Independence Holding Company Announces 2014 First-Quarter Results STAMFORD, Conn., May 8, 2014 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE:IHC) today reported 2014 first-quarter results. Financial Results IHC reported net income of $.21 per diluted share, or $3,701,000, for the three months ended March 31, 2014 compared to $.26 per diluted share, or $4,701,000, for the three months ended March 31, 2013. The Company reported realized gains, net of tax, of $1,000,000 for the first three months of 2014 as compared to $2,961,000 in 2013. Revenues increased to $141,072,000 for the three months ended March 31, 2014 compared to revenues for the three months ended March 31, 2013 of $137,882,000. Chief Executive Officer's Comments Roy Thung, Chief Executive Officer, commented, "We are pleased that our first-quarter results of $.21 per share are significantly improved over those reported in the fourth quarter of 2013 of $.10 per share. Our fully insured segment performed significantly better in the first quarter of 2014 than in the fourth quarter of 2013, as losses arising from the lines of major-medical business that we have exited – and which are in runoff – were significantly reduced due to lower premiums. We expect this runoff premium to continue to decline through the third quarter of 2014 and to terminate by the end of the year.Losses associated with the runoff are, as previously disclosed, largely attributable to the requirements of the Affordable Care Act. Earned premium for medical stop-loss, our largest segment, grew substantially over the same quarter of last year despite the cancellation during 2013 of two independent MGU's that were unprofitable.We also are reporting an increase in earnings in this line in the first quarter of 2014 due to better results on our directly written business. We attribute these positive developments to enhanced sales efforts in our direct business, focused underwriting and a general expansion of the market as new employer groups migrate to self-funding from fully insured in response to health care reform.We expect continued growth of business written as evidenced by the 30% growth in our direct business written in the twelve months ended April 30, 2014. Our overall investment portfolio continues to be very highly rated (on average, AA) and has a duration of approximately six years. Our book value was $15.76 per share at March 31, 2014, an increase of 4% over the book value per share at December 31, 2013, and our total stockholders' equity is $277 million at March 31, 2014 compared to $269 million at December 31, 2013. Through May 1, 2014, we have repurchased 168,678 shares of IHC stock for $2.3 million at an average price of $13.35 per share, and our current intention is to continue to repurchase shares at current price levels. With respect to medical stop-loss, we are quite pleased with our transformation into a direct writer.For 2014 and beyond, we expect that a growing percentage (currently 85%) of ourblock of stop-loss business will be written via our direct platform.Our fully insured division has transitioned from being focused on major-medical to being principally a specialty health insurance company with controlled distribution and higher-margin lines of business.As a result of the significant increase in the volume and quality of our stop-loss business and the improved profitability in our fully insured segment, we expect improved operating results for the remainder of the year as compared to 2013." 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, group major medical, short-term medical, limited medical, group long-term and short-term disability and life, dental, vision and various supplemental products. Madison National Life sells group life and disability, group major medical, dental, individual life insurance and various supplemental products. Independence American offers pet insurance, non-subscriber occupational accident, international coverages, small-group major medical and short-term medical. 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 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 or earnings guidance, and does not undertake to provide any such guidance in the future. INDEPENDENCE HOLDING COMPANY FIRST QUARTER REPORT March 31, 2014 (In Thousands, Except Per Share Data) Three Months Ended March 31, 2014 2013 REVENUES: Premiums earned $123,270 $117,368 Net investment income 5,801 8,001 Fee income 9,339 6,542 Other income 1,111 1,352 Net realized investment gains 1,551 4,619 141,072 137,882 EXPENSES: Insurance benefits, claims and reserves 85,309 85,460 Selling, general and administrative expenses 48,135 42,880 Amortization of deferred acquisitions costs 1,282 1,440 Interest expense on debt 481 487 135,207 130,267 Income before income taxes 5,865 7,615 Income taxes 1,860 2,575 Net income 4,005 5,040 Less: income from noncontrolling interests in (304) (339) subsidiaries NET INCOME ATTRIBUTABLE TO IHC $3,701 $4,701 Basic income per common share $.21 $.26 WEIGHTED AVERAGE SHARES OUTSTANDING 17,623 17,919 Diluted income per common share $.21 $.26 WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 17,763 18,040 As of May 1, 2014, there were 17,491,712 common shares outstanding, net of treasury shares. INDEPENDENCE HOLDING COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Data) March 31, December 31, 2014 2013 ASSETS: Investments: Short-term investments $50 $50 Securities purchased under agreements to resell 34,971 22,594 Trading securities 10,594 7,125 Fixed maturities, available-for-sale 535,094 542,287 Equity securities, available-for-sale 11,995 11,803 Other investments 25,344 25,123 Total investments 618,048 608,982 Cash and cash equivalents 23,081 24,229 Deferred acquisition costs 29,857 29,777 Due and unpaid premiums 62,272 59,435 Due from reinsurers 380,002 380,229 Premium and claim funds 38,262 37,353 Goodwill 50,318 50,318 Other assets 86,178 78,712 TOTAL ASSETS $1,288,018 $1,269,035 LIABILITIES AND STOCKHOLDERS' EQUITY: LIABILITIES: Policy benefits and claims $236,656 $237,754 Future policy benefits 287,309 287,449 Funds on deposit 274,090 274,826 Unearned premiums 13,833 12,423 Other policyholders' funds 25,014 25,129 Due to reinsurers 39,528 37,113 Accounts payable, accruals and other liabilities 80,867 71,889 Debt 6,000 6,000 Junior subordinated debt securities 38,146 38,146 TOTAL LIABILITIES 1,001,443 990,729 STOCKHOLDERS' EQUITY: IHC STOCKHOLDERS' EQUITY: Preferred stock (none issued) -- -- Common stock 18,524 18,524 Paid-in capital 126,335 126,239 Accumulated other comprehensive income (loss) (4,954) (10,472) Treasury stock, at cost (9,432) (8,169) Retained earnings 146,357 142,669 TOTAL IHC STOCKHOLDERS' EQUITY 276,830 268,791 NONCONTROLLING INTERESTS IN SUBSIDIARIES 9,745 9,515 TOTAL EQUITY 286,575 278,306 TOTAL LIABILITIES AND EQUITY $1,288,018 $1,269,035 CONTACT: ADAM VANDERVOORT (646) 509-2156 www.IHCGroup.com
Independence Holding Company Announces 2014 First-Quarter Results
Press spacebar to pause and continue. Press esc to stop.