Company to Host Conference Call at 10:00 A.M. on March 18, 2011
Financial and Operational Highlights
-
Fourth quarter 2010 net income of $2.9 million, or $0.27 per diluted
share
-
2010 fourth quarter gross premiums written improved 15% to $31.4
million
-
FY 2010 gross premiums written improved 1.8% to $158.6 million
-
FY 2010 net loss of $0.9 million, or $0.09 per diluted share
-
80,500 policies-in-force at December 31, 2010
-
Cash and investment holdings of $126.2 million at December 31, 2010
-
Book value per share of $4.28 at December 31, 2010
ST. PETERSBURG, Fla.--(BUSINESS WIRE)--
United Insurance Holdings Corp. (OTCBB: UIHC; UIHCW; UIHCU)(United
or the Company), a property and casualty insurance holding company,
today reported its financial results for the fourth quarter and for the
year ended December 31, 2010.
2010 Fourth Quarter
Net income for the fourth quarter was $2.9 million, or $0.27 per diluted
share, compared to a net loss of $1.2 million, or $0.11 per diluted
share, during the same period last year.
Net premiums earned increased to $18 million from $16.3 million in the
prior year quarter. United reported investment income of $826,000
compared to $1.1 million in the prior year quarter. The Company reported
net investment gains of $4.1 million compared to $ 1.1 million for the
same period last year.
Losses and loss adjustment expenses for the fourth quarter were $10.1
million compared with $9.8 million in the prior year quarter. Policy
acquisition costs decreased to $5.3 million in the fourth quarter
compared to $6.9 million in the fourth quarter of 2009. Operating
expenses and general and administrative expenses, for the three months
ended December 31, 2010 and 2009, were $3.5 million and $3.8 million,
respectively.
Full Year 2010
For the year ended December 31, 2010, United reported a net loss of
$925,000, or $0.09 per diluted share, compared to generating net income
of $4.1 million, or $0.38 per diluted share, for the same period last
year.
Net premiums earned decreased to $66.9 million from $78.2 million in the
prior year. Net investment income decreased to $3.9 million from $4.8
million for the same period last year. Net investment gains increased to
$4.3 million in 2010 compared to $1.8 million in 2009. United recorded
an other-than-temporary impairment charge of $97,000 in the current year
compared to $1.9 million for the same period last year.
Losses and loss adjustment expenses increased to $42.5 million compared
to $40.8 million in the prior year. Policy acquisition costs decreased
to $21.7 million in 2010 from $23.5 million in 2009. Operating expenses
and general and administrative expenses remained flat at $14.7 million
for 2010 and 2009. Interest expense decreased to $1.8 million compared
to $3.2 million for the same period last year. Other expenses increased
to $726,000 from $0 in the prior year.
Balance Sheet Highlights
United's cash and investment holdings totaled $126.2 million at December
31, 2010, compared to $160.1 million at December 31, 2009 because the
Company reduced its outstanding debt by $22.6 million during the year
and accelerated its reinsurance premium payments. United's cash and
investment holdings consist primarily of investments in high-quality
money market instruments, U.S. Government and agency securities and
high-quality corporate debt. Fixed maturities represented approximately
93% and 96% of United's total investments at December 31, 2010, and
December 31, 2009, respectively.
United’s Chief Executive Officer, Don Cronin stated, “We feel that the
Company is beginning to turn a corner during this unprecedented cost and
rate environment. We reported a profit in the fourth quarter and saw our
gross written premiums increase 15% from the prior year period. We also
increased our policies-in-force during the period from the third
quarter, which was the first quarter of sequential growth in 2010.”
United experienced a significant increase in its policies-in-force in
2009, and throughout 2010 worked to mitigate its risk exposure through
the non-renewal of selected policies that did not conform to United’s
exposure management plan. The Company continues to benefit from the
effects of two rate increases implemented over the past 18 months as it
renews existing policies and writes new policies. In addition, United
has received approval by the Florida Office of Insurance Regulation for
an additional 15.9% average rate increase on its homeowner product.
