10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June  30, 2018

or

☐ 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)

_______________________________

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 and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post 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. (Check one):

Large accelerated filer   ☐	Accelerated filer   ☐
Non-accelerated filer   ☐  (Do not check if a smaller reporting company)	Smaller reporting company   ☒
	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.   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐     No ☒

The number of shares of the registrant’s common stock outstanding as of August  9, 2018 was 3,500,000.

Table of Contents

		Page
PART I
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017	3
	Condensed Consolidated Statements of Earnings and Comprehensive Earnings For the Three-Month Periods Ended June 30, 2018 and 2017 (unaudited)	4
	Condensed Consolidated Statements of Earnings and Comprehensive Earnings For the Six-Month Periods Ended June 30, 2018 and 2017 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows For the Six-Month Periods Ended June 30, 2018 and 2017 (unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	38
Item 4.	Controls and Procedures	39
PART II
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Default Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	As of
	June 30,		December 31,
	2018		2017
		(Unaudited)
Assets
Investments and cash:
Available for sale securities, at fair value
Fixed maturity securities (amortized cost - $89,975,510 at	$	89,694,843	$	89,605,073
6/30/2018 and $87,773,047 at 12/31/2017)
Common stocks¹ (cost - $13,100,640 at		12,907,136		8,534,109
6/30/2018 and $7,631,180 at 12/31/2017)
Preferred stocks (cost - $66,675 at		65,650		3,867,429
6/30/2018 and $3,783,311 at 12/31/2017)
Other invested assets		139,200		—
Property held for investment, at cost, net of accumulated depreciation of		3,112,608		3,126,566
$172,791 at 6/30/2018 and $50,948 at 12/31/2017
Cash and cash equivalents		4,055,577		6,876,519
Total investments and cash		109,975,014		112,009,696
Accrued investment income		668,230		687,453
Premiums and reinsurance balances receivable, net of allowances for		21,433,743		19,013,262
uncollectible amounts of $50,000 at 6/30/2018 and 12/31/2017
Ceded unearned premiums		685,736		274,972
Reinsurance balances recoverable on unpaid losses and settlement expenses,		8,287,587		10,029,834
net of allowances for uncollectible amounts of $0 at 6/30/2018 and 12/31/2017
Federal income taxes		1,492,828		922,405
Deferred policy acquisition costs, net		5,090,527		4,592,415
Property and equipment, at cost, net of accumulated depreciation of		3,474,335		3,503,904
$4,815,812 at 6/30/2018 and $4,896,042 at 12/31/2017
Other assets		1,289,712		1,301,420
Total assets	$	152,397,712	$	152,335,361
Liabilities and Equity
Liabilities:
Unpaid losses and settlement expenses	$	51,387,881	$	51,074,126
Unearned premiums		29,298,437		26,555,582
Reinsurance balances payable		943,686		327,483
Corporate debt		3,489,056		4,339,208
Accrued expenses		2,940,084		4,274,002
Other liabilities		1,922,410		1,663,415
Total liabilities		89,981,554		88,233,816
Equity:
Common stock2		35,000		35,000
Additional paid-in capital		32,418,807		32,333,290
Accumulated other comprehensive (loss) earnings, net of tax		(375,404)		2,227,069
Retained earnings		33,502,434		32,787,406
Less: Unearned Employee Stock Ownership Plan shares at cost3		(3,164,679)		(3,281,220)
Total equity		62,416,158		64,101,545
Total liabilities and equity	$	152,397,712	$	152,335,361

1At June 30, 2018, common stock securities consist entirely of individual common stocks. At December 31, 2017, common stock consisted of exchange trade funds (ETF) made up primarily of Dividends Select and the S&P 500.

2Par value $0.01; authorized: 2018 - 10,000,000 shares and  2017–10,000,000 shares; issued: 2018 - 3,500,000 shares and 2017–3,500,000 shares;  outstanding: 2018 - 3,183,532 and 2017 - 3,171,878 shares.

32018  –316,468 shares and 2017 – 328,122 shares

Seeaccompanying notes to consolidated financial statements. 

~  3  ~

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)

	For the Three-Months Ended
	June 30,
	2018		2017
Net premiums earned	$	11,485,071	$	10,710,758
Net investment income		685,492		688,963
Net realized investment losses		(29,930)		(3)
Other-than-temporary impairment losses		—		(57,316)
Other (loss) income		(507)		64,722
Consolidated revenues		12,140,126		11,407,124
Losses and settlement expenses		7,790,587		6,864,258
Policy acquisition costs and other operating expenses		4,160,071		4,720,298
Interest expense on debt		27,621		57,229
General corporate expenses		133,806		128,905
Total expenses		12,112,085		11,770,690
Earnings (loss) before income taxes		28,041		(363,566)
Total income tax benefit		(11,159)		(128,443)
Net earnings (loss)	$	39,200	$	(235,123)
Other comprehensive (loss) earnings, net of tax		(35,396)		542,427
Comprehensive earnings	$	3,804	$	307,304
Earnings (loss) per share:
Basic:
Basic net earnings (loss) per share	$	0.01	$	(0.07)
Diluted:
Diluted net earnings (loss) per share	$	0.01	$	(0.07)
Weighted average number of common shares outstanding:
Basic		3,179,669		3,153,876
Diluted		3,180,679		3,153,876

See accompanying notes to consolidated financial statements.

~  4  ~

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)

	For the Six-Months Ended
	June 30,
	2018		2017
Net premiums earned	$	22,782,015	$	21,548,864
Net investment income		1,388,376		1,161,287
Net realized investment gains		1,072,200		444,778
Other-than-temporary impairment losses		—		(57,316)
Other income		56,171		148,980
Consolidated revenues		25,298,762		23,246,593
Losses and settlement expenses		15,786,436		13,463,642
Policy acquisition costs and other operating expenses		8,297,422		8,454,950
Interest expense on debt		75,782		109,539
General corporate expenses		270,056		268,120
Total expenses		24,429,696		22,296,251
Earnings before income taxes		869,066		950,342
Total income tax expense		154,039		336,421
Net earnings	$	715,027	$	613,921
Other comprehensive (loss) earnings, net of tax		(2,602,473)		596,908
Comprehensive (loss) earnings	$	(1,887,446)	$	1,210,829
Earnings per share:
Basic:
Basic net earnings per share	$	0.23	$	0.19
Diluted:
Diluted net earnings per share	$	0.23	$	0.19
Weighted average number of common shares outstanding:
Basic		3,174,324		3,151,946
Diluted		3,175,334		3,151,946

See accompanying notes to consolidated financial statements.

~  5  ~

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six-Month Periods Ended June 30,
	2018		2017
Cash flows from operating activities:
Net earnings	$	715,027	$	613,921
Adjustments to reconcile net earnings to net cash
used in operating activities
Net realized investment gains		(1,072,200)		(444,778)
Other-than-temporary impairment losses		—		57,316
Depreciation		310,857		428,161
Deferred income tax		(35,427)		190,257
Amortization of bond premium and discount		158,743		135,265
Stock-based compensation expense		202,058		—
Change in:
Accrued investment income		19,223		(122,970)
Premiums and reinsurance balances receivable, (net)		(2,420,481)		(361,761)
Ceded unearned premiums		(410,764)		(25,457)
Reinsurance balances payable		616,203		20,431
Reinsurance balances recoverable		1,742,247		2,364,744
Deferred policy acquisition costs		(498,112)		(139,961)
Unpaid losses and settlement expenses		313,755		(3,125,882)
Unearned premiums		2,742,855		1,022,675
Accrued expenses		(1,333,918)		(1,645,086)
Current federal income tax		156,800		(483,608)
Other		270,703		102,915
Net cash provided by (used in) operating activities		1,477,569		(1,413,818)
Cash flows from investing activities:
Purchases of:
Fixed maturity securities, available-for-sale		(9,003,061)		(22,821,724)
Common stocks, available-for-sale		(13,363,215)		(5,216,872)
Preferred stocks, available-for-sale		(140,925)		(638,922)
Other invested assets		(39,200)		—
Property held for investment		(31,673)		(677,714)
Property and equipment		(300,484)		(333,887)
Proceeds from sales, maturities and calls of:
Fixed maturity securities, available-for-sale		6,669,276		4,414,597
Common stocks, available-for-sale		8,834,375		1,955,715
Preferred stocks, available-for-sale		3,861,722		—
Property and equipment		64,826		967
Net cash used in investing activities		(3,448,359)		(23,317,840)
Cash flows from financing activities:
Net proceeds received from issuance of shares of common stock		—		29,253,588
Proceeds from loans		—		3,499,149
Repayments of borrowed funds		(850,152)		(2,294,961)
Net cash (used in) provided by financing activities		(850,152)		30,457,776
Net (decrease) increase in cash and cash equivalents		(2,820,942)		5,726,118
Cash and cash equivalents at beginning of year		6,876,519		4,376,847
Cash and cash equivalents at end of period	$	4,055,577	$	10,102,965
Supplemental information:
Federal income tax paid	$	—	$	600,000
Interest paid		108,336		109,451

See accompanying notes to consolidated financial statements.

~  6  ~

Notes to Unaudited Condensed Consolidated Financial Statements

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.     DESCRIPTION OF BUSINESS

ICC Holdings, Inc. is a Pennsylvania corporation that was organized in 2016. As used in this Form 10-Q, references to “the Company,” “we,” “us,” and “our” refer to the consolidated group for the period after the completion of the stock conversion and refer to Illinois Casualty Company (ICC) and its subsidiaries for the period prior to the stock conversion. On a stand-alone basis ICC Holdings, Inc. is referred to as the “Parent Company.” The consolidated group consists of the holding company, ICC Holdings, Inc.;ICC Realty, LLC, a real estate services and holding company; Beverage Insurance Agency, Inc., an inactive insurance agency; Estrella Innovative Solutions, Inc., an outsourcing company; andICC, an operating insurance company. ICC is an Illinois domiciled company.

ICC Holdings, Inc. was formed so that it could acquire all of the capital stock of ICC in a mutual-to-stock conversion. The plan of conversion was approved by ICC policyholders at a special meeting on March 17, 2017. Simultaneously, surplus notes totaling $1.65 million were converted into 165,000 shares of the Company’s common stock. The Company’s offering closed on March 24, 2017, and our Employee Stock Ownership Plan (ESOP) purchased 350,000 of the shares in the offering. On March 28, 2017, the Company’s stock began trading on the NASDAQ Capital Market under the “ICCH” ticker. The Company paid $1.0 million of underwriting fees to Griffin Financial Group, LLC. Proceeds received from the offering, net of offering costs and underwriting fees, was $28.7 million.

Prior to the conversion on March 24, 2017, ICC Holdings, Inc. did not engage in any operations. Since the conversion, ICC Holdings, Inc’s primary assets are the outstanding equity of ICC,  ICC Realty, LLC, Estrella Innovative Solutions, Inc., Beverage Insurance Agency, Inc., and a portion of the net proceeds from the stock offering completed in connection with the mutual-to-stock conversion. On the effective date of the conversion, ICC became a wholly owned subsidiary of ICC Holdings, Inc. Themutual-to-stock conversion was accounted for as a change in corporate form with the historic basis of ICC’s assets, liabilities, and equity unchanged as a result.

We are a specialty insurance carrier primarily underwriting commercial multi-peril, liquor liability, workers’ compensation, and umbrella liability coverages for the food and beverage industry through our subsidiary insurance company, ICC. ICC writes business in Colorado, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Ohio, and Wisconsin and markets through independent agents. Approximately 28.8% and 36.5% of the premium is written in Illinois for the three months ended June  30, 2018 and 2017, respectively. For the six months ended, June 30, 2018 and 2017, approximately 30.9% and 36.2% of the premium is written in Illinois, respectively.  ICC sold its two wholly-owned subsidiaries, Beverage Insurance Agency, Inc. and Estrella Innovative Solutions, Inc. to ICC Holdings during the second quarter of 2018. ICC sold all of its real estate holdings held by ICC Realty, LLC to its parent, ICC Holdings, Inc.; via the sale of all of the outstanding equity of ICC Realty, LLC to ICC Holdings, Inc. during the fourth quarter of 2017. The Company operates as a single segment.

B.     PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

The unaudited condensed consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and with the instructions to Form 10-Q.  Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements.  As such, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 10-K”). Management believes that the disclosures are adequate to make the information presented not misleading, and all normal and recurring adjustments necessary to present fairly the financial position at June  30, 2018, and the results of operations of the Company and its subsidiaries for all periods presented have been made. The results of operations for any interim period are not necessarily indicative of the operating results for a full year.

The preparation of the unaudited condensed consolidated interim financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated interim financial statements, and the reported amounts of revenue and expenses during the period. These amounts are inherently subject to change and actual results could differ significantly from these estimates.

C.     SIGNIFICANT ACCOUNTING POLICIES

The Company reported significant accounting policies in the 2017 10-K. The following are new or revised disclosures.

~  7  ~

STOCK-BASED COMPENSATION

We have compensation plans under which stock-based awards may be granted to our employees as described in Note 8 – Employee Benefits. The Company recognizes the fair value of stock-based compensation ratably during each year through a charge to compensation expense and a corresponding entry to equity based on vesting criteria and other pertinent terms of the awards. Stock-based awards are accounted for as equity awards in instances where the awards’ vesting are linked to market, performance, or service condition. The Company granted Restricted Stock Units (RSUs) for the first time in February of 2018. Upon vesting of any outstanding RSUs, the Company has the optionto elect to pay cash or part cash and part Common Stock in lieu of delivering on shares of Common Stock for vested units. The Company’s intention is to settle vested units in Common Stock, and therefore the RSUs are accounted for as equity awards. Equity awards to employees are generally expensed based on the grant date fair value.

EARNINGS PER SHARE

Basic and diluted earnings per share (EPS) are calculated by dividing earnings available to common shareholders by the weighted average number of common shares outstanding during the period. The denominator for basic and diluted EPS includes ESOP shares committed to be released. Dilutive earnings per share includes the effect of all potentially dilutive instruments, such as restricted stock units (RSUs), outstanding during the period.

D.     PROSPECTIVE ACCOUNTING STANDARDS

For information regarding accounting standards that the Company has not yet adopted, see the “Prospective Accounting Standards” in Note 1 – Summary of Significant Accounting Policies in the 2017 10-K. The Company maintains its status as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We have taken advantage of the extended transition period provided by Section 107 of the JOBS Act. We decided to comply with the effective dates for financial accounting standards applicable to emerging growth companies at a later date in compliance with the requirements in Sections 107(b)(2) and (3) of the JOBS Act. Such decision is irrevocable.

E.     PROPERTY AND EQUIPMENT

Annually, the Company reviews the major asset classes of property and equipment held for impairment. For the periods ended June 30, 2018 and 2017, the Company recognized no impairments.  Property and equipment are summarized as follows:

	As of
	June 30,		December 31,
	2018		2017
Automobiles	$	567,291	$	794,959
Furniture and fixtures		427,453		425,825
Computer equipment and software		3,453,042		3,404,975
Home office		3,842,361		3,774,187
Total cost		8,290,147		8,399,946
Accumulated depreciation		(4,815,812)		(4,896,042)
Net property and equipment	$	3,474,335	$	3,503,904

F.     COMPREHENSIVE EARNINGS

Comprehensive earnings (loss) include net earnings (loss) plus the change in unrealized gains and losses on available-for-sale investment securities, net of tax. In reporting the components of comprehensive earnings on a net basis in the statement of earnings, the Company used a 21%and a  34% tax rate for the periods ending June 30, 2018 and 2017, respectively.  

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The following table illustrates the components of other comprehensive earnings for each period presented in the condensed consolidated interim financial statements.

	Three-Month Periods Ended June 30,
	2018						2017
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Other comprehensive earnings (loss),   net of tax
Unrealized gains and losses on investments:
Unrealized holding (losses) gains   arising during the period	$	(74,733)	$	15,692	$	(59,041)	$	764,541	$	(259,944)	$	504,597
Reclassification adjustment for   (gains) losses included in net earnings		29,930		(6,285)		23,645		57,319		(19,489)		37,830
Total other comprehensive (loss) earnings	$	(44,803)	$	9,407	$	(35,396)	$	821,860	$	(279,433)	$	542,427

	Six-Month Periods Ended June 30,
	2018						2017
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Other comprehensive earnings (loss),   net of tax
Unrealized gains and losses on investments:
Unrealized holding (losses) gains   arising during the period	$	(2,222,069)	$	466,634	$	(1,755,435)	$	1,291,868	$	(439,235)	$	852,633
Reclassification adjustment for   (gains) losses included in net earnings		(1,072,200)		225,162		(847,038)		(387,462)		131,737		(255,725)
Total other comprehensive (loss) earnings	$	(3,294,269)	$	691,796	$	(2,602,473)	$	904,406	$	(307,498)	$	596,908

The following table provides the reclassifications from accumulated other comprehensive earnings for the periods presented:

Amounts Reclassified from
Accumulated Other Comprehensive Earnings
Details about Accumulated Other	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,				Affected Line Item in the Statement
Comprehensive Earnings Component	2018		2017		2018		2017		where Net Earnings is Presented
Unrealized gains (losses) on AFS investments:
	$	29,930	$	3	$	(1,072,200)	$	(444,778)	Net realized invesment losses (gains)
		—		57,316		—		57,316	Other-than-temporary impairment losses
		(6,285)		(19,489)		225,162		131,737	Income tax (benefit) expense
Total reclassification adjustment, net of tax	$	23,645	$	37,830	$	(847,038)	$	(255,725)

2.     INVESTMENTS

The Company’s investments are primarily composed of fixed income debt securities and common and preferred stock equity securities. All of the Company’s fixed maturity debt and equity investments are presented as available-for-sale (AFS), which are carried at fair value. When available, quoted market prices are obtained to determine fair value for the Company’s investments. If a quoted market price is not available, fair value is estimated using a secondary pricing source or using quoted market prices of similar securities. The Company has no investment securities for which fair value is determined using Level 3 inputs as defined in Note 3 – Fair Value Disclosures. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date, which does not differ significantly from trade date accounting.

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Fixed Income Securities - Available-for-Sale

The following tables are a summary of the proceeds from sales, maturities, and calls of available-for-sale securities and the related gross realized gains and losses.

	For the Three-Months Ended Ended June 30,
							Net realized
	Proceeds		Gains		Losses		gain / (Loss)
2018
Fixed maturity securities	$	2,598,335	$	4,669	$	(13,084)	$	(8,415)
Common stocks		241,047		16,473		(37,988)		(21,515)
2017
Fixed maturity securities	$	906,700	$	—	$	(3)	$	(3)

	For the Six-Months Ended June 30,
							Net realized
	Proceeds		Gains		Losses		gain
2018
Fixed maturity securities	$	6,669,276	$	52,787	$	(26,115)	$	26,672
Common stocks		8,834,375		1,102,862		(62,242)		1,040,620
Preferred stocks		3,861,722		86,862		(81,954)		4,908
2017
Fixed maturity securities	$	4,414,597	$	29,328	$	(21)	$	29,307
Common stocks		1,955,715		415,471		—		415,471

The amortized cost and estimated fair value of fixed income securities at June 30, 2018, by contractual maturity, are shown as follows:

	Amortized Cost		Fair Value
Due in one year or less	$	311,535	$	311,420
Due after one year through five years		23,915,785		23,924,513
Due after five years through 10 years		10,685,245		10,767,086
Due after 10 years		18,034,819		18,283,025
Asset and mortgage backed securities without a specific due date		37,028,126		36,408,799
Total fixed maturity securities	$	89,975,510	$	89,694,843

Expected maturities may differ from contractual maturities due to call provisions on some existing securities.

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The following table is a schedule of cost or amortized cost and estimated fair values of investments in fixed income and equity securities as of June 30, 2018 and December 31, 2017:  

	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2018
Fixed maturity securities:
U.S. treasury	$	1,347,640	$	1,321,469	$	—	$	(26,171)
MBS/ABS/CMBS		37,028,126		36,408,799		49,487		(668,814)
Corporate		31,210,729		31,157,991		356,164		(408,902)
Municipal		20,389,015		20,806,584		486,377		(68,808)
Total fixed maturity securities		89,975,510		89,694,843		892,028		(1,172,695)
Equity securities:
Common stocks		13,100,640		12,907,136		656,830		(850,334)
Preferred stocks		66,675		65,650		—		(1,025)
Total equity securities		13,167,315		12,972,786		656,830		(851,359)
Total AFS securities	$	103,142,825	$	102,667,629	$	1,548,858	$	(2,024,054)

	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2017
Fixed maturity securities:
U.S. treasury	$	1,346,712	$	1,333,725	$	—	$	(12,987)
MBS/ABS/CMBS		31,584,141		31,518,662		158,944		(224,423)
Corporate		31,038,526		31,989,174		1,001,906		(51,258)
Municipal		23,803,668		24,763,512		976,872		(17,028)
Total fixed maturity securities		87,773,047		89,605,073		2,137,722		(305,696)
Equity securities:
Common stocks		7,631,180		8,534,109		920,629		(17,700)
Preferred stocks		3,783,311		3,867,429		132,054		(47,936)
Total equity securities		11,414,491		12,401,538		1,052,683		(65,636)
Total AFS securities	$	99,187,538	$	102,006,611	$	3,190,405	$	(371,332)

All of the Company’s collaterized securities carry an average credit rating of AA+ by one or more major rating agency and continue to pay according to contractual terms. Included within MBS/ABS/CMBS, as defined in Note 3 – Fair Value Disclosures, are residential mortgage backed securities with fair values of $14,271,429and $13,517,725and commercial mortgage backed securities of $9,177,628and $8,469,852atJune 30, 2018 and December 31, 2017, respectively.

~  11  ~

ANALYSIS

The following table is also used as part of the impairment analysis and displays the total value of securities that were in an unrealized loss position as of June 30, 2018, and December 31, 2017. The table segregates the securities based on type, noting the fair value, cost (or amortized cost), and unrealized loss on each category of investment as well as in total. The table further classifies the securities based on the length of time they have been in an unrealized loss position.

