ROCK
ISLAND, Ill., Nov. 8, 2022
/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 unaudited results for the three and nine months ended
September 30, 2022.
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2022– FINANCIAL
RESULTS
Net earnings totaled $630,000, or $0.21 per share, for the third quarter of
2022, compared to net earnings of $424,000 or
$0.14 per share, for the third
quarter of 2021. The change in third quarter's net earnings as
compared to the same quarter last year was driven primarily by an
increase in earned premiums for those three months in 2022.
For the nine months ended September 30,
2022, the Company reported net loss of
$(3,658,000), or $(1.20) per
share, compared to net earnings of $2,149,000, or $0.71 per share, for the same period in
2021. The decrease in earnings was primarily driven by an
increase in unrealized investment losses. Book value per share
decreased to $17.95 at
September 30, 2022, from $22.69 at December
31, 2021. This negative change in book value is due
to $6,181,000 in pre-tax net unrealized losses from
equity securities coupled with $12,370,000 in after tax unrealized losses on the
fixed income portfolio. The $12,370,000 decrease is being driven by
the rising interest rate environment.
Direct premiums written grew by $2,543,000, or 13.9%, to $20,900,000 for the third quarter of 2022
from $18,357,000 for the same period in 2021. For the nine
months ended September 30, 2022,
direct premiums written grew by $9,650,000, or 18.5%, to $61,695,000 compared to $52,045,000 for the same period in 2021. The
third quarter's growth reflects an increase in renewal premiums.
Net premiums earned grew by 25.9% or $3,646,000 to $17,725,000 for the three months ended
September 30, 2022, from $14,079,000 for the same period in 2021. Net
premiums earned grew by $11,905,000,
or 30.6% to $50,766,000 for the nine months
ended September 30, 2022, from
$38,861,000 for the same period
in 2021. The growth in net premiums earned is driven by the
increase in direct premiums coupled with reduced ceded
premiums.
For the third quarter of 2022, the Company ceded to reinsurers
$2,554,000 of earned premiums,
compared to $2,798,000 of earned
premiums for the third quarter of 2021. For the nine months ended
September 30, 2022, the Company ceded
earned premiums of $7,077,000,
compared to $8,087,000 for the
same period in 2021. The Company is ceding less reinsurance in 2022
due to reinsurance pricing and structure changes.
Net realized investment gains net of other-than-temporary
impairment losses were $41,000 for the third quarter of
2022, compared to $287,000 for
the same period in 2021. For the nine months ended September 30, 2022, net realized gains net
of other-than-temporary impairment losses was $786,000, compared to $824,000 for the
same period in 2021. The gains reflect our rebalancing activities
within the Company's investment portfolio.
Net investment income increased by $204,000, or 24.7%,
to $1,028,000 for the third
quarter of 2022, as compared to $824,000 for the same period in 2021. For
the nine months ended September 30,
2022, net investment income increased by $488,000,
or 20.3%, to $2,897,000 from $2,409,000 for the
same period in 2021. These increases are the result of an increase
in our investment portfolio's investment income, which is due to
increased rates on our portfolio and an increase in overall size of
our investment holdings.
Losses and settlement expenses increased by $1,572,000, or 17.8%, to $10,387,000 for the third quarter of 2022,
from $8,815,000 for the same
period in 2021. Losses and settlement
expenses increased by $9,108,000, or 36.0%, to $34,390,000 for the nine months ended
September 30, 2022, from $25,282,000 for the same period in 2021.
This increase is due to our increase in earned premium coupled with
new information on several prior accident years' claims.
Policy acquisition costs and other operating
expenses increased by $918,000, or 16.9%, to $6,361,000 for the third quarter of 2022,
from $5,443,000 for the same
period in 2021. Policy acquisition costs and other operating
expenses increased by $3,179,000, or 21.3%, to $18,136,000 for the nine months ended
September 30, 2022, from $14,957,000 for the same period in 2021. The
increases for both periods are attributable to an increase in
direct commissions and an increase in salaries. The salary
increases were an intentional talent retention strategy.
