×

Independence Holding Company Announces 2016 First-Quarter Results

STAMFORD, Conn., Aug. 01, 2016 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE:IHC) today reported 2016 first-quarter results.

Financial Results

On March 31, 2016, IHC completed the sale of IHC Risk Solutions LLC (“Risk Solutions”), exited the medical stop-loss business and realized an after tax gain of approximately $99,793,000, net of noncontrolling interest. In addition, under the purchase and sale agreement, all of IHC’s in-force medical stop-loss business produced by Risk Solutions is 100% co-insured as of January 1, 2016 and is expected to run out by early 2017. The disposal transaction qualified for reporting as discontinued operations in the first quarter of 2016.

Net income attributable to IHC of $106,010,000, or $6.08 per share diluted, for the three months ended March 31, 2016 increased from $5,219,000, or $.30 per share diluted, in the same period of 2015 primarily due to the sale of Risk Solutions. Income from continuing operations increased to $.33 per share, diluted, or $5,896,000, for the three months ended March 31, 2016 compared to $.27 per share, diluted, or $4,701,000, for the three months ended March 31, 2015.

The Company reported revenues of $75,895,000 for the three months ended March 31, 2016 compared to revenues for the three months ended March 31, 2015 of $133,105,000. Revenues decreased primarily due to a reduction in premiums from the 100% co-insurance of the Company’s stop-loss business produced by Risk Solutions.

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “With the sale of our stop-loss business, we are now focused on growing our remaining lines of business: group long term disability and life, statutory disability benefit policies (DBL) in New York, and group and individual specialty health insurance (including dental, vision, short term medical, hospital indemnity, gap and scheduled benefit plans). All of these lines performed well in the first quarter and we anticipate continued growth and good underwriting results from these lines of business for the remainder of 2016.”

He continued, “Also as a result of the sale of our stop-loss business, we will have a very significant amount of cash and, by early next year as the stop-loss runs out, significant excess statutory surplus in our carriers. We have designated a relatively small portion of our liquidity to generate growth in our current product lines, and to date we have made two investments in call centers that focus on selling our specialty health products. We have not yet determined how to utilize our remaining large amount of liquidity. Our overall investment portfolio continues to be very highly rated (on average, AA) and has a duration of approximately five and a half years. Our book value increased to $25.08 per share at March 31, 2016 from $18.73 per share at December 31, 2015, and our total stockholders’ equity increased to $432 million at March 31, 2016 compared to $323 million at December 31, 2015. Both of these are all-time highs. The closing price of IHC stock on Friday was $17.41 or 69% of our book value and 81% of our tangible book value.”

About The IHC Group

Independence Holding Company (NYSE:IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual disability, specialty and supplemental health, pet, and life insurance through its subsidiaries since 1980. The IHC Group (including through its 91.4% ownership of American Independence Corp. (NASDAQ:AMIC)) owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company), a majority of Ebix Health Administration Exchange, Inc., a fully insured third party administrator, and IHC Specialty Benefits, Inc., which is a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss). All products are placed with highly rated carriers.

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

FIRST QUARTER REPORT
March 31, 2016
(In Thousands, Except Per Share Data)
Three Months Ended
March 31,
2016 2015
REVENUES:
Premiums earned$ 62,562 $ 122,114
Net investment income 4,436 5,422
Fee income 5,079 2,577
Other income 3,258 992
Net realized investment gains 560 2,000
75,895 133,105
EXPENSES:
Insurance benefits, claims and reserves 30,743 79,620
Selling, general and administrative expenses 35,227 45,484
Interest expense on debt 453 432
66,423 125,536
Income from continuing operations before income taxes 9,472 7,569
Income taxes 3,576 2,868
Income from continuing operations 5,896 4,701
Discontinued operations
Income from discontinued operations, before income taxes 117,636 1,031
Income taxes on discontinued operations 7,866 401
Income from discontinued operations 109,770 630
Net income 115,666 5,331
Less: income from noncontrolling interests in subsidiaries (9,656) (112)
NET INCOME ATTRIBUTABLE TO IHC$ 106,010 $ 5,219
Basic income per common share
Income from continuing operations$ .34 $ .27
Income from discontinued operations 5.81 .03
Basic income per common share$ 6.15 $ .30
WEIGHTED AVERAGE SHARES OUTSTANDING 17,243 17,364
Diluted income per common share
Income from continuing operations$ .33 $ .27
Income from discontinued operations 5.75 .03
Diluted income per common share$ 6.08 $ .30
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 17,449 17,531
As of July 30, 2016, there were 17,170,933 common shares outstanding, net of treasury shares.



INDEPENDENCE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
March 31, December 31,
2016 2015
ASSETS:
Investments:
Short-term investments $ 50 $ 50
Securities purchased under agreements to resell 21,196 28,285
Trading securities 1,190 1,259
Fixed maturities, available-for-sale 520,638 428,601
Equity securities, available-for-sale 8,714 8,426
Other investments 20,501 21,538
Total investments 572,289 488,159
Cash and cash equivalents 145,696 17,500
Due and unpaid premiums 64,645 69,075
Due from reinsurers 462,087 483,073
Premium and claim funds 41,576 22,015
Goodwill 47,276 47,276
Other assets 48,257 57,934
Assets attributable to discontinued operations - 12,931
TOTAL ASSETS $ 1,381,826 $ 1,197,963
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Policy benefits and claims $ 247,900 $ 245,443
Future policy benefits 235,251 270,624
Funds on deposit 149,147 173,350
Unearned premiums 13,350 10,236
Other policyholders' funds 9,675 11,822
Due to reinsurers 70,283 46,355
Due to securities brokers 99,803 998
Accounts payable, accruals and other liabilities 57,020 63,111
Liabilities attributable to discontinued operations 6,085 (15)
Debt 4,250 5,189
Junior subordinated debt securities 38,146 38,146
TOTAL LIABILITIES 930,910 865,259
STOCKHOLDERS’ EQUITY:
IHC STOCKHOLDERS' EQUITY:
Preferred stock (none issued) - -
Common stock 18,569 18,569
Paid-in capital 128,053 127,733
Accumulated other comprehensive income (479) (3,440)
Treasury stock, at cost (14,782) (13,961)
Retained earnings 300,457 194,450
TOTAL IHC STOCKHOLDERS’ EQUITY 431,818 323,351
NONCONTROLLING INTERESTS IN SUBSIDIARIES 19,098 9,353
TOTAL EQUITY 450,916 332,704
TOTAL LIABILITIES AND EQUITY $ 1,381,826 $ 1,197,963


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

Source:Independence Holding Company