INDEPENDENCE HOLDING COMPANY - Form 8-K SEC filing
0000701869 false 0000701869 2021-05-06 2021-05-06

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

  

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) May 6, 2021

 

INDEPENDENCE HOLDING COMPANY

(Exact name of registrant as specified in its charter)

 

Delaware

001-32244

58-1407235

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

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

 

 

96 Cummings Point Road, Stamford, Connecticut

06902

(Address of principal executive offices)

(Zip Code)

 

Registrant's telephone number, including area code:  (203) 358-8000

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

 

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, $1.00 par value

IHC

NYSE

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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) if the Exchange Act.  ¨

 

 

 




Item 2.02 Results of Operations and Financial Condition.

 

The information set forth under this Item 2.02 (Results of Operations and Financial Condition) is intended to be furnished. Such information, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities and Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.

 

On May 6, 2021, Independence Holding Company issued a news release announcing its 2021 first-quarter results, a copy of which is attached as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits

 

(c)  Exhibits: 

 

 

Exhibit 99.1

News Release of Independence Holding Company dated May 6, 2021: Independence Holding Company Announces First-Quarter Results.

Exhibit 104

Cover Page Interactive Data File ( embedded within the Inline XBRL document)

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

INDEPENDENCE HOLDING COMPANY

(Registrant)

 

 

 

By: Teresa A. Herbert

 

 

 

/s/ Teresa A. Herbert

Teresa A. Herbert

Senior Vice President and Chief Financial Officer

 

Date:

 

May 7, 2021

 




 

EXHIBIT 99.1

 

INDEPENDENCE HOLDING COMPANY

CONTACT:  Loan Nisser

96 CUMMINGS POINT ROAD

(646) 509-2107

STAMFORD, CONNECTICUT 06902

www.IHCGroup.com

NYSE: IHC

 

 

NEWS RELEASE

 

INDEPENDENCE HOLDING COMPANY ANNOUNCES

2021 FIRST-QUARTER RESULTS

 

Stamford, Connecticut, May 6, 2021. Independence Holding Company (NYSE: IHC) today reported 2021 first-quarter results.   

Financial Results

Net income attributable to IHC was $5,621,000, or $.38 per share, diluted, for the three months ended March 31, 2021 compared to $4,278,000, or $.29 per share, diluted, for the three months ended March 31, 2020.

The Company reported revenues of $124,657,000 for the three months ended March 31, 2021 compared to revenues for the three months ended March 31, 2020 of $103,997,000. The increase in revenues primarily relates to an increase for the Paid Family Leave (“PFL”) portion of our New York disability law (“DBL”) business, higher premium volume in our pet insurance business and an increase in sales of insurance products (primarily senior products, Affordable Care Act (“ACA”) plans and small group stop-loss) by the IHC agencies for multiple unaffiliated insurance carriers.

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “We are pleased with the increases in net income and revenues for the first quarter of 2021, primarily attributable to the performance of our DBL/PFL line of business as referenced above. Partially offsetting these positive results, we are experiencing a sharp drop in short term medical sales due to changes in the ACA, including the extended Special Enrollment Period for ACA coverage and the increased Advanced Premium Tax Credits, also known as subsidies, which have made ACA plans more affordable for many people who in the past may have elected short term medical.  The Company expects weak sales in short term medical to continue. In addition, the group life incidence rate was higher than expected in the first quarter due to COVID-19 reported deaths, but subsequent to March 31st the death rates have returned to normal.”

Mr. Thung added, “IHC has a very strong balance sheet with no indebtedness and a very substantial amount of free cash at the corporate level and significant excess capital in our insurance companies. Our book value was $32.36 per share at March 31, 2021.  Our overall investment portfolio continues to be very highly rated (on average, AA) and has an effective duration of under three years.”  

About Independence Holding Company

 

Through our subsidiaries, Independence Holding Company (NYSE: IHC) underwrites and distributes health, group disability and life, New York State DBL and paid family leave, and pet insurance. IHC underwrites policies in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands through our three carriers: Independence American Insurance Company, Standard Security Life Insurance Company of New York (“Standard Security Life”) and Madison National Life Insurance Company, Inc.  We also distribute products nationally through multiple channels, including our agencies, call centers, advisors, direct and affinity relationships, Web Broker, and




web properties, including www.healthedeals.com; www.healthinsurance.org; www.medicareresources.org; www.petplace.com; and www.mypetinsurance.com.  As previously announced, IHC recently entered into a stock purchase agreement to sell all of the issued and outstanding capital stock of Standard Security Life. To learn more, visit https://ihcgroup.com/.