Total assets decreased by 5.7% from $200,002,000 on December 31, 2021, to $188,527,000 on September 30, 2022. Our investment portfolio,
which consists of fixed income securities, common stocks, preferred
stock, property held for investment, and other invested assets,
decreased by 12.9% from $140,826,000 on December 31, 2021, to $122,641,000 on
September 30, 2022, which was
attributable to the volatility in the markets and our repurchase of
$2.3M in treasury shares.
Total equity decreased by $18,055,000, or 24.2%, from $74,704,000 at December 31, 2021 to $56,649,000 as of September 31, 2022. The main driver of this
decrease is the $12,370,000 in after tax unrealized
losses on the fixed income portfolio. In addition,
the $6,181,000 in pre-tax net unrealized losses from
equity securities and $2,469,000 repurchase of treasury
shares are offsetting our profitable insurance business.
THIRD QUARTER AND NINE MONTHS ENDED
SEPTEMBER 30, 2022– FINANCIAL
RATIOS
The Company's losses and settlement expense ratio (defined as
losses and settlement expenses divided by net premiums earned) was
58.6% and 67.7% for the third quarter and nine months
ended September 30, 2022, compared
with 62.6% and 65.1% for the same periods of 2021.
The expense ratio (defined as the amortization of deferred
policy acquisition costs and underwriting and administrative
expenses divided by net premiums earned) was 35.9% and
35.7% for the third quarter and nine months ended September 30, 2022, compared to 38.7% and
38.4% for the same period of 2021.
The Company's GAAP combined ratio (defined as the sum of the
losses and settlement expense ratio and the expense ratio) was
94.5% and 103.4% for the third quarter and nine
months ended September 30, 2022,
compared to 101.3% and 103.6% for the same period of
2021.
MANAGEMENT COMMENTARY
"Continued volatility in the stock markets again negatively
impacted our net earnings. Fortunately, profitability in the core
insurance operation in third quarter has helped offset those
losses. Earned premiums are up significantly due to continued rate
strengthening and our losses have stabilized.
"Underwriting continues to be selective with new business and
focused on retaining high quality existing business. Not only has
this led to profitable net earnings for Q3 2022, but we believe is
the right approach for sustained profitability moving forward. By
way of example our property loss ratio improved by 59 basis points
for quarter ended Q3 vs. Q2. The Company is still on
track for entry into Utah fourth
quarter 2022.
"We are optimistic about the future as we navigate the complex
market challenges facing our industry. We do this with a strong
belief that we have the proper resources and strategy in place
to grow profitability." 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 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; future responses to and effects of the COVID-19
pandemic, as well as the distribution and effectiveness of COVID-19
vaccines, including their effects on our business operations and
claims activity; new theories of liability; judicial, legislative,
regulatory and other governmental developments, including, but not
limited to, liability related to business interruption claims
related to COVID-19; litigation tactics and developments; product
and segment expansion; regulatory approval in connection with
expansion; downturns and volatility in global economies and equity
and credit markets, including as a result of inflation and supply
chain disruptions and continued labor shortages; interest rates and
changes in rates could adversely affect the Company's business and
profitability; 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, 2021.
