EX-99.1 2 icch-20190930xex99_1.htm EX-99.1 93019 ICCH Earnings Release

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Contact Info:Arron K. Sutherland, President and CEO 

Illinois Casualty Company

(309) 732-0105

arrons@ilcasco.com

225 20th Street, Rock Island, IL  61201



ICC Holdings, Inc. Reports 2019 Third Quarter and Nine Months Results

FOR IMMEDIATE RELEASE: 11/4/2019



Rock Island, IL. – November 4, 2019 – ICC Holdings, Inc. (NASDAQ: ICCH) (the Company), parent company of Illinois Casualty Company, a regional, multi-line property and casualty insurance company focusing exclusively on the food and beverage industry, today reported preliminary, unaudited results for the third quarter and nine months ended September 30, 2019.  

THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2019 – FINANCIAL RESULTS

Net loss totaled $14,000 or $0.00 per share for the third quarter of 2019, compared to a  net loss of $209,000 or $0.07 per share for the third quarter of 2018. For the nine months ended September 30, 2019, the Company reported net earnings of $717,000 or $0.24 per share, compared to $259,000 or $0.08 per share for the same period in 2018. Additionally, book value per share increased 6.3% to $19.08 at September 30, 2019 from $17.95 at September 30, 2018.

Direct premiums written grew by $134,000, or 0.8%, to $16,305,000 for the third quarter of 2019 from $16,171,000 for the same period in 2018.  For the nine months ended September 30, 2019, direct premiums written grew by $1,766,000, or 3.8%, to $48,349,000 from $46,583,000 for the same period in 2018. Net premiums earned grew by 12.7% to $13,680,000 for the third quarter of 2019 from $12,138,000 for the same period in 2018. Net premiums earned grew by 12.3% to $39,220,000 for the nine months ended September 30, 2019 from $34,920,000 for the same period in 2018.

For the third quarter of 2019, the Company ceded to reinsurers $2,392,000 of earned premiums, compared to $2,969,000 of earned premiums for the third quarter of 2018. For the nine months ended September 30, 2019, the Company ceded $7,665,000 of earned premiums to reinsurers compared to $7,949,000 of earned premiums for the same period in 2018.   

Net realized investment gains including other-than-temporary impairment losses were $141,000 compared to $15,000 for the third quarter of 2019 and 2018, respectively. For the nine months ended September 30, 2019, net realized investment gains net of other-than-temporary impairment losses, decreased by $346,000 to $741,000 from $1,087,000 for the same period in 2018.  

Net investment income increased by $75,000, or 10.2%,  to $811,000 for the third quarter of 2019, as compared to $736,000 for the same period in 2018.  For the nine months ended September 30, 2019, net investment income grew $283,000, or 13.3% to $2,407,000 from $2,124,000 for the same period in 2018.  The growth in net investment income for the nine months ended September 30, 2019, was driven by increased book yield and an increase in net asset value for much of the period.

Losses and settlement expenses increased by $997,000, or 11.6%, to $9,609,000 for the third quarter of 2019, from $8,612,000 for the same period in 2018.  Losses and settlement expenses increased by $3,719,000, or 15.2% to $28,117,000 for the nine months ended September 30, 2019, from $24,398,000 for the same period in 2018.  Losses and settlement expenses increased for the third quarter and nine months ended September 30, 2019, primarily due to an increase in property losses.


 

Policy acquisition costs and other operating expenses increased by $257,000, or 5.7%, to $4,733,000 for the third quarter of 2019 from $4,476,000 for the same period in 2018.  Policy acquisition costs and other operating expenses increased by $1,453,000, or 11.1%, to $14,542,000 for the nine months ended September 30, 2019 from $13,089,000 for the same period in 2018. The primary driver relates to restructuring 2019 reinsurance contracts to eliminate all ceding commissions on primary excess of loss contracts. This change increases the Company’s overall net earned premiums by the same amount as the decrease in ceding commission.  

