Note 5 - Debt

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

5. DEBT

Debt Obligation

ICC Holdings, Inc. secured a loan with a commercial bank in March 2017 in the amount of $3.5 million and used the proceeds to repay ICC for the money borrowed by the ESOP. The term of the loan is five years bearing interest at 3.65%. The Company pledged stock and $1.0 million of marketable assets as collateral for the loan. The Company repaid $3.5 million in April 2022, which fully extinguished the loan balance.

The Company has borrowing capacity of $44.3 million with the Federal Home Loan Bank of Chicago (FHLBC), which is 25% of net admitted statutory assets of ICC as of the prior year-end.

As a part of the Company's response to COVID-19, the Company obtained in March 2020 a $6.0 million from the FHLBC as a precautionary measure to increase its cash position, to provide increased liquidity, and to compensate for potential reductions in premium receivable collections. The term of the loan is five years bearing interest at 1.4%. The Company pledged $6.8 million of fixed income securities as collateral for this loan.

In May 2021, the Company entered into a $4.0 million, 0.74% fixed interest, five-year FHLBC loan.

A one-year FHLBC loan for $5.0 million, 0% interest was entered into in May 2021. Upon maturity in May 2022, this loan was rolled over to a $5.0 million, five-year, 1.36% fixed interest loan.

The Company has $18.2 million in bonds pledged as collateral for all FHLBC loans.

The total balance of the debt agreements at year end 2022 and 2021 was $15,000,000 and $18,455,342, respectively. The weighted average interest rate on remaining debt was 1.2% as of December 31, 2022 and 1.3% as of December 31, 2021.

Revolving Line of Credit

We increased our revolving line of credit with a commercial bank from $2.0 million to $4.0 million in July 2022. As of December 31, 2022, the balance on the line of credit was $0. The line of credit is priced at Prime plus 0.5% with a floor of 4.75% and renews annually with a current expiration date of July 2023. The Company pledged $4.0 million of business assets in the event the Company draws down on the line of credit. This agreement includes an annually calculated financial debt covenant requiring a minimum total adjusted capital of $21.0 million. Total adjusted capital is the sum of an insurer's statutory capital and surplus as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed with the Illinois Department of Insurance. As of  December 31, 2022, our total adjusted capital is in excess of $59.7 million. There was no interest paid on the line of credit during the years ended  December 31, 2022 and 2021.