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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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 August 8, 2022, ICC Holdings, Inc. issued a press release containing financial information regarding its results of operations and financial condition for the period ended June 30, 2022. 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 August 8, 2022.
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104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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: August 8, 2022 |
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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 2022 Second Quarter and Six Months Results
FOR IMMEDIATE RELEASE: 8/8/2022
Rock Island, IL – August 8, 2022 – 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 six months ended June 30, 2022.
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2022 – FINANCIAL RESULTS
Net loss totaled $4,129,000, or $1.35 per share, for the second quarter of 2022, compared to net earnings of $563,000 or $0.18 per share, for the second quarter of 2021. The change in second quarter’s net earnings as compared to the same quarter last year was driven primarily by an increase in unrealized equity investment losses for those three months in 2022. For the six months ended June 30, 2022, the Company reported net loss of $4,289,000, or $1.40 per share, compared to net earnings of $1,725,000, or $0.57 per share, for the same period in 2021. The decrease in earnings is also primarily driven by an increase in unrealized investment losses. Book value per share decreased to $18.70 at June 30, 2022 from $22.69 at December 31, 2021. This negative change in book value is due to $5,097,000 in net unrealized losses from equity securities in 2022 and $8,961,000 in other comprehensive loss, which is driven by the rising interest rate environment.
Direct premiums written grew by $2,713,000, or 14.7%, to $21,229,000 for the second quarter of 2022 from $18,516,000 for the same period in 2021. For the six months ended June 30, 2022, direct premiums written grew by $7,107,000, or 21.1%, to $40,795,000 compared to $33,688,000 for the same period in 2021. The second quarter’s growth reflects an increase in renewal premiums. Net premiums earned grew by 33.7% or $4,291,000 to $17,024,000 for the three months ended June 30, 2022, from $12,733,000 for the same period in 2021. Net premiums earned grew by 33.3% to $33,041,000 for the six months ended June 30, 2022, from $24,782,000 for the same period in 2021. The growth in net premiums earned is due to the increase in direct premiums earned coupled with reduced ceded earned premiums.
For the second quarter of 2022, the Company ceded to reinsurers $2,233,000 of earned premiums, compared to $2,817,000 of earned premiums for the second quarter of 2021. For the six months ended June 30, 2022, the Company ceded earned premiums of $4,523,000, compared to $5,289,000 for the same period in 2021. The Company ceded less reinsurance in 2022 due to our more favorable pricing.
Net realized investment gains net of other-than-temporary impairment losses were $537,000 for the second quarter of 2022 compared to gains of $350,000 for the same period in 2021. For the six months ended June 30, 2022, net realized gains net of other-than-temporary impairment losses was $744,000, compared to gains of $537,000 for the same period in 2021. The gains reflect our rebalancing activities within the Company’s investment portfolio.
Net investment income increased by $168,000, or 21.4%, to $952,000 for the second quarter of 2022, as compared to $784,000 for the same period in 2021. For the six months ended June 30, 2022, net investment income increased $284,000, or 17.9%, to $1,869,000, from $1,585,000 for the same period in 2021. These increases are the result of an increase in our investment portfolio’s investment income, which is due to increased rates on our fixed income portfolio and an increase in overall size of our equity holdings.
Losses and settlement expenses increased by $5,145,000, or 59.4%, to $13,809,000 for the second quarter of 2022, from $8,664,000 for the same period in 2021. Losses and settlement expenses increased by $7,537,000, or 45.8%, to $24,004,000 for the six months ended June 30, 2022, from $16,467,000 for the same period in 2021. This
increase is due to our increase in earned premium coupled with new information on several prior accident year’s claims.
Policy acquisition costs and other operating expenses increased by $956,000, or 18.9%, to $6,003,000 for the second quarter of 2022 from $5,047,000 for the same period in 2021. Policy acquisition costs and other operating expenses increased by $2,260,000, or 23.8%, to $11,775,000 for the six months ended June 30, 2022, from $9,515,000 for the same period in 2021. The increases for both periods are attributable to an increase in direct commissions and an increase in salaries.
Total assets decreased by 3.6% from $200,002,000 on December 31, 2021, to $192,902,000 on June 30, 2022. Our investment portfolio, which consists of fixed income securities, common stocks, preferred stock, property held for investment, and other invested assets, decreased by 12.8% from $140,826,000 on December 31, 2021, to $122,871,000 on June 30, 2022, which was attributable to the volatility in the markets and our planned increase in cash.