Total assets increased by 7.4% from $150,283,000 at December 31, 2018, to $161,472,000 at September 30, 2019.  Our investment portfolio, which consists of fixed maturity securities, common stocks, property held for investment, and other invested assets, increased by 6.1% from $104,565,000 at December 31, 2018, to $110,966,000 at September 30, 2019.

THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2019 – FINANCIAL RATIOS

The Company’s losses and settlement expense ratio (defined as losses and settlement expenses divided by net premiums earned) was 70.24% and 71.69% in the third quarter and nine months ended September 30, 2019, respectively, compared with 70.95% and 69.87% in the same periods of 2018, respectively.

The expense ratio (defined as the amortization of deferred policy acquisition costs and underwriting and administrative expenses divided by net premiums earned) was 34.60% and 37.08% in the third quarter and nine months ended September 30, 2019, respectively, compared to 36.88% and 37.48% in the same periods of 2018, respectively.

The Company’s GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 104.84% and 108.77% in the third quarter and nine months ended September 30, 2019, respectively, compared to 107.83% and 107.35% in the same periods of 2018, respectively.

MANAGEMENT COMMENTARY

“I am pleased to report that the Company continues to produce positive year-to-date earnings per share, along with growth in book value per share.  Although we have not yet returned to historical profitability levels, results signal that the rate strengthening actions implemented this year are starting to positively impact results.  Firstly, both the third quarter earnings per share and combined ratio were an improvement over the same period in 2018.  Additionally, book value per share rose above $19 per share for the first time since becoming publicly traded in 2017.  Unfortunately, weather-related claims costs continue to impede current year earnings and are up approximately 27% over the prior year-to-date period.  The Company’s topline growth slowed in the quarter due to increased focus on profitable renewal business and rate strengthening in our underwriting operations.  The 2019 year-to-date combined ratio continues to improve and, as our book of business renews, I anticipate the impact of continued rate firming coupled with our expense reduction efforts to move the organization closer to underwriting profit.

The Company continues to position itself for future geographic expansion. Licensure has been approved in Utah and Arizona and the Company plans to accept business in those states sometime after 2020.

While recognizing that there is much work left to do to improve underwriting profit, I am pleased to see the positive movement in the year-to-date results and the opportunities going forward for ICCH,” stated Arron Sutherland, President and Chief Executive Officer.

UPDATE REGARDING CONFERENCE CALLS FOR QUARTERLY AND ANNUAL RESULTS

The Company also announced today that it has elected to discontinue future conference calls to discuss quarterly and annual results due to limited third party participation. The Company will continue to evaluate other alternatives to engage with interested parties about its financial performance and outlook and may consider resuming conference calls at a later date.

ABOUT ICC HOLDINGS, INC.

ICC Holdings, Inc. is a vertically integrated company created to facilitate the growth, expansion and diversification of its subsidiaries in order to maximize value to its stakeholders.  The group of companies consolidated under ICC


 

Holdings, Inc. engages in diverse, yet complementary business activities, including property and casualty insurance, real estate, and information technology.

The Company’s common shares trade on the NASDAQ Capital Market under the ticker symbol “ICCH”. For more information about ICC Holdings, visit http://ir.iccholdingsinc.com.  

FORWARD-LOOKING STATEMENTS

This press release, and oral statements made regarding the subjects of this release, contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, or the Reform Act, which may include, but are not limited to, statements regarding the Company’s, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, including statements identified by words such as “believe,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “will,” and similar expressions. All statements addressing operating performance, events, or developments that the Company expects or anticipates will occur in the future, including statements relating to revenue and profit growth, product and segment expansion, regulatory approval in connection with expansion, and market share, as well as statements expressing optimism or pessimism about future operating results, are forward-looking statements within the meaning of the Reform Act. The forward-looking statements are based on management's current views and assumptions regarding future events and operating performance, and are inherently subject to significant business, economic, and competitive uncertainties and contingencies and changes in circumstances, many of which are beyond the Company’s control. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.



