Independence Holding Company Announces 2012 Third-Quarter and Nine-Month Results

Independence Holding Company Announces 2012 Third-Quarter and Nine-Month
Results

STAMFORD, Conn., Nov. 8, 2012 (GLOBE NEWSWIRE) -- November 8, 2012.
Independence Holding Company (NYSE:IHC) today reported 2012 third-quarter and
nine-month results. As previously reported, IHC paid a special 10% stock
dividend to shareholders of record on February 17, 2012. All per share amounts
reflect such stock dividend.This press release contains both GAAP and
non-GAAP financial information for which reconciliations can be found at the
end of this release.

Financial Results

Net income per share attributable to IHC increased to $.22 per share, diluted,
or $3,918,000, for the three months ended September 30, 2012 compared to $.20
per share, diluted, or $3,554,000, for the three months ended September 30,
2011. Revenues increased to $111,502,000 for the three months ended September
30, 2012 compared to revenues for the comparable period in 2011 of
$103,659,000, primarily as a result of an increase in premiums.

Net income per share attributable to IHC increased to $.63 per share, diluted,
or $11,371,000, for the nine months ended September 30, 2012 compared to $.56
per share, diluted, or $9,778,000, for the nine months ended September 30,
2011. This increase was achieved despite not receiving a benefit this period
comparable to the credit of $2,319,000 of deferred income taxes relative to
the Company's investment in AMIC that we recorded in the first quarter of
2011. Revenues increased to $315,101,000 for the nine months ended September
30, 2012 compared to revenues for the nine months ended September 30, 2011 of
$313,503,000, primarily due to an increase in premiums.

IHC reported operating income^1 per share of $.18 per share, diluted, or
$3,250,000, for the three months ended September 30, 2012, compared to $.17
per share, diluted, or $3,033,000, for the three months ended September 30,
2011. IHC reported operating income per share of $.51 per share, diluted, or
$9,221,000, for the nine months ended September 30, 2012, compared to $.49 per
share, diluted, or $8,486,000, for the nine months ended September 30, 2011.
The operating income for the first nine months ended September 30, 2011
benefited from the tax credit of $2,319,000 as described above whereas the
operating income for the nine months ended September 30, 2012 had no such
benefit.

Chief Executive Officer's Comments

Roy Thung, Chief Executive Officer, commented, "We continue to be encouraged
bythe significant increase in profitability and growth of our stop-loss
segment, which we attribute to the more efficient and controlled model of
writing the majority of our medical stop-loss on a direct basis.At present,
all indicators point to a continuation of this higher level of profitability.
We are also encouraged by the performance of all our other lines of business,
and our continuing efforts to introduce new products to our fully insured mix
of business.Our overall investment portfolio continues to be very highly
rated (on average, AA), and has a duration of approximately five years. Our
book value has increased to $15.59 per share at September 30, 2012 from $14.46
per share at December 31, 2011."

Non-GAAP Financial Measures

The Company provides non-GAAP financial measures to complement its
consolidated financial statements presented in accordance with GAAP: (i)
Operating income is net income attributable to IHC excluding net realized
gains or losses and other-than-temporary impairment losses; and (ii) Operating
income per share is operating income (loss) on a per share basis.These
non-GAAP financial measures are intended to supplement the user's overall
understanding of the Company's current financial performance and its prospects
for the future.Specifically, the Company believes the non-GAAP results
provide useful information to both management and investors by excluding
realized gains or losses, net of taxes, that, when excluded from the GAAP
results, may provide additional understanding of the Company's core operating
results or business performance.However, these non-GAAP financial measures
are not intended to supersede or replace the Company's GAAP results.A
reconciliation of the non-GAAP results to the GAAP results is provided in the
"Reconciliation of GAAP Net Income Attributable to IHC to Non-GAAP Income from
Operations" schedule below. 

