ROCK ISLAND, Ill., Nov. 2, 2017 /PRNewswire/ -- 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 results for the third quarter and nine
months ended September 30, 2017.
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2017 – FINANCIAL RESULTS
For the nine months ended September 30,
2017, the Company reported net income of $255,000 or $0.08
per share, compared to $1,586,000 for
the same period in 2016. Net loss totaled $359,000 or $0.11
per share for the third quarter ended September 30, 2017, compared to net income of
$695,000 for the third quarter of
2016.
Direct premiums written grew by $826,000, or 6.2%, to $14,117,000 for the three months ended
September 30, 2017 from $13,291,000 for the same period of 2016. For the
nine months ended September 30, 2017,
direct premiums grew by $1,358,000,
or 3.5%, to $40,527,000 from
$39,169,000 for the same period of
2016. Net premiums earned grew by 3.2% and 3.3% for the third
quarter and first nine months of 2017.
For the nine months ended September 30,
2017, the Company ceded $5,993,000 of earned premiums to reinsurers
compared to $5,959,000 of earned
premiums for the same period in 2016. For the third quarter of
2017, the Company ceded to reinsurers $2,051,000 of earned premiums, compared to
$2,110,000 of earned premiums for the
third quarter of 2016.
For the nine months ended September 30,
2017, net realized investment gains increased by
$367,000, or 1,931.6%, to
$386,000 from $19,000 for the same period of 2016. These
increases were a result of the Company liquidating assets to secure
the funding used to purchase the ESOP shares in the first quarter
of 2017. Net realized investment losses were $2,000 compared to net realized investment losses
of $119,000 for the three months
ended September 30, 2017 and 2016,
respectively.
For the nine months ended September 30,
2017, net investment income grew $416,000, or 29.0% to $1,849,000 from $1,433,000 for the same period of 2016. Net
investment income increased by $25,000, or 3.8%, during the three months ended
September 30, 2017, as compared to
the same period of 2016. The growth in net investment income is
primarily from the increase in available for sale securities.
Losses and settlement expenses increased by $2,816,000, or 15.0%, to $21,527,000 for the nine months ended
September 30, 2017, from $18,711,000 for the same period in 2016.
Losses and settlement expenses increased by $1,909,000, or 31.0%, to $8,063,000 for the three months ended
September 30, 2017, from $6,154,000 for the same period in 2016. The
increase in losses and settlement expenses for the third quarter
ended September 30, 2017 is primarily
due to an increase in fire losses and higher retention of property
losses compared to the same period in 2016.
Policy acquisition costs are costs incurred 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 acquisitions
costs and other operating expenses increased by $1,001,000, or 8.5%, to $12,799,000 for the nine months ended
September 30, 2017, from $11,798,000 for the same period in 2016. Policy
acquisitions costs and other operating expenses increased by
$89,000, or 2.1%, to $4,344,000 for the third quarter of 2017 from
$4,255,000 for the same period in
2016. The increases in policy acquisition costs and other operating
expenses during the three and nine months ended September 30, 2017 are primarily driven by
increases in the other operating expenses. This is due to
additional costs associated with operating as a public company
which did not occur in previous years.
Total assets increased by 25.4 % from $122,160,000 at December 31, 2016 to
$153,149,000 at September 30,
2017, principally as a result of our initial public offering
completed during the first quarter of 2017. Our investment
portfolio, which consists of fixed maturity securities, common
stocks, preferred stocks, and property held for investment,
increased by 37.9% from $76,122,000
at December 31, 2016 to $104,955,000 at September 30, 2017, as a
result of deploying the net proceeds from our completed initial
public offering.
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2017 – FINANCIAL RATIOS
The Company's loss and settlement expense ratio (defined as loss
and settlement expenses divided by net premiums earned) was 72.05%
and 65.75% in the third quarter and nine months ended September 30, 2017, respectively, compared with
56.7% and 59.0% in the same periods of 2016, respectively.
