Company to Host Quarterly Conference Call at 4:00 p.m. on August 15,
2011
Financial and Operational Highlights
-
Second quarter 2011 net income of $89,000, or $0.01 per diluted share
-
Year-to-date 2011 net income of $1.2 million, or $0.12 per diluted
share
-
Second quarter 2011 gross premiums written increased 17% to $65.3
million
-
Homeowners policies in force totaling 94,100 at June 30, 2011
-
Cash and investment holdings of $178.5 million at June 30, 2011
-
Book value per share of $4.50 at June 30, 2011
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 second quarter ended June
30, 2011.
2011 Second Quarter
Net income for the second quarter was $89,000, or $0.01 per diluted
share, compared to net income of $195,000 or $0.02 per diluted share,
during the same period last year. Net premiums earned increased to $22.3
million for the second quarter from $16.3 million during the same period
of last year. Net investment income and other revenues decreased to $1.7
million for quarter compared to $3.1 million in the prior year quarter.
Losses and adjusting expenses increased to $12.6 million for the second
quarter from $8.5 million during the same period of last year. Policy
acquisition costs increased to $7.2 million from $6.2 million for the
second quarter of 2010. Operating expenses, which include general and
administrative expenses, increased to $3.6 million from $3.1 million
during the same period of last year.
2011 Year-to-Date
For the year-to-date period, net income was $1.2 million, or $0.12 per
diluted share, compared to a net loss of $3.5 million, or $0.33 per
diluted share for the same period last year. The Company’s net premiums
earned increased to $41.4 million, from $31 million during the same
period of last year. Net investment income and other revenues decreased
to $3.1 million for the year-to-date period from $5.3 million during the
same period of last year.
Losses and adjusting expenses remained flat at $21 million while policy
acquisition costs increased to $13.7 million from $12.6 million for the
same period last year. Operating expenses increased to $7.2 million from
$6.1 million during the same period of last year. Interest expense
decreased to $311,000 from $1.5 million for the six months ended June
30, 2010.
Balance Sheet Highlights
United's cash and investment holdings totaled $178.5 million at June
30, 2011, compared to $126.2 million at December 31, 2010. 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
97% and 93% of United's total investments at June 30, 2011, and
December 31, 2010, respectively.
An increase in new business, policyholder retention, and three rate
increases implemented by the Company over the last two years resulted in
net premiums earned increasing $6 million to $22.3 million for the
quarter, or 37% over the same period of last year. “Our second quarter
results continued to build on the positive momentum we established in
the first quarter,” said Don Cronin, United’s Chief Executive Officer.
“We continue to benefit from the impact of several rate increases.”
United’s losses and adjusting expenses increased primarily due to an
increase in writings and an $892,000 increase in catastrophic losses
from Hurricane Wilma which United recorded as a result of the
commutation of the 2005 Florida Hurricane Catastrophe Fund contract.
Notwithstanding this increase in its bulk reserves, the Company
continues to see favorable development on prior period cases as well as
improvement in its current year non-catastrophe loss ratios as a result
of the rate increases which have been implemented.
The Company remains on target to begin writing policies in Massachusetts
in the fourth quarter of 2011, and it has applications pending in three
other states along the East Coast.
Company Announces Management Changes
Joseph Peiso, the Company’s Chief Financial Officer, has submitted his
resignation effective August 15, 2011, to pursue another opportunity.
The Board of Directors wishes to thank Mr. Peiso for his contribution
during his tenure with the Company and wishes him well in his new
position.
Donald Cronin, the Company’s President, Chief Executive Officer, and a
Director, announced his intention to retire after the 2011 hurricane
season or at such earlier time as his successor is identified. Mr.
Cronin joined the Company in 2001 and became President in 2002. In
response, the Board has formed a strategic growth and development
committee. Larry Swets, a Director, will serve as Chairman of the
committee.
Greg Branch, Chairman of the Board of Directors, said “The entire United
organization wishes to thank Don for his many contributions over the
past ten years, which led to the Company’s growth from a small
Florida-only carrier to the 15th largest homeowners carrier
in the state. Under Don’s leadership, the Company has generated an
average ROE of over 30% per year and was profitable for eight of the
nine years including the 2004 and 2005 storm-laden years. While we are
sad to see Don leave, we wish him well in his future endeavors.”
“I am very proud of our entire team and what we have accomplished over
the past ten years,” said Don Cronin. “We have continued to post solid
financial results despite enormous challenges in our industry. While it
was a very difficult decision, I believe that this is the right time for
me to move on to the next chapter in my life. I am confident that the
Board will select a leader who will continue the momentum built and
bring the Company to the next stage in its corporate life cycle.”