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2022 – FINANCIAL RATIOS
The Company’s losses and settlement expense ratio (defined as losses and settlement expenses divided by net premiums earned) was 81.1% and 72.6% for the second quarter and six months ended June 30, 2022, compared with 68.0% and 66.4% for the same periods of 2021.
The expense ratio (defined as the amortization of deferred policy acquisition costs and underwriting and administrative expenses divided by net premiums earned) was 35.3% and 35.6% for the second quarter and six months ended June 30, 2022, compared to 39.6% and 38.4% for the same period of 2021.
The Company’s GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 116.4% and 108.3% for the second quarter and six months ended June 30, 2022, compared to 107.7% and 104.8% for the same period of 2021.
MANAGEMENT COMMENTARY
“The first half of 2022 has seen a lot of volatility in the markets, which led to decreased overall earnings for the Company. Our earned premiums are up significantly in the first half of 2022 vs. 2021 due to our strategic vision for growing renewal business through rate increases. Our expense ratio continues its downward trend as a result of our operational efficiencies. We are positioning ourselves well for continued success despite market fluctuations.
“Our losses and settlement expense are up markedly for the first half of 2022 vs. 2021 mainly due to some late reporting claims from 2021 and a large settlement on a 2020 claim. We continue to be very selective with the new business we acquire and renewals we allow while providing our clients with the best-in-class insurance coverage in the food and beverage industry. We are ensuring our ability to pay future claims with the growth of our renewal business.
“We are laser focused on the profitability of our current operations while we continue to search for new revenue opportunities,” 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; downturns and volatility in global economies and equity and credit markets, including as a result of inflation and supply chain disruptions and continued labor shortages; interest rates and changes in rates could adversely affect the Company's business and profitability; 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, 2021. 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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June 30, |
December 31, |
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2022 |
2021 |
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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 $100,018,472 at 6/30/2022 and $102,145,223 at 12/31/2021) |
$ |
92,371,500 |
$ |
105,841,543 | ||
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Common stocks at fair value |
18,092,308 | 23,608,197 | ||||
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Preferred stocks at fair value |
3,033,312 | 2,780,450 | ||||
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Other invested assets |
3,792,362 | 3,086,568 | ||||
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Property held for investment, at cost, net of accumulated depreciation of $521,315 at 6/30/2022 and $464,713 at 12/31/2021 |
5,581,481 | 5,509,114 | ||||
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Cash and cash equivalents |
8,041,975 | 4,606,378 | ||||
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Total investments and cash |
130,912,938 | 145,432,250 | ||||
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Accrued investment income |
707,190 | 659,413 | ||||
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Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $100,000 at 6/30/2022 and 12/31/2021 |
29,759,983 | 27,199,804 | ||||
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Ceded unearned premiums |
981,211 | 967,022 | ||||
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Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $0 at 6/30/2022 and 12/31/2021 |
15,526,114 | 14,521,219 | ||||
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Federal income taxes |
3,324,334 | 195,694 | ||||
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Deferred policy acquisition costs, net |
7,156,770 | 6,538,844 | ||||
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Property and equipment, at cost, net of accumulated depreciation of $6,378,208 at 6/30/2022 and $6,243,055 at 12/31/2021 |
3,206,245 | 3,144,218 | ||||
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Other assets |
1,327,125 | 1,343,504 | ||||
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Total assets |
$ |
192,901,910 |
$ |
200,001,968 | ||
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Liabilities and Equity |
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Liabilities: |
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Unpaid losses and settlement expenses |
$ |
70,381,083 |
$ |
61,834,809 | ||
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Unearned premiums |
39,512,116 | 36,212,266 | ||||
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Reinsurance balances payable |
813,069 | 1,368,294 | ||||
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Corporate debt |
15,000,000 | 18,455,342 | ||||
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Accrued expenses |
4,640,904 | 5,441,611 | ||||
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Other liabilities |
1,047,109 | 1,030,870 | ||||
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Total liabilities |
131,394,281 | 125,298,054 | ||||
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Equity: |
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Common stock1 |
35,000 | 35,000 | ||||
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Treasury stock, at cost2 |
(3,192,640) | (3,155,399) | ||||
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Additional paid-in capital |
32,939,978 | 32,965,136 | ||||
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Accumulated other comprehensive earnings, net of tax |
(6,041,174) | 2,920,027 | ||||
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Retained earnings |
39,993,988 | 44,282,895 | ||||
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Less: Unearned Employee Stock Ownership Plan shares at cost3 |