Although the Company does not make forward-looking statements unless it believes it has a reasonable basis for doing so, the Company cannot guarantee their accuracy. The foregoing factors, among others, could cause actual results to differ materially from those described in these forward-looking statements. For a list of other factors which could affect the Company’s results, see the Company’s filings with the Securities and Exchange Commission, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,” including “Forward-Looking Information,” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. No undue reliance should be placed on any forward-looking statements.








 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets





 

 

 

 

 

 

 

 

 

 

 

 

 



 

As of



 

September 30,

 

December 31,



 

2019

 

2018



 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

 

Investments and cash:

 

 

 

 

 

 

Fixed maturity securities (amortized cost - $88,857,008 at

 

$

92,918,467 

 

$

88,981,159 

9/30/2019 and $89,252,906 at 12/31/2018)

 

 

 

 

 

 

Common stocks (cost - $13,235,053 at

 

 

13,330,075 

 

 

11,843,223 

9/30/2019 and $13,572,713 at 12/31/2018)

 

 

 

 

 

 

Other invested assets

 

 

878,308 

 

 

154,200 

Property held for investment, at cost, net of accumulated depreciation of

 

 

3,839,390 

 

 

3,586,273 

$302,100 at 9/30/2019 and $222,825 at 12/31/2018

 

 

 

 

 

 

Cash and cash equivalents

 

 

2,030,900 

 

 

4,644,784 

Total investments and cash

 

 

112,997,140 

 

 

109,209,639 

Accrued investment income

 

 

650,692 

 

 

648,321 

Premiums and reinsurance balances receivable, net of allowances for

 

 

23,252,325 

 

 

21,404,344 

uncollectible amounts of $50,000 at 9/30/2019 and 12/31/2018

 

 

 

 

 

 

Ceded unearned premiums

 

 

861,471 

 

 

796,065 

Reinsurance balances recoverable on unpaid losses and settlement expenses,

 

 

12,266,481 

 

 

6,735,964 

net of allowances for uncollectible amounts of $0 at 9/30/2019 and 12/31/2018

 

 

 

 

 

 

Federal income taxes

 

 

616,785 

 

 

1,868,669 

Deferred policy acquisition costs, net

 

 

5,525,395 

 

 

5,247,188 

Property and equipment, at cost, net of accumulated depreciation of

 

 

3,088,736 

 

 

3,332,810 

$5,564,730 at 9/30/2019 and $5,099,090 at 12/31/2018

 

 

 

 

 

 

Other assets

 

 

2,212,641 

 

 

1,040,193 

Total assets

 

$

161,471,666 

 

$

150,283,193 

Liabilities and Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Unpaid losses and settlement expenses

 

$

58,322,611 

 

$

51,447,440 

Unearned premiums

 

 

31,615,601 

 

 

29,972,623 

Reinsurance balances payable

 

 

95,991 

 

 

993,004 

Corporate debt

 

 

3,477,586 

 

 

3,484,606 

Accrued expenses

 

 

3,159,742 

 

 

4,536,218 

Other liabilities

 

 

1,858,174 

 

 

1,256,003 

Total liabilities

 

 

98,529,705 

 

 

91,689,894 

Equity:

 

 

 

 

 

 

Common stock1  

 

 

35,000 

 

 

35,000 

Treasury stock, at cost2

 

 

(3,102,850)

 

 

(2,999,995)

Additional paid-in capital

 

 

32,641,488 

 

 

32,505,423 

Accumulated other comprehensive earnings (loss), net of tax

 

 

3,208,554 

 

 

(1,580,976)

Retained earnings

 

 

33,031,328 

 

 

33,680,702 

Less: Unearned Employee Stock Ownership Plan shares at cost3

 

 

(2,871,559)

 

 

(3,046,855)

Total equity

 

 

62,941,961 

 

 

58,593,299 

Total liabilities and equity

 

$

161,471,666 

 

$

150,283,193 



1Par value $0.01; authorized: 2019 - 10,000,000 shares and 2018 – 10,000,000 shares; issued: 2019 - 3,500,000 shares and

2018 – 3,500,000 shares; outstanding: 2019 - 3,012,223 and 2018 - 2,992,734 shares.

