Debt

3 Months Ended

Mar. 31, 2022

Debt [Abstract]

Debt

4.     DEBT

Debt Obligation

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

The Company also has borrowing capacity up to approximately $37 million in the aggregate from its membership with the Federal Home Loan Bank of Chicago (FHLBC).

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

In May 2021, the Company entered into a $4.0 million, 0.74% fixed interest, one year FHLBC loan. Collateral totaling $7.4 million supports both the $6.0 million and $4.0 million outstanding FHLBC loans and consists of fixed income securities.

A one year FHLBC loan for $5.0 million, 0% interest was entered into in May 2021. Upon maturity in May 2022, this loan will rollover to a $5.0 million, 1.36% fixed interest loan. Collateral totaling $5.8 million supports this new FHLBC loan and consists of fixed income securities.

The total balance of the debt agreements at March 31, 2022 and December 31, 2021 was $18,452,288 and $18,455,342, respectively. The average interest rate on remaining debt was 1.3% as of March 31, 2022 and 1.3% as of December 31, 2021.

Revolving Line of Credit

We maintain a revolving line of credit with a commercial bank which permits borrowing up to an aggregate principal amount of $2.0 million. This line of credit is priced at Prime plus 0.5% and renews annually with a current expiration date of July 2022. The Company pledged $2.0 million of business assets in the event the Company draws down on the line of credit. This agreement includes an annually calculated financial debt covenant requiring a minimum total adjusted capital of $21.0 million. As of December 31, 2021, the Company was in compliance with its financial debt covenant.

There was no interest paid on the line of credit during the three months ended March 31, 2022 and 2021.