PR Newswire | Nov 10, 2020 08:05PM EST

11/10 19:05 CST

ICC Holdings, Inc. Reports 2020 Third Quarter and Nine Months Results ROCK ISLAND, Ill., Nov. 10, 2020

ROCK ISLAND, Ill., Nov. 10, 2020 /PRNewswire/ -- ICC Holdings, Inc. (NASDAQ: ICCH) (the Company), parent company of Illinois Casualty Company, a regional, multi-line property and casualty insurance company focusing on the food and beverage industry, today reported preliminary, unaudited results for the third quarter and nine months ended September 30, 2020.

THIRDQUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2020 - FINANCIAL RESULTS

Net earnings totaled $404,000, or $0.13 per share, for the third quarter of 2020, compared to a net loss of $14,000, or $0.00 per share, for the third quarter of 2019. For the nine months ended September 30, 2020, the Company reported a net loss of $787,000, or $0.26 per share, compared to net earnings of $717,000, or $0.24 per share, for the same period in 2019. Additionally, book value per share increased 8.3% to $20.66 at September 30, 2020, from $19.08 at September 30, 2019.

Direct premiums written decreased by $1,771,000, or 10.9%, to $14,534,000 for the third quarter of 2020 from $16,305,000 for the same period in 2019. For the nine months ended September 30, 2020, direct premiums written decreased by $4,109,000, or 8.5%, to $44,240,000 from $48,349,000 for the same period in 2019. Net premiums earned decreased by 8.4% to $12,533,000 for the third quarter of 2020, from $13,680,000 for the same period in 2019. Net premiums earned decreased by 5.9% to $36,922,000 for the nine months ended September 30, 2020, from $39,220,000 for the same period in 2019. These results were due to policy exposure decreases resulting from state mandated shutdowns of restaurants and taverns and increased reinstatement costs associated with the civil unrest and protests occurring in Minneapolis, MN and the greater Chicago area in Illinois.

For the third quarter of 2020, the Company ceded to reinsurers $2,344,000 of earned premiums, compared to $2,392,000 of earned premiums for the third quarter of 2019. For the nine months ended September 30, 2020, the Company ceded earned premiums of $7,905,000, compared to $7,665,000 for the same period in 2019.

Net realized investment losses net of other-than-temporary impairment losses were $59,000 for the third quarter of 2020, compared to gains of $141,000 for the same period in 2019. For the nine months ended September 30, 2020, net realized investment losses net of other-than-temporary impairment losses were $402,000, compared to gains of $741,000 for the same period in 2019.

Net investment income increased by $90,000, or 11.1%, to $901,000 for the third quarter of 2020, as compared to $811,000 for the same period in 2019. For the nine months ended September 30, 2020, net investment income increased $238,000, or 9.9%, to $2,645,000, from $2,407,000 for the same period in 2019.

Losses and settlement expenses decreased by $746,000, or 7.8%, to $8,863,000 for the third quarter of 2020, from $9,609,000 for the same period in 2019. Losses and settlement expenses decreased by $2,203,000, or 7.8%, to $25,914,000 for the nine months ended September 30, 2020, from $28,117,000 for the same period in 2019. The primary driver for the year-to-date decrease in claims expenses was insureds' business closures during the first, second and a portion of the third quarter as a result of COVID-19 stay-at-home state mandates. As of September 30, 2020, the Company has received 1,283 claims for business interruption related to COVID-19. Although a few court cases involving other carriers have sided with policyholders in their claims for coverage for these losses, the Company does not anticipate that property claims of this nature will be found to trigger coverage under its policy language, and therefore does not anticipate being required to make any loss payments.

Policy acquisition costs and other operating expenses decreased by $11,000, or 0.2%, to $4,722,000 for the third quarter of 2020 from $4,733,000 for the same period in 2019. Policy acquisition costs and other operating expenses decreased by $800,000, or 5.5% to $13,742,000 for the nine months ended September 30, 2020, from $14,542,000 for the same period in 2019.