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,
|
|
|
|
2022
|
|
|
2021
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Investments and
cash:
|
|
|
|
|
|
|
|
|
Fixed maturity
securities (amortized cost of $103,689,841 at 9/30/2022 and
$102,145,223
at 12/31/2021)
|
|
$
|
91,727,759
|
|
|
$
|
105,841,543
|
|
Common stocks at fair
value
|
|
|
17,763,670
|
|
|
|
23,608,197
|
|
Preferred stocks at
fair value
|
|
|
2,762,210
|
|
|
|
2,780,450
|
|
Other invested
assets
|
|
|
4,556,769
|
|
|
|
3,086,568
|
|
Property held for
investment, at cost, net of accumulated depreciation of $563,073
at
9/30/2022 and $464,713 at 12/31/2021
|
|
|
5,831,065
|
|
|
|
5,509,114
|
|
Cash and cash
equivalents
|
|
|
3,280,008
|
|
|
|
4,606,378
|
|
Total investments and
cash
|
|
|
125,921,481
|
|
|
|
145,432,250
|
|
Accrued investment
income
|
|
|
776,896
|
|
|
|
659,413
|
|
Premiums and
reinsurance balances receivable, net of allowances for
uncollectible amounts
of $100,000 at 9/30/2022 and 12/31/2021
|
|
|
29,422,855
|
|
|
|
27,199,804
|
|
Ceded unearned
premiums
|
|
|
977,283
|
|
|
|
967,022
|
|
Reinsurance balances
recoverable on unpaid losses and settlement expenses, net of
allowances for uncollectible amounts of $0 at 9/30/2022 and
12/31/2021
|
|
|
14,768,237
|
|
|
|
14,521,219
|
|
Federal income
taxes
|
|
|
4,097,155
|
|
|
|
195,694
|
|
Deferred policy
acquisition costs, net
|
|
|
7,202,485
|
|
|
|
6,538,844
|
|
Property and
equipment, at cost, net of accumulated depreciation of $6,499,976
at
9/30/2022 and $6,243,055 at 12/31/2021
|
|
|
3,314,731
|
|
|
|
3,144,218
|
|
Other
assets
|
|
|
2,046,288
|
|
|
|
1,343,504
|
|
Total assets
|
|
$
|
188,527,411
|
|
|
$
|
200,001,968
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Unpaid losses and
settlement expenses
|
|
$
|
68,630,450
|
|
|
$
|
61,834,809
|
|
Unearned
premiums
|
|
|
40,193,784
|
|
|
|
36,212,266
|
|
Reinsurance balances
payable
|
|
|
1,227,713
|
|
|
|
1,368,294
|
|
Corporate
debt
|
|
|
15,000,000
|
|
|
|
18,455,342
|
|
Accrued
expenses
|
|
|
5,213,706
|
|
|
|
5,441,611
|
|
Income taxes -
deferred
|
|
|
—
|
|
|
|
954,862
|
|
Other
liabilities
|
|
|
1,612,590
|
|
|
|
1,030,870
|
|
Total
liabilities
|
|
|
131,878,243
|
|
|
|
125,298,054
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock1
|
|
|
35,000
|
|
|
|
35,000
|
|
Treasury stock, at
cost2
|
|
|
(5,423,190)
|
|
|
|
(3,155,399)
|
|
Additional paid-in
capital
|
|
|
33,032,189
|
|
|
|
32,965,136
|
|
Accumulated other
comprehensive earnings, net of tax
|
|
|
(9,450,111)
|
|
|
|
2,920,027
|
|
Retained
earnings
|
|
|
40,623,729
|
|
|
|
44,282,895
|
|
Less: Unearned
Employee Stock Ownership Plan shares at cost3
|
|
|
(2,168,449)
|
|
|
|
(2,343,745)
|
|
Total
equity
|
|
|
56,649,168
|
|
|
|
74,703,914
|
|
Total liabilities and
equity
|
|
$
|
188,527,411
|
|
|
$
|
200,001,968
|
|
|
1 Par value $0.01;
authorized: 2022 – 10,000,000 shares and 2021 –
10,000,000 shares; issued: 2022 – 3,500,000 shares and
2021 –
3,500,000 shares; outstanding: 2022
– 3,156,285 and 2021
– 3,291,852 shares
|
2 2022
– 343,715 shares and 2021
– 208,148 shares
|
3 2022
– 216,845 shares and 2021
– 234,374 shares
|
ICC Holdings, Inc.