 

 

Forward-looking Statements

Certain statements and information contained in this release may be considered “forward-looking statements,” such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements.  Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which IHC operates, new federal or state governmental regulation, IHC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in IHC’s other news releases and filings with the Securities and Exchange Commission. IHC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.




INDEPENDENCE HOLDING COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

March 31, 2021

 

(In Thousands, Except Shares and Per Share Data)

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2021

 

2020

REVENUES:

 

 

 

 

Premiums earned

$

115,141  

$

96,050  

Net investment income

 

2,592  

 

3,240  

Fee income

 

6,356  

 

3,942  

Other income

 

353  

 

477  

Net investment gains

 

215  

 

288  

 

 

124,657  

 

103,997  

 

 

 

 

 

EXPENSES:

 

 

 

 

Insurance benefits, claims and reserves

 

67,378  

 

54,058  

Selling, general and administrative expenses

 

50,420  

 

44,574  

 

 

 

 

 

 

 

117,798  

 

98,632  

 

 

 

 

 

Income before income taxes

 

6,859  

 

5,365  

Income taxes

 

1,293  

 

1,043  

 

 

 

 

 

Net income

 

5,566  

 

4,322  

(Income) loss from noncontrolling interests

 

55  

 

(44) 

 

 

 

 

 

NET INCOME ATTRIBUTABLE TO IHC

$

5,621  

$

4,278  

 

 

 

 

 

 

 

 

 

 

Basic income per common share

$

.38  

$

.29  

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

14,641  

 

14,856  

 

 

 

 

 

Diluted income per common share

$

.38  

$

.29  

 

 

 

 

 

WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING

 

14,778  

 

14,911  

 

 

 

 

 

 

 

 

 

As of May 6, 2021, there were 14,639,449 common shares outstanding, net of treasury shares.




INDEPENDENCE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

ASSETS:

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

Short-term investments

 

$

1,559  

 

$

2,634  

 

Securities purchased under agreements to resell

 

 

145,392  

 

 

49,990  

 

Fixed maturities, available-for-sale

 

 

390,942  

 

 

406,649  

 

Equity securities

 

 

2,671  

 

 

6,119  

 

Other investments

 

 

10,768  

 

 

8,238  

 

Total investments

 

 

551,332 

 

 

473,630  

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

22,123  

 

 

72,089  

 

Due and unpaid premiums

 

 

40,688  

 

 

29,182  

 

Due from reinsurers

 

 

357,053  

 

 

357,205  

 

Goodwill

 

 

74,900  

 

 

74,900  

 

Other assets

 

 

78,876  

 

 

76,150  

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

1,124,972  

 

$

1,083,156  

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

Policy benefits and claims

 

$

193,282  

 

$

179,232  

 

Future policy benefits

 

 

196,439  

 

 

198,086  

 

Funds on deposit

 

 

141,891  

 

 

141,376  

 

Unearned premiums

 

 

43,798  

 

 

12,789  

 

Other policyholders' funds

 

 

11,920  

 

 

12,001  

 

Due to reinsurers

 

 

2,634  

 

 

3,872  

 

Accounts payable, accruals and other liabilities

 

 

58,961  

 

 

63,682  

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

648,925  

 

 

611,038  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

2,258  

 

 

2,312  

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

Preferred stock (none issued)

 

 

 

 

 

 

 

Common stock

 

 

18,625  

 

 

18,625  

 

Paid-in capital

 

 

125,189  

 

 

124,757  

 

Accumulated other comprehensive income

 

 

2,268  

 

 

4,197  

 

Treasury stock, at cost

 

 

(77,228) 

 

 

(77,088) 

 

Retained earnings

 

 

404,894  

 

 

399,273  

 

 

 

 

 

 

 

TOTAL IHC STOCKHOLDERS’ EQUITY

 

 

473,748  

 

 

469,764  

NONREDEEMABLE NONCONTROLLING INTERESTS

 

 

41  

 

 

42  

 

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

 

473,789  

 

 

469,806  

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

$

1,124,972  

 

$

1,083,156