ROCK ISLAND, Ill., April 30, 2018 /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 preliminary, unaudited results for the
quarter ended March 31, 2018.
FIRST QUARTER ENDED MARCH 31,
2018 – FINANCIAL RESULTS
Net earnings totaled $676,000 or
$0.21 per share for the first quarter
of 2018, compared to net earnings of $849,000 or $0.27
per share for the first quarter of 2017.
Direct premium written grew by $1,799,000, or 14.3%, to $14,388,000 for the first quarter of 2018 from
$12,589,000 for the same period in
2017. Net premiums earned grew by 4.2% to $11,297,000 for the first quarter of 2018 from
$10,838,000 for the same period in
2017.
For the first quarter of 2018, the Company ceded to reinsurers
$2,248,000 of earned premiums,
compared to $2,004,000 of earned
premiums for the first quarter of 2017.
Net realized investment gains were $1,102,000 compared to net realized investment
gains of $445,000 for the first
quarter of 2018 and 2017, respectively. These increases were a
result of the Company liquidating common stock securities as a
result of changing equity managers during the first quarter of
2018. The Company's previous equity manager had an ETF focus which
required the Company to sell its holdings during the first quarter
of 2018 to allow the new equity manager to implement their
investing strategy.
Net investment income increased by $231,000, or 48.9%, during the first quarter of
2018, as compared to the same period in 2017. The growth in net
investment income is primarily from the increase in the available
for sale securities.
Losses and settlement expenses increased by $1,397,000, or 21.2%, to $7,996,000 for the first quarter of 2018, from
$6,599,000 for the same period in
2017. The increase in losses and settlement expenses for the first
quarter of 2017 is primarily due to an increase in the severity of
workers compensation claims.
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 acquisition
costs and other operating expenses increased by $402,000, or 10.8%, to $4,137,000 for the first quarter of 2018 from
$3,735,000 for the same period in
2017. The increase in policy acquisition costs and other operating
expenses during the three months ended March
31, 2018 are primarily driven by increases in expenses
related to operating as a public company for the entire three
months ended March 31, 2018 compared
with only 18 days of public company operating expenses recognized
during the same period of 2017, as well as an increase in insurance
expense.
Total assets decreased by 2.1 % from $152,334,000 at December 31, 2017 to
$149,064,000 at March 31, 2018,
primarily as a result of a reduction in cash and cash equivalents
used to pay off corporate debt during the first quarter of
2018. Our investment portfolio, which consists of fixed
maturity securities, common stocks, preferred stocks, and property
held for investment, increased by 0.7% from $105,133,000 at December 31, 2017 to
$105,852,000 at March 31,
2018.
FIRST QUARTER ENDED MARCH 31,
2018 – FINANCIAL RATIOS
The Company's loss and settlement expense ratio (defined as loss
and settlement expenses divided by net premiums earned) was 70.8%
in the first quarter ended March 31,
2018 compared with 60.9% in the first quarter of 2017.
The expense ratio (defined as the amortization of deferred
policy acquisition costs and underwriting and administrative
expenses divided by net premiums earned) was 36.6% in the first
quarter of 2018 compared to 34.5% in the first quarter of 2017.
The Company's GAAP combined ratio (defined as the sum of the
losses and settlement expense ratio and the expense ratio) was
107.4% in the first quarter of 2018 compared to 95.4% in the first
quarter of 2017.
MANAGEMENT COMMENTARY
"The Company began the year with historically strong growth in
written premium. This was primarily driven by new business in
both core states and recently added markets including
Colorado. The Company issued its first policies in
Michigan in April and believes
this state provides excellent growth potential. It is
expected that this top line growth trend will continue throughout
2018. In a targeted move, the Company reduced its property
retention level by 43%. While this lowered the amount of net
premium earned in the first quarter, we believe that this move will
be key in returning the Company to historical levels of
profitability. Unfortunately, loss results were negatively
impacted by underperformance in the workers' compensation line in
the first quarter. This was primarily due to unfavorable
development on prior accident year losses. The Company is committed
to profitable growth, and believes that the measures it has taken
to reduce property volatility combined with successful geographic
expansion will translate into these desired results," stated
Arron Sutherland, President and
Chief Executive Officer.
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, 2017.
No undue reliance should be placed on any forward-looking
statements.
ICC Holdings, Inc.