About Independence Holding Company

IHC is a holding company principally engaged in the life and health insurance
business and the acquisition of blocks of policies through its insurance
company subsidiaries (Standard Security Life Insurance Company of New York,
Madison National Life Insurance Company, Inc. and Independence American
Insurance Company) and its marketing and administrative affiliates.Standard
Security Life markets medical stop-loss, small group major medical, short-term
medical, major medical for individuals and families, limited medical, group
long and short-term disability and life, dental, vision and managed health
care products. Madison Life sells group life and disability, employer medical
stop-loss, small group major medical, major medical for individuals and
families, short-term medical, dental, vision, and individual life insurance.
Independence American offers major medical for individuals and families,
medical stop-loss, small group major medical, short-term medical and pet
insurance. IHC owns certain subsidiaries through its majority ownership of
American Independence Corp. (Nasdaq:AMIC), which is a holding company
principally engaged in the insurance and reinsurance business.

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 which 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 or earnings guidance, and does not undertake to
provide any such guidance in the future.

^1 Operating income is a non-GAAP measure representing net income attributable
to IHC excluding net realized investment gains (losses) and
other-than-temporary impairment losses, net of applicable income tax. The
Company believes that the presentation of operating income may offer a better
understanding of the core operating results of the Company.A reconciliation
of net income attributable to IHC to operating income is included in this
press release.

                                                                
                                                                
INDEPENDENCE HOLDING COMPANY
THIRD QUARTER REPORT
September 30, 2012
(In Thousands, Except Per Share Data)
                                                                
                                                                
                                    Three Months Ended  Nine Months Ended
                                    September 30,       September 30,
                                    2012      2011      2012       2011
REVENUES:                                                        
Premiums earned                      $92,236 $85,230 $261,479 $255,104
Net investment income                9,346     9,235     25,706     28,984
Fee income                           7,754     7,118     21,064     22,823
Other income                         1,155     1,259     3,558      4,562
Net realized investment gains       1,011     924       3,998      2,605
Net impairment losses recognized in  --        (107)     (704)      (575)
earnings
                                                                
                                    111,502   103,659   315,101    313,503
EXPENSES:                                                        
Insurance benefits, claims and       63,034    56,654    180,434    183,060
reserves
Selling, general and administrative  39,791    38,958    109,594    111,275
expenses
Amortization of deferred             1,587     1,844     4,812      5,293
acquisitions costs
Interest expense on debt             509       516       1,588      1,433
                                                                
                                    104,921   97,972    296,428    301,061
                                                                
Income before income taxes           6,581     5,687     18,673     12,442
Income taxes                        2,191     1,676     6,123      1,167
                                                                
Net income                          4,390     4,011     12,550     11,275
Less: income from noncontrolling                                 
interests in subsidiaries
                                    (472)     (457)     (1179)     (1497)
                                                                
NET INCOME ATTRIBUTABLE TO IHC       $3,918  $3,554  $11,371  $9,778
                                                                
Basic income per common share        .22       .20       .63        .56
                                                                
WEIGHTED AVERAGE SHARES OUTSTANDING  17,957    17,790    17,991     17,414
                                                                
Diluted income per common share      $.22    $.20    $.63     $.56
                                                                
WEIGHTED AVERAGE DILUTED SHARES                                  
                                    18,028    17,795    18,076     17,422
                                                                
As of November 6, 2012, there were 17,947,330 common shares outstanding, net
of treasury shares.

                                                               
                                                               
RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO IHC TO NON-GAAP INCOME FROM
OPERATIONS
(In Thousands, Except Per Share Data)
                                                               
                                                               
                            Three Months Ended       Nine Months Ended
                            September 30,            September 30,
                            2012         2011        2012         2011
                                                               
Net income attributable to   $3,918     $3,554    $11,371    $9,778
IHC
                                                               
Realized gains, net of taxes (668)        (597)       (2,597)      (1,670)
Net impairment losses
recognized in earnings, net  --           76         447          378
of taxes
                                                               
Operating income from       $3,250     3,033    $9,221     8,486
operations
                                                               
Non - GAAP basic income per  $.18       .17      $.51       .49
common share
                                                               
Non - GAAP diluted income    $.18       .17      $.51       .49
per common share
                                                               
The other-than-temporary-impairment losses are primarily due to the write down
in value of certain Alt-A mortgage fixed maturities.

CONTACT: DAVID T. KETTIG
         (212) 355-4141 Ext. 3047
         www.IHCGroup.com