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GlobeNewswire

Independence Holding Company Announces 2021 Second-Quarter and Six-Month Results

STAMFORD, Conn., Aug. 09, 2021 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE: IHC) today reported 2021 second-quarter and six-month results.   

Financial Results

Net income attributable to IHC of $76,471,000 or $5.22 per share for the three months ended June 30, 2021 compared to $421,000 or $.03 per share, diluted, for the three months ended June 30, 2020.   Net income attributable to IHC was $82,092,000 or $5.61 per share, diluted, for the six months ended June 30, 2021 compared to $4,699,000 or $.32 per share, diluted, for the six months ended June 30, 2020.  

The Company entered into three transactions this year for the sales of Madison National Life Insurance Company, Inc. (“Madison National Life”) to Horace Mann Educators Corporation, Standard Security Life Insurance Company of New York (“Standard Security Life”) to Reliance Standard Life Insurance Company and 70% of its pet business, including all of the common stock of Independence American Insurance Company and 85% of the common stock of PetPartners, Inc. (“PetPartners”), to Iguana Capital, Inc. (“Iguana Capital”).

The Company completed the sale of PetPartners on June 30, 2021, and results for the three months and six months of 2021 include a gain on the sale of PetPartners of $62,693,000 net of tax. Also included in income from discontinued operations is certain income from Standard Security Life and Independence American Insurance Company. The results of Madison National Life will be shown as discontinued operations in the third quarter. The gain on the sale of Standard Security Life, Independence American Insurance Company and Madison National Life will be recorded when those transactions receive regulatory approval and are consummated.

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “We are very pleased with the three transactions we entered into this year, and the consummation of the sales is expected to take most of the focus of the Company for the remainder of 2021. After all the transactions are closed, IHC projects that it will hold approximately $560 million in cash and investments, net of liabilities; a 30% interest in Iguana Capital carried at $115 million; and our health insurance agency and other assets with an aggregate carrying value of approximately $20 million, resulting in an estimated book value of approximately $47.00 per share which is calculated as if the transactions occurred and were recorded on June 30, 2021. Actual book value per share at June 30, 2021 was $37.45. These projections are based on information currently known to management and include the use of estimates and assumptions with regards to anticipated transaction costs, estimated tax rates and other potential changes.”

Mr. Thung added, “We intend to invest, develop and expand our agency operations into a much larger and profitable operation. As we progress, our agency operations will be centered around INSXcloud.com (INSX), our CMS approved Web Broker. INSX provides an agent with the ability to quote, directly enroll and track applications on the Federally Facilitated Marketplace, plus much more. The balance of our agency includes our W-2 Call Centers and our captive independent Advisors unit, both of which sell into the under/over age 65 health insurance markets, as well as our Independence Brokerage Group which recruits independent agents and agencies to sell via our platforms and contracts. We are refocusing a portion of our over 65 division into the under 65 market in order to take advantage of the positioning of INSX, our agency and our lead generation capabilities, and the market growth resulting from the American Rescue Plan Act. Although these operations have been unprofitable, we expect these changes will improve the results and bring us to profitability in the future. In addition, we will also continue to monitor and support our minority interest investment in Iguana Capital.”

About The IHC Group

Independence Holding Company (NYSE: IHC), through our current subsidiaries, 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. (“Madison National Life”). 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.inxscloud.com. As previously announced, IHC has entered into stock purchase agreements to sell all of the issued and outstanding capital stock of Standard Security Life, Madison National Life and Independence American Holdings Corp., which includes Independence American Insurance Company and other assets of IHC’s pet business, each subject to regulatory approval. 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
June 30, 2021
(In Thousands, Except Shares and Per Share Data)
 
 
 
  Three Months Ended Six Months Ended
  June 30, June 30,
  2021
 2020
 2021
 2020
REVENUES:        
Premiums earned$42,451 $49,138 $86,023 $99,804 
Net investment income 1,651  2,329  3,452  4,828 
Fee income 4,944  3,907  11,079  7,341 
Other income 410  807  1,026  1,432 
Net investment gains (losses) (126) 274  91  117 
         