Total assets increased by 10.4% from $163,004,000 at December 31, 2019 to $179,984,000 at September 30, 2020. Our investment portfolio, which consists of fixed income securities, common stocks, preferred stock, property held for investment, and other invested assets, increased by 11.7% from $111,768,000 at December 31, 2019, to $124,848,000 at September 30, 2020.

THIRDQUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2020- FINANCIAL RATIOS

The Company's losses and settlement expense ratio (defined as losses and settlement expenses divided by net premiums earned) was 70.7% and 70.2% in the third quarter and nine months ended September 30, 2020, respectively, compared with 70.2% and 71.7% in the same periods of 2019, respectively.

The expense ratio (defined as the amortization of deferred policy acquisition costs and underwriting and administrative expenses divided by net premiums earned) was 37.7% and 37.2% in the third quarter and nine months ended September 30, 2020, respectively, compared to 34.6% and 37.1% in the same periods of 2019, respectively.

The Company's GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 108.4% and 107.4% in the third quarter and nine months ended September 30, 2020, respectively, compared to 104.8% and 108.8% in the same periods of 2019, respectively.

MANAGEMENT COMMENTARY

"The third quarter generated positive earnings per share despite challenging economic conditions impacting the food and beverage industry. The Company's equity investments experienced a surge in unrealized gains, and, even with the derecho windstorm event moving across the Midwest in August, we managed to hold net losses down.

"Despite the premium challenges associated with COVID-19, the loss and settlement ratio has improved year over year. Due to continued cost cutting measures the Company has maintained a consistent expense ratio. This has led to a 1.4% improvement in the year-to-date combined ratio.

"Second quarter's civil unrest combined with third quarter's derecho windstorm contributed to effective utilization of the Company's 2020 reinsurance program. We ceded $7.9 million of earned premium and in return received claims coverage of $11.6 million.

"The Company's accelerated expansion into Arizona has proven to be a positive strategic move, with related written premiums offsetting a good portion of premium lost due to the impact of the unprecedented COVID-19 pandemic. The Company continues streamlining its operational processes and implementing initiatives that will allow future profitable growth in our niche," 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; future responses to and effects of the COVID-19 pandemic, including their effects on our business operations and claims activity; new theories of liability; judicial, legislative, regulatory and other governmental developments; litigation tactics and developments; 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, 2019. 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,

2020 2019

(Unaudited)

Assets

Investments and cash:

Fixed maturity securities (cost or amortizedcost - $96,725,639 at 9/30/2020 and $88,348,415 $ 103,318,485 $ 92,087,572at 12/31/2019)

Common stocks at fair value 12,596,635 14,448,773

Preferred stocks at fair value 1,638,453 -

Other invested assets 1,779,060 877,900

Property held for investment, at cost, net ofaccumulated depreciation of $438,720 at 9/30/ 5,515,676 4,353,7132020 and $332,218 at 12/31/2019

Cash and cash equivalents 6,598,640 6,626,585

Total investments and cash 131,446,949 118,394,543

Accrued investment income 719,389 646,504

Premiums and reinsurance balances receivable,net of allowances for uncollectible amounts of 22,737,615 22,368,526$100,000 at 9/30/2020 and 12/31/2019

Ceded unearned premiums 839,718 822,818

Reinsurance balances recoverable on unpaidlosses and settlement expenses, net of 13,844,420 11,036,170allowances for uncollectible amounts of $0 at 9/30/2020 and 12/31/2019

Federal income taxes 717,862 192,559

Deferred policy acquisition costs, net 5,267,470 5,269,256

Property and equipment, at cost, net ofaccumulated depreciation of $5,949,933 at 9/30/ 2,851,235 3,033,3482020 and $5,619,706 at 12/31/2019

Other assets 1,559,179 1,239,794

Total assets $ 179,983,837 $ 163,003,518

Liabilities and Equity

Liabilities:

Unpaid losses and settlement expenses $ 61,943,244 $ 56,838,307

Unearned premiums 29,921,669 30,392,817

Reinsurance balances payable 728,674 374,998

Corporate debt 15,097,960 3,475,088

Accrued expenses 3,093,882 4,216,988

Income taxes - deferred 214,674 39,213

Other liabilities 950,858 1,324,273

Total liabilities 111,950,961 96,661,684

Equity:

Common stock1 35,000 35,000

Treasury stock, at cost2 (3,112,656) (3,146,576)

Additional paid-in capital 32,717,495 32,703,209

Accumulated other comprehensive earnings, net 5,208,657 2,953,936of tax

Retained earnings 35,821,408 36,608,750

Less: Unearned Employee Stock Ownership Plan (2,637,028) (2,812,485)shares at cost3

Total equity 68,032,876 66,341,834

Total liabilities and equity $ 179,983,837 $ 163,003,518

1Par value $0.01; authorized: 2020 - 10,000,000 shares and 2019 - 10,000,000shares; issued: 2020- 3,500,000 shares and 2019 - 3,500,000 shares;outstanding: 2020- 3,030,522 and 2019- 3,014,941 shares.

22020 - 205,775 shares and 2019 - 203,811 shares

32020 - 263,703 shares and 2019 - 281,248 shares

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings(Unaudited)

For the Three-Months Ended

September 30,

2020 2019

Net premiums earned $ 12,532,967 $ 13,679,746

Net investment income 900,950 811,462

Net realized investment (losses) gains (59,333) 141,481

Net unrealized gains (losses) on equity securities 981,779 (7,603)

Other (loss) (36,333) (112,763)

Consolidated revenues 14,320,030 14,512,323

Losses and settlement expenses 8,863,053 9,609,347

Policy acquisition costs and other operating 4,722,485 4,733,206expenses

Interest expense on debt 58,724 32,458

General corporate expenses 171,860 164,378

Total expenses 13,816,122 14,539,389

Earnings (loss) before income taxes 503,908 (27,066)

Total income tax expense (benefit) 99,919 (13,150)

Net earnings (loss) $ 403,989 $ (13,916)

Other comprehensive earnings, net of tax 440,838 703,220

Comprehensive earnings $ 844,827 $ 689,304

Earnings per share:

Basic:

Basic net earnings (loss) per share $ 0.13 $ (0.00)

Diluted:

Diluted net earnings (loss) per share $ 0.13 $ (0.00)

Weighted average number of common sharesoutstanding:

Basic 3,030,571 3,011,034

Diluted 3,039,658 3,015,038

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings(Unaudited)

For the Nine-Months Ended

September 30,

2020 2019

Net premiums earned $ 36,921,702 $ 39,219,882

Net investment income 2,644,900 2,406,965

Net realized investment (losses) gains (402,320) 741,123

Net unrealized gains on equity securities 2,195 1,716,124

Other income (loss) 82,934 (43,838)

Consolidated revenues 39,249,411 44,040,256

Losses and settlement expenses 25,913,619 28,117,369

Policy acquisition costs and other operating 13,741,725 14,541,986expenses

Interest expense on debt 150,773 96,353

General corporate expenses 471,616 444,829

Total expenses 40,277,733 43,200,537

(Loss) earnings before income taxes (1,028,322) 839,719

Total income tax (benefit) expense (240,980) 122,796

Net (loss) earnings $ (787,342) $ 716,923

Other comprehensive earnings, net of tax 2,254,721 3,423,233

Comprehensive earnings $ 1,467,379 $ 4,140,156

Earnings per share:

Basic:

Basic net (loss) earnings per share $ (0.26) $ 0.24

Diluted:

Diluted net (loss) earnings per share $ (0.26) $ 0.24

Weighted average number of common sharesoutstanding:

Basic 3,023,794 3,004,887

Diluted 3,032,881 3,008,891

Arron K. Sutherland, President and CEO

Illinois Casualty Company

Contact Info: (309) 732-0105

arrons@ilcasco.com

225 20th Street, Rock Island, IL 61201

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SOURCE ICC Holdings, Inc.