AMIC American Independence Corp.

Independence Holding Company (NYSE:IHC) today reported 2016 second-quarter and six-month results.

Financial Results

Net income attributable to IHC of $4,436,000, or $.26 per share diluted, for the three months ended June 30, 2016 decreased from $5,032,000, or $.29 per share diluted, in the same period of 2015. Income from continuing operations decreased to $.25 per share, diluted, or $4,495,000, for the three months ended June 30, 2016 compared to $.29 per share, diluted, or $5,222,000, for the three months ended June 30, 2015. The decrease is primarily due to a lower amount of net realized gains for the second quarter of 2016 compared to the same quarter in 2015.

On March 31, 2016, IHC completed the sale of IHC Risk Solutions LLC (“Risk Solutions”) and exited the medical stop-loss business. Additionally, in connection with the sale, all of IHC’s in-force medical stop-loss business produced by Risk Solutions is 100% co-insured as of January 1, 2016 and is expected to run out by early 2017.

Net income attributable to IHC of $110,446,000, or $6.34 per share diluted, for the six months ended June 30, 2016 increased from $10,251,000, or $.59 per share diluted, in the same period of 2015. Income from continuing operations increased to $.58 per share, diluted, or $10,391,000, for the six months ended June 30, 2016 compared to $.56 per share, diluted, or $9,923,000, for the six months ended June 30, 2015. The increase in income from continuing operations is primarily due to ceding commissions earned as a result of the 100% co-insurance of the Company’s stop-loss business produced by Risk Solutions, and higher volume and retention in various lines of business in our Group disability, life and New York statutory disability benefit policies (DBL) segment.

The Company reported revenues of $77,696,000 and $153,591,000 for the three months and six months ended June 30, 2016, respectively, compared to revenues for the three months and six months ended June 30, 2015 of $133,015,000 and $266,120,000.  Revenues decreased primarily due to a reduction in premiums from the 100% co-insurance of the Company’s stop-loss business produced by Risk Solutions.

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “With the sale of our stop-loss business, IHC finds itself in the extremely enviable position of having a large amount of cash and significant excess statutory surplus in our carriers.  While we have made small investments in two call centers that focus on selling our specialty health products, and are currently negotiating another similar transaction, we have not as yet made a final decision as how best to deploy the vast majority of our liquidity. Having said that, it is important to note that our remaining core lines of business (group long term disability and life, New York statutory disability benefit policies (DBL), and group and individual specialty health insurance, including dental, vision, short term medical, hospital indemnity, gap and scheduled benefit plans) are growing and very profitable.  Our overall investment portfolio continues to be very highly rated (on average, AA) and has a duration of approximately four and a half years. Our book value increased to $25.58 per share at June 30, 2016 from $18.73 per share at December 31, 2015, and our total stockholders’ equity increased to $439 million at June 30, 2016 compared to $323 million at December 31, 2015.  Both of these are all-time highs. The closing price of IHC stock on Friday August 12, 2015 was $16.30, or 64% of our book value, and 74% of our tangible book value. We have increased our stock buyback program from 215,000 shares to 3 million shares.  We are very optimistic that we will continue to drive significant increases in shareholder value.”  

About The IHC Group

Independence Holding Company (NYSE:IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual disability, specialty and supplemental health, pet, and life insurance through its subsidiaries since 1980.  The IHC Group (including through its 91.4% ownership of American Independence Corp. (NASDAQ:AMIC)) owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company), a majority of Ebix Health Administration Exchange, Inc., a fully insured third party administrator, and IHC Specialty Benefits, Inc., which is a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss).  All products are placed with highly rated carriers.

Forward-looking Statements

Certain statements and information contained in this release may be considered “forward-looking statements,” such as statements relating to management's views with respect to future events and financial performance.  Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements.  Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which IHC operates, new federal or state governmental regulation, IHC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in IHC’s other news releases and filings with the Securities and Exchange Commission.  IHC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.

