) earnings, net of tax |
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(1,826,510) |
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2,254,721 |
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Comprehensive earnings |
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$ |
322,360 |
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$ |
1,467,379 |
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Earnings per share: |
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Basic: |
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Basic net earnings (loss) per share |
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$ |
0.71 |
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$ |
(0.26) |
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Diluted: |
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Diluted net earnings (loss) per share |
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$ |
0.70 |
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$ |
(0.26) |
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Weighted average number of common shares outstanding: |
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Basic |
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3,042,035 |
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3,023,794 |
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Diluted |
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3,057,704 |
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3,032,881 |