	June 30, 2018						December 31, 2017
			12 Months						12 Months
	< 12 Months		& Greater		Total		< 12 Months		& Greater		Total
U.S. treasury
Fair value	$	1,029,263	$	292,206	$	1,321,469	$	1,038,297	$	295,428	$	1,333,725
Cost or amortized cost		1,047,472		300,168		1,347,640		1,046,508		300,204		1,346,712
Unrealized loss		(18,209)		(7,962)		(26,171)		(8,211)		(4,776)		(12,987)
MBS/ABS/CMBS
Fair value		20,073,237		6,708,127		26,781,364		9,754,119		7,445,071		17,199,190
Cost or amortized cost		20,368,837		7,081,341		27,450,178		9,778,528		7,645,085		17,423,613
Unrealized loss		(295,600)		(373,214)		(668,814)		(24,409)		(200,014)		(224,423)
Corporate
Fair value		17,434,719		755,371		18,190,090		5,583,942		2,023,856		7,607,798
Cost or amortized cost		17,799,788		799,204		18,598,992		5,610,093		2,048,963		7,659,056
Unrealized loss		(365,069)		(43,833)		(408,902)		(26,151)		(25,107)		(51,258)
Municipal
Fair value		3,644,260		839,947		4,484,207		478,019		1,171,520		1,649,539
Cost or amortized cost		3,677,077		875,938		4,553,015		479,904		1,186,663		1,666,567
Unrealized loss		(32,817)		(35,991)		(68,808)		(1,885)		(15,143)		(17,028)
Subtotal, fixed income
Fair value		42,181,479		8,595,651		50,777,130		16,854,377		10,935,875		27,790,252
Cost or amortized cost		42,893,174		9,056,651		51,949,825		16,915,033		11,180,915		28,095,948
Unrealized loss		(711,695)		(461,000)		(1,172,695)		(60,656)		(245,040)		(305,696)
Common stock
Fair value		7,254,241		—		7,254,241		637,100		—		637,100
Cost or amortized cost		8,104,575		—		8,104,575		654,800		—		654,800
Unrealized loss		(850,334)		—		(850,334)		(17,700)		—		(17,700)
Preferred stock
Fair value		65,650		—		65,650		842,530		520,710		1,363,240
Cost or amortized cost		66,675		—		66,675		870,755		540,421		1,411,176
Unrealized loss		(1,025)		—		(1,025)		(28,225)		(19,711)		(47,936)
Total
Fair value		49,501,370		8,595,651		58,097,021		18,334,007		11,456,585		29,790,592
Cost or amortized cost		51,064,424		9,056,651		60,121,075		18,440,588		11,721,336		30,161,924
Unrealized loss	$	(1,563,054)	$	(461,000)	$	(2,024,054)	$	(106,581)	$	(264,751)	$	(371,332)

As of June 30, 2018, the Company held 148 common stock and preferred stock securities in an unrealized loss position. Of these 148 securities, none have been in an unrealized loss position for 12 consecutive months or longer. As of December 31, 2017, the Company held 13 equity securities that were in unrealized loss positions. Of these 13 securities, five were in an unrealized loss position for 12 consecutive months or longer and represented $19,711 in unrealized losses.

The fixed income portfolio contained 124 securities in an unrealized loss position as of June 30,  2018. Of these 124 securities, 24 have been in an unrealized loss position for 12 consecutive months or longer and represent $461,000 in unrealized losses. All fixed income securities in the investment portfolio continue to pay the expected coupon payments under the contractual terms of the securities. Credit-related impairments on fixed income securities that we do not plan to sell, and for which we are not more likely than not to be required to sell, are recognized in net earnings. Any non-credit related impairment is recognized in comprehensive earnings. Based on management’s analysis, the fixed income portfolio is of a high credit quality and it is believed it will recover the amortized cost basis of the fixed income securities. Management monitors the

~  12  ~

credit quality of the fixed income investments to assess if it is probable that the Company will receive its contractual or estimated cash flows in the form of principal and interest. There were no other-than-temporary impairment losses recognized in net earnings during the first six months ended June 30, 2018. For the six months ended, June 30, 2017, the Company recognized in net earnings $57,316 of other-than-temporary impairment losses on an ETF included in common stock that was impaired during the second quarter of 2017.The securities in an unrealized loss position were not other-than-temporarily impaired at June 30, 2018 and December 31, 2017.

Other Invested Assets

Other invested assets include privately held investments, including membership in the Federal Home Loan Bank of Chicago (FHLBC), which occurred in February 2018 . Our investment in FHLBC stock is carried at cost. Due to the nature of our membership in the FHLBC, its carrying amount approximates fair value. As of June 30, 2018, there were no investments pledged as collateral with the FHLBC. There may be investments pledged as collateral with the FHLBC to ensure timely access to the secured lending facility that ownership of FHLBC stock provides. As of and during the three and six month periods ending June 30, 2018, there were no outstanding borrowings with the FHLBC.

3.     FAIR VALUE DISCLOSURES

Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. The fair value of certain financial instruments is determined based on their underlying characteristics and relevant transactions in the marketplace. GAAP guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance also describes three levels of inputs that may be used to measure fair value.

The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level:

· Level 1 is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets.

· Level 2 is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data.

· Level 3 is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value.

As a part of the process to determine fair value, management utilizes widely recognized, third-party pricing sources to determine fair values. Management has obtained an understanding of the third-party pricing sources’ valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy.

Corporate, Agencies, and Municipal Bonds—The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. All Corporate, Agencies, and Municipal securities are deemed Level 2.

Mortgage-backed Securities (MBS)/Collateralized Mortgage Obligations (CMO) and Asset-backed Securities (ABS)—The pricing vendor evaluation methodology includes principally interest rate movements and new issue data. Evaluation of the tranches (non-volatile, volatile, or credit sensitivity) is based on the pricing vendors’ interpretation of accepted modeling and pricing conventions. This information is then used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate CMO volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates, and recent trade activity. MBS/CMO and ABS with corroborated and observable inputs are classified as Level 2. All MBS/CMO and ABS holdings are deemed Level 2.

~  13  ~

U.S. Treasury Bonds, Common Stocks and Exchange Traded Funds—U.S. treasury bonds and exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). All common stock holdings are deemed Level 1.

Preferred Stock—Preferred stocks do not have readily observable prices, but do have quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices and are classified as Level 2. All preferred stock holdings are deemed Level 2.

Due to the relatively short-term nature of cash, cash equivalents, and the mortgage on the home office, their carrying amounts are reasonable estimates of fair value. Reported in Note 4–Debt, the surplus notes, capital lease obligations, and other debt obligations are carried at face value and given that there is no readily available market for these to trade in, management believes that face value accurately reflects fair value. Cash and cash equivalents are classified as Level 1 of the hierarchy.

Assets measured at fair value on a recurring basis as of June 30, 2018, are as summarized below:

			Significant
	Quoted in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
AFS securities
Fixed maturity securities
U.S. treasury	$	1,321,469	$	—	$	—	$	1,321,469
MBS/ABS/CMBS		—		36,408,799		—		36,408,799
Corporate		—		31,157,991		—		31,157,991
Municipal		—		20,806,584		—		20,806,584
Total fixed maturity securities		1,321,469		88,373,374		—		89,694,843
Equity securities
Common stocks		12,907,136		—		—		12,907,136
Preferred stocks		—		65,650		—		65,650
Total equity securities		12,907,136		65,650		—		12,972,786
Total AFS securities	$	14,228,605	$	88,439,024	$	—	$	102,667,629

Assets measured at fair value on a recurring basis as of December 31, 2017, are as summarized below:

			Significant
	Quoted in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
AFS securities
Fixed maturity securities
U.S. treasury	$	1,333,725	$	—	$	—	$	1,333,725
MBS/ABS/CMBS		—		31,518,662		—		31,518,662
Corporate		—		31,989,174		—		31,989,174
Municipal		—		24,763,512		—		24,763,512
Total fixed maturity securities		1,333,725		88,271,348		—		89,605,073
Equity securities
Common stocks		8,534,109		—		—		8,534,109
Preferred stocks		—		3,867,429		—		3,867,429
Total equity securities		8,534,109		3,867,429		—		12,401,538
Total AFS securities	$	9,867,834	$	92,138,777	$	—	$	102,006,611

As noted in the previous tables, the Company did not have any assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of June 30, 2018, and December 31, 2017. Additionally, there were no securities transferred in or out of Levels 1 or 2 during the six-month periods ended June 30, 2018 and 2017.

~  14  ~

4.     DEBT

As of June 30, 2018 and December 31, 2017, outstanding debt balances totaled $3,489,056 and$4,339,208, respectively. The average rate on remaining debt was 3.7% as of June 30, 2018, compared to 3.9% as of December 31, 2017.  

Long-term debt consists of the following as of the periods referenced below:

	June 30,		December 31,
	2018		2017
Capital lease obligation	$	—	$	805,013
Debt obligation		3,489,056		3,534,195
Total	$	3,489,056	$	4,339,208

Leasehold Obligation

The Company entered into a sale leaseback arrangement in 2016 that was accounted for as a capital lease. Under the agreement, Bofi Federal Bank purchased electronic data processing software, vehicles, and other assets which are leased to the Company. These assets remained on the Company’s books due to provisions within the agreement that trigger capital lease accounting. To secure the lowest rate possible of 4.7%, the Company pledged bonds totaling $923,563 and  $923,766 as ofMarch 31, 2018 and December 31, 2017. There was no gain or loss recognized as part of this transaction. On March 2, 2018 and March 7, 2018, the Company paid $404,928 and $346,000,  respectively to Bofi. These disbursements were made to pay off the balances of the sale leaseback arrangements. As a result of paying off the leasehold obligations during the first quarter of 2018, the bonds pledged as collateral related to this debt were released in April 2018. Lease payments totaled $0 and $125,494 for the three months ended June 30, 2018 and 2017, respectively.For the six months ended June 30, 2018 and 2017, lease payments totaled $70,051 and $250,988, respectively. The outstanding lease obligation was$0 and $805,013 at June 30, 2018 and December 31, 2017, respectively.

Debt Obligation

ICC Holdings, Inc. secured a loan with American Bank & Trust in March 2017 in the amount of $3,500,000and 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 the ESOP shares and $1.5 million of trust assets as collateral for the loan. Additionally, the Company entered into two debt agreements in 2016 with Bofi Federal Bank; one agreement for $500,000 and another debt agreement for $75,000.  The terms of the loans were 36 months, but the Company had the option to prepay the $500,000 loan after 12 months. The Company paid off the remaining balance of the $500,000 loan in September 2017. The $75,000 loan was paid off in March of 2018. The total balance of the debt agreements at June 30, 2018 and December 31, 2017 was $3,489,056and $3,534,195, respectively.

Revolving Line of Credit

We maintain a revolving line of credit with American Bank & Trust, which permits borrowing up to an aggregate principal amount of $1.75 million. This facility was initially entered into during 2013 and is renewed annually with a current expiration of August 25, 2018. The line of credit is priced at 30 day LIBOR plus 2% with a floor of 3.5%.  In order to secure the lowest rate possible, the Company pledged marketable securities not to exceed $5.0 million in the event the Company draws down on the line of credit.There was no interest paid on the line of credit during the six months ended June 30, 2018 and no interest paid on the line of credit during the six months ended June 30, 2017. There are no financial covenants governing this agreement.

5.     REINSURANCE

In the ordinary course of business, the Company assumes and cedes premiums and selected insured risks with other insurance companies, known as reinsurance. A large portion of the reinsurance is put into effect under contracts known as treaties and, in some instances, by negotiation on each individual risk (known as facultative reinsurance). In addition, there are several types of treaties including quota share, excess of loss and catastrophe reinsurance contracts that protect against losses over stipulated amounts arising from any one occurrence or event. The arrangements allow the Company to pursue greater diversification of business and serve to limit the maximum net loss to a single event, such as a catastrophe. Through the quantification of exposed policy limits in each region and the extensive use of computer-assisted modeling techniques, management monitors the concentration of risks exposed to catastrophic events.

Through the purchase of reinsurance, the Company also generally limits its net loss on any individual risk to a maximum of $750,000, although certain treaties contain an annual aggregate deductible before reinsurance applies.

~  15  ~

Premiums, written and earned, along with losses and settlement expenses incurred for the periods presented is summarized as follows:

	Three-Month Periods Ended June 30,
	2018		2017
WRITTEN
Direct	$	16,024,661	$	13,821,048
Reinsurance assumed		39,681		63,549
Reinsurance ceded		(2,923,738)		(1,990,713)
Net	$	13,140,604	$	11,893,884
EARNED
Direct	$	14,175,677	$	12,580,381
Reinsurance assumed		41,420		67,956
Reinsurance ceded		(2,732,026)		(1,937,579)
Net	$	11,485,071	$	10,710,758
LOSS AND SETTLEMENT EXPENSES INCURRED
Direct	$	9,051,216	$	8,583,336
Reinsurance assumed		(1,374)		20,026
Reinsurance ceded		(1,259,255)		(1,739,104)
Net	$	7,790,587	$	6,864,258

	Six-Month Periods Ended June 30,
	2018		2017
WRITTEN
Direct	$	30,412,331	$	26,409,639
Reinsurance assumed		92,487		103,385
Reinsurance ceded		(5,390,711)		(3,966,942)
Net	$	25,114,107	$	22,546,082
EARNED
Direct	$	27,662,798	$	25,373,175
Reinsurance assumed		99,164		117,174
Reinsurance ceded		(4,979,947)		(3,941,485)
Net	$	22,782,015	$	21,548,864
LOSSES AND SETTLEMENT EXPENSES INCURRED
Direct	$	18,597,156	$	16,452,838
Reinsurance assumed		34,757		62,458
Reinsurance ceded		(2,845,477)		(3,051,654)
Net	$	15,786,436	$	13,463,642

~  16  ~

6.     UNPAID LOSSES AND SETTLEMENT EXPENSES

The following table is a reconciliation of the Company’s unpaid losses and settlement expenses:

	For the Six-Months Ended
	June 30,
(In thousands)	2018		2017
Unpaid losses and settlement expense - beginning of the period:
Gross	$	51,074	$	52,817
Less: Ceded		10,030		12,115
Net		41,044		40,702
Increase (decrease) in incurred losses and settlement expense:
Current year		14,263		13,804
Prior years		1,523		(340)
Total incurred		15,786		13,464
Deduct: Loss and settlement expense payments for claims incurred:
Current year		3,898		4,727
Prior years		9,832		9,498
Total paid		13,730		14,225
Net unpaid losses and settlement expense - end of the period		43,100		39,941
Plus: Reinsurance recoverable on unpaid losses		8,288		9,750
Gross unpaid losses and settlement expense - end of the period	$	51,388	$	49,691

7.     INCOME TAXES

The Company’s effective tax rate for the six month period ended June 30, 2018, was 17.7%, compared to 35.4% for the same period in 2017. Effective rates are dependent upon components of pretax earnings and the related tax effects.

The Tax Cuts and Jobs Act of 2017 (the Tax Act) lowered the federal corporate tax rate to 21% effective January 1, 2018.We are still analyzing certain aspects of the TCJA and are refining our calculations of existing current and deferred tax amounts. No material changes were made to the tax effects recorded in 2017. Income tax expense for the three and six-month periods ended June 30, 2018 and 2017, differed from the amounts computed by applying the U.S. federal tax rate of 21%  and 34%, respectively, to pretax income from continuing operations as demonstrated in the following tables:

	For the Three-Months Ended
	June 30,
	2018		2017
Provision for income taxes at the statutory federal tax rates	$	5,889	$	(123,612)
Increase (reduction) in taxes resulting from:
Dividends received deduction		(8,950)		(9,104)
Tax-exempt interest income		(33,569)		(51,643)
Proration of tax exempt interest and dividends received deduction		10,413		9,112
Officer life insurance, net		3,578		5,793
Nondeductible expenses		9,746		8,530
Prior year true-ups and other		1,734		32,481
Total	$	(11,159)	$	(128,443)

~  17  ~

	For the Six-Months Ended
	June 30,
	2018		2017
Provision for income taxes at the statutory federal tax rates	$	182,504	$	323,116
Increase (reduction) in taxes resulting from:
Dividends received deduction		(17,901)		(18,207)
Tax-exempt interest income		(69,892)		(91,981)
Proration of tax exempt interest and dividends received deduction		21,492		16,528
Officer life insurance, net		6,807		10,796
Nondeductible expenses		24,169		17,341
Prior year true-up and other		6,860		78,828
Total	$	154,039	$	336,421

The Company had historically recorded its deferred tax assets and liabilities using the statutory federal tax rate of 34%. As a result, the Company revalued deferred tax items as of December 31, 2017 to reflect the lower rate as provided for in the Tax Cuts and Jobs Act of 2017.The Tax Cuts and Jobs Act of 2017 provides for a change in the methodology employed to calculate reserves for tax purposes. Beginning January 1, 2018, a higher interest rate assumption and longer payout patterns will be used to discount these reserves. In addition, companies will no longer be able to elect to use their own experience to discount reserves, but will instead be required to use the industry-based tables published by the IRS annually; however, the 2018 tables have yet to be released.  Consequently, the company cannot reasonably estimate the impact this would have on deferred taxes at June 30, 2018.Management believes it is more likely than not that all deferred tax assets will be recovered as the result of future operations, which will generate sufficient taxable income to realize the deferred tax asset. In addition, management believes that when these deferred items reverse in future years, taxable income will be taxed at a federal rate of 21%.

As of June 30, 2018 and December 31, 2017, the Company does not have any capital or operating loss carryforwards. Periods still subject to Internal Revenue Service (IRS) audit include 2014 through current year. There are currently no open tax exams.

~  18  ~

8.     EMPLOYEE BENEFITS

ESOP

In connection with our conversion and public offering, we established an ESOP. The ESOP borrowed from the Company to purchase 350,000 shares in the offering. The issuance of the shares to the ESOP resulted in a contra account established in the equity section of the balance sheet for the unallocated shares at an amount equal to their $10.00 per share purchase price.

The Company may make discretionary contributions to the ESOP and pay dividends on unallocated shares to the ESOP, the ESOP uses funds it receives to repay the loan. When loan payments are made, ESOP shares are allocated to participants based on relative compensation and expense is recorded. No contributions to the ESOP were made during the six months ended June  30, 2018 and 2017, respectively.

A compensation expense charge is booked monthly during each year for the shares committed to be allocated to participants that year, determined with reference to the fair market value of our stock at the time the commitment to allocate the shares is accrued and recognized. For the six months ended June 30, 2018, we recognized compensation expense of $186,083 related to 11,654 shares of our common stock that are committed to be released to participants’ accounts at December 31, 2018. Of the 11,654 shares committed to be released, 1,932 shares were committed on June 30, 2018 and had no impact on the weighted average common shares outstanding for the three and six months ended June 30, 2018.For the six months ended June 30, 2017, we recognized compensation expense of $141,328 related to 8,680 shares of our common stock that were committed to be released to participants’ accounts at December 31, 2017. Of the 8,680 shares committed to be released at December 31, 2017,2,389 shares were committed on June 30, 2017 and had no impact on the weighted average common shares outstanding for the three and six months ended June 30, 2017.

RESTRICTED STOCK UNITS

RSUs were granted for the first time in February 2018. RSUs have a grant date value equal to the closing price of the Company’s stock on the dates the shares are granted. The RSUs vest 1/3 over three years from the date of grant.

As of June 30, 2018, 11,700 RSUs have been granted at a fair market value of $15.10. We recognized$14,682and $20,975of expense on these units in the three and six months ended June 30, 2018, respectively. Total unrecognized compensation expense relating to outstanding and unvested RSUs was $155,695 as of June 30, 2018, which will be recognized over the remainder of the three-year vesting period.

9.     RELATED PARTY

Mr. John R. Klockau, a director of the Company, held two surplus notes from the Company totaling $1,150,000 which were converted into 115,000 shares of the Company’s common stock on March 17, 2017. John R. Klockau received a payment for interest on the surplus notes of $12,975 during the three months ended March 31, 2017. Additionally, Mr. Klockau is a claims consultant and was paid $7,350 and $6,495 as of June 30, 2018 and 2017, respectively, related to his services to the Company.

Mr. Kevin Clinton is a director of the Company and owns more than 10% of the Company’s outstanding shares of common stock. Mr. Clinton was paid $1,368 and $805 as of June 30, 2018 and 2017, respectively, for travel reimbursement costs.

Mr. Scott T. Burgess is a director of the Company and a Senior Managing Director of Griffin Financial Group (Griffin).  Mr. Burgess was paid $2,362, and $1,046as of June 30, 2018 and 2017, respectively. Griffin was paid $0and $893,240as of June 30, 2018 and 2017, respectively.  Griffin and Stevens & Lee are affiliated. Stevens & Lee is a full-service law firm that was paid $72,091and $14,347 as of June 30, 2018 and 2017, respectively.

10.     SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date the financial statements were issued.

The Company has reached an agreement in principle with the Clinton-Flood Purchasers, as previously defined in our final prospectus filed with the SEC on February 13, 2017, which includes R. Kevin Clinton, a member of the Company’s board of directors, and his affiliates, to repurchase 196,721 shares of the Company’s common stock at a price of $15.25 per share. The Company intends to complete the share repurchase upon completion of final agreements with the shareholders and receipt of regulatory approvals, with funding either by a loan from Illinois Casualty Company or from a dividend payment from Illinois Casualty Company to ICC Holdings, Inc. Illinois Casualty will fund the proceeds either from cash on hand or borrowing from the FHLB.

~  19  ~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Private Securities Litigation Reform Act of 1995 (the “Reform Act”) provides a safe harbor for forward-looking statements made by or on behalf of ICC Holdings, Inc. ICC Holdings, Inc. and its representatives may, from time to time, make written or verbal forward-looking statements, including statements contained in ICC Holdings, Inc.'s filings with the Securities and Exchange Commission (SEC) and its reports to shareholders. Generally, the inclusion of the words “anticipates,” “believe,” “estimate,” “expect,” “future,” “intend,” “estimate,” “may,” “plans,” “seek”, “will,” or the negative of such terms and similar expressions identify statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and that are intended to come within the safe harbor protection provided by those sections. All statements addressing operating performance, events, or developments that ICC Holdings, Inc. expects or anticipates will occur in the future, including statements relating to sales growth, earnings or earnings per share growth, 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 and will be based on management’s then-current beliefs and assumptions regarding future events and operating performance and on information currently available to management, and are applicable only as of the dates of such statements.

Forward-looking statements involve risks, uncertainties and assumptions, including, among other things, the factors discussed under the heading “Item 1A. Risk Factors” of ICC Holdings, Inc.’s Annual Report on Form 10-K and those listed below. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Actual results may differ materially from those expressed in these forward-looking statements due to a number of uncertainties and risks, including the risks described in this Quarterly Report on Form 10-Q and other unforeseen risks. Readers should not put undue reliance on any forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q, even if subsequently made available by us on our website or otherwise, and we undertake no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

All of these factors are difficult to predict and many are beyond our control. These important factors include those discussed under “Item 1A. Risk Factors” of ICC Holdings, Inc.’s 2017 Annual Report on Form 10-K and those listed below:

· the potential impact of fraud, operational errors, systems malfunctions, or cybersecurity incidents;

· future economic conditions in the markets in which we compete that are less favorable than expected;

· our ability to expand geographically;

· the effects of weather-related and other catastrophic events;

· the effect of legislative, judicial, economic, demographic and regulatory events in the jurisdictions where we do business, especially changes with respect to laws, regulations and judicial decisions relating to liquor liability;

· our ability to enter new markets successfully and capitalize on growth opportunities either through acquisitions or the expansion of our producer network;

· financial market conditions, including, but not limited to, changes in interest rates and the stock markets causing a reduction of investment income or investment gains and a reduction in the value of our investment portfolio;

· heightened competition, including specifically the intensification of price competition, the entry of new competitors and the development of new products by new or existing competitors, resulting in a reduction in the demand for our products;

· the impact of acts of terrorism and acts of war;

· the effects of terrorist related insurance legislation and laws;

· changes in general economic conditions, including inflation, unemployment, interest rates and other factors;

· the cost, availability and collectability of reinsurance;

· estimates and adequacy of loss reserves and trends in loss and settlement expenses;

· changes in the coverage terms selected by insurance customers, including higher limits;

· our inability to obtain regulatory approval of, or to implement, premium rate increases;

· our ability to obtain reinsurance coverage at reasonable prices or on terms that adequately protect us;

· the potential impact on our reported net income that could result from the adoption of future auditing or accounting standards issued by the Public Company Accounting Oversight Board or the Financial Accounting Standards Board or other standard-setting bodies;

· unanticipated changes in industry trends and ratings assigned by nationally recognized rating organizations;

· adverse litigation or arbitration results; and

· adverse changes in applicable laws, regulations or rules governing insurance holding companies and insurance companies, and environmental, tax or accounting matters including limitations on premium levels, increases in minimum capital and reserves, and other financial viability requirements, and changes that affect the cost of, or demand for our products.