22019 –200,621 shares and 2018 – 196,721 shares

32019 –287,156 shares and 2018 –304,685 shares














 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)









 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three-Months Ended



 

September 30,



 

2019

 

2018

Net premiums earned

 

$

13,679,746 

 

$

12,137,690 

Net investment income

 

 

811,462 

 

 

735,683 

Net realized investment gains (losses)

 

 

141,481 

 

 

15,029 

Net unrealized losses on equity securities

 

 

(7,603)

 

 

 —

Other (loss) income

 

 

(112,763)

 

 

74,051 

Consolidated revenues

 

 

14,512,323 

 

 

12,962,453 

Losses and settlement expenses

 

 

9,609,347 

 

 

8,611,573 

Policy acquisition costs and other operating expenses

 

 

4,733,206 

 

 

4,475,659 

Interest (income) expense on debt

 

 

32,458 

 

 

32,553 

General corporate expenses

 

 

164,378 

 

 

128,803 

Total expenses

 

 

14,539,389 

 

 

13,248,588 

Loss before income taxes

 

 

(27,066)

 

 

(286,135)

Total income tax benefit

 

 

(13,150)

 

 

(77,569)

Net loss

 

$

(13,916)

 

$

(208,566)



 

 

 

 

 

 

Other comprehensive earnings, net of tax

 

 

703,220 

 

 

213,059 

Comprehensive earnings

 

$

689,304 

 

$

4,493 



 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Basic net loss per share

 

$

(0.00)

 

$

(0.07)

Diluted:

 

 

 

 

 

 

Diluted net loss per share

 

$

(0.00)

 

$

(0.07)



 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

Basic

 

 

3,011,034 

 

 

3,135,277 

Diluted

 

 

3,015,038 

 

 

3,136,764 










 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)









 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Nine-Months Ended



 

September 30,



 

2019

 

2018

Net premiums earned

 

$

39,219,882 

 

$

34,919,705 

Net investment income

 

 

2,406,965 

 

 

2,124,059 

Net realized investment gains

 

 

741,123 

 

 

1,087,229 

Net unrealized gains on equity securities

 

 

1,716,124 

 

 

 —

Other income

 

 

(43,838)

 

 

130,222 

Consolidated revenues

 

 

44,040,256 

 

 

38,261,215 

Losses and settlement expenses

 

 

28,117,369 

 

 

24,398,009 

Policy acquisition costs and other operating expenses

 

 

14,541,986 

 

 

13,089,081 

Interest expense on debt

 

 

96,353 

 

 

108,335 

General corporate expenses

 

 

444,829 

 

 

398,859 

Total expenses

 

 

43,200,537 

 

 

37,994,284 

Earnings before income taxes

 

 

839,719 

 

 

266,931 

Total income tax expense

 

 

122,796 

 

 

8,209 

Net earnings

 

$

716,923 

 

$

258,722 



 

 

 

 

 

 

Other comprehensive earnings (loss), net of tax

 

 

3,423,233 

 

 

(2,389,414)

Comprehensive earnings (loss)

 

$

4,140,156 

 

$

(2,130,692)



 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Basic net earnings per share

 

$

0.24 

 

$

0.08 

Diluted:

 

 

 

 

 

 

Diluted net earnings per share

 

$

0.24 

 

$

0.08 



 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

Basic

 

 

3,004,887 

 

 

3,165,239 

Diluted

 

 

3,008,891 

 

 

3,166,726