  49,330  56,455  101,671  113,522 
         
EXPENSES:        
Insurance benefits, claims and reserves 17,192  21,339  39,113  47,628 
Selling, general and administrative expenses 32,842  37,974  63,602  69,034 
         
  50,034  59,313  102,715  116,662 
         
Loss from continuing operations before income taxes (704) (2,858) (1,044) (3,140)
Income tax benefit (267) (1,066) (430) (1,187)
         
Loss from continuing operations, net of tax (437) (1,792) (614) (1,953)
         
Discontinued operations:        
Total pretax income from discontinued operations 92,375  3,594  99,574  9,243 
Income tax expense on discontinued operations 15,570  1,264  17,026  2,430 
Income from discontinued operations, net of tax 76,805  2,330  82,548  6,813 
         
Net income  76,368  538  81,934  4,860 
(Income) loss from nonredeemable noncontrolling interests 1  (43) 2  (34)
(Income) loss from redeemable noncontrolling interests 102  (74) 156  (127)
         
NET INCOME ATTRIBUTABLE TO IHC$76,471 $421 $82,092 $4,699 
         
Basic income per common share        
Loss from continuing operations$(.03)$(.12)$(.04)$(.13)
Income from discontinued operations 5.25  .15  5.65  .45 
Basic income per common share$5.22 $.03 $5.61 $.32 
         
WEIGHTED AVERAGE SHARES OUTSTANDING 14,642  14,765  14,641  14,811 
         
Diluted income per common share        
Loss from continuing operations$(.03)$(.12)$(.04)$(.13)
Income from discontinued operations 5.25  .15  5.65  .45 
Diluted income per common share$5.22 $.03 $5.61 $.32 
         
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 14,642  14,765  14,641  14,811 
         

As of August 7, 2021, there were 14,644,389 common shares outstanding, net of treasury shares.

 
INDEPENDENCE HOLDING COMPANY
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
 
 
 
   June 30, 2021  December 31, 2020
       
ASSETS:      
Investments:      
Short-term investments $1,550  $1,568 
Securities purchased under agreements to resell  70,323   33,038 
Fixed maturities, available-for-sale  183,709   210,719 
Equity securities  -   1,753 
Other investments  2,022   1,928 
Total investments  257,604   249,006 
       
Cash and cash equivalents  22,834   31,923 
Investment in Iguana Capital, Inc.  33,762   - 
Due and unpaid premiums  10,950   9,981 
Due from reinsurers  354,735   357,237 
Goodwill  12,486   12,486 
Funds held in escrow  78,779   - 
Other assets  29,864   46,832 
Assets attributable to discontinued operations  416,162   375,691 
       
TOTAL ASSETS $1,217,176  $1,083,156 
       
LIABILITIES AND EQUITY:      
LIABILITIES:      
Policy benefits and claims $127,815  $132,957 
Future policy benefits  196,026   198,086 
Funds on deposit  142,155   141,376 
Unearned premiums  1,763   1,952 
Other policyholders' funds  11,988   12,001 
Due to reinsurers  2,242   3,872 
Accounts payable, accruals and other liabilities  66,519   44,855 
Liabilities attributable to discontinued operations  120,180   75,939 
       
TOTAL LIABILITIES  668,688   611,038 
       
Commitments and contingencies      
Redeemable noncontrolling interest  -   2,312 
       
STOCKHOLDERS’ EQUITY:      
Preferred stock (none issued)  -   - 
Common Stock  18,625   18,625 
Paid-in capital  125,653   124,757 
Accumulated other comprehensive income  3,220   4,197 
Treasury stock, at cost  (77,189)  (77,088)
Retained earnings  478,139   399,273 
       
TOTAL IHC STOCKHOLDERS’ EQUITY  548,448   469,764 
NONREDEEMABLE NONCONTROLLING INTERESTS  40   42 
       
TOTAL EQUITY  548,488   469,806 
       
TOTAL LIABILITIES AND EQUITY  $1,217,176  $1,083,156 
         

CONTACT: Loan Nisser
(646) 509-2107
www.IHCGroup.com