~  20  ~

Because forward-looking information is subject to various risks and uncertainties, actual results may differ materially from that expressed or implied by the forward-looking information.

All subsequent written and oral forward-looking information attributable to ICC Holdings, Inc. or any person acting on our behalf is expressly qualified in its entirety by the cautionary statement contained or referred to in this section.

In the following discussion and analysis of results of operations and financial condition, certain financial measures may be considered “non-GAAP financial measures” under Securities and Exchange Commission rules.  These rules require supplemental explanation and reconciliation, which is provided in this Quarterly Report on Form 10-Q. Management uses the non-GAAP measures “losses and settlement expense ratio”, “expense ratio” and “combined ratio” in its evaluation of business and financial performance. These disclosures have limitations as an analytical tool, should not be viewed as a substitute for net earnings determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Management believes that this non-GAAP supplemental information is helpful in understanding the Company’s ongoing operating results.

Overview

ICC is a regional property and casualty insurance company incorporated in Illinois and focused exclusively on the food and beverage industry. On the effective date of the conversion, ICC became a wholly owned subsidiary of ICC Holdings, Inc. The consolidated financial statements of ICC prior to the conversion became the consolidated financial statements of ICC Holdings, Inc. upon completion of the conversion.

For the six months ended June 30, 2018, we had direct written premium of $30,412,000, net premiums earned of $22,782,000, and net earnings of $715,000. For the six months ended June 30, 2017, we had direct premiums written of $26,410,000, net premiums earned of $21,549,000, and net earnings of $614,000. At June 30, 2018, we had total assets of $152,398,000 and equity of $62,416,000. At December 31, 2017, we had total assets of $152,335,000 and equity of $64,101,000.  

We are an “emerging growth company” as defined in the JOBS Act and take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to: not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; exemptions from the requirements of holding an annual non-binding advisory vote on executive compensation and nonbinding stockholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have taken advantage of the extended transition period provided by Section 107 of the JOBS Act. Wedecided to comply with the effective dates for financial accounting standards applicable to emerging growth companies at a later date in compliance with the requirements in Sections 107(b)(2) and (3) of the JOBS Act. Such decision is irrevocable.

Principal Revenue and Expense Items

We derive our revenue primarily from premiums earned, net investment income and net realized gains (losses) from investments.

Gross and net premiums written

Gross premiums written is equal to direct and assumed premiums before the effect of ceded reinsurance. Net premiums written is the difference between gross premiums written and premiums ceded or paid to reinsurers (ceded premiums written).

~  21  ~

Premiums earned

Premiums earned is the earned portion of our net premiums written. Gross premiums written include all premiums recorded by an insurance company during a specified policy period. Insurance premiums on property and casualty insurance contracts are recognized in proportion to the underlying risk insured and are earned ratably over the duration of the policies. At the end of each accounting period, the portion of the premiums that is not yet earned is included in unearned premiums and is realized as revenue in subsequent periods over the remaining term of the policy. Our policies typically have a term of twelve months. Thus, for example, for a policy that is written on July 1, 2018, one-half of the premiums would be earned in 2018 and the other half would be earned in 2019.

Net investment income and net realized gains (losses) on investments

We invest our surplus and the funds supporting our insurance liabilities (including unearned premiums and unpaid loss and loss adjustment expenses) in cash, cash equivalents, equities, fixed maturity securities and real estate. Investment income includes interest and dividends earned on invested assets as well as rental income on investment properties. Net realized gains and losses on invested assets are reported separately from net investment income. We recognize realized gains when invested assets are sold for an amount greater than their cost or amortized cost (in the case of fixed maturity securities) and recognize realized losses when investment securities are written down as a result of an other than temporary impairment or sold for an amount less than their cost or amortized cost, as applicable. Our portfolio of investment securities is managed by two independent third parties and managers specializing in the insurance industry.

ICC’s expenses consist primarily of:

Loss and settlement expense

Loss and settlement expenses represent the largest expense item and include: (1) claim payments made, (2) estimates for future claim payments and changes in those estimates for prior periods, and (3) costs associated with investigating, defending and adjusting claims.

Amortization of deferred policy acquisition costs and other operating expenses

Expenses incurred to underwrite risks are referred to as policy acquisition expenses. Variable policy acquisition costs consist of commission expenses, premium taxes and certain other underwriting expenses that vary with and are primarily related to the writing and acquisition of new and renewal business. These policy acquisition costs are deferred and amortized over the effective period of the related insurance policies. Fixed policy acquisition costs are expensed as incurred. These costs include salaries, rent, office supplies, and depreciation. Other operating expenses consist primarily of information technology costs, accounting and internal control salaries, as well as audit and legal expenses.

Income taxes

We use the asset and liability method of accounting for income taxes. Deferred income taxes arise from the recognition of temporary differences between financial statement carrying amounts and the tax bases of our assets and liabilities. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. The effect of a change in tax rates is recognized in the period of the enactment date.

Key Financial Measures

We evaluate our insurance operations by monitoring certain key measures of growth and profitability. In addition to reviewing our financial performance based on results determined in accordance with generally accepted accounting principles in the United States (GAAP), we utilize certain non-GAAP financial measures that we believe are valuable in managing our business and for comparison to our peers. These non-GAAP measures are combined ratio, written premiums, underwriting income, the loss and loss adjustment expense ratio, the expense ratio, the ratio of net written premiums to statutory surplus and return on average equity.

We measure growth by monitoring changes in gross premiums written and net premiums written. We measure underwriting profitability by examining losses and settlement expense, underwriting expense and combined ratios. We also measure profitability by examining underwriting income (loss) and net income (loss).

Loss and settlement expense ratio

The loss and settlement expense ratio is the ratio (expressed as a percentage) of loss and settlement expenses incurred to premiums earned. We measure the loss ratio on an accident year and calendar year loss basis to measure underwriting

~  22  ~

profitability. An accident year loss ratio measures loss and loss adjustment expenses for insured events occurring in a particular year, regardless of when they are reported, as a percentage of premiums earned during that year. A calendar year loss ratio measures loss and settlement expense for insured events occurring during a particular year and the change in loss reserves from prior accident years as a percentage of premiums earned during that year.

Expense ratio

The underwriting expense ratio is the ratio (expressed as a percentage) of amortization of deferred policy acquisition costs and other operating expenses to premiums earned, and measures our operational efficiency in producing, underwriting and administering our insurance business.

GAAP combined ratio

Our GAAP combined ratio is the sum of the loss and loss adjustment expense ratio and the expense ratio and measures our overall underwriting profit. If the GAAP combined ratio is below 100%, we are making an underwriting profit. If our combined ratio is at or above 100%, we are not profitable without investment income and may not be profitable if investment income is insufficient.

Net premiums written to statutory surplus ratio

The net premiums written to statutory surplus ratio represents the ratio of net premiums written, after reinsurance ceded, to statutory surplus. This ratio measures our exposure to pricing errors in our current book of business. The higher the ratio, the greater the impact on surplus should pricing prove inadequate.

Underwriting income (loss)

Underwriting income (loss) measures the pre-tax profitability of our insurance operations. It is derived by subtracting loss and loss adjustment expense, amortization of deferred policy acquisition costs, and other operating expenses from earned premiums. Each of these items is presented as a caption in our statements of operations.

Net earnings (loss) and return on average equity

We use net earnings (loss) to measure our profit and return on average equity to measure our effectiveness in utilizing equity to generate net income. In determining return on average equity for a given year, net earnings (loss) is divided by the average of the beginning and ending equity for that year.

Critical Accounting Policies

The accounting policies and estimates considered by management to be critically important in the preparation and understanding of the Company’s financial statements and related disclosures are presented in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Results of Operations

Our results of operations are influenced by factors affecting the property and casualty insurance industry in general. The operating results of the United States property and casualty insurance industry are subject to significant variations due to competition, weather, catastrophic events, regulation, general economic conditions, judicial trends, fluctuations in interest rates and other changes in the investment environment.

Our premium growth and underwriting results have been, and continue to be, influenced by market conditions. Pricing in the property and casualty insurance industry historically has been cyclical. During a soft market cycle, price competition is more significant than during a hard market cycle and makes it difficult to attract and retain properly priced commercial business. A hard market typically has a positive effect on premium growth.

~  23  ~

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

The major components of operating revenues and net earnings are as follows:

	For the Six-Months Ended
	June 30,
(In thousands)	2018		2017
Revenues
Total premiums earned	$	22,782	$	21,549
Investment income, net of investment expense		1,388		1,161
Realized investment gains, net		1,072		388
Other income		56		149
Total revenues	$	25,298	$	23,247
Summarized components of net earnings
Underwriting (loss)¹	$	(1,301)	$	(370)
Investment income, net of investment expense		1,388		1,161
Realized investment gains, net		1,072		388
Other income		56		149
General corporate expenses		270		268
Interest expense		76		110
Earnings, before income taxes		869		950
Income tax expense		154		336
Net earnings	$	715	$	614
Total other comprehensive (loss) earnings		(2,602)		597
Comprehensive (loss) earnings	$	(1,887)	$	1,211

1Calculated by subtracting the sum of loss and settlement expenses (2018  -$15,786 and 2017  -$13,464) and policy and acquisition costs and other operating expenses (2018 - $8,297 and 2017 - $8,455) from net premiums earned (2018  -$22,782 and 2017 - $21,549).

	For the Six-Months Ended June 30,
	2018		2017
Non-GAAP Ratios:
Losses and settlement expense ratio1		69.29%		62.48%
Expense ratio2		36.42%		39.24%
Combined ratio3		105.71%		101.72%

1Calculated by dividing loss and settlement expenses by net premiums earned.

2Calculated by dividing the sum of policy acquisition costs and operating expenses by net earned premiums.

3The sum of the losses and settlement expense ratio and the expense ratio. A combined ratio of under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.

The following summarizes our results for the six months ended June 30, 2018 and 2017:

Premiums

Direct premiums written grew by $4,002,000, or 15.2%, to $30,412,000 for the six months ended June 30, 2018 from $26,410,000 for the same period of 2017. Net written premium grew by $2,568,000, or 11.4%, to $25,114,000 for the six months ended June 30, 2018 from $22,546,000 for the same period in 2017. Net premiums earned grew by $1,233,000, or 5.7%, in the six months ended June 30, 2018 as compared to the six months ended June 30, 2017, primarily due to increased organic growth including the impact of recent geographical expansion efforts.  

For the six months ended June 30, 2018, we ceded to reinsurers $4,980,000 of earned premiums, compared to $3,941,000 of earned premiums for the six months ended June 30, 2017. Ceded earned premiums as a percent of direct premiums written was 16.4% in the six months ended June 30, 2018, and 14.9% in the six months ended June 30, 2017.  

~  24  ~

Premiums are earned ratably over the term of the policy whereas written premiums are reflected on the effective date of the policy.

Other Income

Other income is derived from policies we write and represents additional charges to policyholders for services outside of the premium charge, such as installment billing or policy issuance costs. Another component of other income is attributable to sales made by the Company’s subsidiary, Estrella Innovative Solutions, Inc. Other income decreased by $93,000 or 62.4% during the six months ended June 30, 2018 as compared to the same period of 2017 primarily as a result of an increase in premiums written off.  

Unpaid Losses and Settlement Expenses

The following table details our unpaid losses and settlement expenses.

	For the Six-Months Ended
	June 30,
(In thousands)	2018		2017
Unpaid losses and settlement expense - beginning of the period:
Gross	$	51,074	$	52,817
Less: Ceded		10,030		12,115
Net		41,044		40,702
Increase (decrease) in incurred losses and settlement expense:
Current year		14,263		13,804
Prior years		1,523		(340)
Total incurred		15,786		13,464
Deduct: Loss and settlement expense payments for claims incurred:
Current year		3,898		4,727
Prior years		9,832		9,498
Total paid		13,730		14,225
Net unpaid losses and settlement expense - end of the period		43,100		39,941
Plus: Reinsurance recoverable on unpaid losses		8,288		9,750
Gross unpaid losses and settlement expense - end of the period	$	51,388	$	49,691

Net unpaid losses and settlement expense increased $3,159,000, or 7.9%, in the six months ended June 30, 2018 as compared to the same period in 2017.For the six months ended June 30, 2018 and 2017, we experienced unfavorable development of $1,523,000 and favorable development of $340,000, respectively. The increase in unfavorable development was primarily driven by the workers compensation and BOP lines of business.

Losses and Settlement Expenses

Losses and settlement expenses increased by $2,322,000, or 17.2%, to $15,786,000 for the six months ended June 30, 2018, from $13,464,000 for the same period in 2017. The increase in losses and settlement expenses for the six months ended June 30, 2018 is primarily due to BOP liability losses in the state of Missouri combined with weaker workers compensation results.

Policy Acquisition Costs and Other Operating Expenses and the Expense Ratio

Policy acquisition costs are costs we incur to issue policies, which include commissions, premium taxes, underwriting reports, and underwriter compensation costs. The Company offsets the direct commissions it pays with ceded commissions it receives from reinsurers. Other operating expenses consist primarily of information technology costs, accounting and internal control salaries, as well as audit and legal expenses. Policy acquisition costs and other operating expenses decreased by $158,000, or 1.9%. The decrease in policy acquisition costs and other operating expenses during the six months ended June 30, 2018 is primarily driven by a decrease in agency contingent commission.

Our expense ratio is calculated by dividing the sum of policy acquisition costs and operating expenses by net earned premiums. We use the expense ratio to evaluate the operating efficiency of our consolidated operations. Costs that cannot be readily identifiable as a direct cost of a product line remain in Corporate and Other.

~  25  ~

Our expense ratio decreased by 282 basis points to 36.42% from 39.24% for the six months ended June 30, 2018 as compared to 2017.

General Corporate Expenses

General corporate expenses consist primarily of occupancy costs, such as rent and utilities. These costs are largely fixed and, therefore, do not vary significantly with premium volume but do vary with the Company’s changes in properties held for investment. Our general corporate expenses increased by $2,000, or 0.7%, in the six months ended June 30, 2018 as compared to the same period in 2017.  

Investment Income

Net investment income increased by $227,000, or 19.6%, during the six months ended June 30, 2018as compared to the six months ended June 30, 2017, primarily from increases inavailable for sale securities. Average cash and invested assets during the six months ended June 30, 2018 was $110,992,000 compared to $95,417,000 during the same period in 2017, an increase of $15,575,000, or 16.3%. The increase in the portfolio was primarily due to proceeds from the initial public offering that closed on March 24, 2017 being fully invested for the entire six months ended June 30, 2018.  

Interest Expense

Interest expense decreased to $76,000 for the six months ended June 30, 2018 from $110,000 for the same period during 2017. This 30.9% decrease year over year reflects the impact of the Company prepaying the balances of financial sale leaseback transactions, prepaying debt agreements entered into during 2016, as well as the elimination of surplus notes through conversion and redemptions in March 2017. The decrease in interest expense resulting from the early reduction of corporate debt was partially offset by an increase in interest expense on a debt agreement entered into in March 2017. See Financial Position – Leasehold Obligations and Financial Position – Debt Obligations.

Income Tax Expense

We reported income tax expense of $154,000 and $336,000 for the six months ended June 30, 2018 and 2017, respectively. The decrease in income tax expense in 2018 relates to both lower levels of pretax earnings and effective tax rates for the six months ended June 30, 2018 compared to the same period in 2017. Our effective tax rate for the six months ended June 30, 2018 was 17.7%, compared to 35.4% for the same period in 2017. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was lower for the six months ended June 30, 2018 compared to the same period in 2017 primarily due to the decrease in the statutory rate as a result of the Tax Act.

The Company has not established a valuation allowance against any of the net deferred tax assets.

~  26  ~

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

The major components of operating revenues and net earnings are as follows:

	For the Three-Months Ended
	June 30,
(In thousands)	2018		2017
Revenues
Total premiums earned	$	11,485	$	10,711
Investment income, net of investment expense		685		689
Realized investment gains, net		(30)		(57)
Other (loss) income		(1)		64
Total revenues	$	12,139	$	11,407
Summarized components of net earnings (loss)
Underwriting (loss)¹	$	(466)	$	(873)
Investment income, net of investment expense		685		689
Realized investment (losses), net		(30)		(57)
Other income		(1)		64
General corporate expenses		133		129
Interest expense		27		57
Earnings (Loss), before income taxes		28		(363)
Income tax benefit		(11)		(128)
Net earnings (loss)	$	39	$	(235)
Total other comprehensive (loss) earnings		(35)		542
Comprehensive earnings	$	4	$	307

1Calculated by subtracting the sum of loss and settlement expenses (2018 -$7,791 and 2017 -$6,864) and policy and acquisition costs and other operating expenses (2018 - $4,160 and 2017 - $4,720) from net premiums earned (2018 -$11,485 and 2017 - $10,711).

	For the Three-Months Ended June 30,
	2018		2017
Non-GAAP Ratios:
Losses and settlement expense ratio1		67.83%		64.09%
Expense ratio2		36.21%		44.07%
Combined ratio3		104.04%		108.16%

1Calculated by dividing loss and settlement expenses by net premiums earned.

2Calculated by dividing the sum of policy acquisition costs and operating expenses by net earned premiums.

3The sum of the losses and settlement expense ratio and the expense ratio. A combined ratio of under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.

The following summarizes our results for the three months ended June 30, 2018 and 2017:

Premiums

Direct premiums written grew by $2,203,000, or 15.9%, to $16,024,000 for the three months ended June 30, 2018 from $13,821,000 for the same period of 2017. Net written premium grew by $1,247,000, or 10.5%, to $13,140,000 for the three months ended June 30, 2018 from $11,893,000 for the same period in 2017. Net premiums earned grew by $774,000, or 7.2%, in the three months ended June 30, 2018 as compared to the three months ended June 30, 2017, primarily due to increased organic growth including the impact of geographical expansion efforts.

For the three months ended June 30, 2018, we ceded to reinsurers $2,732,000 of earned premiums, compared to $1,938,000 of earned premiums for the three months ended June 30, 2017. Ceded earned premiums as a percent of direct premiums written was 17.0% in the three months ended June 30, 2018, and 14.0% in the three months ended June 30, 2017.  

~  27  ~

Premiums are earned ratably over the term of the policy whereas written premiums are reflected on the effective date of the policy.

Other Income

Other income is derived from policies we write and represents additional charges to policyholders for services outside of the premium charge, such as installment billing or policy issuance costs. Another component of other income is attributable to sales made by the Company’s subsidiary, Estrella Innovative Solutions, Inc. Other income decreased by $65,000 or 101.6% during the three months ended June 30, 2018 as compared to the same period of 2017 primarily as a result of an increase in policy writeoffs in the period.

Losses and Settlement Expenses

Losses and settlement expenses increased by $927,000, or 13.5%, to $7,791,000 for the three months ended June 30, 2018, from $6,864,000 for the same period in 2017. The increase in losses and settlement expenses for the three months ended June 30, 2018 is primarily due to BOP liability losses in the state of Missouri combined with weaker workers compensation results.

Policy Acquisition Costs and Other Operating Expenses and the Expense Ratio

Policy acquisition costs are costs we incur to issue policies, which include commissions, premium taxes, underwriting reports, and underwriter compensation costs. The Company offsets the direct commissions it pays with ceded commissions it receives from reinsurers. Other operating expenses consist primarily of information technology costs, accounting and internal control salaries, as well as audit and legal expenses. Policy acquisition costs and other operating expenses decreased by $560,000, or 11.9%. The decrease in policy acquisition costs and other operating expenses during the three months ended June 30, 2018 is primarily driven by a decrease in agency contingent commission.

Our expense ratio is calculated by dividing the sum of policy acquisition costs and operating expenses by net earned premiums. We use the expense ratio to evaluate the operating efficiency of our consolidated operations. Costs that cannot be readily identifiable as a direct cost of a product line remain in Corporate and Other.

Our expense ratio decreased by 786 basis points to 36.21% from 44.07% for the three months ended June 30, 2018 as compared to 2017.

General Corporate Expenses

General corporate expenses consist primarily of occupancy costs, such as rent and utilities. These costs are largely fixed and, therefore, do not vary significantly with premium volume but do vary with the Company’s changes in properties held for investment. Our general corporate expenses increased by $4,000, or 3.1%, in the three months ended June 30, 2018 as compared to the same period in 2017.  

Investment Income

Net investment income decreased by $4,000, or 0.6%, during the three months ended June 30, 2018as compared to the three months ended June 30, 2017, primarily from increases inavailable for sale securities. Average cash and invested assets during the three months ended June 30, 2018 was $108,678,000 compared to $112,378,000 during the same period in 2017, a decrease of $3,700,000, or 3.3%.  

Interest Expense

Interest expense decreased to $27,000 for the three months ended June 30, 2018 from $57,000 for the same period during 2017. This 52.6% decrease year over year reflects the impact of the Company prepaying the balances of financial sale leaseback transactions, prepaying debt agreements entered into during 2016, as well as the elimination of surplus notes through conversion and redemptions in March 2017. The decrease in interest expense resulting from the early reduction of corporate debt was partially offset by an increase in interest expense on a debt agreement entered into in March 2017. See Financial Position – Leasehold Obligations and Financial Position – Debt Obligations.

Income Tax Expense

We reported income tax benefit of $11,000 and $128,000 for the three months ended June 30, 2018 and 2017, respectively. The decrease in income tax benefit in 2018 relates to a higher level of pretax earningsfor the three months ended June 30, 2018 compared to the same period in 2017. Our effective tax rate for the three months ended June 30, 2018 was -39.8%, compared to

~  28  ~

35.3% for the same period in 2017. Effective rates are dependent upon components of pretax earnings and the related tax effects.

The Company has not established a valuation allowance against any of the net deferred tax assets.

~  29  ~

Financial Position

The major components of our assets and liabilities are as follows:

	As of
	June 30,		December 31,
	2018		2017
(In thousands)	(Unaudited)
Assets
Investments and cash:
Available for sale securities, at fair value
Fixed maturity securities (amortized cost - $89,976 at 6/30/2018	$	89,695	$	89,605
and $87,773 at 12/31/2017)
Common Stocks (cost - $13,101 at 6/30/2018 and $7,631 at 12/31/2017)		12,907		8,534
Preferred Stocks (cost - $67 at 6/30/2018 and $3,783 at 12/31/2017)		66		3,867
Other invested assets		139		—
Property held for investment, at cost, net of accumulated depreciation of		3,113		3,127
$173 at 6/30/2018 and $51 at 12/31/2017
Cash and cash equivalents		4,055		6,877
Total investments and cash		109,975		112,010
Accrued investment income		668		687
Premiums and reinsurance balances receivable, net of allowances for		21,434		19,014
uncollectible amounts of $50 at 6/30/2018 and 12/31/2017
Ceded unearned premiums		686		275
Reinsurance balances recoverable on unpaid losses and settlement		8,288		10,030
expenses, net of allowances for uncollectible amounts of
$0 at 6/30/2018 and 12/31/2017
Federal income taxes		1,492		922
Deferred policy acquisition costs, net		5,091		4,592
Property and equipment, at cost, net of accumulated depreciation of		3,474		3,504
$4,816 at 6/30/2018 and $4,896 at 12/31/2017
Other assets		1,290		1,301
Total assets	$	152,398	$	152,335
Liabilities and Equity
Liabilities:
Unpaid losses and settlement expenses	$	51,388	$	51,074
Unearned premiums		29,299		26,556
Reinsurance balances payable		944		327
Corporate debt		3,489		4,339
Accrued expenses		2,940		4,274
Other liabilities		1,922		1,664
Total liabilities		89,982		88,234
Equity:
Common stock1		35		35
Additional paid-in capital		32,419		32,333
Accumulated other comprehensive (loss) earnings, net of tax		(375)		2,227
Retained earnings		33,502		32,787
Less: Unearned ESOP shares at cost (6/30/18 - 316,468 shares and 12/31/17 - 328,122 shares)		(3,165)		(3,281)
Total equity		62,416		64,101
Total liabilities and equity	$	152,398	$	152,335

1Par value $0.01; authorized: 2018 - 10,000,000 shares and  2017 – 10,000,000 shares; issued: 2018 - 3,500,000 shares and 2017 – 3,500,000 shares;  outstanding: 2018 - 3,183,532 and 2017 - 3,171,878 shares.