Mr. Cronin continued, “We continued to diversify our book of business
through our expansion into South Carolina in July and our approval to
begin writing in Massachusetts. We feel that this expansion is a strong
complement to our existing operations in Florida and can serve as a
driver of policy and revenue growth in 2011 and beyond.”
United is in varying stages of discussion with state regulatory
authorities regarding its desire to write property insurance in Rhode
Island, New York, North Carolina and New Jersey. The Company believes
that its products particularly fit the needs of homeowners in these
regions of the United States, while also further diversifying United’s
book of business.
Conference Call
The Company will hold its quarterly conference call to discuss these
results on Friday, March 18, 2011, at 10:00 a.m. Eastern Time.
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The dial-in numbers are:
|
|
(866) 861-6730 (US)
|
|
(706) 679-0882 (International)
|
A recorded replay of the call will be available until 11:59 p.m. Eastern
Time on March 20, 2011. Listeners may dial 800-642-1687 (Domestic) or
706-645-9291 (International) and use the code 44077439 for the replay.
A live webcast of the call can be accessed at www.upcic.com
in the “Events & Presentations” section. If you are unable to
participate in the live call, the webcast version of the conference call
will be available at the same link following the call. Listeners
interested in participating in the Q&A session should go to the website
at least 15 minutes early to register, download and install any
necessary audio software.
About United Insurance Holdings Corp.
Founded in 1999, United Property & Casualty Insurance Company, a
subsidiary of United Insurance Holdings Corp., writes and services
homeowners insurance in Florida and South Carolina and is licensed to
write property & casualty insurance in Massachusetts. From its
headquarters in St. Petersburg, United's team of dedicated employees
manages a completely integrated insurance company, including sales,
underwriting, customer service and claims. The Company distributes its
homeowners, dwelling fire and flood products through many agency groups
and conducts business through three wholly-owned subsidiaries.
Homeowners insurance constitutes the majority of United's premiums and
policies.
Forward-Looking Statements
Statements in this press release that are not historical facts are
forward-looking statements that are subject to certain risks and
uncertainties that could cause actual events and results to differ
materially from those discussed herein. Without limiting the generality
of the foregoing, words such as “may,” “will,” “expect,” “believe,”
“anticipate,” “intend,” “could,” “would,” “estimate,” “or “continue” or
the other negative variations thereof or comparable terminology are
intended to identify forward-looking statements. The forward-looking
statements in this press release include statements regarding the impact
of the additional rate increases, and the expansion into South Carolina
and other states. The risks and uncertainties that could cause our
actual results to differ from those expressed or implied herein include,
without limitation, the success of the Company's marketing initiatives,
inflation and other changes in economic conditions (including changes in
interest rates and financial markets); the impact of new Federal and
State regulations that affect the property and casualty insurance
market; the costs of reinsurance and the collectability of reinsurance,
assessments charged by various governmental agencies; pricing
competition and other initiatives by competitors; our ability to obtain
regulatory approval for requested rate changes, and the timing thereof;
legislative and regulatory developments; the outcome of litigation
pending against us, including the terms of any settlements; risks
related to the nature of our business; dependence on investment income
and the composition of our investment portfolio; the adequacy of our
liability for losses and loss adjustment expense; insurance agents;
claims experience; ratings by industry services; catastrophe losses;
reliance on key personnel; weather conditions (including the severity
and frequency of storms, hurricanes, tornadoes and hail); changes in
loss trends; acts of war and terrorist activities; court decisions and
trends in litigation, and health care; and other matters described from
time to time by us in our filings with the Securities and Exchange
Commission, including, but not limited to, the Company's Annual Report
on Form 10-K for the year ended December 31, 2010. In addition,
investors should be aware that generally accepted accounting principles
prescribe when a company may reserve for particular risks, including
litigation exposures. Accordingly, results for a given reporting period
could be significantly affected if and when a reserve is established for
a major contingency. Reported results may therefore, appear to be
volatile in certain accounting periods. The Company undertakes no
obligations to update, change or revise any forward-looking statement,
whether as a result of new information, additional or subsequent
developments or otherwise.
