Note 4 - Debt

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Debt Disclosure [Text Block]

4. DEBT

Debt Obligation

Debt Obligations

The Company had $15,000,000 in outstanding debt as of  March 31, 2024 and December 31, 2023.

The Company also has borrowing capacity of $48.2 million with the Federal Home Loan Bank of Chicago (FHLBC), which is 25% of net admitted statutory assets of Illinois Casualty Company as of the prior year-end. As of  March 31, 2024, the Company has used $15.0 million of that capacity through three separate 5-year term loans expiring between 2025 and 2027, with a weighted average interest rate of 1.21%.

The Company has $19.1 million in bonds pledged as collateral for all FHLBC loans.

Revolving Line of Credit

As of March 31, 2024, the balance on the line of credit was $0. As of  July 5, 2023, this line of credit is priced at prime plus 0.5% with a floor of 6.00% and renews annually with a current expiration date of July 5, 2024. The Company has $4.0 million of available credit and has 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 principles applicable to the annual financial statements required to be filed with Illinois Department of Insurance. As of March 31, 2024, our total adjusted capital is approximately $65.4 million. There was no interest paid on the line of credit during the three months ended March 31, 2024 and 2023.