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Unpaid Losses and LAE

Our reserves for unpaid loss and LAE are summarized below:

	As of June 30,		As of December 31,
(In thousands)	2018		2017
Case reserves	$	21,684	$	19,997
IBNR reserves		21,416		21,047
Net unpaid losses and settlement expense		43,100		41,044
Reinsurance recoverable on unpaid loss and settlement expense		8,288		10,030
Reserves for unpaid loss and settlement expense	$	51,388	$	51,074

Actuarial Ranges

The selection of the ultimate loss is based on information unique to each line of business and accident year and the judgment and expertise of our actuary and management.

The following table provides case and IBNR reserves for losses and loss adjustment expenses as of June 30, 2018 and December 31, 2017.

As of June 30, 2018

(In thousands)	Case Reserves		IBNR Reserves		Total Reserves
Commercial liability	$	15,668	$	16,070	$	31,738
Property		2,990		4,158		7,148
Other		3,026		1,188		4,214
Total net reserves		21,684		21,416		43,100
Reinsurance recoverables		3,371		4,917		8,288
Gross reserves	$	25,055	$	26,333	$	51,388

As of December 31, 2017

							Actuarially Determined Range of Estimates
(In thousands)	Case Reserves		IBNR Reserves		Total Reserves		Low		High
Commercial liability	$	14,763	$	15,384	$	30,147
Property		1,789		4,303		6,092
Other		3,445		1,360		4,805
Total net reserves		19,997		21,047		41,044	$	36,295	$	41,383
Reinsurance recoverables		5,403		4,627		10,030		9,314		12,361
Gross reserves	$	25,400	$	25,674	$	51,074	$	45,609	$	53,744

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Our actuary determined a range of reasonable reserve estimates which reflect the uncertainty inherent in the loss reserve process. This range does not represent the range of all possible outcomes. We believe that the actuarially-determined ranges represent reasonably likely changes in the loss and settlement expense estimates, however actual results could differ significantly from these estimates. The range was determined by line of business and accident year after a review of the output generated by the various actuarial methods utilized. The actuary reviewed the variance around the select loss reserve estimates for each of the actuarial methods and selected reasonable low and high estimates based on his knowledge and judgment. In making these judgments the actuary typically assumed, based on his experience, that the larger the reserve the less volatility and that property reserves would exhibit less volatility than casualty reserves. In addition, when selecting these low and high estimates, the actuary considered:

· historical industry development experience in our business line;

· historical company development experience;

· the impact of court decisions on insurance coverage issues, which can impact the ultimate cost of settling claims;

· changes in our internal claims processing policies and procedures; and

· trends and risks in claim costs, such as risk that medical cost inflation could increase.

Our actuary is required to exercise a considerable degree of judgment in the evaluation of all of these and other factors in the analysis of our loss and settlement expense reserves, and related range of anticipated losses. Because of the level of uncertainty impacting the estimation process, it is reasonably possible that different actuaries would arrive at different conclusions. The method of determining the reserve range has not changed and the reserve range generated by our actuary is consistent with the observed development of our loss reserves over the last few years.

The width of the range in reserves arises primarily because specific losses may not be known and reported for some period and the ultimate losses paid and loss adjustment expenses incurred with respect to known losses may be larger than currently estimated. The ultimate frequency or severity of these claims can be very different than the assumptions we used in our estimation of ultimate reserves for these exposures.

Specifically, the following factors could impact the frequency and severity of claims, and therefore, the ultimate amount of loss and settlement expense paid:

· the rate of increase in labor costs, medical costs, and material costs that underlie insured risks;

· development of risk associated with our expanding producer relationships and our growth in new states or states where we currently have small market share; and

· impact of changes in laws or regulations.

The estimation process for determining the liability for unpaid loss and settlement expense inherently results in adjustments each year for claims incurred (but not paid) in preceding years. Negative amounts reported for claims incurred related to prior years are a result of claims being settled for amounts less than originally estimated (favorable development). Positive amounts reported for claims incurred related to prior years are a result of claims being settled for amounts greater than originally estimated (unfavorable development). For the six months ended June 30, 2018 and 2017, we experienced unfavorable development of $1,523,000 and favorable development of $340,000, respectively.

Potential for variability in our reserves is evidenced by this development. As further illustration of reserve variability, we initially estimated unpaid loss and settlement expense net of reinsurance at the end of 2017 at $41,044,000. As of June 30, 2018, that reserve was re-estimated at $42,567,000, which is $1,523,000, or 3.7%,  higher than the initial estimate.

The estimation of our reserves is based on several actuarial methods, each of which incorporates many quantitative assumptions. The judgment of the actuary plays an important role in selecting among various loss development factors and selecting the appropriate method, or combination of methods, to use for a given accident year. The ranges presented above represent the expected variability around the actuarially determined central estimate. The total range around our actuarially determined estimate varies from (6.2)% to 7.0%. As shown in the table below, since 2013 the variance in our originally estimated accident year loss reserves has ranged from  (10.9)%deficient to 12.7% redundant as of June 30, 2018.

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Recent Variabilities of Incurred Losses and Settlement Expense, Net of Reinsurance

	Accident Year Data
(In thousands)	2013		2014		2015		2016			2017
As originally estimated	$	22,064	$	22,267	$	24,293	$	25,619	$	29,801
As estimated at June 30, 2018		22,360		24,694		21,205		24,218		29,982
Net cumulative (deficiency) redundancy	$	(296)	$	(2,427)	$	3,088	$	1,401	$	(181)
% (deficiency) redundancy		(1.3)%		(10.9)%		12.7%		5.5%		(0.6)%

The table below summarizes the impact on equity, net of tax, from changes in estimates of net unpaid loss and settlement expense:

	December 31,
	2017
(In thousands)	Aggregate Loss and Settlement Reserve		Percentage Change in Equity
Reserve Range for Unpaid Losses and Settlement Expense
Low End	$	36,295		4.9%
Recorded		41,044		0.0%
High End		41,383		-0.3%

If the net loss and settlement expense reserves were recorded at the high end of the actuarially-determined range as of December 31, 2017, the loss and settlement expense reserves would increase by $339,000 before taxes. This increase in reserves would have the effect of decreasing net income and equity as of December 31, 2017 by $224,000. If the loss and settlement expense reserves were recorded at the low end of the actuarially-determined range, the net loss and settlement expense reserves at December 31, 2017 would be reduced by $4.7 million with corresponding increases in net income and equity of $3.1 million.

Investments

Our fixed maturity and equity securities investments are classified as available-for-sale and carried at estimated fair value as determined by management based upon quoted market prices or a recognized pricing service at the reporting date for those or similar investments. Changes in unrealized investment gains or losses on our investments, net of applicable income taxes, are reflected directly in equity as a component of comprehensive income (loss) and, accordingly, have no effect on net income (loss). Investment income is recognized when earned, and capital gains and losses are recognized when investments are sold, or other-than-temporarily impaired.

The fair value and unrealized losses for our securities that were temporarily impaired are as follows:

	June 30, 2018
	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury	$	1,029	$	(18)	$	292	$	(8)	$	1,321	$	(26)
MBS/ABS/CMBS		20,073		(296)		6,708		(373)		26,781		(669)
Corporate		17,435		(365)		756		(44)		18,191		(409)
Municipal		3,644		(33)		840		(36)		4,484		(69)
Total fixed maturities		42,181		(712)		8,596		(461)		50,777		(1,173)
Common stocks		7,254		(850)		—		—		7,254		(850)
Preferred stocks		66		(1)		—		—		66		(1)
Total temporarily impaired securities	$	49,501	$	(1,563)	$	8,596	$	(461)	$	58,097	$	(2,024)

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	December 31, 2017
	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury	$	1,038	$	(8)	$	295	$	(5)	$	1,333	$	(13)
MBS/ABS/CMBS		9,754		(24)		7,445		(200)		17,199		(224)
Corporate		5,584		(26)		2,024		(25)		7,608		(51)
Municipal		478		(2)		1,172		(15)		1,650		(17)
Total fixed maturities		16,854		(60)		10,936		(245)		27,790		(305)
Common stocks		637		(18)		—		—		637		(18)
Preferred stocks		843		(28)		521		(20)		1,364		(48)
Total temporarily impaired securities	$	18,334	$	(106)	$	11,457	$	(265)	$	29,791	$	(371)

The unrealized losses as of June 30, 2018 and December 31, 2017 were primarily related to increases in interest rates.  Although our strategies are outperforming the representative market indices, the overall equity market returns for the holding period were negative. Value has underperformed growth overall, which impacts the largest portion of our portfolio. As the 2 year Treasury Note and the dividend yield on the Russell 1000 Value both finished the second quarter at approximately 2.5%, bonds were more attractive from a pure yield perspective. The equity market pullback in February was a result of fears about a potentially faster Fed tightening cycle, and this coupled with a spike in volatility. The headline risk in the second quarter regarding potential trade wars has contributed to market pullbacks and general volatility. Concerns that tensions are starting to impact corporate profits and supply chains have increased, particularly as the path toward resolution is unknown.0The unrealized losses on fixed maturities as of June 30, 2018 also reflect spread widening in the Corporate sector. Fair values of interest rate sensitive instruments may be affected by increases and decreases in prevailing interest rates which generally translate, respectively, into decreases and increases in fair values of fixed maturity investments. The fair values of interest rate sensitive instruments also may be affected by the credit worthiness of the issuer, prepayment options, relative values of other investments, the liquidity of the instrument, and other general market conditions.

We monitor our investment portfolio and review securities that have experienced a decline in fair value below cost to evaluate whether the decline is other than temporary. When assessing whether the amortized cost basis of the security will be recovered, we compare the present value of the cash flows likely to be collected, based on an evaluation of all available information relevant to the collectability of the security, to the amortized cost basis of the security. The shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is referred to as the “credit loss.” If there is a credit loss, the impairment is considered to be other-than-temporary. If we identify that an other-than-temporary impairment loss has occurred, we then determine whether we intend to sell the security, or if it is more likely than not that we will be required to sell the security prior to recovering the amortized cost basis less any current-period credit losses. If we determine that we do not intend to sell, and it is not more likely than not that we will be required to sell the security, the amount of the impairment loss related to the credit loss will be recorded in earnings, and the remaining portion of the other-than-temporary impairment loss will be recognized in other comprehensive income (loss), net of tax. If we determine that we intend to sell the security, or that it is more likely than not that we will be required to sell the security prior to recovering its amortized cost basis less any current-period credit losses, the full amount of the other-than-temporary impairment will be recognized in earnings.

For the six months ended June 30, 2018, the Company did not take an impairment charge on any of its security holdings.  For the six months ended June 30, 2017, the Company incurred $57,000 of OTTI losses on an ETF included in common stock that was impaired in the three months ended June 30, 2017. Adverse investment market conditions, or poor operating results of underlying investments, could result in impairment charges in the future.

We use quoted values and other data provided by independent pricing services in our process for determining fair values of our investments. The evaluations of such pricing services represent an exit price and a good faith opinion as to what a buyer in the marketplace would pay for a security in a current sale. This pricing service provides us with one quote per instrument. For fixed maturity securities that have quoted prices in active markets, market quotations are provided. For fixed maturity securities that do not trade on a daily basis, the independent pricing service prepares estimates of fair value using a wide array of observable inputs including relevant market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. The observable market inputs that our independent pricing service utilizes may include (listed in order of priority for use) benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers, and other reference data on markets, industry, and the economy. Additionally, the independent pricing service uses an option adjusted spread model to develop prepayment and interest rate scenarios. The pricing service did not use broker quotes in determining fair values of our investments.

Should the independent pricing service be unable to provide a fair value estimate, we would attempt to obtain a non-binding fair value estimate from a number of broker-dealers and review this estimate in conjunction with a fair value estimate

~  34  ~

reported by an independent business news service or other sources. In instances where only one broker-dealer provides a fair value for a fixed maturity security, we use that estimate. In instances where we are able to obtain fair value estimates from more than one broker-dealer, we would review the range of estimates and would select the most appropriate value based on the facts and circumstances. Should neither the independent pricing service nor a broker-dealer provide a fair value estimate, we would develop a fair value estimate based on cash flow analyses and other valuation techniques that utilize certain unobservable inputs. Accordingly, we would classify such a security as a Level 3 investment.

The fair value estimates of our investments provided by the independent pricing service at June 30, 2018 and December 31, 2017, respectively, were utilized, among other resources, in reaching a conclusion as to the fair value of our investments.

Management reviews the reasonableness of the pricing provided by the independent pricing service by employing various analytical procedures. We review all securities to identify recent downgrades, significant changes in pricing, and pricing anomalies on individual securities relative to other similar securities. This will include looking for relative consistency across securities in common sectors, durations, and credit ratings. This review will also include all fixed maturity securities rated lower than “A” by Moody’s or S&P. If, after this review, management does not believe the pricing for any security is a reasonable estimate of fair value, then it will seek to resolve the discrepancy through discussions with the pricing service. In our review, we did not identify any such discrepancies for the six months ended June 30, 2018 and 2017 and for the year ended December 31, 2017, and no adjustments were made to the estimates provided by the pricing service. The classification within the fair value hierarchy of Accounting Standards Codification (ASC) Topic 820, Fair Value Measurement, is then confirmed based on the final conclusions from the pricing review.

Deferred Policy Acquisition Costs

Certain acquisition costs consisting of direct and ceded commissions, premium taxes and certain other direct underwriting expenses that vary with and are primarily related to the production of business are deferred and amortized over the effective period of the related insurance policies as the underlying policy premiums are earned. At June 30, 2018 and December 31, 2017, deferred acquisition costs and the related unearned premium reserves were as follows:

(In thousands)	June 30, 2018		December 31, 2017
Deferred acquisition costs	$	5,091	$	4,592
Unearned premium reserves		29,298		26,556

The method followed in computing deferred acquisition costs limits the amount of deferred costs to their estimated realizable value, which gives effect to the premium to be earned, related investment income, loss and loss adjustment expenses, and certain other costs expected to be incurred as the premium is earned. Future changes in estimates, the most significant of which is expected loss and loss adjustment expenses, may require adjustments to deferred policy acquisition costs. If the estimation of net realizable value indicates that the deferred acquisition costs are not recoverable, they would be written off.

Income Taxes

We use the asset and liability method of accounting for income taxes. Deferred income taxes arise from the recognition of

temporary differences between financial statement carrying amounts and the tax bases of our assets and liabilities. A valuation

allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. The effect of a change in tax rates is recognized in the period of the enactment date.

We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments require us to make projections of future taxable income. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require us to record an additional valuation allowance against our deferred tax assets.

As of June 30, 2018 and December 31, 2017, we had no material unrecognized tax benefits or accrued interest and penalties. Federal tax years 2014 through 2016 are open for examination. The tax return related to the year ended December 31, 2017 has not yet been filed.

Other Assets

As of June 30, 2018 and December 31, 2017 other assets totaled $1,290,000 and $1,301,000, respectively. The other assets balances on the consolidated balance sheets are primarily composed of Corporate Owned Life Insurance asset value as well as prepaid fees.

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Outstanding Debt

As of June 30, 2018 and December 31, 2017, outstanding debt balances totaled $3,489,056 and$4,339,208, respectively. The average rate on remaining debt was 3.7% as of June 30, 2018, compared to 3.9% as of December 31, 2017.  The debt balance as of June 30, 2018 is comprised of debt obligations. The debt balance as of December 31, 2017 was comprised of leasehold obligations and debt obligations.

Leasehold Obligations

The Company entered into a sale leaseback arrangement in 2016 that was accounted for as a capital lease. Under the agreement, Bofi Federal Bank purchased electronic data processing software, vehicles, and other assets which are leased to the Company. These assets remained on the Company’s books due to provisions within the agreement that trigger capital lease accounting. To secure the lowest rate possible of 4.7%, the Company pledged bonds totaling $923,563 and  $923,766 as ofMarch 31, 2018 and December 31, 2017. There was no gain or loss recognized as part of this transaction. On March 2, 2018 and March 7, 2018, the Company paid $404,928 and $346,000,  respectively, to Bofi. These disbursements were made to pay off the balances of the sale leaseback arrangements. As a result of paying off the leasehold obligations during the first quarter of 2018, the bonds pledged as collateral related to this debt were released in April 2018. Lease payments totaled $0 and $125,494 for the three months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018 and 2017, lease payments totaled $70,051 and $250,988, respectively. The outstanding lease obligation was$0 and $805,013 at June 30, 2018 and December 31, 2017, respectively.

Debt Obligation

ICC Holdings, Inc. secured a loan with American Bank & Trust in March 2017 in the amount of $3,500,000and 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 the ESOP shares and $1.5 million of trust assets as collateral for the loan. Additionally, the Company entered into two debt agreements in 2016 with Bofi Federal Bank; one agreement for $500,000 and another debt agreement for $75,000.  The terms of the loans were 36 months, but the Company had the option to prepay the $500,000 loan after 12 months. The Company paid off the remaining balance of the $500,000 loan in September 2017. The $75,000 loan was paid off in March of 2018. The total balance of the debt agreements at June 30, 2018 and December 31, 2017 was $3,489,056 and $3,534,195, respectively.

Revolving Line of Credit

We maintain a revolving line of credit with American Bank & Trust, which permits borrowing up to an aggregate principal amount of $1.75 million. This facility was initially entered into during 2013 and is renewed annually with a current expiration of August 25, 2018. The line of credit is priced at 30 day LIBOR plus 2% with a floor of 3.5%.  In order to secure the lowest rate possible, the Company pledged marketable securities not to exceed $5.0 million in the event the Company draws down on the line of credit. There was no interest paid on the line of credit during the six months ended June 30, 2018 and no interest paid on the line of credit during the six months ended June 30, 2017. There are no financial covenants governing this agreement.

ESOP

In connection with the offering, the ESOP financed the purchase of 10.0% of the common stock issued in the offering for $3,500,000 with the proceeds of a loan from ICC prior to the expiration of the offering. ICC will make annual contributions to the ESOP sufficient to repay that loan. See Note 8 – Employee Benefits of this Form 10-Q as well as the “Management — Benefit Plans and Employment Agreements —Employee Stock Ownership Plan” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

~  36  ~

Stock-based Incentive Plan

Under the ICC Holdings, Inc. 2016 Equity Incentive Plan, we reserved for issuance a total of 490,000 shares of common stock. Of this amount, 350,000 shares of common stock may be granted in the form of restricted stock and stock-settled restricted stock unit awards, and 140,000 shares of common stock may be granted in the form of stock options under the stock-based incentive plan. The grant-date fair value of any common stock used for restricted stock and restricted stock unit awards will represent unearned compensation. As we accrue compensation expense to reflect the vesting of such shares, unearned compensation will be reduced accordingly. We compute compensation expense at the time stock options are awarded based on the fair value of such options on the date they are granted. This compensation expense is recognized over the appropriate service period. Restricted stock units (RSUs) were granted for the first time in February 2018. The RSUs vest 1/3 over three years from the date of grant. See Note 8 – Employee Benefits of this Form 10-Q as well as the “Management — Benefit Plans and Employment Agreements” section of the Company’s 2017 Annual Report on Form 10-K.

Liquidity and Capital Resources

We generate sufficient funds from our operations and maintain a high degree of liquidity in our investment portfolio to meet the demands of claim settlements and operating expenses. The primary sources of funds are premium collections, investment earnings and maturing investments. The decrease in cash flows from financing activities during the six months ended June 30, 2018compared to the same period in 2017 relates to the 2017 initial public offering and changes in debt and shares outstanding which occurred during the first quarter of 2017.

We maintain investment and reinsurance programs that are intended to provide sufficient funds to meet our obligations without forced sales of investments. We maintain a portion of our investment portfolio in relatively short-term and highly liquid assets to ensure the availability of funds.

Cash flows from continuing operations for the six months ended June 30, 2018 and 2017 were as follows:

	Six Months Ended June 30,
(In thousands)	2018		2017
Net cash provided by (used in) operating activities	$	1,478	$	(1,414)
Net cash used in investing activities		(3,448)		(23,318)
Net cash (used in) provided by financing activities		(850)		30,458
Net (decrease) increase in cash and cash equivalents	$	(2,820)	$	5,726

ICC Holdings, Inc.’s principal source of liquidity will be dividend payments and other fees received from ICC and ICC Realty, LLC. ICC is restricted by the insurance laws of Illinois as to the amount of dividends or other distributions it may pay to us. Under Illinois law, there is a maximum amount that may be paid by ICC during any twelve-month period. ICC may pay dividends to us after notice to, but without prior approval of the Illinois Department of Insurance in an amount “not to exceed” the greater of (i) 10% of the surplus as regards policyholders of ICC as reported on its most recent annual statement filed with the Illinois Department of Insurance, or (ii) the statutory net income of ICC for the period covered by such annual statement. Dividends in excess of this amount are considered “extraordinary” and are subject to the approval of the Illinois Department of Insurance.

The amount available for payment of dividends from ICC in 2018 without the prior approval of the Illinois Department of Insurance is approximately $5.1 million based upon the insurance company’s 2017 annual statement. Prior to its payment of any dividend, ICC is required to provide notice of the dividend to the Illinois Department of Insurance. This notice must be provided to the Illinois Department of Insurance 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of an ordinary dividend. The Illinois Department of Insurance has the power to limit or prohibit dividend payments if ICC is in violation of any law or regulation. These restrictions or any subsequently imposed restrictions may affect our future liquidity.

Additionally, our insurance company, ICC, became a member of the FHLBC in February 2018. Membership in the Federal Home Loan Bank System provides ICC access to an additional source of liquidity via a secured lending facility. Our membership allows each insurance subsidiary to determine tenor and structure at the time of borrowing. As of and during the six-month period ended June 30, 2018, there were no outstanding borrowing amounts with the FHLBC.

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The following table summarizes, as of June 30, 2018, our future payments under contractual obligations and estimated claims and claims related payments for continuing operations.

	Payments Due by Period
(In thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Estimated gross loss and settlement expense payments	$	51,388	$	22,001	$	20,999	$	5,671	$	2,717
Debt obligations		3,971		69		277		3,625		—
Operating lease obligations		111		111		—		—		—
Total	$	55,470	$	22,181	$	21,276	$	9,296	$	2,717

The timing of the amounts of the gross loss and loss adjustment expense payments is an estimate based on historical experience and the expectations of future payment patterns. However, the timing of these payments may vary from the amounts stated above.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital reserves.

