ROCK
ISLAND, Ill., March 1,
2023 /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 twelve
months ended December 31, 2022.
FOURTH QUARTER AND TWELVE MONTHS
ENDED DECEMBER 31, 2022 –
FINANCIAL RESULTS
Net earnings totaled $3,188,000, or $1.08 per share, for the fourth quarter
of 2022, compared to net earnings of $1,994,000 or
$0.65 per share, for the
fourth quarter of 2021. The change in
the fourth quarter's net earnings as compared to the
same quarter last year was driven primarily by an increase in
earned premiums for 2022. For the twelve months ended
December 31, 2022, the Company
reported a net loss of $471,000, or $(0.16) per share, compared to
net earnings of $4,143,000,
or $1.36 per share, for the same
period in 2021. The decrease in earnings was primarily driven
by an increase in unrealized investment losses, driven by the
unfavorable equity markets. Book value per share decreased to
$19.20 at December 31, 2022, from $22.69 at December
31, 2021. This negative change in book value was driven
by $4,706,000 in pre-tax net unrealized losses from
equity securities coupled with $11,762,000 in after-tax unrealized
losses on the fixed income portfolio, which exceeded the
positive impact of the $2,308,000 repurchase of common stock during
2022.
Direct premiums written grew by $1,985,000, or 10.4%, to $21,032,000 for the fourth quarter of
2022 from $19,047,000 for the same period in 2021. For
the twelve months ended December 31,
2022, direct premiums written grew by $11,635,000, or 16.4%, to $82,727,000 compared to $71,092,000 for the same period in 2021. The
fourth quarter's growth reflects an increase in renewal
premiums. Net premiums earned grew by 21.7% or
$3,260,000 to $18,292,000 for the three months ended
December 31, 2022, from $15,032,000 for the same period in 2021. Net
premiums earned grew by $15,164,000,
or 28.1% to $69,057,000 for the
twelve months ended December 31,
2022, from $53,893,000 for the same period in 2021. The
growth in net premiums earned is driven by the increase in
direct premiums earned coupled with reduced ceded premiums
earned.
For the fourth quarter of 2022, the Company ceded to
reinsurers $2,435,000 of earned
premiums, compared to $2,767,000 of earned premiums for
the fourth quarter of 2021. For the twelve months ended
December 31, 2022, the Company ceded
earned premiums of $9,512,000,
compared to $10,854,000 for the
same period in 2021. The Company is ceding less premium in
2022 due to reinsurance pricing and structure changes and expects
this trend to continue into 2023.
Net investment income increased by $132,000, or 13.1%,
to $1,137,000 for the
fourth quarter of 2022, as compared to $1,005,000 for the same period in 2021. For
the twelve months ended December 31,
2022, net investment
income increased by $620,000, or 18.2%, to
$4,034,000 from $3,414,000 for the
same period in 2021. These increases are the result of an increase
in the investment portfolio's investment income, which is due
to increased rates and rental income on the portfolio and
an increase in the overall size of
our investment holdings.
Net realized
investment gains were $89,000 for the
fourth quarter of 2022, compared to gains
of $158,000 for the same period in 2021. For the
twelve months ended December 31,
2022, net realized gains were $874,000,
compared to gains of $983,000 for the same
period in 2021. The gains reflect rebalancing activities within the
Company's investment portfolio.
Net unrealized gains on equity securities were $1,475,000 and $1,409,000 for the fourth quarters of 2022
and 2021, respectively. Net unrealized (losses) gains on
equity securities were $4,706,000 and $2,802,000 for the years ended December 31, 2022 and December 31, 2021, respectively. The 2022
losses are a result of the unfavorable equity markets.
Losses and settlement expenses increased by $724,000, or 7.7%, to $10,142,000 for the fourth quarter of
2022, from $9,418,000 for the
same period in 2021. Losses and settlement
expenses increased by $9,833,000, or 28.3%, to $44,533,000 for the twelve months ended
December 31, 2022, from $34,700,000 for the same period in 2021.
This increase is due to our increase in earned premium coupled with
new information on several accident claims which occurred in prior
years.