The expense ratio (defined as the amortization of deferred
policy acquisition costs and underwriting and administrative
expenses divided by net premiums earned) was 38.8% and 39.1% in the
third quarter and nine months ended September 30, 2017, respectively, compared with
39.2% and 37.2% in the same periods of 2016, respectively.
The Company's GAAP combined ratio (defined as the sum of the
losses and settlement expense ratio and the expense ratio) was
110.9% and 104.8% in the third quarter and nine months ended
September 30, 2017, respectively,
compared to 95.9% and 96.3% in the same periods of 2016,
respectively.
MANAGEMENT COMMENTARY
"The Company has continued to experience challenges relating to
the Property book of business in the third quarter.
Additional Midwest storm activity combined with restaurant
fire claims being unusually high, both in frequency and severity,
led to a loss in the third quarter. Although statistical
analysis has not yet resulted in an identifiable pattern explaining
the problem, the Company continues to evaluate the root cause of
the unprecedented fire activity. The negative results in the
property line were partially offset by continued strong performance
in the core liquor liability line and positive workers'
compensation results. The Company has experienced positive top line
growth for the year. This growth is primarily lead by the
performance in Minnesota and our
new state of Colorado, both of
which have exceeded our initial expectations despite the soft
market conditions. The Company is moving forward with expansion
plans into Michigan which is
planned to occur in the first half of 2018.
"We believe we have adequate property pricing in place and will
continue to increase focus on underwriting and loss control to
strengthen future results as we anticipate a return to historical
fire loss levels.
"The Company's core strengths of specialized products, niche
focus, and superior service combined with a committed agency force
are the keys to long term growth and profitability. The
Company will maintain underwriting discipline and sustainable
pricing to grow and ensure a profitable future," stated
Arron Sutherland, President and
Chief Executive Officer.
EARNINGS CONFERENCE CALL
The Company will hold a conference call on Thursday, November 16th, 2017 at
2:00 PM CT to discuss results for the
third quarter and nine months ended September 30, 2017.
Teleconference:
Dial-in information for the call is
866-595-5224 (toll-free domestic) or 636-812-6497
(international).
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, 2016. 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,
|
|
|
2017
|
|
2016
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
|
Investments and
cash:
|
|
|
|
|
|
|
Available for sale
securities, at fair value
|
|
|
|
|
|
|
Fixed maturity
securities (amortized cost - $85,067,335 at 9/30/2017 and $62,929,091 at 12/31/2016)
|
|
$
|
87,040,384
|
|
$
|
64,134,023
|
|
|
Common stocks¹ (cost -
$10,247,724 at 9/30/2017 and
$6,311,708 at 12/31/2016)
|
|
|
11,264,700
|
|
|
6,982,547
|
|
|
|
|
Preferred stocks (cost
- $3,670,999 at 9/30/2017 and
$2,925,434 at 12/31/2016)
|
|
|
3,785,161
|
|
|
2,798,413
|
|
|
|
|
Property held for
investment, at cost, net of accumulated depreciation of
$103,080 at 9/30/2017 and $50,948 at
12/31/2016
|
|
|
2,865,376
|
|
|
2,207,424
|
|
|
|
|
Cash and cash
equivalents
|
|
|
6,853,760
|
|
|
4,376,847
|
Total investments and
cash
|
|
|
111,809,381
|
|
|
80,499,254
|
Accrued investment
income
|
|
|
715,950
|
|
|
524,156
|
Premiums and
reinsurance balances receivable, net of allowances for
uncollectible amounts of $50,000 at
9/30/2017 and 12/31/2016
|
|
|
18,219,138
|
|