Item 3. Quantitative and Qualitative Information about Market Risk

Market Risk

Market risk is the risk that we will incur losses due to adverse changes in the fair value of financial instruments. We have exposure to three principal types of market risk through our investment activities: interest rate risk, credit risk and equity risk. Our primary market risk exposure is to changes in interest rates. We have not entered, and do not plan to enter, into any derivative financial instruments for hedging, trading or speculative purposes.

Interest Rate Risk

Interest rate risk is the risk that we will incur economic losses due to adverse changes in interest rates. Our exposure to interest rate changes primarily results from our significant holdings of fixed rate investments. Fluctuations in interest rates have a direct impact on the fair value of these securities.

The average maturity of the debt securities in our investment portfolio at June 30, 2018, was 6.79 years. Our debt securities investments include U.S. government bonds, securities issued by government agencies, obligations of state and local governments and governmental authorities, and corporate bonds, most of which are exposed to changes in prevailing interest rates and which may experience moderate fluctuations in fair value resulting from changes in interest rates. We carry these investments as available for sale. This allows us to manage our exposure to risks associated with interest rate fluctuations through active review of our investment portfolio by our management and board of directors and consultation with our third party investment manager.

Fluctuations in near-term interest rates could have an impact on our results of operations and cash flows. Certain of these securities may have call features. In a declining interest rate environment these securities may be called by their issuer and replaced with securities bearing lower interest rates. If we are required to sell these securities in a rising interest rate environment we may recognize losses.

As a general matter, we attempt to match the durations of our assets with the durations of our liabilities. Our investment objectives include maintaining adequate liquidity to meet our operational needs, optimizing our after-tax investment income, and our after-tax total return, all of which are subject to our tolerance for risk.

~  38  ~

The table below shows the interest rate sensitivity of our fixed maturity investments measured in terms of fair value (which is equal to the carrying value for all of our investment securities that are subject to interest rate changes):

	June 30, 2018
Hypothetical Change in Interest Rates (In thousands)	Estimated Change in Fair Value		Fair Value
200 basis point increase	$	(7,328)	$	82,367
100 basis point increase		(3,740)		85,955
No change		—		89,695
100 basis point decrease		3,722		93,417
200 basis point decrease		7,292		96,987

Credit Risk

Credit risk is the potential economic loss principally arising from adverse changes in the financial condition of a specific debt issuer. We address this risk by investing primarily in fixed maturity securities that are rated investment grade and at least 70% of our investment securities must be rated at least “A” by Moody’s or an equivalent rating quality. We also independently, and through our independent third party investment manager, monitor the financial condition of all of the issuers of fixed maturity securities in the portfolio. To limit our exposure to risk, we employ diversification rules that limit the credit exposure to any single issuer or asset class.

Equity Risk

Equity price risk is the risk that we will incur economic losses due to adverse changes in equity prices.

Impact of Inflation

Inflation increases our customers’ needs for property and casualty insurance coverage due to the increase in the value of the property covered and any potential liability exposure. Inflation also increases claims incurred by property and casualty insurers as property repairs, replacements and medical expenses increase. These cost increases reduce profit margins to the extent that rate increases are not implemented on an adequate and timely basis. We establish property and casualty insurance premiums levels before the amount of loss and loss expenses, or the extent to which inflation may impact these expenses, are known. Therefore, we attempt to anticipate the potential impact of inflation when establishing rates. Because inflation has remained relatively low in recent years, financial results have not been significantly affected by it.

Item 4. Controls and Procedures

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that required information is recorded, processed, summarized and reported within the required timeframe as specified in the SEC’s rules and forms of the SEC. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our management, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures at June 30, 2018. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, as of June 30, 2018.

~  39  ~

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

There were no material changes to report.

Item 1A. Risk Factors

There were no material changes to report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchase Plan

In September 2017, our Board of Directors approved a $3.0 million share repurchase program with no expiration date.  The authorized repurchases will be made from time to time in either the open market or through privately negotiated transactions.  The timing, volume and nature of share repurchases will be at the sole discretion of management, dependent on market conditions, applicable securities laws, and other factors, and may be suspended or discontinued at any time.  No assurance can be given that any particular amount of common stock will be repurchased.  All or part of the repurchases may be implemented under a Rule 10b5-1 trading plan, which would allow repurchases under pre-set terms at times when the Company might otherwise be prevented from doing so under insider trading laws or because of self-imposed blackout periods. This repurchase program may be modified, extended or terminated by the Board of Directors at any time. There were no repurchases made under this share repurchase authorization as of June 30, 2018.

Item 3. Default Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

~  40  ~

Item 6. Exhibits

Exhibit Number	Description
3.1	Form of Amended and Restated Articles of Incorporation of ICC Holdings, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-214081) filed on December 23, 2016)
3.2	Form of Amended and Restated Bylaws of ICC Holdings, Inc. (incorporated by reference to Exhibit 3.2 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-214081) filed on December 23, 2016)
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~  41  ~

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, thereunto duly authorized, on August 14, 2018.

ICC HOLDINGS, INC.
By:	/s/ Arron K. Sutherland
	Arron K. Sutherland President, Chief Executive Officer and Director (Principal Executive Officer)
By:	/s/ Michael R. Smith
	Michael R. Smith Chief Financial Officer (Principal Financial and Accounting Officer)

~  42  ~

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER’S 302 CERTIFICATION

I, Arron K. Sutherland, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ICC Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August14, 2018

/s/ Arron K. Sutherland

Arron K. Sutherland

Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER’S 302 CERTIFICATION

I, Michael R. Smith, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ICC Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2018

/s/ Michael R. Smith

Michael R. Smith

Chief Financial Officer

(principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ICC Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Arron K. Sutherland, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August14, 2018

/s/Arron K. Sutherland

Arron K. Sutherland

Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ICC Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael R. Smith, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2018

/s/ Michael R. Smith

Michael R. Smith

Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 09, 2018
Document And Entity Information
Entity Registrant Name	ICC Holdings, Inc.
Entity Central Index Key	0001681903
Trading Symbol	ICCH
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		3,500,000

XML

Condensed Consolidated Balance Sheets - USD ($)		Jun. 30, 2018	Dec. 31, 2017
Available for sale securities, at fair value
Fixed maturity securities (amortized cost - $89,975,510 at 6/30/2018 and $87,773,047 at 12/31/2017)		$ 89,694,843	$ 89,605,073
Available-for-sale		12,972,786	12,401,538
Other invested assets		139,200
Property held for investment, at cost, net of accumulated depreciation of $172,791 at 6/30/2018 and $50,948 at 12/31/2017		3,112,608	3,126,566
Cash and cash equivalents		4,055,577	6,876,519
Total investments and cash		109,975,014	112,009,696
Accrued investment income		668,230	687,453
Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $50,000 at 6/30/2018 and 12/31/2017		21,433,743	19,013,262
Ceded unearned premiums		685,736	274,972
Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $0 at 6/30/2018 and 12/31/2017		8,287,587	10,029,834
Federal income taxes		1,492,828	922,405
Deferred policy acquisition costs, net		5,090,527	4,592,415
Property and equipment, at cost, net of accumulated depreciation of $4,815,812 at 6/30/2018 and $4,896,042 at 12/31/2017		3,474,335	3,503,904
Other assets		1,289,712	1,301,420
Total assets		152,397,712	152,335,361
Liabilities:
Unpaid losses and settlement expenses		51,387,881	51,074,126
Unearned premiums		29,298,437	26,555,582
Reinsurance balances payable		943,686	327,483
Corporate debt		3,489,056	4,339,208
Accrued expenses		2,940,084	4,274,002
Other liabilities		1,922,410	1,663,415
Total liabilities		89,981,554	88,233,816
Equity:
Common stock	[1]	35,000	35,000
Additional paid-in capital		32,418,807	32,333,290
Accumulated other comprehensive (loss) earnings, net of tax		(375,404)	2,227,069
Retained earnings		33,502,434	32,787,406
Less: Unearned Employee Stock Ownership Plan shares at cost	[2]	(3,164,679)	(3,281,220)
Total equity		62,416,158	64,101,545
Total liabilities and equity		152,397,712	152,335,361
Common Stocks [Member]
Available for sale securities, at fair value
Available-for-sale	[3]	12,907,136	8,534,109
Preferred Stocks [Member]
Available for sale securities, at fair value
Available-for-sale		$ 65,650	$ 3,867,429

[1] Par value $0.01; authorized: 2018 - 10,000,000 shares and 2017 - 10,000,000 shares; issued: 2018 - 3,500,000 shares and 2017 - 3,500,000 shares; outstanding: 2018 - 3,183,532 and 2017 - 3,171,878 shares.

[2] 2018 -316,468 shares and 2017 - 328,122 shares

[3] At June 30, 2018, common stock securities consist entirely of individual common stocks. At December 31, 2017, common stock consisted of exchange trade funds (ETF) made up primarily of Dividends Select and the S&P 500.

XML

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Fixed maturity securities, amortized cost	$ 89,975,510	$ 87,773,047
Equity securities, amortized cost	13,167,315	11,414,491
Property held for investment, accumulated depreciation	172,791	50,948
Premiums and reinsurance balances receivable, allowances for uncollectible amounts	50,000	50,000
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts	0	0
Property and equipment, at cost, accumulated depreciation	$ 4,815,812	$ 4,896,042
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, shares issued (in shares)	3,500,000	3,500,000
Common stock, shares outstanding (in shares)	3,183,532	3,171,878
Unearned ESOP shares (in shares)	316,468	328,122
Common Stocks [Member]
Equity securities, amortized cost	$ 13,100,640	$ 7,631,180
Preferred Stocks [Member]
Equity securities, amortized cost	$ 66,675	$ 3,783,311

XML

Condensed Consolidated Statements of Earnings and Comprehensive Earnings - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Condensed Consolidated Statements of Earnings and Comprehensive Earnings [Abstract]
Net premiums earned	$ 11,485,071	$ 10,710,758	$ 22,782,015	$ 21,548,864
Net investment income	685,492	688,963	1,388,376	1,161,287
Net realized investment losses	(29,930)	(3)	1,072,200	444,778
Other-than-temporary impairment losses		(57,316)		(57,316)
Other (loss) income	(507)	64,722	56,171	148,980
Consolidated revenues	12,140,126	11,407,124	25,298,762	23,246,593
Losses and settlement expenses	7,790,587	6,864,258	15,786,436	13,463,642
Policy acquisition costs and other operating expenses	4,160,071	4,720,298	8,297,422	8,454,950
Interest expense on debt	27,621	57,229	75,782	109,539
General corporate expenses	133,806	128,905	270,056	268,120
Total expenses	12,112,085	11,770,690	24,429,696	22,296,251
Earnings (loss) before income taxes	28,041	(363,566)	869,066	950,342
Total income tax benefit	(11,159)	(128,443)	154,039	336,421
Net earnings (loss)	39,200	(235,123)	715,027	613,921
Other comprehensive (loss) earnings, net of tax	(35,396)	542,427	(2,602,473)	596,908
Comprehensive (loss) earnings	$ 3,804	$ 307,304	$ (1,887,446)	$ 1,210,829
Basic:
Basic net earnings (loss) per share	$ 0.01	$ (0.07)	$ 0.23	$ 0.19
Diluted:
Diluted net earnings (loss) per share	$ 0.01	$ (0.07)	$ 0.23	$ 0.19
Weighted average number of common shares outstanding:
Basic	3,179,669	3,153,876	3,174,324	3,151,946
Diluted	3,180,679	3,153,876	3,175,334	3,151,946

XML

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net earnings	$ 715,027	$ 613,921
Adjustments to reconcile net earnings to net cash used in operating activities
Net realized investment gains	(1,072,200)	(444,778)
Other-than-temporary impairment losses		57,316
Depreciation	310,857	428,161
Deferred income tax	(35,427)	190,257
Amortization of bond premium and discount	158,743	135,265
Stock-based compensation expense	202,058
Change in:
Accrued investment income	19,223	(122,970)
Premiums and reinsurance balances receivable, (net)	(2,420,481)	(361,761)
Ceded unearned premiums	(410,764)	(25,457)
Reinsurance balances payable	616,203	20,431
Reinsurance balances recoverable	1,742,247	2,364,744
Deferred policy acquisition costs	(498,112)	(139,961)
Unpaid losses and settlement expenses	313,755	(3,125,882)
Unearned premiums	2,742,855	1,022,675
Accrued expenses	(1,333,918)	(1,645,086)
Current federal income tax	156,800	(483,608)
Other	270,703	102,915
Net cash provided by (used in) operating activities	1,477,569	(1,413,818)
Purchases of:
Fixed maturity securities, available-for-sale	(9,003,061)	(22,821,724)
Other invested assets	(39,200)
Property held for investment	(31,673)	(677,714)
Property and equipment	(300,484)	(333,887)
Proceeds from sales, maturities and calls of:
Fixed maturity securities, available-for-sale	6,669,276	4,414,597
Property and equipment	64,826	967
Net cash used in investing activities	(3,448,359)	(23,317,840)
Cash flows from financing activities:
Net proceeds received from issuance of shares of common stock		29,253,588
Proceeds from loans		3,499,149
Repayments of borrowed funds	(850,152)	(2,294,961)
Net cash (used in) provided by financing activities	(850,152)	30,457,776
Net (decrease) increase in cash and cash equivalents	(2,820,942)	5,726,118
Cash and cash equivalents at beginning of year	6,876,519	4,376,847
Cash and cash equivalents at end of period	4,055,577	10,102,965
Supplemental information:
Federal income tax paid		600,000
Interest paid	108,336	109,451
Common Stocks [Member]
Purchases of:
Equity securities, available-for-sale	(13,363,215)	(5,216,872)
Proceeds from sales, maturities and calls of:
Equity securities, available-for-sale	8,834,375	1,955,715
Preferred Stocks [Member]
Purchases of:
Equity securities, available-for-sale	(140,925)	$ (638,922)
Proceeds from sales, maturities and calls of:
Equity securities, available-for-sale	$ 3,861,722

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.     DESCRIPTION OF BUSINESS

ICC Holdings, Inc. is a Pennsylvania corporation that was organized in 2016. As used in this Form 10-Q, references to “the Company,” “we,” “us,” and “our” refer to the consolidated group for the period after the completion of the stock conversion and refer to Illinois Casualty Company (ICC) and its subsidiaries for the period prior to the stock conversion. On a stand-alone basis ICC Holdings, Inc. is referred to as the “Parent Company.” The consolidated group consists of the holding company, ICC Holdings, Inc.;ICC Realty, LLC, a real estate services and holding company; Beverage Insurance Agency, Inc., an inactive insurance agency; Estrella Innovative Solutions, Inc., an outsourcing company; and ICC, an operating insurance company. ICC is an Illinois domiciled company.

ICC Holdings, Inc. was formed so that it could acquire all of the capital stock of ICC in a mutual-to-stock conversion. The plan of conversion was approved by ICC policyholders at a special meeting on March 17, 2017. Simultaneously, surplus notes totaling $1.65 million were converted into 165,000 shares of the Company’s common stock. The Company’s offering closed on March 24, 2017, and our Employee Stock Ownership Plan (ESOP) purchased 350,000 of the shares in the offering. On March 28, 2017, the Company’s stock began trading on the NASDAQ Capital Market under the “ICCH” ticker. The Company paid $1.0 million of underwriting fees to Griffin Financial Group, LLC. Proceeds received from the offering, net of offering costs and underwriting fees, was $28.7 million.

Prior to the conversion on March 24, 2017, ICC Holdings, Inc. did not engage in any operations. Since the conversion, ICC Holdings, Inc’s primary assets are the outstanding equity of ICC, ICC Realty, LLC, Estrella Innovative Solutions, Inc., Beverage Insurance Agency, Inc., and a portion of the net proceeds from the stock offering completed in connection with the mutual-to-stock conversion. On the effective date of the conversion, ICC became a wholly owned subsidiary of ICC Holdings, Inc. Themutual-to-stock conversion was accounted for as a change in corporate form with the historic basis of ICC’s assets, liabilities, and equity unchanged as a result.

We are a specialty insurance carrier primarily underwriting commercial multi-peril, liquor liability, workers’ compensation, and umbrella liability coverages for the food and beverage industry through our subsidiary insurance company, ICC. ICC writes business in Colorado, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Ohio, and Wisconsin and markets through independent agents. Approximately 28.8% and 36.5% of the premium is written in Illinois for the three months ended June  30, 2018 and 2017, respectively. For the six months ended, June 30, 2018 and 2017, approximately 30.9% and 36.2% of the premium is written in Illinois, respectively. ICC sold its two wholly-owned subsidiaries, Beverage Insurance Agency, Inc. and Estrella Innovative Solutions, Inc. to ICC Holdings during the second quarter of 2018. ICC sold all of its real estate holdings held by ICC Realty, LLC to its parent, ICC Holdings, Inc.; via the sale of all of the outstanding equity of ICC Realty, LLC to ICC Holdings, Inc. during the fourth quarter of 2017. The Company operates as a single segment.

B.     PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

The unaudited condensed consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and with the instructions to Form 10-Q.  Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements.  As such, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 10-K”). Management believes that the disclosures are adequate to make the information presented not misleading, and all normal and recurring adjustments necessary to present fairly the financial position at June  30, 2018, and the results of operations of the Company and its subsidiaries for all periods presented have been made. The results of operations for any interim period are not necessarily indicative of the operating results for a full year.

The preparation of the unaudited condensed consolidated interim financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated interim financial statements, and the reported amounts of revenue and expenses during the period. These amounts are inherently subject to change and actual results could differ significantly from these estimates.

C.     SIGNIFICANT ACCOUNTING POLICIES

The Company reported significant accounting policies in the 2017 10-K. The following are new or revised disclosures.

STOCK-BASED COMPENSATION

We have compensation plans under which stock-based awards may be granted to our employees as described in Note 8 – Employee Benefits. The Company recognizes the fair value of stock-based compensation ratably during each year through a charge to compensation expense and a corresponding entry to equity based on vesting criteria and other pertinent terms of the awards. Stock-based awards are accounted for as equity awards in instances where the awards’ vesting are linked to market, performance, or service condition. The Company granted Restricted Stock Units (RSUs) for the first time in February of 2018. Upon vesting of any outstanding RSUs, the Company has the option to elect to pay cash or part cash and part Common Stock in lieu of delivering on shares of Common Stock for vested units. The Company’s intention is to settle vested units in Common Stock, and therefore the RSUs are accounted for as equity awards. Equity awards to employees are generally expensed based on the grant date fair value.

EARNINGS PER SHARE

Basic and diluted earnings per share (EPS) are calculated by dividing earnings available to common shareholders by the weighted average number of common shares outstanding during the period. The denominator for basic and diluted EPS includes ESOP shares committed to be released. Dilutive earnings per share includes the effect of all potentially dilutive instruments, such as restricted stock units (RSUs), outstanding during the period.

D.     PROSPECTIVE ACCOUNTING STANDARDS

For information regarding accounting standards that the Company has not yet adopted, see the “Prospective Accounting Standards” in Note 1 – Summary of Significant Accounting Policies in the 2017 10-K. The Company maintains its status as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We have taken advantage of the extended transition period provided by Section 107 of the JOBS Act. We decided to comply with the effective dates for financial accounting standards applicable to emerging growth companies at a later date in compliance with the requirements in Sections 107(b)(2) and (3) of the JOBS Act. Such decision is irrevocable.

E.     PROPERTY AND EQUIPMENT

Annually, the Company reviews the major asset classes of property and equipment held for impairment. For the periods ended June 30, 2018 and 2017, the Company recognized no impairments.  Property and equipment are summarized as follows:

	As of
	June 30,		December 31,
	2018		2017
Automobiles	$	567,291	$	794,959
Furniture and fixtures		427,453		425,825
Computer equipment and software		3,453,042		3,404,975
Home office		3,842,361		3,774,187
Total cost		8,290,147		8,399,946
Accumulated depreciation		(4,815,812)		(4,896,042)
Net property and equipment	$	3,474,335	$	3,503,904

F.     COMPREHENSIVE EARNINGS

Comprehensive earnings (loss) include net earnings (loss) plus the change in unrealized gains and losses on available-for-sale investment securities, net of tax. In reporting the components of comprehensive earnings on a net basis in the statement of earnings, the Company used a 21% and a  34% tax rate for the periods ending June 30, 2018 and 2017, respectively.  

The following table illustrates the components of other comprehensive earnings for each period presented in the condensed consolidated interim financial statements.

	Three-Month Periods Ended June 30,
	2018						2017
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Other comprehensive earnings (loss),   net of tax
Unrealized gains and losses on investments:
Unrealized holding (losses) gains   arising during the period	$	(74,733)	$	15,692	$	(59,041)	$	764,541	$	(259,944)	$	504,597
Reclassification adjustment for   (gains) losses included in net earnings		29,930		(6,285)		23,645		57,319		(19,489)		37,830
Total other comprehensive (loss) earnings	$	(44,803)	$	9,407	$	(35,396)	$	821,860	$	(279,433)	$	542,427

	Six-Month Periods Ended June 30,
	2018						2017
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Other comprehensive earnings (loss),   net of tax
Unrealized gains and losses on investments:
Unrealized holding (losses) gains   arising during the period	$	(2,222,069)	$	466,634	$	(1,755,435)	$	1,291,868	$	(439,235)	$	852,633
Reclassification adjustment for   (gains) losses included in net earnings		(1,072,200)		225,162		(847,038)		(387,462)		131,737		(255,725)
Total other comprehensive (loss) earnings	$	(3,294,269)	$	691,796	$	(2,602,473)	$	904,406	$	(307,498)	$	596,908

The following table provides the reclassifications from accumulated other comprehensive earnings for the periods presented:

Amounts Reclassified from
Accumulated Other Comprehensive Earnings
Details about Accumulated Other	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,				Affected Line Item in the Statement
Comprehensive Earnings Component	2018		2017		2018		2017		where Net Earnings is Presented
Unrealized gains (losses) on AFS investments:
	$	29,930	$	3	$	(1,072,200)	$	(444,778)	Net realized invesment losses (gains)
		—		57,316		—		57,316	Other-than-temporary impairment losses
		(6,285)		(19,489)		225,162		131,737	Income tax (benefit) expense
Total reclassification adjustment, net of tax	$	23,645	$	37,830	$	(847,038)	$	(255,725)

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Investments

6 Months Ended

Jun. 30, 2018

Investments [Abstract]

Investments

2.     INVESTMENTS

The Company’s investments are primarily composed of fixed income debt securities and common and preferred stock equity securities. All of the Company’s fixed maturity debt and equity investments are presented as available-for-sale (AFS), which are carried at fair value. When available, quoted market prices are obtained to determine fair value for the Company’s investments. If a quoted market price is not available, fair value is estimated using a secondary pricing source or using quoted market prices of similar securities. The Company has no investment securities for which fair value is determined using Level 3 inputs as defined in Note 3 – Fair Value Disclosures. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date, which does not differ significantly from trade date accounting.

Fixed Income Securities - Available-for-Sale

The following tables are a summary of the proceeds from sales, maturities, and calls of available-for-sale securities and the related gross realized gains and losses.

