American Independence Corp. (NASDAQ:AMIC) today reported 2016 first-quarter results.

Financial Results

AMIC completed the sale of IHC Risk Solutions LLC (“Risk Solutions”) and the medical stop-loss business it produced on March 31, 2016 and realized an after tax gain of approximately $114 million.  In addition, under the purchase and sale agreement, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions is 100% co-insured as of January 1, 2016.  AMIC’s block of medical stop-loss business is in run-off.  The sale of Risk Solutions and exit from the medical stop-loss business represents a strategic shift that will have a major effect on the Company’s operations and financial results.  The disposal transaction qualifies for reporting as discontinued operations in the first quarter of 2016.  

AMIC reported net income of $114.2 million ($14.10 per diluted share) for the three months ended March 31, 2016 compared to $0.7 million ($.09 per diluted share) for the three months ended March 31, 2015.  Income from continuing operations was $0.4 million ($.03 per diluted share), and $0.3 million ($.03 per diluted share), for the three months ended March 31, 2016 and 2015, respectively.

Revenues decreased to $29.4 million for the three months ended March 31, 2016 compared to revenues of $39.4 million for the three months ended March 31, 2015, primarily due to the sale of Risk Solutions and the exit from the medical stop-loss business. 

Independence Holding Company (“IHC”) has announced a “going private” transaction by way of a statutory “short-form" merger of AMIC with and into AMIC Holdings, Inc. (“Holdings”), a newly formed subsidiary into which IHC and one of its subsidiaries will contribute their shares of AMIC common stock, with Holdings continuing as the surviving corporation.  Once the transaction is consummated, Holdings will own all of the outstanding shares of common stock of AMIC.  IHC is under no obligation to consummate the merger and could decide to withdraw from the transaction at any time before it becomes effective.

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “Our financial condition and balance sheet remain strong.  As previously announced, AMIC completed the sale of IHC Risk Solutions LLC and the stop-loss business it produced on March 31, 2016 and realized an after tax gain of approximately $114 million.  AMIC has re-positioned itself as a specialty health underwriter and sales and marketing company, and produced solid growth and underwriting results in these lines in the first quarter.  Our occupational accident line has been underperforming, and we are implementing changes to improve our results.”

About American Independence Corp.

American Independence Corp. (AMIC) is a holding company principally engaged in health insurance and reinsurance.  It provides specialized health coverage and related services to commercial customers and individuals.  Through Independence American Insurance Company and its other subsidiaries, it offers non-subscriber occupational accident, pet insurance, short-term medical, vision, dental and various supplemental products.  Through its subsidiaries IHC Specialty Benefits, Inc. (including through www.healthedeals.com and www.aspiraAmas.com), IPA Direct, LLC and IPA Family, LLC, AMIC markets products underwritten by its affiliated companies and various products (including ACA plans and medical stop-loss) on behalf of unaffiliated 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 AMIC operates, new federal or state governmental regulation, AMIC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in AMIC’s other news releases and filings with the Securities and Exchange Commission.  AMIC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.

American Independence Corp.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
       
      Three Months
      Ended March 31,
      2016     2015 
REVENUES:              
  Premiums earned   $ 21,096   $ 36,217  
  Agency income     5,500     2,477  
  Net investment income     1,470     599  
  Net realized investment gains (losses)     214     141  
  Other income     1,122     1  
      29,402     39,435  
               
               
EXPENSES              
  Insurance benefits, claims and reserves     14,966     23,970  
  Selling, general and administrative expenses     13,506     14,952  
  Amortization and depreciation     280     115  
      28,752     39,037  
               
Income from continuing operations before income taxes     650     398  
Provision for income taxes     234     140  
               
Income from continuing operations     416     258  
               
Discontinued operations: (Note 3)              
  Income from discontinued operations, before income taxes     122,034     837  
  Income taxes on discontinued operations     8,069     324  
  Income from discontinued operations     113,965     513  
               
Net income     114,381     771  
  Less: Net (income) loss attributable to the non-controlling interest     178     49  
               
Net income attributable to American Independence Corp.   $ 114,203   $ 722  
               
Basic income per common share:              
  Income from continuing operations   $ .03   $ .03  
  Income from discontinued operations     14.07     .06  
      Basic income per common share   $ 14.10   $ .09  
               
Weighted-average shares outstanding     8,101     8,079  
               
Diluted income per common share:              
  Income from continuing operations   $ .03   $ .03  
  Income from discontinued operations     14.04     .06  
      Basic income per common share   $ 14.07   $ .09  
               
Weighted-average diluted shares outstanding     8,119     8,094  
               

American Independence Corp.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
         
    March 31,      
    2016      December 31,
ASSETS:   (Unaudited)     2015 
  Investments:              
  Securities purchased under agreements to resell $ 1,629      $ 4,595   
  Fixed maturities available-for-sale, at fair value   181,158        84,933   
  Equity securities available-for-sale, at fair value   2,603        2,594   
                   
  Total investments   185,390        92,122   
           
  Cash and cash equivalents   134,415        4,861   
  Restricted cash   966        1,377   
  Accrued investment income   769        727   
  Premiums receivable   16,005        16,654   
  Net deferred tax asset   15,848        13,944   
  Due from reinsurers   19,987        4,950   
  Goodwill   5,703        5,703   
  Intangible assets   13,086        13,327   
  Due from securities brokers   111        1,051   
  Other assets   18,037        10,540   
  Assets attributable to discontinued operations   -        31,718   
           
  TOTAL ASSETS $ 410,317      $ 196,974   
           
LIABILITIES AND STOCKHOLDERS’ EQUITY:          
  LIABILITIES:          
  Policy benefits and claims $ 47,386      $ 43,764   
  Premium and claim funds payable   966        1,377   
  Commission payable   8,444        5,817   
  Accounts payable, accruals and other liabilities   13,346        11,192   
  Debt   2,250        3,189   
  State income taxes payable   5,882        -   
  Due to securities brokers   99,777        -   
  Due to reinsurers   8,896        100   
  Liabilities attributable to discontinued operations   953        24,337   
           
  Total liabilities   187,900        89,776   
             
STOCKHOLDERS’ EQUITY:          
  American Independence Corp. stockholders’ equity:          
    Preferred stock, $0.10 par value, 1,000 shares designated; no shares          
      issued and outstanding   -        -   
    Common stock, $0.01 par value, 15,000,000 shares authorized;          
      9,181,793 shares issued, respectively; 8,101,883 and 8,088,105          
      shares outstanding, respectively   92        92   
    Additional paid-in capital   88,648        88,637   
    Accumulated other comprehensive gain (loss)   484        (197 )
    Treasury stock, at cost, 1,079,910 and 1,093,688 shares, respectively   (10,033 )     (10,161 )
    Retained earnings   139,749        25,549   
    Total American Independence Corp. stockholders’ equity   218,940        103,920   
  Non-controlling interest in subsidiaries   3,477        3,278   
    Total equity   222,417        107,198   
    TOTAL LIABILITIES AND EQUITY $ 410,317      $ 196,974   
                    
CONTACT:  LOAN NISSER
(646) 509-2107
www.americanindependencecorp.com
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