INDEPENDENCE HOLDING COMPANY
SECOND QUARTER REPORT
June 30, 2016
(In Thousands, Except Per Share Data)
					Three Months Ended										Six Months Ended
					June 30,										June 30,
					2016					2015					2016					2015
REVENUES:
	Premiums earned			$		65,627			$		120,443			$		128,189			$		242,557
	Net investment income					4,260					4,488					8,696					9,910
	Fee income					3,412					4,417					8,491					6,994
	Other income					3,379					1,567					6,637					2,559
	Net realized investment gains					1,018					2,100					1,578					4,100
						77,696					133,015					153,591					266,120
EXPENSES:
	Insurance benefits, claims and reserves					40,477					79,380					71,220					159,000
	Selling, general and administrative expenses					29,897					44,954					65,124					90,438
	Interest expense on debt					473					478					926					910
						70,847					124,812					137,270					250,348
	Income from continuing operations before income taxes					6,849					8,203					16,321					15,772
	Income taxes					2,354					2,981					5,930					5,849
	Income from continuing operations					4,495					5,222					10,391					9,923
	Discontinued operations:
	Income (loss) from discontinued operations, before income taxes					-					(82	)				117,636					949
	Income taxes (benefits) on discontinued operations					(142	)				(16	)				7,724					385
	Income (loss) from discontinued operations					142					(66	)				109,912					564
	Net income					4,637					5,156					120,303					10,487
	Less: Income from noncontrolling interests in subsidiaries					(201	)				(124	)				(9,857	)				(236		)
			NET INCOME ATTRIBUTABLE TO IHC	$		4,436			$		5,032			$		110,446			$		10,251
Basic income per common share:
	Income from continuing operations			$		.25			$		.29			$		.59			$			.56
	Income (loss) from discontinued operations					.01					(.00	)				5.83						.03
		Basic income per common share		$		.26			$		.29			$		6.42			$		.59
WEIGHTED AVERAGE SHARES OUTSTANDING						17,204					17,338					17,223					17,351
Diluted income per common share:
	Income from continuing operations			$		.25			$		.29			$		.58			$			.56
	Income (loss) from discontinued operations					.01					(.00	)				5.76						.03
		Diluted income per common share		$		.26			$		.29			$		6.34			$			.59
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING						17,417					17,501					17,433					17,516
As of August 12, 2016, there were 17,170,933 common shares outstanding, net of treasury shares.

INDEPENDENCE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
						June 30,					December 31,
						2016					2015
ASSETS:
	Investments:
		Short-term investments			$		50			$		50
		Securities purchased under agreements to resell					16,232					28,285
		Trading securities					1,216					1,259
		Fixed maturities, available-for-sale					560,135					428,601
		Equity securities, available-for-sale					8,941					8,426
		Other investments					20,294					21,538
			Total investments				606,868					488,159
	Cash and cash equivalents						26,624					17,500
	Due and unpaid premiums						59,386					69,075
	Due from reinsurers						488,337					483,073
	Premium and claim funds						24,671					22,015
	Goodwill						47,276					47,276
	Other assets						44,718					57,934
	Assets attributable to discontinued operations						-					12,931
			TOTAL ASSETS		$		1,297,880			$		1,197,963
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
	Policy benefits and claims				$		247,568			$		245,443
	Future policy benefits						233,603					270,624
	Funds on deposit						150,040					173,350
	Unearned premiums						11,747					10,236
	Other policyholders' funds						9,695					11,822
	Due to reinsurers						81,550					46,355
	Accounts payable, accruals and other liabilities						60,406					64,109
	Liabilities attributable to discontinued operations						2,410					(15	)
	Debt						4,025					5,189
	Junior subordinated debt securities						38,146					38,146
			TOTAL LIABILITIES				839,190					865,259
STOCKHOLDERS’ EQUITY:
IHC STOCKHOLDERS' EQUITY:
	Preferred stock (none issued)						-					-
	Common stock						18,584					18,569
	Paid-in capital						128,303					127,733
	Accumulated other comprehensive income (loss)						4,054					(3,440	)
	Treasury stock, at cost						(15,753	)				(13,961	)
	Retained earnings						304,075					194,450
TOTAL IHC STOCKHOLDERS’ EQUITY							439,263					323,351
NONCONTROLLING INTERESTS IN SUBSIDIARIES							19,427					9,353
			TOTAL EQUITY				458,690					332,704
			TOTAL LIABILITIES AND EQUITY		$		1,297,880			$		1,197,963

CONTACT:  Loan Nisser
(646) 509-2107
www.IHCGroup.com