|
17,479,487
|
|
|
|
|
Ceded unearned
premiums
|
|
|
297,127
|
|
|
270,751
|
Reinsurance balances
recoverable on unpaid losses and settlement expenses,
net of allowances for uncollectible
amounts of $0 at 9/30/2017 and 12/31/2016
|
|
|
11,640,539
|
|
|
12,114,998
|
|
|
|
|
Federal income
taxes
|
|
|
1,207,546
|
|
|
1,037,506
|
Deferred policy
acquisition costs, net
|
|
|
4,556,116
|
|
|
4,162,927
|
Property and
equipment, at cost, net of accumulated depreciation of
$4,747,641 at 9/30/2017 and $4,308,247 at
12/31/2016
|
|
|
3,564,286
|
|
|
3,719,535
|
|
|
|
|
Other
assets
|
|
|
1,138,907
|
|
|
2,351,347
|
Total
assets
|
|
$
|
153,148,990
|
|
$
|
122,159,961
|
Liabilities and
Equity
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Unpaid losses and
settlement expenses
|
|
$
|
52,551,866
|
|
$
|
52,817,254
|
Unearned
premiums
|
|
|
26,789,274
|
|
|
24,777,712
|
Reinsurance balances
payable
|
|
|
179,000
|
|
|
109,790
|
Corporate
debt
|
|
|
4,454,138
|
|
|
3,786,950
|
Accrued
expenses
|
|
|
4,072,007
|
|
|
4,827,042
|
Other
liabilities
|
|
|
1,371,653
|
|
|
2,241,003
|
Total
liabilities
|
|
|
89,417,938
|
|
|
88,559,751
|
Equity:
|
|
|
|
|
|
|
Common
stock2
|
|
|
35,000
|
|
|
—
|
Additional paid-in capital
|
|
|
32,296,455
|
|
|
—
|
Accumulated other
comprehensive earnings, net of tax
|
|
|
2,048,764
|
|
|
1,154,175
|
Retained
earnings
|
|
|
32,700,797
|
|
|
32,446,035
|
Less: Unearned
Employee Stock Ownership Plan shares at cost3
|
|
|
(3,349,964)
|
|
|
—
|
Total
equity
|
|
|
63,731,052
|
|
|
33,600,210
|
Total liabilities and
equity
|
|
$
|
153,148,990
|
|
$
|
122,159,961
|
|
1Common
stock securities consist of exchange trade funds (ETF) made up
primarily of Dividends Select and the S&P 500
|
2Par
value $0.01; authorized: 2017 - 10,000,000 shares and 2016 - 0
shares; issued: 2017 - 3,500,000 and 2016 - 0 shares;
outstanding: 2017 - 3,165,003 and 2016 - 0
shares.
|
32017 –
334,997 shares and 2016 - 0 shares
|
ICC Holdings, Inc.
and Subsidiaries
Condensed
Consolidated Statements of Earnings and Comprehensive
Earnings
|
|
|
|
|
|
|
|
|
|
For the Three-Months
Ended
|
|
|
September
30,
|
|
|
2017
|
|
2016
|
Net premiums
earned
|
|
$
|
11,191,448
|
|
$
|
10,848,363
|
Net investment
income
|
|
|
688,134
|
|
|
663,111
|
Net realized
investment (losses) gains
|
|
|
(1,833)
|
|
|
93,561
|
Other-than-temporary
impairment losses
|
|
|
—
|
|
|
(212,731)
|
Other
income
|
|
|
48,667
|
|
|
28,058
|
Consolidated
revenues
|
|
|
11,926,416
|
|
|
11,420,362
|
Losses and settlement
expenses
|
|
|
8,063,401
|
|
|
6,154,162
|
Policy acquisition
costs and other operating expenses
|
|
|
4,344,129
|
|
|
4,254,640
|
Interest expense on
debt
|
|
|
64,810
|
|
|
48,563
|
General corporate
expenses
|
|
|
183,540
|
|
|
137,109
|
Total
expenses
|
|
|
12,655,880
|
|
|
10,594,474
|
(Loss) earnings
before income taxes
|
|
|
(729,464)
|
|
|
825,888
|
Total income tax
(benefit) expense
|
|
|
(370,306)
|
|
|
130,920
|
Net (loss)
earnings
|
|
$
|
(359,158)
|
|
$
|
694,968
|
|
|
|
|
|
|
|
Other comprehensive
earnings, net of tax
|
|
|
297,681
|
|
|
93,301
|
Comprehensive
earnings
|
|
$
|
(61,477)
|
|
$
|
788,269
|
|
|
|
|
|
|
|
(Loss) earnings per
share1:
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
Basic net (loss)
earnings per share
|
|
|
$
(0.11)
|
|
|
$
0.22
|
Diluted:
|
|
|
|
|
|
|
Diluted net (loss)
earnings per share
|
|
|
$
(0.11)
|
|
|
$
0.22
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding2:
|
|
|
|
|
|
|
Basic
|
|
|
3,160,892
|
|
|
3,150,000
|
Diluted
|
|
|
3,160,892
|
|
|
3,150,000
|
|
1The
unaudited pro forma earnings per share for the three months ended
September 30, 2016 is provided as a basis for comparison of current
period earnings.