and Subsidiaries
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
March 31,
|
|
December 31,
|
|
|
2018
|
|
2017
|
Assets
|
|
|
|
|
|
|
Investments and
cash:
|
|
|
|
|
|
|
Available for sale
securities, at fair value
|
|
|
|
|
|
|
Fixed maturity
securities (amortized cost - $89,877,704 at 3/31/2018 and $87,773,047 at 12/31/2017)
|
|
$
|
90,042,265
|
|
$
|
89,605,073
|
|
|
|
|
|
|
Common stocks¹ (cost -
$13,201,032 at 3/31/2018 and
$7,631,180 at 12/31/2017)
|
|
|
12,607,029
|
|
|
8,534,109
|
|
|
|
|
|
|
Preferred stocks (cost
- $0,066,675 at 3/31/2018 and
$3,783,311 at 12/31/2017)
|
|
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65,725
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|
|
3,867,429
|
|
|
|
|
|
|
Property held for
investment, at cost, net of accumulated depreciation of
$150,200 at 3/31/2018 and $50,948 at
12/31/2017
|
|
|
3,137,229
|
|
|
3,126,566
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
1,528,380
|
|
|
6,876,519
|
Total investments and
cash
|
|
|
107,380,628
|
|
|
112,009,696
|
Accrued investment
income
|
|
|
703,801
|
|
|
687,453
|
Premiums and
reinsurance balances receivable, net of allowances for
uncollectible amounts of $50,000 at
3/31/2018 and 12/31/2017
|
|
|
19,934,301
|
|
|
19,013,262
|
|
|
|
|
|
|
Ceded unearned
premiums
|
|
|
494,023
|
|
|
274,972
|
Reinsurance balances
recoverable on unpaid losses and settlement expenses,
net of allowances for uncollectible
amounts of $0 at 3/31/2018 and 12/31/2017
|
|
|
9,764,338
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|
|
10,029,834
|
|
|
|
|
|
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Federal income
taxes
|
|
|
1,466,079
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|
|
922,405
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Deferred policy
acquisition costs, net
|
|
|
4,519,590
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|
|
4,592,415
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Property and
equipment, at cost, net of accumulated depreciation of
$4,691,231 at 3/31/2018 and $4,896,042 at
12/31/2017
|
|
|
3,516,809
|
|
|
3,503,904
|
|
|
|
|
|
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Other
assets
|
|
|
1,283,546
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|
|
1,301,420
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Total
assets
|
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$
|
149,063,115
|
|
$
|
152,335,361
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Liabilities and
Equity
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|
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Liabilities:
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|
|
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Unpaid losses and
settlement expenses
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$
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51,444,103
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|
$
|
51,074,126
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Unearned
premiums
|
|
|
27,451,191
|
|
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26,555,582
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Reinsurance balances
payable
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683,077
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327,483
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Corporate
debt
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|
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3,491,077
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|
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4,339,208
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Accrued
expenses
|
|
|
2,471,516
|
|
|
4,274,002
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Other
liabilities
|
|
|
1,214,858
|
|
|
1,663,415
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Total
liabilities
|
|
|
86,755,822
|
|
|
88,233,816
|
Equity:
|
|
|
|
|
|
|
Common
stock2
|
|
|
35,000
|
|
|
35,000
|
Additional paid-in
capital
|
|
|
32,371,876
|
|
|
32,333,290
|
Accumulated other
comprehensive earnings, net of tax
|
|
|
(340,008)
|
|
|
2,227,069
|
Retained
earnings
|
|
|
33,463,696
|
|
|
32,787,406
|
Less: Unearned
Employee Stock Ownership Plan shares at cost3
|
|
|
(3,223,271)
|
|
|
(3,281,220)
|
Total
equity
|
|
|
62,307,293
|
|
|
64,101,545
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Total liabilities and
equity
|
|
$
|
149,063,115
|
|
$
|
152,335,361
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1At
March 31, 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 500.500
|
2Par
value $0.01; authorized: 2018 - 10,000,000 shares and 2017 –
10,000,000 shares; issued: 2018 - 3,500,000 and 2017 – 3,500,000
shares; outstanding: 2018 - 3,177,672 and 2017 – 3,150,000
shares.
|
32018 –
322,328 shares and 2017 – 350,000 shares
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ICC Holdings, Inc.
and Subsidiaries
Condensed
Consolidated Statements of Earnings and Comprehensive Earnings
(Unaudited)
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For the Three-Months
Ended
|
|
|
March 31,
|
|
|
2018
|
|
2017
|
Net premiums
earned
|
|
$
|
11,296,944
|
|
$
|
10,838,106
|
Net investment
income
|
|
|
702,884
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|
|
472,324
|
Net realized
investment (losses) gains
|
|
|
1,102,130
|
|
|
444,781
|
Other
income
|
|
|
56,678
|
|
|
84,258
|
Consolidated
revenues
|
|
|
13,158,636
|
|
|
11,839,469
|
Losses and settlement
expenses
|
|
|
7,995,849
|
|
|
6,599,384
|
Policy acquisition
costs and other operating expenses
|
|
|
4,137,351
|
|
|
3,734,652
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Interest expense on
debt
|
|
|
48,161
|
|
|
52,310
|
General corporate
expenses
|
|
|
136,250
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|
|
139,215
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Total
expenses
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|
|
12,317,611
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|
|
10,525,561
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(Loss) earnings
before income taxes
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|
|
841,025
|
|
|
1,313,908
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Total income tax
(benefit) expense
|
|
|
164,735
|
|
|
464,864
|
Net (loss)
earnings
|
|
$
|
676,290
|
|
$
|
849,044
|
|
|
|
|
|
|
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Other comprehensive
earnings, net of tax
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|
|
(2,567,077)
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|
|
54,481
|
Comprehensive (loss)
earnings
|
|
$
|
(1,890,787)
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|
$
|
903,525
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|
|
|
|
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|
(Loss) earnings per
share:
|
|
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Basic:
|
|
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|
Basic net (loss)
earnings per share
|
|
|
$
0.21
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|
$
0.27
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Diluted:
|
|
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|
|
|
|
Diluted net (loss)
earnings per share
|
|
|
$
0.21
|
|
|
$
0.27
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|
|
|
|
|
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|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
3,173,807
|
|
|
3,150,000
|
Diluted
|
|
|
3,174,234
|
|
|
3,150,000
|
Contact
Info:
|
Arron K. Sutherland,
President and CEO
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|
Illinois Casualty
Company
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(309)
732-0105
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arrons@ilcasco.com
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225 20th
Street, Rock Island, IL 61201
|
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SOURCE ICC Holdings, Inc.