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Table of Contents

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 September 30, 2021


¨	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 November 10, 2021 was 3,292,788.

Table of Contents


		Page
PART I
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020	3
	Condensed Consolidated Statements of Earnings and Comprehensive Earnings for the Three-Month Periods Ended September 30, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Earnings and Comprehensive Earnings for the Nine-Month Periods Ended September 30, 2021 and 2020 (unaudited)	5
	Condensed Consolidated Statements of Stockholders Equity for the Nine-Month Periods Ended September 30, 2021 and 2020 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 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	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	34

PART II
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Default Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36

Signatures		37

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Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets



	As of
	September 30,		December 31,
	2021		2020
		(Unaudited)
Assets
Investments and cash:
Fixed maturity securities (amortized cost of $103,846,072 at 9/30/2021 and $98,753,027 at 12/31/2020)	$	108,521,574	$	105,740,566
Common stocks at fair value		22,066,048		14,724,814
Preferred stocks at fair value		1,803,285		1,683,892
Other invested assets		1,837,430		1,772,867
Property held for investment, at cost, net of accumulated depreciation of $427,818 at 9/30/2021 and $465,364 at 12/31/2020		5,451,710		5,399,826
Cash and cash equivalents		2,639,480		6,598,842
Total investments and cash		142,319,527		135,920,807
Accrued investment income		713,585		660,793
Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $150,000 at 9/30/2021 and 12/31/2020		26,162,183		23,506,171
Ceded unearned premiums		957,508		860,905
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		14,476,233		13,019,865
Federal income taxes		104,751		372,986
Deferred policy acquisition costs, net		6,284,156		5,429,620
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		3,085,985		2,860,331
Other assets		1,202,170		1,307,794
Total assets	$	195,306,098	$	183,939,272
Liabilities and Equity
Liabilities:
Unpaid losses and settlement expenses	$	61,290,612	$	61,575,666
Unearned premiums		34,920,950		29,788,834
Reinsurance balances payable		1,176,193		371,195
Corporate debt		18,458,022		13,465,574
Accrued expenses		4,246,487		3,472,511
Income taxes - deferred		964,625		1,231,271
Other liabilities		878,347		1,290,532
Total liabilities		121,935,236		111,195,583
Equity:
Common stock¹		35,000		35,000
Treasury stock, at cost²		(3,119,646)		(3,153,838)
Additional paid-in capital		32,875,761		32,780,436
Accumulated other comprehensive earnings, net of tax		3,693,581		5,520,091
Retained earnings		42,288,985		40,140,115
Less: Unearned Employee Stock Ownership Plan shares at cost³		(2,402,819)		(2,578,115)
Total equity		73,370,862		72,743,689
Total liabilities and equity	$	195,306,098	$	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

See accompanying notes to consolidated financial statements.
‎

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Table of Contents

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)



	For the Three-Months Ended
	September 30,
	2021		2020
Net premiums earned	$	14,079,395	$	12,532,967
Net investment income		823,912		900,950
Net realized investment gains (losses)		287,455		(59,333)
Net unrealized (losses) gains on equity securities		(212,136)		981,779
Other income (loss)		58,590		(36,333)
Consolidated revenues		15,037,216		14,320,030
Losses and settlement expenses		8,814,522		8,863,053
Policy acquisition costs and other operating expenses		5,442,542		4,722,485
Interest expense on debt		62,379		58,724
General corporate expenses		171,105		171,860
Total expenses		14,490,548		13,816,122
Earnings before income taxes		546,668		503,908
Total income tax expense		122,405		99,919
Net earnings	$	424,263	$	403,989

Other comprehensive (loss) earnings, net of tax		(680,975)		440,838
Comprehensive (loss) earnings	$	(256,712)	$	844,827

Earnings per share:
Basic:
Basic net earnings per share	$	0.14	$	0.13
Diluted:
Diluted net earnings per share	$	0.14	$	0.13

Weighted average number of common shares outstanding:
Basic		3,068,199		3,030,571
Diluted		3,083,867		3,039,658

See accompanying notes to consolidated financial statements.

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Table of Contents

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)



	For the Nine-Months Ended
	September 30,
	2021		2020
Net premiums earned	$	38,860,915	$	36,921,702
Net investment income		2,409,036		2,644,900
Net realized investment gains (losses)		824,070		(402,320)
Net unrealized gains on equity securities		1,392,999		2,195
Other income		196,624		82,934
Consolidated revenues		43,683,644		39,249,411
Losses and settlement expenses		25,281,508		25,913,619
Policy acquisition costs and other operating expenses		14,957,143		13,741,725
Interest expense on debt		174,095		150,773
General corporate expenses		531,222		471,616
Total expenses		40,943,968		40,277,733
Earnings (loss) before income taxes		2,739,676		(1,028,322)
Total income tax expense (benefit)		590,806		(240,980)
Net earnings (loss)	$	2,148,870	$	(787,342)

Other comprehensive (loss) earnings, net of tax		(1,826,510)		2,254,721
Comprehensive earnings	$	322,360	$	1,467,379

Earnings per share:
Basic:
Basic net earnings (loss) per share	$	0.71	$	(0.26)
Diluted:
Diluted net earnings (loss) per share	$	0.70	$	(0.26)

Weighted average number of common shares outstanding:
Basic		3,042,035		3,023,794
Diluted		3,057,704		3,032,881

See accompanying notes to consolidated financial statements.

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Table of Contents

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		—		(109,460)			—		—		—		—		(109,460)
Net (loss)		—		—			—		—		(787,342)		—		(787,342)
Other comprehensive earnings, net of tax		—		—			—		—		—		2,254,721		2,254,721
Restricted stock unit expense		—		143,380	¹		—		(16,792)		—		—		126,588
ESOP compensation expense		—		—			175,457		31,078		—		—		206,535
Balance, September 30, 2020	$	35,000	$	(3,112,656)		$	(2,637,028)	$	32,717,495	$	35,821,408	$	5,208,657	$	68,032,876



	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		—		(103,407)			—		—		—		—		(103,407)
Net earnings		—		—			—		—		2,148,870		—		2,148,870
Other comprehensive loss, net of tax		—		—			—		—		—		(1,826,510)		(1,826,510)
Restricted stock unit expense		—		137,599	¹		—		(544)		—		—		137,055
ESOP compensation expense		—		—			175,296		95,869		—		—		271,165
Balance, September 30, 2021	$	35,000	$	(3,119,646)		$	(2,402,819)	$	32,875,761	$	42,288,985	$	3,693,581	$	73,370,862

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

See accompanying notes to consolidated financial statements.

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Table of Contents

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)



	Nine-Month Periods Ended September 30,
	2021		2020
Cash flows from operating activities:
Net earnings (loss)	$	2,148,870	$	(787,342)
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities
Net realized investment (gains) losses		(824,070)		402,320
Net unrealized gains on equity securities		(1,392,999)		(2,195)
Depreciation		485,688		508,152
Deferred income tax		218,885		(423,896)
Amortization of bond premium and discount		209,740		175,114
Stock-based compensation expense		408,220		333,123
Change in:
Accrued investment income		(52,792)