Policy acquisition costs and other operating
expenses increased by $892,000, or 15.2%, to $6,760,000 for the fourth quarter of
2022, from $5,868,000 for the
same period in 2021. Policy acquisition costs and other operating
expenses increased by $4,071,000, or 19.5%, to $24,896,000 for the twelve months ended
December 31, 2022, from $20,825,000 for the same period in 2021. The
increases for both periods are attributable to an increase in
direct commissions, which increase in direct proportion to
direct written premium, and an increase in salary expense. The
salary increases were an intentional talent retention strategy.
Total assets decreased by 3.9% from $200,002,000 at December 31, 2021, to
$192,273,000 at December
31, 2022. The investment portfolio, which consists of fixed
income securities, common stocks, preferred stocks,
properties held for investment, and other invested assets,
decreased by 9.6% from $140,826,000 at December 31, 2021,
to $127,325,000 at December 31, 2022, which was
attributable to the volatility in the markets and repurchase of
$2,308,000 in treasury
shares.
Total equity decreased by $14,153,000, or 18.9%, from $74,704,000 at December 31, 2021 to $60,551,000 at December 31,
2022. The main driver of this decrease is
the $11,762,000 in after-tax unrealized losses on the
fixed income portfolio. In addition, the $4,706,000 in
pre-tax net unrealized losses from equity securities and
$2,308,000 repurchase of
shares, further reduced overall equity during the year.
FOURTH QUARTER AND TWELVE MONTHS
ENDED DECEMBER 31, 2022 –
FINANCIAL RATIOS
The Company's losses and settlement expense ratio (defined as
losses and settlement expenses divided by net premiums earned) was
55.4% and 64.5% for the fourth quarter and
twelve months ended December 31,
2022, compared with 62.7% and 64.4% 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 37.0% and
36.1% for the fourth quarter and twelve months ended
December 31, 2022, compared to
39.0% and 38.6% for the same periods of 2021.
The Company's GAAP combined ratio (defined as the sum of the
losses and settlement expense ratio and the expense ratio) was
92.4% and 100.6% for the fourth quarter and
twelve months ended December 31,
2022, compared to 101.7% and 103.0% for the
same periods of 2021.
MANAGEMENT COMMENTARY
"We are pleased to see our normal pattern of a strong
fourth quarter, with a GAAP combined ratio of 92.4%. We experienced
continued growth in premium in 2022 with renewal business growing
by $14.8 million. While premium grew
by $11.6 million, our overall
exposure based decreased. We strengthened our overall reserve
position with $4.8 million in
additional IBNR recorded during 2022. This shows the health of our
core insurance business.
"Our rating increase to A- in 2021 provided us additional
opportunities to reshape our portfolio of risks within the
food and beverage industry through reduced limits and a shifting
away from some classes of business that were not generating
adequate returns. Our selectivity with new business and focus
on retaining high quality existing business will continue into
2023. The Company wrote its first policy in Utah in Q4 2022, as a part of our plan to
capitalize on exciting new opportunities. We recently applied
for licensure in Kentucky,
Nebraska, North Dakota, and South Dakota in order to expand our geographic
footprint and earnings potential.
"We continue to be optimistic about the future. Our core
insurance business remains strong. We anticipate our recent
expansion into new territories utilizing our proven business model