	For the Three-Months Ended Ended June 30,
							Net realized
	Proceeds		Gains		Losses		gain / (Loss)
2018
Fixed maturity securities	$	2,598,335	$	4,669	$	(13,084)	$	(8,415)
Common stocks		241,047		16,473		(37,988)		(21,515)
2017
Fixed maturity securities	$	906,700	$	—	$	(3)	$	(3)

	For the Six-Months Ended June 30,
							Net realized
	Proceeds		Gains		Losses		gain
2018
Fixed maturity securities	$	6,669,276	$	52,787	$	(26,115)	$	26,672
Common stocks		8,834,375		1,102,862		(62,242)		1,040,620
Preferred stocks		3,861,722		86,862		(81,954)		4,908
2017
Fixed maturity securities	$	4,414,597	$	29,328	$	(21)	$	29,307
Common stocks		1,955,715		415,471		—		415,471

The amortized cost and estimated fair value of fixed income securities at June 30, 2018, by contractual maturity, are shown as follows:

	Amortized Cost		Fair Value
Due in one year or less	$	311,535	$	311,420
Due after one year through five years		23,915,785		23,924,513
Due after five years through 10 years		10,685,245		10,767,086
Due after 10 years		18,034,819		18,283,025
Asset and mortgage backed securities without a specific due date		37,028,126		36,408,799
Total fixed maturity securities	$	89,975,510	$	89,694,843

Expected maturities may differ from contractual maturities due to call provisions on some existing securities.

The following table is a schedule of cost or amortized cost and estimated fair values of investments in fixed income and equity securities as of June 30, 2018 and December 31, 2017:  

	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2018
Fixed maturity securities:
U.S. treasury	$	1,347,640	$	1,321,469	$	—	$	(26,171)
MBS/ABS/CMBS		37,028,126		36,408,799		49,487		(668,814)
Corporate		31,210,729		31,157,991		356,164		(408,902)
Municipal		20,389,015		20,806,584		486,377		(68,808)
Total fixed maturity securities		89,975,510		89,694,843		892,028		(1,172,695)
Equity securities:
Common stocks		13,100,640		12,907,136		656,830		(850,334)
Preferred stocks		66,675		65,650		—		(1,025)
Total equity securities		13,167,315		12,972,786		656,830		(851,359)
Total AFS securities	$	103,142,825	$	102,667,629	$	1,548,858	$	(2,024,054)

	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2017
Fixed maturity securities:
U.S. treasury	$	1,346,712	$	1,333,725	$	—	$	(12,987)
MBS/ABS/CMBS		31,584,141		31,518,662		158,944		(224,423)
Corporate		31,038,526		31,989,174		1,001,906		(51,258)
Municipal		23,803,668		24,763,512		976,872		(17,028)
Total fixed maturity securities		87,773,047		89,605,073		2,137,722		(305,696)
Equity securities:
Common stocks		7,631,180		8,534,109		920,629		(17,700)
Preferred stocks		3,783,311		3,867,429		132,054		(47,936)
Total equity securities		11,414,491		12,401,538		1,052,683		(65,636)
Total AFS securities	$	99,187,538	$	102,006,611	$	3,190,405	$	(371,332)

All of the Company’s collaterized securities carry an average credit rating of AA+ by one or more major rating agency and continue to pay according to contractual terms. Included within MBS/ABS/CMBS, as defined in Note 3 – Fair Value Disclosures, are residential mortgage backed securities with fair values of $14,271,429 and $13,517,725 and commercial mortgage backed securities of $9,177,628 and $8,469,852 atJune 30, 2018 and December 31, 2017, respectively.

ANALYSIS

The following table is also used as part of the impairment analysis and displays the total value of securities that were in an unrealized loss position as of June 30, 2018, and December 31, 2017. The table segregates the securities based on type, noting the fair value, cost (or amortized cost), and unrealized loss on each category of investment as well as in total. The table further classifies the securities based on the length of time they have been in an unrealized loss position.

	June 30, 2018						December 31, 2017
			12 Months						12 Months
	< 12 Months		& Greater		Total		< 12 Months		& Greater		Total
U.S. treasury
Fair value	$	1,029,263	$	292,206	$	1,321,469	$	1,038,297	$	295,428	$	1,333,725
Cost or amortized cost		1,047,472		300,168		1,347,640		1,046,508		300,204		1,346,712
Unrealized loss		(18,209)		(7,962)		(26,171)		(8,211)		(4,776)		(12,987)
MBS/ABS/CMBS
Fair value		20,073,237		6,708,127		26,781,364		9,754,119		7,445,071		17,199,190
Cost or amortized cost		20,368,837		7,081,341		27,450,178		9,778,528		7,645,085		17,423,613
Unrealized loss		(295,600)		(373,214)		(668,814)		(24,409)		(200,014)		(224,423)
Corporate
Fair value		17,434,719		755,371		18,190,090		5,583,942		2,023,856		7,607,798
Cost or amortized cost		17,799,788		799,204		18,598,992		5,610,093		2,048,963		7,659,056
Unrealized loss		(365,069)		(43,833)		(408,902)		(26,151)		(25,107)		(51,258)
Municipal
Fair value		3,644,260		839,947		4,484,207		478,019		1,171,520		1,649,539
Cost or amortized cost		3,677,077		875,938		4,553,015		479,904		1,186,663		1,666,567
Unrealized loss		(32,817)		(35,991)		(68,808)		(1,885)		(15,143)		(17,028)
Subtotal, fixed income
Fair value		42,181,479		8,595,651		50,777,130		16,854,377		10,935,875		27,790,252
Cost or amortized cost		42,893,174		9,056,651		51,949,825		16,915,033		11,180,915		28,095,948
Unrealized loss		(711,695)		(461,000)		(1,172,695)		(60,656)		(245,040)		(305,696)
Common stock
Fair value		7,254,241		—		7,254,241		637,100		—		637,100
Cost or amortized cost		8,104,575		—		8,104,575		654,800		—		654,800
Unrealized loss		(850,334)		—		(850,334)		(17,700)		—		(17,700)
Preferred stock
Fair value		65,650		—		65,650		842,530		520,710		1,363,240
Cost or amortized cost		66,675		—		66,675		870,755		540,421		1,411,176
Unrealized loss		(1,025)		—		(1,025)		(28,225)		(19,711)		(47,936)
Total
Fair value		49,501,370		8,595,651		58,097,021		18,334,007		11,456,585		29,790,592
Cost or amortized cost		51,064,424		9,056,651		60,121,075		18,440,588		11,721,336		30,161,924
Unrealized loss	$	(1,563,054)	$	(461,000)	$	(2,024,054)	$	(106,581)	$	(264,751)	$	(371,332)

As of June 30, 2018, the Company held 148 common stock and preferred stock securities in an unrealized loss position. Of these 148 securities, none have been in an unrealized loss position for 12 consecutive months or longer. As of December 31, 2017, the Company held 13 equity securities that were in unrealized loss positions. Of these 13 securities, five were in an unrealized loss position for 12 consecutive months or longer and represented $19,711 in unrealized losses.

The fixed income portfolio contained 124 securities in an unrealized loss position as of June 30,  2018. Of these 124 securities, 24 have been in an unrealized loss position for 12 consecutive months or longer and represent $461,000 in unrealized losses. All fixed income securities in the investment portfolio continue to pay the expected coupon payments under the contractual terms of the securities. Credit-related impairments on fixed income securities that we do not plan to sell, and for which we are not more likely than not to be required to sell, are recognized in net earnings. Any non-credit related impairment is recognized in comprehensive earnings. Based on management’s analysis, the fixed income portfolio is of a high credit quality and it is believed it will recover the amortized cost basis of the fixed income securities. Management monitors the credit quality of the fixed income investments to assess if it is probable that the Company will receive its contractual or estimated cash flows in the form of principal and interest. There were no other-than-temporary impairment losses recognized in net earnings during the first six months ended June 30, 2018. For the six months ended, June 30, 2017, the Company recognized in net earnings $57,316 of other-than-temporary impairment losses on an ETF included in common stock that was impaired during the second quarter of 2017. The securities in an unrealized loss position were not other-than-temporarily impaired at June 30, 2018 and December 31, 2017.

Other Invested Assets

Other invested assets include privately held investments, including membership in the Federal Home Loan Bank of Chicago (FHLBC), which occurred in February 2018 . Our investment in FHLBC stock is carried at cost. Due to the nature of our membership in the FHLBC, its carrying amount approximates fair value. As of June 30, 2018, there were no investments pledged as collateral with the FHLBC. There may be investments pledged as collateral with the FHLBC to ensure timely access to the secured lending facility that ownership of FHLBC stock provides. As of and during the three and six month periods ending June 30, 2018, there were no outstanding borrowings with the FHLBC.

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Fair Value Disclosures

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Disclosures

3.     FAIR VALUE DISCLOSURES

Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. The fair value of certain financial instruments is determined based on their underlying characteristics and relevant transactions in the marketplace. GAAP guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance also describes three levels of inputs that may be used to measure fair value.

The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level:

· Level 1 is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets.

· Level 2 is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data.

· Level 3 is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value.

As a part of the process to determine fair value, management utilizes widely recognized, third-party pricing sources to determine fair values. Management has obtained an understanding of the third-party pricing sources’ valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy.

Corporate, Agencies, and Municipal Bonds—The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. All Corporate, Agencies, and Municipal securities are deemed Level 2.

Mortgage-backed Securities (MBS)/Collateralized Mortgage Obligations (CMO) and Asset-backed Securities (ABS)—The pricing vendor evaluation methodology includes principally interest rate movements and new issue data. Evaluation of the tranches (non-volatile, volatile, or credit sensitivity) is based on the pricing vendors’ interpretation of accepted modeling and pricing conventions. This information is then used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate CMO volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates, and recent trade activity. MBS/CMO and ABS with corroborated and observable inputs are classified as Level 2. All MBS/CMO and ABS holdings are deemed Level 2.

U.S. Treasury Bonds, Common Stocks and Exchange Traded Funds—U.S. treasury bonds and exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). All common stock holdings are deemed Level 1.

Preferred Stock—Preferred stocks do not have readily observable prices, but do have quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices and are classified as Level 2. All preferred stock holdings are deemed Level 2.

Due to the relatively short-term nature of cash, cash equivalents, and the mortgage on the home office, their carrying amounts are reasonable estimates of fair value. Reported in Note 4–Debt, the surplus notes, capital lease obligations, and other debt obligations are carried at face value and given that there is no readily available market for these to trade in, management believes that face value accurately reflects fair value. Cash and cash equivalents are classified as Level 1 of the hierarchy.

Assets measured at fair value on a recurring basis as of June 30, 2018, are as summarized below:

			Significant
	Quoted in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
AFS securities
Fixed maturity securities
U.S. treasury	$	1,321,469	$	—	$	—	$	1,321,469
MBS/ABS/CMBS		—		36,408,799		—		36,408,799
Corporate		—		31,157,991		—		31,157,991
Municipal		—		20,806,584		—		20,806,584
Total fixed maturity securities		1,321,469		88,373,374		—		89,694,843
Equity securities
Common stocks		12,907,136		—		—		12,907,136
Preferred stocks		—		65,650		—		65,650
Total equity securities		12,907,136		65,650		—		12,972,786
Total AFS securities	$	14,228,605	$	88,439,024	$	—	$	102,667,629

Assets measured at fair value on a recurring basis as of December 31, 2017, are as summarized below:

			Significant
	Quoted in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
AFS securities
Fixed maturity securities
U.S. treasury	$	1,333,725	$	—	$	—	$	1,333,725
MBS/ABS/CMBS		—		31,518,662		—		31,518,662
Corporate		—		31,989,174		—		31,989,174
Municipal		—		24,763,512		—		24,763,512
Total fixed maturity securities		1,333,725		88,271,348		—		89,605,073
Equity securities
Common stocks		8,534,109		—		—		8,534,109
Preferred stocks		—		3,867,429		—		3,867,429
Total equity securities		8,534,109		3,867,429		—		12,401,538
Total AFS securities	$	9,867,834	$	92,138,777	$	—	$	102,006,611

As noted in the previous tables, the Company did not have any assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of June 30, 2018, and December 31, 2017. Additionally, there were no securities transferred in or out of Levels 1 or 2 during the six-month periods ended June 30, 2018 and 2017.

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Debt

6 Months Ended

Jun. 30, 2018

Debt [Abstract]

Debt

4.     DEBT

As of June 30, 2018 and December 31, 2017, outstanding debt balances totaled $3,489,056 and$4,339,208, respectively. The average rate on remaining debt was 3.7% as of June 30, 2018, compared to 3.9% as of December 31, 2017.  

Long-term debt consists of the following as of the periods referenced below:

	June 30,		December 31,
	2018		2017
Capital lease obligation	$	—	$	805,013
Debt obligation		3,489,056		3,534,195
Total	$	3,489,056	$	4,339,208

Leasehold Obligation

The Company entered into a sale leaseback arrangement in 2016 that was accounted for as a capital lease. Under the agreement, Bofi Federal Bank purchased electronic data processing software, vehicles, and other assets which are leased to the Company. These assets remained on the Company’s books due to provisions within the agreement that trigger capital lease accounting. To secure the lowest rate possible of 4.7%, the Company pledged bonds totaling $923,563 and  $923,766 as ofMarch 31, 2018 and December 31, 2017. There was no gain or loss recognized as part of this transaction. On March 2, 2018 and March 7, 2018, the Company paid $404,928 and $346,000,  respectively to Bofi. These disbursements were made to pay off the balances of the sale leaseback arrangements. As a result of paying off the leasehold obligations during the first quarter of 2018, the bonds pledged as collateral related to this debt were released in April 2018. Lease payments totaled $0 and $125,494 for the three months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018 and 2017, lease payments totaled $70,051 and $250,988, respectively. The outstanding lease obligation was$0 and $805,013 at June 30, 2018 and December 31, 2017, respectively.

Debt Obligation

ICC Holdings, Inc. secured a loan with American Bank & Trust in March 2017 in the amount of $3,500,000and 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 the ESOP shares and $1.5 million of trust assets as collateral for the loan. Additionally, the Company entered into two debt agreements in 2016 with Bofi Federal Bank; one agreement for $500,000 and another debt agreement for $75,000.  The terms of the loans were 36 months, but the Company had the option to prepay the $500,000 loan after 12 months. The Company paid off the remaining balance of the $500,000 loan in September 2017. The $75,000 loan was paid off in March of 2018. The total balance of the debt agreements at June 30, 2018 and December 31, 2017 was $3,489,056 and $3,534,195, respectively.

Revolving Line of Credit

We maintain a revolving line of credit with American Bank & Trust, which permits borrowing up to an aggregate principal amount of $1.75 million. This facility was initially entered into during 2013 and is renewed annually with a current expiration of August 25, 2018. The line of credit is priced at 30 day LIBOR plus 2% with a floor of 3.5%.  In order to secure the lowest rate possible, the Company pledged marketable securities not to exceed $5.0 million in the event the Company draws down on the line of credit. There was no interest paid on the line of credit during the six months ended June 30, 2018 and no interest paid on the line of credit during the six months ended June 30, 2017. There are no financial covenants governing this agreement.

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Reinsurance

6 Months Ended

Jun. 30, 2018

Reinsurance [Abstract]

Reinsurance

5.     REINSURANCE

In the ordinary course of business, the Company assumes and cedes premiums and selected insured risks with other insurance companies, known as reinsurance. A large portion of the reinsurance is put into effect under contracts known as treaties and, in some instances, by negotiation on each individual risk (known as facultative reinsurance). In addition, there are several types of treaties including quota share, excess of loss and catastrophe reinsurance contracts that protect against losses over stipulated amounts arising from any one occurrence or event. The arrangements allow the Company to pursue greater diversification of business and serve to limit the maximum net loss to a single event, such as a catastrophe. Through the quantification of exposed policy limits in each region and the extensive use of computer-assisted modeling techniques, management monitors the concentration of risks exposed to catastrophic events.

Through the purchase of reinsurance, the Company also generally limits its net loss on any individual risk to a maximum of $750,000, although certain treaties contain an annual aggregate deductible before reinsurance applies.

Premiums, written and earned, along with losses and settlement expenses incurred for the periods presented is summarized as follows:

	Three-Month Periods Ended June 30,
	2018		2017
WRITTEN
Direct	$	16,024,661	$	13,821,048
Reinsurance assumed		39,681		63,549
Reinsurance ceded		(2,923,738)		(1,990,713)
Net	$	13,140,604	$	11,893,884
EARNED
Direct	$	14,175,677	$	12,580,381
Reinsurance assumed		41,420		67,956
Reinsurance ceded		(2,732,026)		(1,937,579)
Net	$	11,485,071	$	10,710,758
LOSS AND SETTLEMENT EXPENSES INCURRED
Direct	$	9,051,216	$	8,583,336
Reinsurance assumed		(1,374)		20,026
Reinsurance ceded		(1,259,255)		(1,739,104)
Net	$	7,790,587	$	6,864,258

	Six-Month Periods Ended June 30,
	2018		2017
WRITTEN
Direct	$	30,412,331	$	26,409,639
Reinsurance assumed		92,487		103,385
Reinsurance ceded		(5,390,711)		(3,966,942)
Net	$	25,114,107	$	22,546,082
EARNED
Direct	$	27,662,798	$	25,373,175
Reinsurance assumed		99,164		117,174
Reinsurance ceded		(4,979,947)		(3,941,485)
Net	$	22,782,015	$	21,548,864
LOSSES AND SETTLEMENT EXPENSES INCURRED
Direct	$	18,597,156	$	16,452,838
Reinsurance assumed		34,757		62,458
Reinsurance ceded		(2,845,477)		(3,051,654)
Net	$	15,786,436	$	13,463,642

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Unpaid Losses and Settlement Expenses

6 Months Ended

Jun. 30, 2018

Unpaid Losses and Settlement Expenses [Abstract]

Unpaid Losses and Settlement Expenses

6.     UNPAID LOSSES AND SETTLEMENT EXPENSES

The following table is a reconciliation of the Company’s unpaid losses and settlement expenses:

	For the Six-Months Ended
	June 30,
(In thousands)	2018		2017
Unpaid losses and settlement expense - beginning of the period:
Gross	$	51,074	$	52,817
Less: Ceded		10,030		12,115
Net		41,044		40,702
Increase (decrease) in incurred losses and settlement expense:
Current year		14,263		13,804
Prior years		1,523		(340)
Total incurred		15,786		13,464
Deduct: Loss and settlement expense payments for claims incurred:
Current year		3,898		4,727
Prior years		9,832		9,498
Total paid		13,730		14,225
Net unpaid losses and settlement expense - end of the period		43,100		39,941
Plus: Reinsurance recoverable on unpaid losses		8,288		9,750
Gross unpaid losses and settlement expense - end of the period	$	51,388	$	49,691

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Taxes [Abstract]

Income Taxes

7.     INCOME TAXES

The Company’s effective tax rate for the six month period ended June 30, 2018, was 17.7%, compared to 35.4% for the same period in 2017. Effective rates are dependent upon components of pretax earnings and the related tax effects.

The Tax Cuts and Jobs Act of 2017 (the Tax Act) lowered the federal corporate tax rate to 21% effective January 1, 2018. We are still analyzing certain aspects of the TCJA and are refining our calculations of existing current and deferred tax amounts. No material changes were made to the tax effects recorded in 2017. Income tax expense for the three and six-month periods ended June 30, 2018 and 2017, differed from the amounts computed by applying the U.S. federal tax rate of 21%  and 34%, respectively, to pretax income from continuing operations as demonstrated in the following tables:

	For the Three-Months Ended
	June 30,
	2018		2017
Provision for income taxes at the statutory federal tax rates	$	5,889	$	(123,612)
Increase (reduction) in taxes resulting from:
Dividends received deduction		(8,950)		(9,104)
Tax-exempt interest income		(33,569)		(51,643)
Proration of tax exempt interest and dividends received deduction		10,413		9,112
Officer life insurance, net		3,578		5,793
Nondeductible expenses		9,746		8,530
Prior year true-ups and other		1,734		32,481
Total	$	(11,159)	$	(128,443)

	For the Six-Months Ended
	June 30,
	2018		2017
Provision for income taxes at the statutory federal tax rates	$	182,504	$	323,116
Increase (reduction) in taxes resulting from:
Dividends received deduction		(17,901)		(18,207)
Tax-exempt interest income		(69,892)		(91,981)
Proration of tax exempt interest and dividends received deduction		21,492		16,528
Officer life insurance, net		6,807		10,796
Nondeductible expenses		24,169		17,341
Prior year true-up and other		6,860		78,828
Total	$	154,039	$	336,421

The Company had historically recorded its deferred tax assets and liabilities using the statutory federal tax rate of 34%. As a result, the Company revalued deferred tax items as of December 31, 2017 to reflect the lower rate as provided for in the Tax Cuts and Jobs Act of 2017. The Tax Cuts and Jobs Act of 2017 provides for a change in the methodology employed to calculate reserves for tax purposes. Beginning January 1, 2018, a higher interest rate assumption and longer payout patterns will be used to discount these reserves. In addition, companies will no longer be able to elect to use their own experience to discount reserves, but will instead be required to use the industry-based tables published by the IRS annually; however, the 2018 tables have yet to be released.  Consequently, the company cannot reasonably estimate the impact this would have on deferred taxes at June 30, 2018.Management believes it is more likely than not that all deferred tax assets will be recovered as the result of future operations, which will generate sufficient taxable income to realize the deferred tax asset. In addition, management believes that when these deferred items reverse in future years, taxable income will be taxed at a federal rate of 21%.

As of June 30, 2018 and December 31, 2017, the Company does not have any capital or operating loss carryforwards. Periods still subject to Internal Revenue Service (IRS) audit include 2014 through current year. There are currently no open tax exams.

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Employee Benefits

6 Months Ended

Jun. 30, 2018

Employee Benefits [Abstract]

Employee Benefits

8.     EMPLOYEE BENEFITS

ESOP

In connection with our conversion and public offering, we established an ESOP. The ESOP borrowed from the Company to purchase 350,000 shares in the offering. The issuance of the shares to the ESOP resulted in a contra account established in the equity section of the balance sheet for the unallocated shares at an amount equal to their $10.00 per share purchase price.

The Company may make discretionary contributions to the ESOP and pay dividends on unallocated shares to the ESOP, the ESOP uses funds it receives to repay the loan. When loan payments are made, ESOP shares are allocated to participants based on relative compensation and expense is recorded. No contributions to the ESOP were made during the six months ended June 30, 2018 and 2017, respectively.

A compensation expense charge is booked monthly during each year for the shares committed to be allocated to participants that year, determined with reference to the fair market value of our stock at the time the commitment to allocate the shares is accrued and recognized. For the six months ended June 30, 2018, we recognized compensation expense of $186,083 related to 11,654 shares of our common stock that are committed to be released to participants’ accounts at December 31, 2018. Of the 11,654 shares committed to be released, 1,932 shares were committed on June 30, 2018 and had no impact on the weighted average common shares outstanding for the three and six months ended June 30, 2018.For the six months ended June 30, 2017, we recognized compensation expense of $141,328 related to 8,680 shares of our common stock that were committed to be released to participants’ accounts at December 31, 2017. Of the 8,680 shares committed to be released at December 31, 2017, 2,389 shares were committed on June 30, 2017 and had no impact on the weighted average common shares outstanding for the three and six months ended June 30, 2017.

RESTRICTED STOCK UNITS

RSUs were granted for the first time in February 2018. RSUs have a grant date value equal to the closing price of the Company’s stock on the dates the shares are granted. The RSUs vest 1/3 over three years from the date of grant.