|
|
|
| |
| |
| Condensed Consolidated Statements of Income |
In thousands, except share and per share amounts |
| | | | | |
|
| | | | Three Months Ended
December 31, | | Year Ended
December 31, |
| | | | 2010 |
| 2009 | | 2010 |
| 2009 |
|
REVENUE:
| | | | | | | | | | |
|
Gross premiums written
| | | |
$
|
31,378
| | |
$
|
27,312
| | |
$
|
158,637
| | |
$
|
155,840
| |
|
Decrease (increase) in gross unearned premiums
| | | |
8,142
|
| |
12,363
|
| |
(3,330
|
)
| |
553
|
|
|
Gross premiums earned
| | | |
39,520
| | |
39,675
| | |
155,307
| | |
156,393
| |
|
Ceded premiums earned
| | | |
(21,523
|
)
| |
(23,353
|
)
| |
(88,452
|
)
| |
(78,212
|
)
|
|
Net premiums earned
| | | |
17,997
| | |
16,322
| | |
66,855
| | |
78,181
| |
|
Net investment income
| | | |
826
| | |
1,115
| | |
3,879
| | |
4,831
| |
|
Net realized investment gains
| | | |
4,112
| | |
1,057
| | |
4,346
| | |
1,837
| |
|
Other-than-temporary impairment of investments
| | | |
(97
|
)
| |
—
| | |
(97
|
)
| |
(1,878
|
)
|
|
Other revenue
| | | |
837
|
| |
956
|
| |
5,008
|
| |
5,498
|
|
|
Total revenue
| | | |
23,675
| | |
19,450
| | |
79,991
| | |
88,469
| |
|
EXPENSES:
| | | | | | | | | | |
|
Losses and loss adjustment expenses
| | | |
10,067
| | |
9,823
| | |
42,533
| | |
40,755
| |
|
Policy acquisition costs
| | | |
5,328
| | |
6,917
| | |
21,712
| | |
23,482
| |
|
Operating expenses
| | | |
1,624
| | |
2,405
| | |
7,155
| | |
7,696
| |
|
General and administrative expenses
| | | |
1,837
| | |
1,363
| | |
7,506
| | |
7,032
| |
|
Interest expense
| | | |
130
|
| |
817
|
| |
1,767
|
| |
3,177
|
|
|
Total expenses
| | | |
18,986
| | |
21,325
| | |
80,673
| | |
82,142
| |
|
Income (loss) before other expenses
| | | |
4,689
| | |
(1,875
|
)
| |
(682
|
)
| |
6,327
| |
|
Other expenses
| | | |
—
|
| |
—
|
| |
726
|
| |
—
|
|
|
Income (loss) before income taxes
| | | |
4,689
| | |
(1,875
|
)
| |
(1,408
|
)
| |
6,327
| |
|
Provision for (benefit from) income taxes
| | | |
1,794
|
| |
(694
|
)
| |
(483
|
)
| |
2,270
|
|
|
Net income (loss)
| | | |
$
|
2,895
|
| |
$
|
(1,181
|
)
| |
$
|
(925
|
)
| |
$
|
4,057
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS):
| | | | | | | | | | |
|
Change in net unrealized gain on investments
| | | |
(2,065
|
)
| |
(68
|
)
| |
2,093
| | |
4,152
| |
|
Reclassification adjustment for net realized investment gains
| | | |
(4,112
|
)
| |
(1,057
|
)
| |
(4,346
|
)
| |
(1,837
|
)
|
|
Reclassification adjustment for recognized other-than-temporary
impairments
| | | |
97
| | |
—
| | |
97
| | |
1,878
| |
|
Income tax expense related to items of other comprehensive income
| | | |
2,345
|
| |
434
|
| |
832
|
| |
(1,595
|
)
|
|
Total comprehensive income (loss)
| | | |
$
|
(840
|
)
| |
$
|
(1,872
|
)
| |
$
|
(2,249
|
)
| |
$
|
6,655
|
|
| | | | | | | | | |
|
|
Weighted average shares outstanding
| | | | | | | | | | |
|
Basic and Diluted