will create continued profitability in 2023," 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
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Investments and
cash:
|
|
|
|
|
|
|
|
|
Fixed maturity
securities (amortized cost of $104,580,681 at 12/31/2022 and
$102,145,223 at
12/31/2021)
|
|
$
|
93,388,971
|
|
|
$
|
105,841,543
|
|
Common stocks at fair
value
|
|
|
20,438,907
|
|
|
|
23,608,197
|
|
Preferred stocks at
fair value
|
|
|
2,772,605
|
|
|
|
2,780,450
|
|
Other invested
assets
|
|
|
4,722,137
|
|
|
|
3,086,568
|
|
Property held for
investment, at cost, net of accumulated depreciation of $609,282
at
12/31/2022 and $464,713 at 12/31/2021
|
|
|
6,002,233
|
|
|
|
5,509,114
|
|
Cash and cash
equivalents
|
|
|
3,139,986
|
|
|
|
4,606,378
|
|
Total investments and
cash
|
|
|
130,464,839
|
|
|
|
145,432,250
|
|
Accrued investment
income
|
|
|
791,812
|
|
|
|
659,413
|
|
Premiums and
reinsurance balances receivable, net of allowances for
uncollectible amounts of
$50,000 at 12/31/2022 and $100,000 at 12/31/2021
|
|
|
31,270,460
|
|
|
|
27,199,804
|
|
Ceded unearned
premiums
|
|
|
947,851
|
|
|
|
967,022
|
|
Reinsurance balances
recoverable on unpaid losses and settlement expenses, net of
allowances for uncollectible amounts of $0 at 12/31/2022 and
12/31/2021
|
|
|
13,610,295
|
|
|
|
14,521,219
|
|
Income taxes -
current
|
|
|
22,042
|
|
|
|
195,694
|
|
Income taxes -
deferred
|
|
|
3,407,006
|
|
|
|
—
|
|
Deferred policy
acquisition costs, net
|
|
|
7,167,036
|
|
|
|
6,538,844
|
|
Property and equipment,
at cost, net of accumulated depreciation of $6,590,602 at
12/31/2022
and $6,243,055 at 12/31/2021
|
|
|
3,313,719
|
|
|
|
3,144,218
|
|
Other assets
|
|
|
1,277,469
|
|
|
|
1,343,504
|
|
Total assets
|
|
$
|
192,272,529
|
|
|
$
|
200,001,968
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Unpaid losses and
settlement expenses
|
|
$
|
67,614,063
|
|
|
$
|
61,834,809
|
|
Unearned
premiums
|
|
|
40,527,182
|
|
|
|
36,212,266
|
|
Reinsurance balances
payable
|
|
|
1,405,337
|
|
|
|
1,368,294
|
|
Corporate
debt
|
|
|
15,000,000
|
|
|
|
18,455,342
|
|
Accrued
expenses
|
|
|
6,072,020
|
|
|
|
5,441,611
|
|
Income taxes -
deferred
|
|
|
—
|
|
|
|
954,862
|
|
Other
liabilities
|
|
|
1,102,678
|
|
|
|
1,030,870
|
|
Total
liabilities
|
|
|
131,721,280
|
|
|
|
125,298,054
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock1
|
|
|
35,000
|
|
|
|
35,000
|
|
Treasury stock, at
cost2
|
|
|
(5,463,535)
|
|
|
|
(3,155,399)
|
|
Additional paid-in
capital
|
|
|
33,119,125
|
|
|
|
32,965,136
|
|
Accumulated other
comprehensive (loss) earnings, net of tax
|
|
|
(8,841,517)
|
|
|
|
2,920,027
|
|
Retained
earnings
|
|
|
43,811,551
|
|
|
|
44,282,895
|
|
Less: Unearned Employee
Stock Ownership Plan shares at cost3
|
|
|
(2,109,375)
|
|
|
|
(2,343,745)
|
|
Total equity
|
|
|
60,551,249
|
|
|
|
74,703,914
|
|
Total liabilities and
equity
|
|
$
|
192,272,529
|
|
|
$
|
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
– 3,153,741 and 2021
– 3,291,852 shares
|
2 2022
– 346,259 shares and 2021
– 208,148 shares
|
3 2022
– 210,935 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
|
|
|
|
December
31,
|
|
|
|
2022
|
|
|
2021
|
|
Net premiums
earned
|
|
$
|
18,291,583
|
|
|
$
|
15,032,105
|
|
Net investment
income
|
|
|
1,137,327
|
|
|
|
1,005,372
|
|
Net realized investment
gains
|
|
|
88,870
|
|
|
|
158,477
|
|
Net unrealized gains on
equity securities
|
|
|
1,475,087
|
|
|
|
1,408,992
|
|
Other income
|
|
|
87,143
|
|
|
|
152,085
|
|
Consolidated
revenues
|
|
|
21,080,010
|
|
|
|
17,757,031
|
|
Losses and settlement
expenses
|
|
|
10,142,399
|
|
|
|
9,418,035
|
|
Policy acquisition
costs and other operating expenses