As of June 30, 2018, 11,700 RSUs have been granted at a fair market value of $15.10. We recognized $14,682 and $20,975 of expense on these units in the three and six months ended June 30, 2018, respectively. Total unrecognized compensation expense relating to outstanding and unvested RSUs was $155,695 as of June 30, 2018, which will be recognized over the remainder of the three-year vesting period.

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Related Party

6 Months Ended

Jun. 30, 2018

Related Party [Abstract]

Related Party

9.     RELATED PARTY

Mr. John R. Klockau, a director of the Company, held two surplus notes from the Company totaling $1,150,000 which were converted into 115,000 shares of the Company’s common stock on March 17, 2017. John R. Klockau received a payment for interest on the surplus notes of $12,975 during the three months ended March 31, 2017. Additionally, Mr. Klockau is a claims consultant and was paid $7,350 and $6,495 as of June 30, 2018 and 2017, respectively, related to his services to the Company.

Mr. Kevin Clinton is a director of the Company and owns more than 10% of the Company’s outstanding shares of common stock. Mr. Clinton was paid $1,368 and $805 as of June 30, 2018 and 2017, respectively, for travel reimbursement costs.

Mr. Scott T. Burgess is a director of the Company and a Senior Managing Director of Griffin Financial Group (Griffin).  Mr. Burgess was paid $2,362, and $1,046as of June 30, 2018 and 2017, respectively. Griffin was paid $0and $893,240 as of June 30, 2018 and 2017, respectively.  Griffin and Stevens & Lee are affiliated. Stevens & Lee is a full-service law firm that was paid $72,091and $14,347 as of June 30, 2018 and 2017, respectively.

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

10.     SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date the financial statements were issued.

The Company has reached an agreement in principle with the Clinton-Flood Purchasers, as previously defined in our final prospectus filed with the SEC on February 13, 2017, which includes R. Kevin Clinton, a member of the Company’s board of directors, and his affiliates, to repurchase 196,721 shares of the Company’s common stock at a price of $15.25 per share. The Company intends to complete the share repurchase upon completion of final agreements with the shareholders and receipt of regulatory approvals, with funding either by a loan from Illinois Casualty Company or from a dividend payment from Illinois Casualty Company to ICC Holdings, Inc. Illinois Casualty will fund the proceeds either from cash on hand or borrowing from the FHLB.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies [Abstract]

Description of Business

A.     DESCRIPTION OF BUSINESS

ICC Holdings, Inc. is a Pennsylvania corporation that was organized in 2016. As used in this Form 10-Q, references to “the Company,” “we,” “us,” and “our” refer to the consolidated group for the period after the completion of the stock conversion and refer to Illinois Casualty Company (ICC) and its subsidiaries for the period prior to the stock conversion. On a stand-alone basis ICC Holdings, Inc. is referred to as the “Parent Company.” The consolidated group consists of the holding company, ICC Holdings, Inc.;ICC Realty, LLC, a real estate services and holding company; Beverage Insurance Agency, Inc., an inactive insurance agency; Estrella Innovative Solutions, Inc., an outsourcing company; and ICC, an operating insurance company. ICC is an Illinois domiciled company.

ICC Holdings, Inc. was formed so that it could acquire all of the capital stock of ICC in a mutual-to-stock conversion. The plan of conversion was approved by ICC policyholders at a special meeting on March 17, 2017. Simultaneously, surplus notes totaling $1.65 million were converted into 165,000 shares of the Company’s common stock. The Company’s offering closed on March 24, 2017, and our Employee Stock Ownership Plan (ESOP) purchased 350,000 of the shares in the offering. On March 28, 2017, the Company’s stock began trading on the NASDAQ Capital Market under the “ICCH” ticker. The Company paid $1.0 million of underwriting fees to Griffin Financial Group, LLC. Proceeds received from the offering, net of offering costs and underwriting fees, was $28.7 million.

Prior to the conversion on March 24, 2017, ICC Holdings, Inc. did not engage in any operations. Since the conversion, ICC Holdings, Inc’s primary assets are the outstanding equity of ICC, ICC Realty, LLC, Estrella Innovative Solutions, Inc., Beverage Insurance Agency, Inc., and a portion of the net proceeds from the stock offering completed in connection with the mutual-to-stock conversion. On the effective date of the conversion, ICC became a wholly owned subsidiary of ICC Holdings, Inc. Themutual-to-stock conversion was accounted for as a change in corporate form with the historic basis of ICC’s assets, liabilities, and equity unchanged as a result.

We are a specialty insurance carrier primarily underwriting commercial multi-peril, liquor liability, workers’ compensation, and umbrella liability coverages for the food and beverage industry through our subsidiary insurance company, ICC. ICC writes business in Colorado, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Ohio, and Wisconsin and markets through independent agents. Approximately 28.8% and 36.5% of the premium is written in Illinois for the three months ended June  30, 2018 and 2017, respectively. For the six months ended, June 30, 2018 and 2017, approximately 30.9% and 36.2% of the premium is written in Illinois, respectively. ICC sold its two wholly-owned subsidiaries, Beverage Insurance Agency, Inc. and Estrella Innovative Solutions, Inc. to ICC Holdings during the second quarter of 2018. ICC sold all of its real estate holdings held by ICC Realty, LLC to its parent, ICC Holdings, Inc.; via the sale of all of the outstanding equity of ICC Realty, LLC to ICC Holdings, Inc. during the fourth quarter of 2017. The Company operates as a single segment.

Principles of Consolidation and Basis of Presentation

B.     PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

The unaudited condensed consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and with the instructions to Form 10-Q.  Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements.  As such, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 10-K”). Management believes that the disclosures are adequate to make the information presented not misleading, and all normal and recurring adjustments necessary to present fairly the financial position at June  30, 2018, and the results of operations of the Company and its subsidiaries for all periods presented have been made. The results of operations for any interim period are not necessarily indicative of the operating results for a full year.

The preparation of the unaudited condensed consolidated interim financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated interim financial statements, and the reported amounts of revenue and expenses during the period. These amounts are inherently subject to change and actual results could differ significantly from these estimates.

Significant Accountnig Policies

C.     SIGNIFICANT ACCOUNTING POLICIES

The Company reported significant accounting policies in the 2017 10-K. The following are new or revised disclosures.

STOCK-BASED COMPENSATION

We have compensation plans under which stock-based awards may be granted to our employees as described in Note 8 – Employee Benefits. The Company recognizes the fair value of stock-based compensation ratably during each year through a charge to compensation expense and a corresponding entry to equity based on vesting criteria and other pertinent terms of the awards. Stock-based awards are accounted for as equity awards in instances where the awards’ vesting are linked to market, performance, or service condition. The Company granted Restricted Stock Units (RSUs) for the first time in February of 2018. Upon vesting of any outstanding RSUs, the Company has the option to elect to pay cash or part cash and part Common Stock in lieu of delivering on shares of Common Stock for vested units. The Company’s intention is to settle vested units in Common Stock, and therefore the RSUs are accounted for as equity awards. Equity awards to employees are generally expensed based on the grant date fair value.

EARNINGS PER SHARE

Basic and diluted earnings per share (EPS) are calculated by dividing earnings available to common shareholders by the weighted average number of common shares outstanding during the period. The denominator for basic and diluted EPS includes ESOP shares committed to be released. Dilutive earnings per share includes the effect of all potentially dilutive instruments, such as restricted stock units (RSUs), outstanding during the period.

Prospective Accounting Standards

D.     PROSPECTIVE ACCOUNTING STANDARDS

For information regarding accounting standards that the Company has not yet adopted, see the “Prospective Accounting Standards” in Note 1 – Summary of Significant Accounting Policies in the 2017 10-K. The Company maintains its status as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We have taken advantage of the extended transition period provided by Section 107 of the JOBS Act. We decided to comply with the effective dates for financial accounting standards applicable to emerging growth companies at a later date in compliance with the requirements in Sections 107(b)(2) and (3) of the JOBS Act. Such decision is irrevocable.

Property and Equipment

E.     PROPERTY AND EQUIPMENT

Annually, the Company reviews the major asset classes of property and equipment held for impairment. For the periods ended June 30, 2018 and 2017, the Company recognized no impairments.  Property and equipment are summarized as follows:

	As of
	June 30,		December 31,
	2018		2017
Automobiles	$	567,291	$	794,959
Furniture and fixtures		427,453		425,825
Computer equipment and software		3,453,042		3,404,975
Home office		3,842,361		3,774,187
Total cost		8,290,147		8,399,946
Accumulated depreciation		(4,815,812)		(4,896,042)
Net property and equipment	$	3,474,335	$	3,503,904

Comprehensive Earnings

F.     COMPREHENSIVE EARNINGS

Comprehensive earnings (loss) include net earnings (loss) plus the change in unrealized gains and losses on available-for-sale investment securities, net of tax. In reporting the components of comprehensive earnings on a net basis in the statement of earnings, the Company used a 21% and a  34% tax rate for the periods ending June 30, 2018 and 2017, respectively.  

The following table illustrates the components of other comprehensive earnings for each period presented in the condensed consolidated interim financial statements.

	Three-Month Periods Ended June 30,
	2018						2017
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Other comprehensive earnings (loss),   net of tax
Unrealized gains and losses on investments:
Unrealized holding (losses) gains   arising during the period	$	(74,733)	$	15,692	$	(59,041)	$	764,541	$	(259,944)	$	504,597
Reclassification adjustment for   (gains) losses included in net earnings		29,930		(6,285)		23,645		57,319		(19,489)		37,830
Total other comprehensive (loss) earnings	$	(44,803)	$	9,407	$	(35,396)	$	821,860	$	(279,433)	$	542,427

	Six-Month Periods Ended June 30,
	2018						2017
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Other comprehensive earnings (loss),   net of tax
Unrealized gains and losses on investments:
Unrealized holding (losses) gains   arising during the period	$	(2,222,069)	$	466,634	$	(1,755,435)	$	1,291,868	$	(439,235)	$	852,633
Reclassification adjustment for   (gains) losses included in net earnings		(1,072,200)		225,162		(847,038)		(387,462)		131,737		(255,725)
Total other comprehensive (loss) earnings	$	(3,294,269)	$	691,796	$	(2,602,473)	$	904,406	$	(307,498)	$	596,908

The following table provides the reclassifications from accumulated other comprehensive earnings for the periods presented:

Amounts Reclassified from
Accumulated Other Comprehensive Earnings
Details about Accumulated Other	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,				Affected Line Item in the Statement
Comprehensive Earnings Component	2018		2017		2018		2017		where Net Earnings is Presented
Unrealized gains (losses) on AFS investments:
	$	29,930	$	3	$	(1,072,200)	$	(444,778)	Net realized invesment losses (gains)
		—		57,316		—		57,316	Other-than-temporary impairment losses
		(6,285)		(19,489)		225,162		131,737	Income tax (benefit) expense
Total reclassification adjustment, net of tax	$	23,645	$	37,830	$	(847,038)	$	(255,725)

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies [Abstract]

Summary of Property, Plant and Equipment

	As of
	June 30,		December 31,
	2018		2017
Automobiles	$	567,291	$	794,959
Furniture and fixtures		427,453		425,825
Computer equipment and software		3,453,042		3,404,975
Home office		3,842,361		3,774,187
Total cost		8,290,147		8,399,946
Accumulated depreciation		(4,815,812)		(4,896,042)
Net property and equipment	$	3,474,335	$	3,503,904

Summary of Components of Other Comprehensive Earnings

	Three-Month Periods Ended June 30,
	2018						2017
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Other comprehensive earnings (loss),   net of tax
Unrealized gains and losses on investments:
Unrealized holding (losses) gains   arising during the period	$	(74,733)	$	15,692	$	(59,041)	$	764,541	$	(259,944)	$	504,597
Reclassification adjustment for   (gains) losses included in net earnings		29,930		(6,285)		23,645		57,319		(19,489)		37,830
Total other comprehensive (loss) earnings	$	(44,803)	$	9,407	$	(35,396)	$	821,860	$	(279,433)	$	542,427

	Six-Month Periods Ended June 30,
	2018						2017
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Other comprehensive earnings (loss),   net of tax
Unrealized gains and losses on investments:
Unrealized holding (losses) gains   arising during the period	$	(2,222,069)	$	466,634	$	(1,755,435)	$	1,291,868	$	(439,235)	$	852,633
Reclassification adjustment for   (gains) losses included in net earnings		(1,072,200)		225,162		(847,038)		(387,462)		131,737		(255,725)
Total other comprehensive (loss) earnings	$	(3,294,269)	$	691,796	$	(2,602,473)	$	904,406	$	(307,498)	$	596,908

Schedule of Reclassifications Out of Accumulated Other Comprehensive Earnins

Amounts Reclassified from
Accumulated Other Comprehensive Earnings
Details about Accumulated Other	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,				Affected Line Item in the Statement
Comprehensive Earnings Component	2018		2017		2018		2017		where Net Earnings is Presented
Unrealized gains (losses) on AFS investments:
	$	29,930	$	3	$	(1,072,200)	$	(444,778)	Net realized invesment losses (gains)
		—		57,316		—		57,316	Other-than-temporary impairment losses
		(6,285)		(19,489)		225,162		131,737	Income tax (benefit) expense
Total reclassification adjustment, net of tax	$	23,645	$	37,830	$	(847,038)	$	(255,725)

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Investments (Tables)

6 Months Ended

Jun. 30, 2018

Investments [Abstract]

Summary of Recognized Impairments

	For the Three-Months Ended Ended June 30,
							Net realized
	Proceeds		Gains		Losses		gain / (Loss)
2018
Fixed maturity securities	$	2,598,335	$	4,669	$	(13,084)	$	(8,415)
Common stocks		241,047		16,473		(37,988)		(21,515)
2017
Fixed maturity securities	$	906,700	$	—	$	(3)	$	(3)

	For the Six-Months Ended June 30,
							Net realized
	Proceeds		Gains		Losses		gain
2018
Fixed maturity securities	$	6,669,276	$	52,787	$	(26,115)	$	26,672
Common stocks		8,834,375		1,102,862		(62,242)		1,040,620
Preferred stocks		3,861,722		86,862		(81,954)		4,908
2017
Fixed maturity securities	$	4,414,597	$	29,328	$	(21)	$	29,307
Common stocks		1,955,715		415,471		—		415,471

Summary of Amortized Cost and Fair Value of Securities by Contractual Maturity

	Amortized Cost		Fair Value
Due in one year or less	$	311,535	$	311,420
Due after one year through five years		23,915,785		23,924,513
Due after five years through 10 years		10,685,245		10,767,086
Due after 10 years		18,034,819		18,283,025
Asset and mortgage backed securities without a specific due date		37,028,126		36,408,799
Total fixed maturity securities	$	89,975,510	$	89,694,843

Schedule of Cost or Amortized Cost and Estimated Fair Values of Investments

	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2018
Fixed maturity securities:
U.S. treasury	$	1,347,640	$	1,321,469	$	—	$	(26,171)
MBS/ABS/CMBS		37,028,126		36,408,799		49,487		(668,814)
Corporate		31,210,729		31,157,991		356,164		(408,902)
Municipal		20,389,015		20,806,584		486,377		(68,808)
Total fixed maturity securities		89,975,510		89,694,843		892,028		(1,172,695)
Equity securities:
Common stocks		13,100,640		12,907,136		656,830		(850,334)
Preferred stocks		66,675		65,650		—		(1,025)
Total equity securities		13,167,315		12,972,786		656,830		(851,359)
Total AFS securities	$	103,142,825	$	102,667,629	$	1,548,858	$	(2,024,054)

	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2017
Fixed maturity securities:
U.S. treasury	$	1,346,712	$	1,333,725	$	—	$	(12,987)
MBS/ABS/CMBS		31,584,141		31,518,662		158,944		(224,423)
Corporate		31,038,526		31,989,174		1,001,906		(51,258)
Municipal		23,803,668		24,763,512		976,872		(17,028)
Total fixed maturity securities		87,773,047		89,605,073		2,137,722		(305,696)
Equity securities:
Common stocks		7,631,180		8,534,109		920,629		(17,700)
Preferred stocks		3,783,311		3,867,429		132,054		(47,936)
Total equity securities		11,414,491		12,401,538		1,052,683		(65,636)
Total AFS securities	$	99,187,538	$	102,006,611	$	3,190,405	$	(371,332)

Summary of Impairment Analysis and Value of Securities in an Unrealized Loss Position

	June 30, 2018						December 31, 2017
			12 Months						12 Months
	< 12 Months		& Greater		Total		< 12 Months		& Greater		Total
U.S. treasury
Fair value	$	1,029,263	$	292,206	$	1,321,469	$	1,038,297	$	295,428	$	1,333,725
Cost or amortized cost		1,047,472		300,168		1,347,640		1,046,508		300,204		1,346,712
Unrealized loss		(18,209)		(7,962)		(26,171)		(8,211)		(4,776)		(12,987)
MBS/ABS/CMBS
Fair value		20,073,237		6,708,127		26,781,364		9,754,119		7,445,071		17,199,190
Cost or amortized cost		20,368,837		7,081,341		27,450,178		9,778,528		7,645,085		17,423,613
Unrealized loss		(295,600)		(373,214)		(668,814)		(24,409)		(200,014)		(224,423)
Corporate
Fair value		17,434,719		755,371		18,190,090		5,583,942		2,023,856		7,607,798
Cost or amortized cost		17,799,788		799,204		18,598,992		5,610,093		2,048,963		7,659,056
Unrealized loss		(365,069)		(43,833)		(408,902)		(26,151)		(25,107)		(51,258)
Municipal
Fair value		3,644,260		839,947		4,484,207		478,019		1,171,520		1,649,539
Cost or amortized cost		3,677,077		875,938		4,553,015		479,904		1,186,663		1,666,567
Unrealized loss		(32,817)		(35,991)		(68,808)		(1,885)		(15,143)		(17,028)
Subtotal, fixed income
Fair value		42,181,479		8,595,651		50,777,130		16,854,377		10,935,875		27,790,252
Cost or amortized cost		42,893,174		9,056,651		51,949,825		16,915,033		11,180,915		28,095,948
Unrealized loss		(711,695)		(461,000)		(1,172,695)		(60,656)		(245,040)		(305,696)
Common stock
Fair value		7,254,241		—		7,254,241		637,100		—		637,100
Cost or amortized cost		8,104,575		—		8,104,575		654,800		—		654,800
Unrealized loss		(850,334)		—		(850,334)		(17,700)		—		(17,700)
Preferred stock
Fair value		65,650		—		65,650		842,530		520,710		1,363,240
Cost or amortized cost		66,675		—		66,675		870,755		540,421		1,411,176
Unrealized loss		(1,025)		—		(1,025)		(28,225)		(19,711)		(47,936)
Total
Fair value		49,501,370		8,595,651		58,097,021		18,334,007		11,456,585		29,790,592
Cost or amortized cost		51,064,424		9,056,651		60,121,075		18,440,588		11,721,336		30,161,924
Unrealized loss	$	(1,563,054)	$	(461,000)	$	(2,024,054)	$	(106,581)	$	(264,751)	$	(371,332)

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Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Summary of Assets Measured at Fai Value on a recurring Basis

Assets measured at fair value on a recurring basis as of June 30, 2018, are as summarized below:

			Significant
	Quoted in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
AFS securities
Fixed maturity securities
U.S. treasury	$	1,321,469	$	—	$	—	$	1,321,469
MBS/ABS/CMBS		—		36,408,799		—		36,408,799
Corporate		—		31,157,991		—		31,157,991
Municipal		—		20,806,584		—		20,806,584
Total fixed maturity securities		1,321,469		88,373,374		—		89,694,843
Equity securities
Common stocks		12,907,136		—		—		12,907,136
Preferred stocks		—		65,650		—		65,650
Total equity securities		12,907,136		65,650		—		12,972,786
Total AFS securities	$	14,228,605	$	88,439,024	$	—	$	102,667,629

Assets measured at fair value on a recurring basis as of December 31, 2017, are as summarized below:

			Significant
	Quoted in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
AFS securities
Fixed maturity securities
U.S. treasury	$	1,333,725	$	—	$	—	$	1,333,725
MBS/ABS/CMBS		—		31,518,662		—		31,518,662
Corporate		—		31,989,174		—		31,989,174
Municipal		—		24,763,512		—		24,763,512
Total fixed maturity securities		1,333,725		88,271,348		—		89,605,073
Equity securities
Common stocks		8,534,109		—		—		8,534,109
Preferred stocks		—		3,867,429		—		3,867,429
Total equity securities		8,534,109		3,867,429		—		12,401,538
Total AFS securities	$	9,867,834	$	92,138,777	$	—	$	102,006,611

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt [Abstract]

Schedule of Long-Term Debt

	June 30,		December 31,
	2018		2017
Capital lease obligation	$	—	$	805,013
Debt obligation		3,489,056		3,534,195
Total	$	3,489,056	$	4,339,208

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Reinsurance (Tables)

6 Months Ended

Jun. 30, 2018

Reinsurance [Abstract]

Summary of the Effects of Reinsurance

	Three-Month Periods Ended June 30,
	2018		2017
WRITTEN
Direct	$	16,024,661	$	13,821,048
Reinsurance assumed		39,681		63,549
Reinsurance ceded		(2,923,738)		(1,990,713)
Net	$	13,140,604	$	11,893,884
EARNED
Direct	$	14,175,677	$	12,580,381
Reinsurance assumed		41,420		67,956
Reinsurance ceded		(2,732,026)		(1,937,579)
Net	$	11,485,071	$	10,710,758
LOSS AND SETTLEMENT EXPENSES INCURRED
Direct	$	9,051,216	$	8,583,336
Reinsurance assumed		(1,374)		20,026
Reinsurance ceded		(1,259,255)		(1,739,104)
Net	$	7,790,587	$	6,864,258

	Six-Month Periods Ended June 30,
	2018		2017
WRITTEN
Direct	$	30,412,331	$	26,409,639
Reinsurance assumed		92,487		103,385
Reinsurance ceded		(5,390,711)		(3,966,942)
Net	$	25,114,107	$	22,546,082
EARNED
Direct	$	27,662,798	$	25,373,175
Reinsurance assumed		99,164		117,174
Reinsurance ceded		(4,979,947)		(3,941,485)
Net	$	22,782,015	$	21,548,864
LOSSES AND SETTLEMENT EXPENSES INCURRED
Direct	$	18,597,156	$	16,452,838
Reinsurance assumed		34,757		62,458
Reinsurance ceded		(2,845,477)		(3,051,654)
Net	$	15,786,436	$	13,463,642

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Unpaid Losses and Settlement Expenses (Tables)

6 Months Ended

Jun. 30, 2018

Unpaid Losses and Settlement Expenses [Abstract]

Schedule of the Changes in the Reserves for Losses and Loss Adjustment Expense

	For the Six-Months Ended
	June 30,
(In thousands)	2018		2017
Unpaid losses and settlement expense - beginning of the period:
Gross	$	51,074	$	52,817
Less: Ceded		10,030		12,115
Net		41,044		40,702
Increase (decrease) in incurred losses and settlement expense:
Current year		14,263		13,804
Prior years		1,523		(340)
Total incurred		15,786		13,464
Deduct: Loss and settlement expense payments for claims incurred:
Current year		3,898		4,727
Prior years		9,832		9,498
Total paid		13,730		14,225
Net unpaid losses and settlement expense - end of the period		43,100		39,941
Plus: Reinsurance recoverable on unpaid losses		8,288		9,750
Gross unpaid losses and settlement expense - end of the period	$	51,388	$	49,691

