icch-20220808x8k
false000168190300016819032022-08-082022-08-08

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

 

August 8, 2022

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:

 

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

 

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

 

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

 

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

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 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 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.  



 

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:

 

99.1

Press release, dated August 8, 2022.

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.

 

 

ICC HOLDINGS, INC.

 

 

 

Dated:  August 8, 2022

 

 

 

 

 

 

By:

/s/  Arron K. Sutherland

 

 

 

 

Arron K. Sutherland

 

 

 

President, Chief Executive Officer and

Director

 

 

 

 

 

Ex 991 63022 ICCH Earnings Release

Picture 1



 

 



 

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 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





 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 



 

As of



 

June 30,

 

December 31,



 

2022

 

2021



 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

 

Investments and cash:

 

 

 

 

 

 

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 

Common stocks at fair value

 

 

18,092,308 

 

 

23,608,197 

Preferred stocks at fair value

 

 

3,033,312 

 

 

2,780,450 

Other invested assets

 

 

3,792,362 

 

 

3,086,568 

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 

Cash and cash equivalents

 

 

8,041,975 

 

 

4,606,378 

Total investments and cash

 

 

130,912,938 

 

 

145,432,250 

Accrued investment income

 

 

707,190 

 

 

659,413 

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 

Ceded unearned premiums

 

 

981,211 

 

 

967,022 

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 

Federal income taxes

 

 

3,324,334 

 

 

195,694 

Deferred policy acquisition costs, net

 

 

7,156,770 

 

 

6,538,844 

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 

Other assets

 

 

1,327,125 

 

 

1,343,504 

Total assets

 

$

192,901,910 

 

$

200,001,968 



 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Unpaid losses and settlement expenses

 

$

70,381,083 

 

$

61,834,809 

Unearned premiums

 

 

39,512,116 

 

 

36,212,266 

Reinsurance balances payable

 

 

813,069 

 

 

1,368,294 

Corporate debt

 

 

15,000,000 

 

 

18,455,342 

Accrued expenses

 

 

4,640,904 

 

 

5,441,611 

Other liabilities

 

 

1,047,109 

 

 

1,030,870 

Total liabilities

 

 

131,394,281 

 

 

125,298,054 



 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Common stock1  

 

 

35,000 

 

 

35,000 

Treasury stock, at cost2

 

 

(3,192,640)

 

 

(3,155,399)

Additional paid-in capital

 

 

32,939,978 

 

 

32,965,136 

Accumulated other comprehensive earnings, net of tax

 

 

(6,041,174)

 

 

2,920,027 

Retained earnings

 

 

39,993,988 

 

 

44,282,895 

Less: Unearned Employee Stock Ownership Plan shares at cost3

 

 

(2,227,523)

 

 

(2,343,745)

Total equity

 

 

61,507,629 

 

 

74,703,914 

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)









 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three-Months Ended



 

June 30,



 

2022

 

2021

Net premiums earned

 

$

17,024,642 

 

$

12,732,807 

Net investment income

 

 

952,189 

 

 

783,718 

Net realized investment gains

 

 

536,809 

 

 

349,906 

Net unrealized (losses) gains on equity securities

 

 

(3,804,511)

 

 

728,819 

Other income

 

 

88,226 

 

 

91,318 

Consolidated revenues

 

 

14,797,355 

 

 

14,686,568 

Losses and settlement expenses

 

 

13,808,605 

 

 

8,664,280 

Policy acquisition costs and other operating expenses

 

 

6,002,808 

 

 

5,047,023 

Interest expense on debt

 

 

42,241 

 

 

58,014 

General corporate expenses

 

 

184,503 

 

 

196,133 

Total expenses

 

 

20,038,157 

 

 

13,965,450 

(Loss) earnings before income taxes

 

 

(5,240,802)

 

 

721,118 

Total income tax (benefit) expense

 

 

(1,112,035)

 

 

158,450 

Net (loss) earnings

 

$

(4,128,767)

 

$

562,668 



 

 

 

 

 

 

Other comprehensive (loss) earnings, net of tax

 

 

(3,992,132)

 

 

1,080,987 

Comprehensive (loss) earnings

 

$

(8,120,899)

 

$

1,643,655 



 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Basic net (loss) earnings per share

 

$

(1.35)

 

$

0.18 

Diluted:

 

 

 

 

 

 

Diluted net (loss) earnings per share

 

$

(1.34)

 

$

0.18 



 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

Basic

 

 

3,069,430 

 

 

3,051,010 

Diluted

 

 

3,082,000 

 

 

3,064,455 




 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)





 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Six-Months Ended



 

June 30,



 

2022

 

2021

Net premiums earned

 

$

33,041,319 

 

$

24,781,520 

Net investment income

 

 

1,869,270 

 

 

1,585,124 

Net realized investment gains

 

 

744,394 

 

 

536,615 

Net unrealized (losses) gains on equity securities

 

 

(5,097,203)

 

 

1,605,135 

Other income

 

 

247,657 

 

 

138,034 

Consolidated revenues

 

 

30,805,437 

 

 

28,646,428 

Losses and settlement expenses

 

 

24,003,806 

 

 

16,466,986 

Policy acquisition costs and other operating expenses

 

 

11,775,208 

 

 

9,514,601 

Interest expense on debt

 

 

103,252 

 

 

111,716 

General corporate expenses

 

 

373,918 

 

 

360,117 

Total expenses

 

 

36,256,184 

 

 

26,453,420 

(Loss) earnings before income taxes

 

 

(5,450,747)

 

 

2,193,008 

Total income tax (benefit) expense

 

 

(1,161,840)

 

 

468,401 

Net (loss) earnings

 

$

(4,288,907)

 

$

1,724,607 



 

 

 

 

 

 

Other comprehensive loss, net of tax

 

 

(8,961,201)

 

 

(1,145,535)

Comprehensive (loss) earnings

 

$

(13,250,108)

 

$

579,072 



 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Basic net (loss) earnings per share

 

$

(1.40)

 

$

0.57 

Diluted:

 

 

 

 

 

 

Diluted net (loss) earnings per share

 

$

(1.40)

 

$

0.57 



 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

Basic

 

 

3,061,119 

 

 

3,037,738 

Diluted

 

 

3,073,689 

 

 

3,051,183