Conference Call Details
|
August 15, 2011 - 4:00 PM ET
|
|
Participant Dial-In Numbers:
|
|
(United States):
|
|
877-407-0782
|
|
(International):
| |
201-689-8567
|
Webcast
To listen to the live webcast, please go to www.upcic.com(“Events and Presentations”) and click on the conference call link,
or go to: http://www.investorcalendar.com/IC/CEPage.asp?ID=165176.
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 |
(Unaudited) |
In thousands, except share and per share amounts |
|
|
|
| | |
|
|
|
| | |
| | | | | Three Months Ended | | | | | | Six Months Ended |
| | | | | June 30, | | | | | | June 30, |
| | | | | 2011 |
|
| | 2010 | | | | | | 2011 |
|
| | 2010 |
|
REVENUE:
| | | | | | | | | | | | | | | | | | | | | | | |
|
Gross premiums written
| | | |
$
|
65,296
| | | |
$
|
55,675
| | | | | |
$
|
116,071
| | | |
$
|
91,242
| |
|
Decrease (increase) in gross unearned premiums
| | | | |
(21,037
|
)
| | | |
(17,431
|
)
| | | | | |
(31,446
|
)
| | | |
(14,912
|
)
|
|
Gross premiums earned
| | | | |
44,259
| | | | |
38,244
| | | | | | |
84,625
| | | | |
76,330
| |
|
Ceded premiums earned
| | | | |
(21,960
|
)
| | | |
(21,944
|
)
| | | | | |
(43,218
|
)
| | | |
(45,337
|
)
|
|
Net premiums earned
| | | | |
22,299
| | | | |
16,300
| | | | | | |
41,407
| | | | |
30,993
| |
|
Net investment income
| | | | |
700
| | | | |
968
| | | | | | |
1,234
| | | | |
2,016
| |
|
Net realized gains
| | | | |
112
| | | | |
42
| | | | | | |
112
| | | | |
28
| |
|
Other revenue
| | | | |
884
|
| | | |
2,059
|
| | | | | |
1,710
|
| | | |
3,280
|
|
|
Total revenue
| | | | |
23,995
| | | | |
19,369
| | | | | | |
44,463
| | | | |
36,317
| |
|
EXPENSES:
| | | | | | | | | | | | | | | | | | | | | | | |
|
Losses and loss adjustment expenses
| | | | |
12,601
| | | | |
8,546
| | | | | | |
20,985
| | | | |
21,015
| |
|
Policy acquisition costs
| | | | |
7,181
| | | | |
6,161
| | | | | | |
13,725
| | | | |
12,616
| |
|
Operating expenses
| | | | |
3,557
| | | | |
3,149
| | | | | | |
7,217
| | | | |
6,104
| |
|
Interest expense
| | | | |
157
|
| | | |
391
|
| | | | | |
311
|
| | | |
1,482
|
|
|
Total expenses
| | | | |
23,496
| | | | |
18,247
| | | | | | |
42,238
| | | | |
41,217
| |
|
Income (loss) before other expenses
| | | | |
499
| | | | |
1,122
| | | | | | |
2,225
| | | | |
(4,900
|
)
|
|
Other expenses
| | | | |
279
|
| | | |
726
|
| | | | | |
279
|
| | | |
726
|
|
|
Income (loss) before income taxes
| | | | |
220
| | | | |
396
| | | | | | |
1,946
| | | | |
(5,626
|
)
|
|
Provision for (benefit from) income taxes
| | | | |
131
|
| | | |
201
|
| | | | | |
733
|
| | | |
(2,122
|
)
|
|
Net income (loss)
| | | |
$
|
89
|
| | |
$
|
195
|
| | | | |
$
|
1,213
|
| | |
$
|
(3,504
|
)
|
|
OTHER COMPREHENSIVE INCOME (LOSS):
| | | | | | | | | | | | | | | | | | | | | | | |
|
Change in net unrealized gain on investments
| | | | |
1,091
| | | | |
684
| | | | | | |
1,029
| | | | |
1,796
| |
|
Reclassification adjustment for net realized investment gains
| | | | |
(112
|
)
| | | |
(42
|
)
| | | | | |
(112
|
)
| | | |
(28
|
)
|
|
Income tax expense related to items of other comprehensive income
| | | | |
(377
|
)
| | | |
(247
|
)
| | | | | |
(354
|
)
| | | |
(682
|
)
|
|
Total comprehensive income (loss)
| | | |
$
|
691
|
| | |
$
|
590
|
| | | | |
$
|
1,776
|
| | |
$
|
(2,418
|
)
|
| | | | | | | | | | | | | | | | | | | | | | |
|
|
Weighted average shares outstanding
| | | | | | | | | | | | | | | | | | | | | | | |