|
|
|
6,760,016
|
|
|
|
5,867,757
|
|
Interest expense on
debt
|
|
|
46,409
|
|
|
|
60,906
|
|
General corporate
expenses
|
|
|
213,121
|
|
|
|
192,128
|
|
Total
expenses
|
|
|
17,161,945
|
|
|
|
15,538,826
|
|
Earnings before income
taxes
|
|
|
3,918,065
|
|
|
|
2,218,205
|
|
Income tax expense
(benefit):
|
|
|
|
|
|
|
|
|
Current
|
|
|
448,656
|
|
|
|
28,434
|
|
Deferred
|
|
|
281,586
|
|
|
|
195,862
|
|
Total income tax
expense
|
|
|
730,243
|
|
|
|
224,296
|
|
Net earnings
|
|
$
|
3,187,822
|
|
|
$
|
1,993,909
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
earnings (loss), net of tax
|
|
|
608,594
|
|
|
|
(773,554)
|
|
Comprehensive
earnings
|
|
$
|
3,796,416
|
|
|
$
|
1,220,355
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Basic net earnings per
share
|
|
$
|
1.08
|
|
|
$
|
0.65
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Diluted net earnings
per share
|
|
|
1.08
|
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
2,939,218
|
|
|
|
3,047,433
|
|
Diluted
|
|
|
2,939,218
|
|
|
|
3,065,025
|
|
ICC Holdings,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Earnings and Comprehensive Earnings
(Unaudited)
|
|
|
|
For the
Twelve-Months Ended
|
|
|
|
December
31,
|
|
|
|
2022
|
|
|
2021
|
|
Net premiums
earned
|
|
$
|
69,057,343
|
|
|
$
|
53,893,020
|
|
Net investment
income
|
|
|
4,034,228
|
|
|
|
3,414,408
|
|
Net realized investment
gains
|
|
|
874,470
|
|
|
|
982,547
|
|
Net unrealized (losses)
gains on equity securities
|
|
|
(4,706,405)
|
|
|
|
2,801,991
|
|
Other income
|
|
|
420,202
|
|
|
|
348,709
|
|
Consolidated
revenues
|
|
|
69,679,838
|
|
|
|
61,440,675
|
|
Losses and settlement
expenses
|
|
|
44,532,729
|
|
|
|
34,699,543
|
|
Policy acquisition
costs and other operating expenses
|
|
|
24,896,120
|
|
|
|
20,824,900
|
|
Interest expense on
debt
|
|
|
196,070
|
|
|
|
235,001
|
|
General corporate
expenses
|
|
|
776,747
|
|
|
|
723,350
|
|
Total
expenses
|
|
|
70,401,666
|
|
|
|
56,482,794
|
|
(Loss) earnings before
income taxes
|
|
|
(721,828)
|
|
|
|
4,957,881
|
|
Income tax
expense:
|
|
|
|
|
|
|
|
|
Current
|
|
|
984,897
|
|
|
|
400,355
|
|
Deferred
|
|
|
(1,235,381)
|
|
|
|
414,747
|
|
Total income tax
(benefit) expense
|
|
|
(250,484)
|
|
|
|
815,102
|
|
Net (loss)
earnings
|
|
$
|
(471,344)
|
|
|
$
|
4,142,779
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Basic net (loss)
earnings per share
|
|
$
|
(0.16)
|
|
|
$
|
1.36
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Diluted net (loss)
earnings per share
|
|
$
|
(0.16)
|
|
|
$
|
1.35
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
3,032,155
|
|
|
|
3,047,433
|
|
Diluted
|
|
|
3,032,155
|
|
|
|
3,065,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
earnings
|
|
$
|
(471,344)
|
|
|
$
|
4,142,779
|
|
Other comprehensive
loss, net of tax
|
|
|
|
|
|
|
|
|
Unrealized gains and
losses on fixed maturity securities:
|
|
|
|
|
|
|
|
|
Unrealized holding
(losses) arising during the period, net of income tax (benefit)
of
$(3,128,757) in 2022 and $(641,107) in 2021
|
|
$
|
(11,770,084)
|
|
|
$
|
(2,411,782)
|
|
Reclassification
adjustment for gains included in net income, net of income tax
expense of
$(2,270) in 2022 and $50,050 in 2021
|
|
|
8,540
|
|
|
|
(188,282)
|
|
Total other
comprehensive loss
|
|
|
(11,761,544)
|
|
|
|
(2,600,064)
|
|
Comprehensive (loss)
earnings
|
|
$
|
(12,232,888)
|
|
|
$
|
1,542,715
|
|
Contact Info: Arron K.
Sutherland, President and CEO
Illinois Casualty Company
(309) 732-0105
arrons@ilcasco.com
225 20th Street, Rock Island, IL
61201
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SOURCE ICC Holdings, Inc.