and Subsidiaries Condensed Consolidated Statements of
Earnings and Comprehensive Earnings (Unaudited)
|
|
|
|
For the Three-Months
Ended
|
|
|
|
September
30,
|
|
|
|
2022
|
|
|
2021
|
|
Net premiums
earned
|
|
$
|
17,724,441
|
|
|
$
|
14,079,395
|
|
Net investment
income
|
|
|
1,027,631
|
|
|
|
823,912
|
|
Net realized investment
gains
|
|
|
41,206
|
|
|
|
287,455
|
|
Net unrealized losses
on equity securities
|
|
|
(1,084,289)
|
|
|
|
(212,136)
|
|
Other income
|
|
|
85,402
|
|
|
|
58,590
|
|
Consolidated
revenues
|
|
|
17,794,391
|
|
|
|
15,037,216
|
|
Losses and settlement
expenses
|
|
|
10,386,524
|
|
|
|
8,814,522
|
|
Policy acquisition
costs and other operating expenses
|
|
|
6,360,896
|
|
|
|
5,442,542
|
|
Interest expense on
debt
|
|
|
46,409
|
|
|
|
62,379
|
|
General corporate
expenses
|
|
|
189,708
|
|
|
|
171,105
|
|
Total
expenses
|
|
|
16,983,537
|
|
|
|
14,490,548
|
|
Earnings before income
taxes
|
|
|
810,854
|
|
|
|
546,668
|
|
Total income tax
expense
|
|
|
181,114
|
|
|
|
122,405
|
|
Net earnings
|
|
$
|
629,740
|
|
|
$
|
424,263
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss, net of tax
|
|
|
(3,408,937)
|
|
|
|
(680,975)
|
|
Comprehensive
loss
|
|
$
|
(2,779,197)
|
|
|
$
|
(256,712)
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Basic net earnings per
share
|
|
$
|
0.21
|
|
|
$
|
0.14
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Diluted net earnings
per share
|
|
|
0.20
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
3,060,693
|
|
|
|
3,068,199
|
|
Diluted
|
|
|
3,074,236
|
|
|
|
3,083,867
|
|
ICC Holdings, Inc.
and Subsidiaries Condensed Consolidated Statements of
Earnings and Comprehensive Earnings (Unaudited)
|
|
|
|
For the Nine-Months
Ended
|
|
|
|
September
30,
|
|
|
|
2022
|
|
|
2021
|
|
Net premiums
earned
|
|
$
|
50,765,760
|
|
|
$
|
38,860,915
|
|
Net investment
income
|
|
|
2,896,901
|
|
|
|
2,409,036
|
|
Net realized investment
gains
|
|
|
785,600
|
|
|
|
824,070
|
|
Net unrealized (losses)
gains on equity securities
|
|
|
(6,181,492)
|
|
|
|
1,392,999
|
|
Other income
|
|
|
333,059
|
|
|
|
196,624
|
|
Consolidated
revenues
|
|
|
48,599,828
|
|
|
|
43,683,644
|
|
Losses and settlement
expenses
|
|
|
34,390,330
|
|
|
|
25,281,508
|
|
Policy acquisition
costs and other operating expenses
|
|
|
18,136,104
|
|
|
|
14,957,143
|
|
Interest expense on
debt
|
|
|
149,661
|
|
|
|
174,095
|
|
General corporate
expenses
|
|
|
563,626
|
|
|
|
531,222
|
|
Total
expenses
|
|
|
53,239,721
|
|
|
|
40,943,968
|
|
(Loss) earnings before
income taxes
|
|
|
(4,639,893)
|
|
|
|
2,739,676
|
|
Total income tax
(benefit) expense
|
|
|
(980,726)
|
|
|
|
590,806
|
|
Net (loss)
earnings
|
|
$
|
(3,659,167)
|
|
|
$
|
2,148,870
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss, net of tax
|
|
|
(12,370,138)
|
|
|
|
(1,826,510)
|
|
Comprehensive (loss)
earnings
|
|
$
|
(16,029,305)
|
|
|
$
|
322,360
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Basic net (loss)
earnings per share
|
|
$
|
(1.20)
|
|
|
$
|
0.71
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Diluted net (loss)
earnings per share
|
|
$
|
(1.19)
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
3,061,961
|
|
|
|
3,042,035
|
|
Diluted
|
|
|
3,075,504
|
|
|
|
3,057,704
|
|
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:https://www.prnewswire.com/news-releases/icc-holdings-inc-reports-2022-third-quarter-and-nine-months-results-301672272.html
SOURCE ICC Holdings, Inc.