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2018

Income Taxes [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

	For the Three-Months Ended
	June 30,
	2018		2017
Provision for income taxes at the statutory federal tax rates	$	5,889	$	(123,612)
Increase (reduction) in taxes resulting from:
Dividends received deduction		(8,950)		(9,104)
Tax-exempt interest income		(33,569)		(51,643)
Proration of tax exempt interest and dividends received deduction		10,413		9,112
Officer life insurance, net		3,578		5,793
Nondeductible expenses		9,746		8,530
Prior year true-ups and other		1,734		32,481
Total	$	(11,159)	$	(128,443)

	For the Six-Months Ended
	June 30,
	2018		2017
Provision for income taxes at the statutory federal tax rates	$	182,504	$	323,116
Increase (reduction) in taxes resulting from:
Dividends received deduction		(17,901)		(18,207)
Tax-exempt interest income		(69,892)		(91,981)
Proration of tax exempt interest and dividends received deduction		21,492		16,528
Officer life insurance, net		6,807		10,796
Nondeductible expenses		24,169		17,341
Prior year true-up and other		6,860		78,828
Total	$	154,039	$	336,421

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Summary of Significant Accounting Policies (Narrative) (Details)			3 Months Ended		6 Months Ended
	Mar. 28, 2017 USD ($)	Mar. 17, 2017 USD ($) shares	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018 USD ($) segment	Jun. 30, 2017 USD ($)	Mar. 24, 2017 shares
Summary Of Significant Accounting Policies [Line Items]
Impairment					$ 0	$ 0
Federal tax rate					21.00%	34.00%
Employee stock ownership plan, shares | shares							350,000
Underwriting fees paid	$ 1,000,000
Net proceeds received from issuance of shares of common stock	$ 28,700,000					$ 29,253,588
Operating segments | segment					1
Illinois [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration risk			28.80%	36.50%	30.90%	36.20%
Surplus Notes [Member]
Summary Of Significant Accounting Policies [Line Items]
Notes converted		$ 1,650,000
Debt converted, shares issued | shares		165,000

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Summary of Significant Accounting Policies (Summary of Property, Plant and Equipment) (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Total cost	$ 8,290,147	$ 8,399,946
Accumulated depreciation	(4,815,812)	(4,896,042)
Net property and equipent	3,474,335	3,503,904
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Total cost	567,291	794,959
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total cost	427,453	425,825
Computer Equipment and Software [Member]
Property, Plant and Equipment [Line Items]
Total cost	3,453,042	3,404,975
Home Office [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 3,842,361	$ 3,774,187

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Summary of Significant Accounting Policies (Summary of Components of Other Comprehensive Earnings) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Summary of Significant Accounting Policies [Abstract]
Unrealized holding (losses) gains arising during the period, Pre-tax	$ (74,733)	$ 764,541	$ (2,222,069)	$ 1,291,868
Reclassification adjustment for (gains) losses included in net earnings, Pre-tax	29,930	57,319	(1,072,200)	(387,462)
Total other comprehensive (loss) earnings, Pre-tax	(44,803)	821,860	(3,294,269)	904,406
Unrealized holding (losses) gains arising during the period, Tax	15,692	(259,944)	466,634	(439,235)
Reclassification adjustment for (gains) losses included in net earnings, Tax	(6,285)	(19,489)	225,162	131,737
Total other comprehensive (loss) earnings, Tax	9,407	(279,433)	691,796	(307,498)
Unrealized holding (losses) gains arising during the period, After-tax	(59,041)	504,597	(1,755,435)	852,633
Reclassification adjustment for (gains) losses included in net earnings, After-tax	23,645	37,830	(847,038)	(255,725)
Total other comprehensive (loss) earnings	$ (35,396)	$ 542,427	$ (2,602,473)	$ 596,908

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Summary of Significant Accounting Policies (Schedule of Reclassification Out of Accumulated Other Comprehensive Earnings) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net realized investment loses (gains)	$ 29,930	$ 3	$ (1,072,200)	$ (444,778)
Other-than-temporary impairment losses		57,316		57,316
Income tax (benefit) expense	(11,159)	(128,443)	154,039	336,421
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income (loss)	23,645	37,830	(847,038)	(255,725)
Unrealized Gains on AFS Investments [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net realized investment loses (gains)	29,930	3	(1,072,200)	(444,778)
Other-than-temporary impairment losses		57,316		57,316
Income tax (benefit) expense	$ (6,285)	$ (19,489)	$ 225,162	$ 131,737

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Investments (Narrative) (Details)	6 Months Ended
	Jun. 30, 2018 USD ($) item	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) item
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses for 12 consecutive months or longer	$ 461,000		$ 264,751
OTTI losses recognized in other comprehensive earnings	0	$ 57,316
Securities pledged	0
FHLBC outstanding balance	$ 0
Common Equity And Preferred Stock Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Number of securities in an unrealized loss position | item	148		13
Number of securities in an unrealized loss position for 12 consecutive months or longer | item	0		5
Unrealized losses for 12 consecutive months or longer			$ 19,711
Common Stocks [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses for 12 consecutive months or longer
Fixed Maturity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Number of securities in an unrealized loss position | item	124
Number of securities in an unrealized loss position for 12 consecutive months or longer | item	24
Unrealized losses for 12 consecutive months or longer	$ 461,000		245,040
MBS/ABS/CMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses for 12 consecutive months or longer	373,214		200,014
MBS/ABS/CMBS [Member] | Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	14,271,429		13,517,725
MBS/ABS/CMBS [Member] | Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	9,177,628		$ 8,469,852
Significant Unobservable Inputs (Level 3)
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 0

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Investments (Summary of Recognized Impairments) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fixed Maturity Securities [Member]
Proceeds	$ 2,598,335	$ 906,700	$ 6,669,276	$ 4,414,597
Gains	4,669		52,787	29,328
Losses	(13,084)	(3)	(26,115)	(21)
Net realized gain / (Loss)	(8,415)	$ (3)	26,672	29,307
Common Stocks [Member]
Proceeds	241,047		8,834,375	1,955,715
Gains	16,473		1,102,862	415,471
Losses	(37,988)		(62,242)
Net realized gain / (Loss)	$ (21,515)		1,040,620	$ 415,471
Preferred Stocks [Member]
Proceeds			3,861,722
Gains			86,862
Losses			(81,954)
Net realized gain / (Loss)			$ 4,908

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Investments (Summary of Amortized Cost and Fair Value of Securities by Contractual Maturity) (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Investments [Abstract]
Due in one year or less, amortized cost	$ 311,535
Due after one year through five years, amortized cost	23,915,785
Due after five years through 10 years, amortized cost	10,685,245
Due after 10 years, amortized cost	18,034,819
Asset and mortgage backed securities without a specific due date, amortized cost	37,028,126
Fixed maturity securities, amortized cost	89,975,510	$ 87,773,047
Due in one year or less, fair value	311,420
Due after one year through five years, fair value	23,924,513
Due after five years through 10 years, fair value	10,767,086
Due after 10 years, fair value	18,283,025
Asset and mortgage backed securities witout a specific due date, fair value	36,408,799
Fixed maturity securities, fair value	$ 89,694,843	$ 89,605,073

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Investments (Schedule of Cost or Amortized Cost and Estimated Fair Values of Investments) (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, amortized cost	$ 89,975,510	$ 87,773,047
Equity securities, amortized cost	13,167,315	11,414,491
AFS securities, amortized cost	103,142,825	99,187,538
Fixed maturity securities	89,694,843	89,605,073
Equity securities	12,972,786	12,401,538
AFS securities, fair value	102,667,629	102,006,611
Fixed maturity securities, gross unrealized gains	892,028	2,137,722
Equity securities, gross unrealized gains	656,830	1,052,683
Total AFS securities, gross unrealized gains	1,548,858	3,190,405
Fixed maturity securities, gross unrealized losses	(1,172,695)	(305,696)
Equity securities, gross unrealized losses	(851,359)	(65,636)
Total AFS securities, gross unrealized losses	(2,024,054)	(371,332)
US Treasury [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, amortized cost	1,347,640	1,346,712
Fixed maturity securities	1,321,469	1,333,725
Fixed maturity securities, gross unrealized losses	(26,171)	(12,987)
MBS/ABS/CMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, amortized cost	37,028,126	31,584,141
Fixed maturity securities	36,408,799	31,518,662
Fixed maturity securities, gross unrealized gains	49,487	158,944
Fixed maturity securities, gross unrealized losses	(668,814)	(224,423)
Corporate [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, amortized cost	31,210,729	31,038,526
Fixed maturity securities	31,157,991	31,989,174
Fixed maturity securities, gross unrealized gains	356,164	1,001,906
Fixed maturity securities, gross unrealized losses	(408,902)	(51,258)
Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, amortized cost	20,389,015	23,803,668
Fixed maturity securities	20,806,584	24,763,512
Fixed maturity securities, gross unrealized gains	486,377	976,872
Fixed maturity securities, gross unrealized losses	(68,808)	(17,028)
Common Stocks [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity securities, amortized cost	13,100,640	7,631,180
Equity securities	12,907,136	8,534,109
Equity securities, gross unrealized gains	656,830	920,629
Equity securities, gross unrealized losses	(850,334)	(17,700)
Preferred Stocks [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity securities, amortized cost	66,675	3,783,311
Equity securities	65,650	3,867,429
Equity securities, gross unrealized gains		132,054
Equity securities, gross unrealized losses	$ (1,025)	$ (47,936)

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Investments (Summary of Impairment Analysis and Value of Securities in an Unrealized Loss Position) (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, fair value	$ 49,501,370	$ 18,334,007
Greater than 12 months, fair value	8,595,651	11,456,585
Fair value	58,097,021	29,790,592
Less than 12 months, Cost or amortized cost	51,064,424	18,440,588
Greater than 12 months, Cost or amortized cost	9,056,651	11,721,336
Cost or amortized cost	60,121,075	30,161,924
Less than 12 months, unrealized losses	(1,563,054)	(106,581)
Greater than 12 months, unrealized losses	(461,000)	(264,751)
Unrealized losses	(2,024,054)	(371,332)
US Treasury [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, fair value	1,029,263	1,038,297
Greater than 12 months, fair value	292,206	295,428
Fair value	1,321,469	1,333,725
Less than 12 months, Cost or amortized cost	1,047,472	1,046,508
Greater than 12 months, Cost or amortized cost	300,168	300,204
Cost or amortized cost	1,347,640	1,346,712
Less than 12 months, unrealized losses	(18,209)	(8,211)
Greater than 12 months, unrealized losses	(7,962)	(4,776)
Unrealized losses	(26,171)	(12,987)
MBS/ABS/CMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, fair value	20,073,237	9,754,119
Greater than 12 months, fair value	6,708,127	7,445,071
Fair value	26,781,364	17,199,190
Less than 12 months, Cost or amortized cost	20,368,837	9,778,528
Greater than 12 months, Cost or amortized cost	7,081,341	7,645,085
Cost or amortized cost	27,450,178	17,423,613
Less than 12 months, unrealized losses	(295,600)	(24,409)
Greater than 12 months, unrealized losses	(373,214)	(200,014)
Unrealized losses	(668,814)	(224,423)
Corporate [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, fair value	17,434,719	5,583,942
Greater than 12 months, fair value	755,371	2,023,856
Fair value	18,190,090	7,607,798
Less than 12 months, Cost or amortized cost	17,799,788	5,610,093
Greater than 12 months, Cost or amortized cost	799,204	2,048,963
Cost or amortized cost	18,598,992	7,659,056
Less than 12 months, unrealized losses	(365,069)	(26,151)
Greater than 12 months, unrealized losses	(43,833)	(25,107)
Unrealized losses	(408,902)	(51,258)
Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, fair value	3,644,260	478,019
Greater than 12 months, fair value	839,947	1,171,520
Fair value	4,484,207	1,649,539
Less than 12 months, Cost or amortized cost	3,677,077	479,904
Greater than 12 months, Cost or amortized cost	875,938	1,186,663
Cost or amortized cost	4,553,015	1,666,567
Less than 12 months, unrealized losses	(32,817)	(1,885)
Greater than 12 months, unrealized losses	(35,991)	(15,143)
Unrealized losses	(68,808)	(17,028)
Fixed Maturity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, fair value	42,181,479	16,854,377
Greater than 12 months, fair value	8,595,651	10,935,875
Fair value	50,777,130	27,790,252
Less than 12 months, Cost or amortized cost	42,893,174	16,915,033
Greater than 12 months, Cost or amortized cost	9,056,651	11,180,915
Cost or amortized cost	51,949,825	28,095,948
Less than 12 months, unrealized losses	(711,695)	(60,656)
Greater than 12 months, unrealized losses	(461,000)	(245,040)
Unrealized losses	(1,172,695)	(305,696)
Common Stocks [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, fair value	7,254,241	637,100
Greater than 12 months, fair value
Fair value	7,254,241	637,100
Less than 12 months, Cost or amortized cost	8,104,575	654,800
Greater than 12 months, Cost or amortized cost
Cost or amortized cost	8,104,575	654,800
Less than 12 months, unrealized losses	(850,334)	(17,700)
Greater than 12 months, unrealized losses
Unrealized losses	(850,334)	(17,700)
Preferred Stocks [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, fair value	65,650	842,530
Greater than 12 months, fair value		520,710
Fair value	65,650	1,363,240
Less than 12 months, Cost or amortized cost	66,675	870,755
Greater than 12 months, Cost or amortized cost		540,421
Cost or amortized cost	66,675	1,411,176
Less than 12 months, unrealized losses	(1,025)	(28,225)
Greater than 12 months, unrealized losses		(19,711)
Unrealized losses	$ (1,025)	$ (47,936)

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Fair Value Disclosures (Narrative) (Details) - USD ($)	Jun. 30, 2018	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Securities transferred from level 1 to level 2	$ 0	$ 0
Securities transferred from level 2 to level 1	$ 0	$ 0

XML

Fair Value Disclosures (Summary of Assets Measured at Fai Value on a recurring Basis) (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	$ 0	$ 0
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	102,667,629	102,006,611
Fair Value, Measurements, Recurring [Member] | US Treasury [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	1,321,469	1,333,725
Fair Value, Measurements, Recurring [Member] | MBS/ABS/CMBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	36,408,799	31,518,662
Fair Value, Measurements, Recurring [Member] | Corporate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	31,157,991	31,989,174
Fair Value, Measurements, Recurring [Member] | Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	20,806,584	24,763,512
Fair Value, Measurements, Recurring [Member] | Fixed Maturity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	89,694,843	89,605,073
Fair Value, Measurements, Recurring [Member] | Common Stocks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	12,907,136	8,534,109
Fair Value, Measurements, Recurring [Member] | Preferred Stocks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	65,650	3,867,429
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	12,972,786	12,401,538
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	14,228,605	9,867,834
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | US Treasury [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	1,321,469	1,333,725
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | MBS/ABS/CMBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed Maturity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	1,321,469	1,333,725
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Common Stocks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	12,907,136	8,534,109
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Preferred Stocks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	12,907,136	8,534,109
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	88,439,024	92,138,777
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | US Treasury [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | MBS/ABS/CMBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	36,408,799	31,518,662
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Corporate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	31,157,991	31,989,174
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	20,806,584	24,763,512
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Fixed Maturity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	88,373,374	88,271,348
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Common Stocks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Preferred Stocks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	65,650	3,867,429
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities	65,650	3,867,429
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | US Treasury [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | MBS/ABS/CMBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Corporate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Fixed Maturity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Common Stocks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Preferred Stocks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS securities

XML

Debt (Narrative) (Details)			1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 07, 2018 USD ($)	Mar. 02, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) item	Mar. 31, 2017 USD ($)
Debt Instrument [Line Items]
Corporate debt					$ 3,489,056		$ 3,489,056		$ 4,339,208
Current interest rate							3.70%		3.90%
Revolver
Debt Instrument [Line Items]
Interest expense							$ 0	$ 0
Debt maturity							Aug. 25, 2018
Collateral					5,000,000		$ 5,000,000
Maximum borrowing capacity					$ 1,750,000		$ 1,750,000
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Revolver
Debt Instrument [Line Items]
Variable interest rate							2.00%
London Interbank Offered Rate (LIBOR) [Member] | Maximum | Revolver
Debt Instrument [Line Items]
Variable interest rate							3.50%
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Interest rate					4.70%		4.70%
Collateral					$ 923,563		$ 923,563		$ 923,766
Gain (loss) on capital lease							0	0
Lease payments	$ 346,000	$ 404,928			0	$ 125,494	70,051	$ 250,988
Outstanding lease obligation					$ 0		$ 0		805,013
Debt Obligation [Member]
Debt Instrument [Line Items]
Face amount of debt instrument										$ 3,500,000
Interest rate					3.65%		3.65%
Debt					$ 3,489,056		$ 3,489,056		3,534,195
Collateral					1,500,000		$ 1,500,000
Term of debt instrument							5 years
Debt Obligation [Member] | Bofi Federal Bank B [Member]
Debt Instrument [Line Items]
Repayments of borrowed funds				$ 500,000
Face amount of debt instrument									500,000
Debt Obligation [Member] | Bofi Federal Bank C [Member]
Debt Instrument [Line Items]
Repayments of borrowed funds			$ 75,000
Face amount of debt instrument									$ 75,000
Debt Obligation [Member] | Bofi Federal Bank B & C [Member]
Debt Instrument [Line Items]
Face amount of debt instrument					500,000		$ 500,000
Number of debt agreements | item									2
Optional prepayment term							12 months
Debt					$ 3,489,056		$ 3,489,056		$ 3,534,195
Term of debt instrument							36 months

XML

Debt (Schedule of Long-Term Debt) (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total	$ 3,489,056	$ 4,339,208
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Capital lease obligation		805,013
Debt Obligation [Member]
Debt Instrument [Line Items]
Debt	$ 3,489,056	$ 3,534,195

XML

Reinsurance (Narrative) (Details)	6 Months Ended
	Jun. 30, 2018 USD ($)
Reinsurance [Abstract]
Individual risk	$ 750,000

XML

Reinsurance (Summary of the Effects of Reinsurance) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
WRITTEN
Direct	$ 16,024,661	$ 13,821,048	$ 30,412,331	$ 26,409,639
Reinsurance assumed	39,681	63,549	92,487	103,385
Reinsurance ceded	(2,923,738)	(1,990,713)	(5,390,711)	(3,966,942)
Net	13,140,604	11,893,884	25,114,107	22,546,082
EARNED
Direct	14,175,677	12,580,381	27,662,798	25,373,175
Reinsurance assumed	41,420	67,956	99,164	117,174
Reinsurance ceded	(2,732,026)	(1,937,579)	(4,979,947)	(3,941,485)
Net	11,485,071	10,710,758	22,782,015	21,548,864
LOSSES AND SETTLEMENT EXPENSES INCURRED
Direct	9,051,216	8,583,336	18,597,156	16,452,838
Reinsurance assumed	(1,374)	20,026	34,757	62,458
Reinsurance ceded	(1,259,255)	(1,739,104)	(2,845,477)	(3,051,654)
Net	$ 7,790,587	$ 6,864,258	$ 15,786,436	$ 13,463,642

XML

Unpaid Losses and Settlement Expenses (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Unpaid losses and settlement expense - beginning of the period:
Gross			$ 51,074,126	$ 52,817,000
Less: Ceded			10,029,834	12,115,000
Net			41,044,000	40,702,000
Increase (decrease) in incurred losses and settlement expense:
Current year			14,263,000	13,804,000
Prior years			1,523,000	(340,000)
Net	$ 7,790,587	$ 6,864,258	15,786,436	13,463,642
Deduct: Loss and settlement expense payments for claims incurred:
Current year			3,898,000	4,727,000
Prior years			9,832,000	9,498,000
Total paid			13,730,000	14,225,000
Net unpaid losses and settlement expense - end of the period	43,100,000	39,941,000	43,100,000	39,941,000
Plus: Reinsurance recoverable on unpaid losses	8,287,587	9,750,000	8,287,587	9,750,000
Gross unpaid losses and settlement expense - end of the period	$ 51,387,881	$ 49,691,000	$ 51,387,881	$ 49,691,000

XML

Income Taxes (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Income Taxes [Abstract]
Federal tax rate	21.00%	34.00%
Effective tax rate	17.70%	35.40%
Capital loss carryforward	$ 0		$ 0
Operating loss carryforward	$ 0		$ 0

XML

Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Taxes [Abstract]
Provision for income taxes at the statutory federal tax rates	$ 5,889	$ (123,612)	$ 182,504	$ 323,116
Increase (reduction) in taxes resulting from:
Dividends received deduction	(8,950)	(9,104)	(17,901)	(18,207)
Tax-exempt interest income	(33,569)	(51,643)	(69,892)	(91,981)
Proration of tax exempt interest and dividends received decution	10,413	9,112	21,492	16,528
Officer life insurance, net	3,578	5,793	6,807	10,796
Nondeductible expenses	9,746	8,530	24,169	17,341
Prior year true-ups and other	1,734	32,481	6,860	78,828
Total income tax expense	$ (11,159)	$ (128,443)	$ 154,039	$ 336,421

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Employee Benefits (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Employee stock ownership plan, shares	350,000		350,000
Employee stock ownership plan, share purchase price			$ 10.00
Contributions to ESOP			$ 0	$ 0
Shares committed		2,389		2,389
Restricted Stock Units (RSUs)
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Shaes granted			11,700
Fair value of shares granted			$ 15.10
Share compensation expense	$ 14,682		$ 20,975
Unrecognized compensation expense	$ 155,695		$ 155,695
Vesting period			3 years
December 31, 2018 [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Compensation expense			$ 186,083
Shares committed to be released	11,654		11,654
June 30, 2018 [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Shares committed to be released	1,932		1,932
Impact on weighted average shares outstanding	0		0
December 31, 2017 [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Compensation expense				$ 141,328
Shares committed to be released		8,680		8,680
Impact on weighted average shares outstanding		0		0

XML

Related Party (Details)		3 Months Ended	6 Months Ended
	Mar. 17, 2017 USD ($) loan shares	Mar. 31, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)
John R. Klockau [Member]
Related Party Transaction [Line Items]
Fees paid to related party			$ 7,350	$ 6,495
Kevin Clinton [Member]
Related Party Transaction [Line Items]
Fees paid to related party			1,368	805
Scott T. Burgess [Member]
Related Party Transaction [Line Items]
Fees paid to related party			2,362	1,046
Griffin Financial Group [Member]
Related Party Transaction [Line Items]
Fees paid to related party			0	893,240
Griffin and Stevens & Lee [Member]
Related Party Transaction [Line Items]
Fees paid to related party			$ 72,091	$ 14,347
Surplus Notes [Member]
Related Party Transaction [Line Items]
Notes converted	$ 1,650,000
Debt converted, shares issued | shares	165,000
Surplus Notes [Member] | John R. Klockau [Member]
Related Party Transaction [Line Items]
Number of notes held | loan	2
Notes converted	$ 1,150,000
Debt converted, shares issued | shares	115,000
Debt converted, interest payment		$ 12,975

XML

Subsequent Events (Details) - Subsequent Event [Member]	1 Months Ended
	Aug. 13, 2018 $ / shares shares
Subsequent Event [Line Items]
Shares repurchased | shares	196,721
stock price | $ / shares	$ 15.25