(2,227,523) | (2,343,745) | ||||
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Total equity |
61,507,629 | 74,703,914 | ||||
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Total liabilities and equity |
$ |
192,901,910 |
$ |
200,001,968 | ||
1Par value $0.01; authorized: 2022 – 10,000,000 shares and 2021 – 10,000,000 shares; issued: 2022 – 3,500,000 shares and 2021 – 3,500,000 shares; outstanding: 2022 –3,289,558 and 2021 –3,291,852 shares
22022 –210,442 shares and 2021 –208,875 shares
32022 –222,752 shares and 2021 –234,374 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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June 30, |
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2022 |
2021 |
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Net premiums earned |
$ |
17,024,642 |
$ |
12,732,807 | ||
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Net investment income |
952,189 | 783,718 | ||||
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Net realized investment gains |
536,809 | 349,906 | ||||
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Net unrealized (losses) gains on equity securities |
(3,804,511) | 728,819 | ||||
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Other income |
88,226 | 91,318 | ||||
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Consolidated revenues |
14,797,355 | 14,686,568 | ||||
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Losses and settlement expenses |
13,808,605 | 8,664,280 | ||||
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Policy acquisition costs and other operating expenses |
6,002,808 | 5,047,023 | ||||
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Interest expense on debt |
42,241 | 58,014 | ||||
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General corporate expenses |
184,503 | 196,133 | ||||
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Total expenses |
20,038,157 | 13,965,450 | ||||
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(Loss) earnings before income taxes |
(5,240,802) | 721,118 | ||||
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Total income tax (benefit) expense |
(1,112,035) | 158,450 | ||||
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Net (loss) earnings |
$ |
(4,128,767) |
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562,668 | ||
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Other comprehensive (loss) earnings, net of tax |
(3,992,132) | 1,080,987 | ||||
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Comprehensive (loss) earnings |
$ |
(8,120,899) |
$ |
1,643,655 | ||
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Earnings per share: |
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Basic: |
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Basic net (loss) earnings per share |
$ |
(1.35) |
$ |
0.18 | ||
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Diluted: |
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Diluted net (loss) earnings per share |
$ |
(1.34) |
$ |
0.18 | ||
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Weighted average number of common shares outstanding: |
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Basic |
3,069,430 | 3,051,010 | ||||
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Diluted |
3,082,000 | 3,064,455 | ||||
ICC Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)
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For the Six-Months Ended |
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June 30, |
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2022 |
2021 |
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Net premiums earned |
$ |
33,041,319 |
$ |
24,781,520 | ||
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Net investment income |
1,869,270 | 1,585,124 | ||||
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Net realized investment gains |
744,394 | 536,615 | ||||
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Net unrealized (losses) gains on equity securities |
(5,097,203) | 1,605,135 | ||||
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Other income |
247,657 | 138,034 | ||||
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Consolidated revenues |
30,805,437 | 28,646,428 | ||||
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Losses and settlement expenses |
24,003,806 | 16,466,986 | ||||
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Policy acquisition costs and other operating expenses |
11,775,208 | 9,514,601 | ||||
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Interest expense on debt |
103,252 | 111,716 | ||||
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General corporate expenses |
373,918 | 360,117 | ||||
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Total expenses |
36,256,184 | 26,453,420 | ||||
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(Loss) earnings before income taxes |
(5,450,747) | 2,193,008 | ||||
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Total income tax (benefit) expense |
(1,161,840) | 468,401 | ||||
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Net (loss) earnings |
$ |
(4,288,907) |
$ |
1,724,607 | ||
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Other comprehensive loss, net of tax |
(8,961,201) | (1,145,535) | ||||
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Comprehensive (loss) earnings |
$ |
(13,250,108) |
$ |
579,072 | ||
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Earnings per share: |
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Basic: |
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Basic net (loss) earnings per share |
$ |
(1.40) |
$ |
0.57 | ||
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Diluted: |
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Diluted net (loss) earnings per share |
$ |
(1.40) |
$ |
0.57 | ||
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Weighted average number of common shares outstanding: |
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Basic |
3,061,119 | 3,037,738 | ||||
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Diluted |
3,073,689 | 3,051,183 | ||||
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