|
Basic and Diluted
| | | | |
10,473,717
|
| | | |
10,573,932
|
| | | | | |
10,523,548
|
| | | |
10,573,932
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
|
Earnings (loss) per share
| | | | | | | | | | | | | | | | | | | | | | | |
|
Basic and Diluted
| | | |
$
|
0.01
|
| | |
$
|
0.02
|
| | | | |
$
|
0.12
|
| | |
$
|
(0.33
|
)
|
| | | | | | | | | | | | | | | | | | | | | | |
|
|
Dividends declared per share
| | | |
$
|
—
|
| | |
$
|
—
|
| | | | |
$
|
—
|
| | |
$
|
0.05
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| Condensed Consolidated Balance Sheets |
|
|
In thousands, except share and par value amounts |
|
|
| | | |
|
| | | |
| | | | June 30, | | | | December 31, |
| | | | 2011 | | | | 2010 |
|
ASSETS
| | | | (Unaudited) | | | | | |
|
Investments available for sale, at fair value:
| | | | | | | | | | |
|
Fixed maturities (amortized cost of $127,079 and $50,984,
respectively)
| | |
$
|
127,450
|
| | |
$
|
50,683
| |
|
Equity securities (adjusted cost of $3,579 and $3,666, respectively)
| | | |
3,773
| | | | |
3,615
| |
|
Other long-term investments
| | | |
300
|
| | | |
300
|
|
|
Total investments
| | | |
131,523
| | | | |
54,598
| |
|
Cash and cash equivalents
| | | |
46,960
| | | | |
71,644
| |
|
Accrued investment income
| | | |
929
| | | | |
414
| |
|
Premiums receivable, net of allowances for credit losses of $64 and
$61, respectively
| | | |
14,845
| | | | |
7,825
| |
|
Reinsurance recoverable on paid and unpaid losses
| | | |
19,928
| | | | |
27,304
| |
|
Prepaid reinsurance premiums
| | | |
84,230
| | | | |
38,307
| |
|
Deferred policy acquisition costs
| | | |
13,632
| | | | |
9,342
| |
|
Other assets
| | | |
8,241
|
| | | |
4,187
|
|
|
Total Assets
| | |
$
|
320,288
|
| | |
$
|
213,621
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
| | | | | | | | | | |
|
Liabilities:
| | | | | | | | | | |
|
Unpaid losses and loss adjustment expenses
| | |
$
|
44,057
|
| | |
$
|
47,414
| |
|
Unearned premiums
| | | |
108,607
| | | | |
77,161
| |
|
Reinsurance payable
| | | |
86,043
| | | | |
14,982
| |
|
Other liabilities
| | | |
17,296
| | | | |
10,536
| |
|
Notes payable
| | | |
17,647
|
| | | |
18,235
|
|
|
Total Liabilities
| | | |
273,650
|
| | | |
168,328
|
|
|
Commitments and contingencies
| | | | | | | | | | |
|
Stockholders' Equity:
| | | | | | | | | | |
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized;
none issued or outstanding for 2011 and 2010
| | | |
—
|
| | | |
—
| |
|
Common stock, $0.0001 par value; 50,000,000 shares authorized;
10,573,932 issued for 2011 and 2010, respectively; 10,361,849 and
10,573,932 outstanding for 2011 and 2010, respectively
| | | |
1
| | | | |
1
| |
|
Additional paid-in capital
| | | |
75
| | | | |
75
| |
|
Treasury shares, at cost; 212,083 and 0 shares, respectively
| | | |
(431
|
)
| |
| |
—
| |
|
Accumulated other comprehensive income
| | | |
347
| | | | |
(216
|
)
|
|
Retained earnings
| | | |
46,646
|
| | | |
45,433
|
|
|
Total Stockholders' Equity
| | | |
46,638
|
| | | |
45,293
|
|
|
Total Liabilities and Stockholders' Equity
| | |
$
|
320,288
|
| | |
$
|
213,621
|
|
Source: United Insurance Holdings Corp.
Contact:
United Insurance Holdings Corp.
John Rohloff
SEC
Reporting Manager
727-895-7737 / jrohloff@upcic.com
OR
INVESTOR
RELATIONS:
The Equity Group
Adam Prior
Vice
President
212-836-9606 / aprior@equityny.com
or
Terry
Downs
Account Executive
212-836-9615 / tdowns@equityny.com