icch20240331

icch20240331_10q.htm

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from __________ to __________.

Commission File Number: 001-38046

ICC Holdings, Inc.

(Exact name of registrant as specified in its charter)

_______________________________

Pennsylvania

(State or other jurisdiction of
incorporation or organization)

81-3359409

(I.R.S. Employer
Identification No.)

225 20th Street, Rock Island, Illinois

(Address of principal executive offices)

61201

(Zip Code)

(309) 793-1700

(Registrant’s telephone number, including area code)

_______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ICCH	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of May 9, 2024 was 3,142,973.

Table of Contents

Table of Contents



			Page
PART I
Item 1	Financial Statements
		Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	3
		Condensed Consolidated Statements of Earnings and Comprehensive Earnings for the Three Month Periods Ended March 31, 2024 and 2023 (unaudited)	4
		Condensed Consolidated Statements of Earnings and Comprehensive Earnings for the Three Month Periods Ended March 31, 2024 and 2023 (unaudited)	4
		Condensed Consolidated Statements of Stockholders Equity for the Three Month Periods Ended March 31, 2024 and 2023 (unaudited)	5
		Condensed Consolidated Statements of Cash Flows for the Three Month Periods Ended March 31, 2024 and 2023 (unaudited)	6
		Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3	Quantitative and Qualitative Disclosures about Market Risk		33
Item 4	Controls and Procedures		34

PART II
Item 1	Legal Proceedings		35
Item 1A	Risk Factors		35
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3	Default Upon Senior Securities		35
Item 4	Mine Safety Disclosures		35
Item 5	Other Information		35
Item 6	Exhibits		36

Signatures			37

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Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	*As of*
	*March 31,*			*December 31,*
	*2024*			*2023*
		(Unaudited)
Assets:
Investments and cash:
Fixed maturity securities (amortized cost of $118,359,809 at 3/31/2024 and $119,336,041 at 12/31/2023)	$	109,168,285		$	110,955,697
Common stocks at fair value		13,369,954			12,191,621
Preferred stocks at fair value		3,046,812			2,896,296
Other invested assets, net of allowances for credit losses of $39,000 at 3/31/2024 and $39,000 at 12/31/2023		9,040,528			8,898,409
Property held for investment, at cost, net of accumulated depreciation of $728,443 at 3/31/2024 and $682,402 at 12/31/2023		6,115,025			5,910,864
Cash and cash equivalents		7,026,999			1,478,135
Total investments and cash		147,767,603			142,331,022
Accrued investment income		962,242			915,156
Premiums and reinsurance balances receivable, net of allowances for credit losses of $136,000 at 3/31/2024 and $143,000 at 12/31/2023		36,450,702			37,220,433
Ceded unearned premiums		724,172			755,099
Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for credit losses of $88,000 at 3/31/2024 and $82,000 at 12/31/2023		13,738,899			12,736,579
Federal income taxes		2,386,403			2,775,366
Deferred policy acquisition costs, net		8,643,538			8,552,459
Property and equipment, at cost, net of accumulated depreciation of $7,109,013 at 3/31/2024 and $6,990,076 at 12/31/2023		3,363,731			3,325,322
Other Assets, net of allowances for credit losses of $5,000 at 3/31/2024 and $5,000 at 12/31/2023		2,395,727			2,405,577
Total assets	$	216,433,017		$	211,017,013

Liabilities:
Unpaid losses and settlement expenses	$	77,650,986		$	71,919,585
Unearned premiums		47,450,348			47,259,637
Reinsurance balances payable		663,886			1,132,301
Corporate debt		15,000,000			15,000,000
Accrued expenses		5,783,483			7,442,617
Other liabilities		1,198,903			1,259,324
Total liabilities		147,747,606			144,013,464

Equity:
Common stock¹		35,000			35,000
Treasury stock, at cost²		(5,776,979	)		(5,710,324	)
Additional paid-in capital		33,421,997			33,330,846
Accumulated other comprehensive (loss), net of tax		(7,261,448	)		(6,621,336	)
Retained earnings		50,083,573			47,844,368
Less: Unearned Employee Stock Ownership Plan shares at cost³		(1,816,732	)		(1,875,005	)
Total equity		68,685,411			67,003,549
Total liabilities and equity	$	216,433,017		$	211,017,013

¹Par value $0.01; authorized: 2024 and 2023 - 10,000,000 shares; issued: 2024 – 3,500,000 shares and 2023 – 3,500,000 shares; outstanding: 2024 – 3,138,976 and 2023 – 3,138,976 shares

² 2024 – 361,024 shares and 2023 – 361,024 shares

³ 2024 – 181,671 shares and 2023 – 187,498 shares

See accompanying notes to consolidated financial statements.