|
2Weighted average number of common
shares outstanding for the three months ended September 30, 2016 is
based off of the resulting shares from the initial public offering
that was completed in March 2017.
|
ICC Holdings, Inc.
and Subsidiaries
Condensed
Consolidated Statements of Earnings and Comprehensive
Earnings
|
|
|
|
|
|
|
|
|
|
For the Nine-Months
Ended
|
|
|
September
30,
|
|
|
2017
|
|
2016
|
Net premiums
earned
|
|
$
|
32,740,312
|
|
$
|
31,694,591
|
Net investment
income
|
|
|
1,849,421
|
|
|
1,433,005
|
Net realized
investment gains
|
|
|
442,945
|
|
|
231,779
|
Other-than-temporary
impairment losses
|
|
|
(57,316)
|
|
|
(212,731)
|
Other
income
|
|
|
197,647
|
|
|
103,919
|
Consolidated
revenues
|
|
|
35,173,009
|
|
|
33,250,563
|
Losses and settlement
expenses
|
|
|
21,527,043
|
|
|
18,711,078
|
Policy acquisition
costs and other operating expenses
|
|
|
12,799,079
|
|
|
11,797,914
|
Interest expense on
debt
|
|
|
174,349
|
|
|
140,185
|
General corporate
expenses
|
|
|
451,660
|
|
|
336,581
|
Total
expenses
|
|
|
34,952,131
|
|
|
30,985,758
|
Earnings before
income taxes
|
|
|
220,878
|
|
|
2,264,805
|
Total income tax
expense
|
|
|
(33,885)
|
|
|
679,270
|
Net
earnings
|
|
$
|
254,763
|
|
$
|
1,585,535
|
|
|
|
|
|
|
|
Earnings per
share1:
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
Basic net earnings per
share
|
|
|
$
0.08
|
|
|
$
0.50
|
Diluted:
|
|
|
|
|
|
|
Diluted net earnings
per share
|
|
|
$
0.08
|
|
|
$
0.50
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding2:
|
|
|
|
|
|
|
Basic
|
|
|
3,154,992
|
|
|
3,150,000
|
Diluted
|
|
|
3,154,992
|
|
|
3,150,000
|
|
1The
unaudited pro forma earnings per share for the nine months ended
September 30, 2016 is provided as a basis for comparison of current
period earnings.
|
2Weighted average number of common
shares outstanding for the nine months ended September 30, 2016 is
based off of the resulting shares from the initial public offering
that was completed in March 2017.
|
Contact
Info:
|
Arron K. Sutherland,
President and CEO
|
|
Illinois Casualty
Company
|
|
(309)
732-0105
|
|
arrons@ilcasco.com
|
|
225 20th
Street, Rock Island, IL 61201
|
View original
content:http://www.prnewswire.com/news-releases/icc-holdings-inc-reports-2017-third-quarter-and-nine-month-results-300548830.html
SOURCE ICC Holdings, Inc.