| | | |
10,573,932
|
| |
10,573,932
|
| |
10,573,932
|
| |
10,568,247
|
|
| | | | | | | | | |
|
|
Earnings (loss) per share
| | | | | | | | | | |
|
Basic and Diluted
| | | |
$
|
0.27
|
| |
$
|
(0.11
|
)
| |
$
|
(0.09
|
)
| |
$
|
0.38
|
|
| | | | | | | | | |
|
|
Dividends declared per share
| | | |
$
|
—
|
| |
$
|
0.05
|
| |
$
|
0.05
|
| |
$
|
0.15
|
|
| | | | | | | | | | | | | | | | | |
|
|
|
|
| |
| Condensed Consolidated Balance Sheets |
In thousands, except share and par value amounts
|
| | | |
|
| | | | December 31, |
| | | | 2010 |
| 2009 |
|
ASSETS
| | | | | | |
|
Investments available for sale, at fair value:
| | | | | | |
|
Fixed maturities (amortized cost of $50,984 and $125,920,
respectively)
| | | |
$
|
50,683
| | |
$
|
128,020
|
|
Equity securities (adjusted cost of $3,666 and $5,000, respectively)
| | | |
3,615
| | |
4,704
|
|
Other long-term investments
| | | |
300
|
| |
300
|
|
Total investments
| | | |
54,598
|
| |
133,024
|
|
Cash and cash equivalents
| | | |
71,644
| | |
27,086
|
|
Accrued investment income
| | | |
414
| | |
1,119
|
|
Premiums receivable, net
| | | |
7,825
| | |
7,544
|
|
Reinsurance recoverable on paid and unpaid losses
| | | |
27,304
| | |
25,477
|
|
Prepaid reinsurance premiums
| | | |
38,307
| | |
40,285
|
|
Deferred policy acquisition costs
| | | |
9,342
| | |
9,256
|
|
Other assets
| | | |
4,187
|
| |
3,967
|
|
Total Assets
| | | |
$
|
213,621
|
| |
$
|
247,758
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
| | | | | | |
|
Liabilities:
| | | | | | |
|
Unpaid losses and loss adjustment expenses
| | | |
$
|
47,414
| | |
$
|
44,112
|
|
Unearned premiums
| | | |
77,161
| | |
73,831
|
|
Reinsurance payable
| | | |
14,982
| | |
28,162
|
|
Other liabilities
| | | |
10,536
| | |
12,154
|
|
Notes payable, net
| | | |
18,235
|
| |
41,428
|
|
Total Liabilities
| | | |
168,328
|
| |
199,687
|
|
Commitments and contingencies
| | | | | | |
|
Stockholders' Equity:
| | | | | | |
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized;
none issued or outstanding for 2010 and 2009
| | | |
—
| | |
—
|
|
Common stock, $0.0001 par value; 50,000,000 shares authorized;
10,573,932 issued and outstanding for 2010 and 2009
| | | |
1
| | |
1
|
|
Additional paid-in capital
| | | |
75
| | |
75
|
|
Accumulated other comprehensive income
| | | |
(216
|
)
| |
1,108
|
|
Retained earnings
| | | |
45,433
|
| |
46,887
|
|
Total Stockholders' Equity
| | | |
45,293
|
| |
48,071
|
|
Total Liabilities and Stockholders' Equity
| | | |
$
|
213,621
|
| |
$
|
247,758
|
| | | | | | | | |
|
Source: United Insurance Holdings Corp.
Contact:
United Insurance Holdings Corp.
Joe Peiso, 727-895-7737
Chief
Financial Officer
jpeiso@upcic.com
or
John
Rohloff, 727-895-7737
SEC Reporting Manager
jrohloff@upcic.com
or
INVESTOR
RELATIONS:
The Equity Group
Adam Prior, 212-836-9606
Vice
President
aprior@equityny.com