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ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)

	*For the Three-Months Ended*
	*March 31,*
	*2024*			*2023*
Net premiums earned	$	20,222,366		$	17,801,297
Net investment income		1,440,202			1,209,415
Net realized investment gains (losses)		150,686			(75,565	)
Net unrealized gains on investments		1,273,890			639,418
Other (loss) income		(5,037	)		45,836
Consolidated revenues		23,082,107			19,620,401
Losses and settlement expenses		12,336,928			11,047,681
Policy acquisition costs and other operating expenses		7,663,099			6,349,581
Interest expense on debt		45,904			45,400
General corporate expenses		200,770			193,674
Total expenses		20,246,701			17,636,336
Earnings before income taxes		2,835,406			1,984,065
Total income tax expense		596,201			405,520
Net earnings	$	2,239,205		$	1,578,545

Other comprehensive (loss) earnings, net of tax		(640,112	)		1,596,353
Comprehensive earnings	$	1,599,093		$	3,174,898

Earnings per share:
Basic:
Basic net earnings per share	$	0.76		$	0.54
Diluted:
Diluted net earnings per share	$	0.75		$	0.53

Weighted average number of common shares outstanding:
Basic		2,953,441			2,942,659
Diluted		2,969,446			2,956,273

See accompanying notes to consolidated financial statements.

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ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

	*Common stock*		*Treasury stock*			*Unearned ESOP*			*Additional paid-in capital*		*Retained earnings*			*Accumulated other comprehensive earnings (loss)*			*Total equity*
Balance, January 1, 2023	$	35,000	$	(5,463,535	)	$	(2,109,375	)	$	33,119,125	$	43,701,233		$	(8,841,517	)	$	60,440,931
Cumulative adjustment for adoption of ASU 2016-13, net of tax		—		—			—			—		(113,760	)		—			(113,760	)
Purchase of treasury stock		—		(46,334	)		—			—		—			—			(46,334	)
Net earnings		—		—			—			—		1,578,545			—			1,578,545
Other comprehensive earnings, net of tax		—		—			—			—		—			1,596,353			1,596,353
Restricted stock unit expense		—		—			—			52,850		—			—			52,850
ESOP compensation expense		—		—			57,790			32,154		—			—			89,944
Balance, March 31, 2023	$	35,000	$	(5,509,869	)	$	(2,051,585	)	$	33,204,129	$	45,166,018		$	(7,245,164	)	$	63,598,529

	*Common stock*		*Treasury stock*			*Unearned ESOP*			*Additional paid-in capital*		*Retained earnings*		*Accumulated other comprehensive earnings (loss)*			*Total equity*
Balance, January 1, 2024	$	35,000	$	(5,710,324	)	$	(1,875,005	)	$	33,330,846	$	47,844,368	$	(6,621,336	)	$	67,003,549
Purchase of treasury stock		—		(66,655	)		—			—		—		—			(66,655	)
Net earnings		—		—			—			—		2,239,205		—			2,239,205
Other comprehensive loss, net of tax		—		—			—			—		—		(640,112	)		(640,112	)
Restricted stock unit expense		—		—			—			59,380		—		—			59,380
ESOP compensation expense		—		—			58,273			31,771		—		—			90,044
Balance, March 31, 2024	$	35,000	$	(5,776,979	)	$	(1,816,732	)	$	33,421,997	$	50,083,573	$	(7,261,448	)	$	68,685,411

See accompanying notes to consolidated financial statements.

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ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

	*Three-Month Periods Ended March 31,*
	*2024*			*2023*
Cash flows from operating activities:
Net earnings	$	2,239,205		$	1,578,545
Adjustments to reconcile net earnings to net cash provided by operating activities
Net realized investment (gains) losses		(150,686	)		75,565
Net unrealized gains on investments		(1,273,890	)		(639,418	)
Depreciation		199,686			173,491
Deferred income tax		194,829			267,226
Amortization of bond premium and discount		(18,871	)		29,821
Stock-based compensation expense		149,424			142,794
Change in:
Accrued investment income		(47,086	)		509
Premiums and reinsurance balances receivable		769,731			(506,948	)
Ceded unearned premiums		30,927			143,200
Reinsurance balances recoverable		(1,002,320	)		(843,357	)
Deferred policy acquisition costs		(91,079	)		(565,515	)
Unpaid losses and settlement expenses		5,731,401			5,252,537
Unearned premiums		190,711			568,115
Reinsurance balances payable		(468,415	)		(1,123,875	)
Accrued expenses		(1,659,134	)		(1,949,578	)
Current federal income tax		364,293			124,565
Other		(93,842	)		(386,200	)
Net cash provided by operating activities		5,064,884			2,341,477
Cash flows from investing activities:
Purchases of:
Fixed maturity securities		(3,259,172	)		(5,960,521	)
Common stocks		(826,741	)		(807,926	)
Preferred stocks		(242,131	)		(78,716	)
Other invested assets		—			(360,000	)
Property held for investment		(250,201	)		(358,210	)
Property and equipment		(192,156	)		(160,191	)
Proceeds from sales, maturities and calls of:
Fixed maturity securities		4,294,521			3,830,441
Common stocks		705,443			778,071
Preferred stocks		245,513			95,628
Other invested assets		75,458			8,557
Property and equipment		101			33
Net cash provided by (used in) investing activities		550,635			(3,012,834	)
Cash flows from financing activities:
Purchase of treasury stock		(66,655	)		(46,334	)
Net cash used in financing activities		(66,655	)		(46,334	)
Net increase (decrease) in cash and cash equivalents		5,548,864			(

SEC Form 10-Q filed by ICC Holdings Inc.