Company to Host Quarterly Conference Call at 10:00 A.M. on November
10, 2011
Financial and Operational Highlights
-
Third quarter 2011 net income of $3.7 million, or $0.35 per diluted
share
-
Year-to-date 2011 net income of $4.9 million, or $0.46 per diluted
share
-
Third quarter 2011 gross premiums written increased 23% to $44.3
million
-
Homeowners policies in force totaling 97,600 at September 30, 2011
-
Cash and investment holdings of $185.6 million at September 30, 2011
-
Book value per share of $5.00 at September 30, 2011
-
Quarterly dividend of $0.05 per share approved by Board of Directors
and will be payable on December 15, 2011 to shareholders of record as
of November 30, 2011
ST. PETERSBURG, Fla.--(BUSINESS WIRE)--
United Insurance Holdings Corp. (OTCBB: UIHC)(United or the
Company), a property and casualty insurance holding company, today
reported its financial results for the third quarter and nine months
ended September 30, 2011.
2011 Third Quarter
Net income for the third quarter totaled $3.7 million, or $0.35 per
diluted share, compared to a net loss of $316,000 or $0.03 per diluted
share, during the same period last year. Net premiums earned increased
to $23.9 million from $17.9 million for the third quarter 2010. Net
investment income and other revenues decreased to $1.6 million for the
quarter from $2.1 million in the prior year quarter.
Losses and loss adjustment expenses decreased to $8.4 million for the
quarter from $11.5 million during the same period last year. Policy
acquisition costs increased to $7.6 million from $6.2 million for the
third quarter 2010. Operating expenses increased to $1.1 million from
$769,000 during the same period last year. General and administrative
expenses increased to $2.4 million from $1.9 million for the third
quarter of last year.
2011 Year-to-Date
For the year-to-date period, net income was $4.9 million, or $0.46 per
diluted share, compared to a net loss of $3.8 million, or $0.36 per
diluted share for the same period last year. The Company's net premiums
earned increased to $65.3 million, from $48.9 million during the same
period of last year. Net investment income and other revenues decreased
to $4.7 million for the year-to-date period from $7.5 million during the
same period of last year.
Losses and loss adjustment expenses decreased to $29.4 million from
$32.5 million while policy acquisition costs increased to $21.3 million
from $18.8 million for the same period last year. Operating expenses
increased to $3.9 million from $3.1 million during the same period of
last year. General and administrative expenses increased to $6.8 million
from $5.7 million while interest expense decreased to $453,000 from $1.6
million for the nine months ended September 30, 2010.
Balance Sheet Highlights
United's cash and investment holdings totaled $185.6 million at
September 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 September
30, 2011, and December 31, 2010, respectively.
“We are pleased to report positive third-quarter results,” said Don
Cronin, United’s Chief Executive Officer. “Our results continue to be
positively impacted by our new business writings while achieving an
appropriate rate for risk.” Net premiums earned increased $6 million to
$23.9 million for the quarter, or 34% over the same period last year
because the Company continues to benefit from an increase in new
business, policyholder retention, and three rate increases implemented
over the prior two years.
The Company’s losses and loss adjustment expenses decreased $3 million
to $8.4 million for the quarter from the same period last year. The
frequency and severity of current accident year claims has decreased in
comparison to the same period of the prior year. Additionally, the
Company continues to see improvement in its current year non-catastrophe
loss ratios as a result of the rate increases which have been
implemented. The decreases in frequency and severity mitigated the
impact of the increase in policies written.
United Property and Casualty Insurance Company (UPC), one of the
Company’s wholly-owned subsidiaries, began writing policies in
Massachusetts on November 1, 2011. During the third quarter, the Rhode
Island Department of Business Regulation approved UPC to write property
and casualty insurance in the state as an admitted carrier and UPC plans
to begin writing policies during the first quarter of 2012. UPC
currently has applications pending in two additional states.
On November 1, the Company implemented an additional 7.5% average
increase for its homeowner product and 14.9% average increase on its
dwelling fire product that was approved by the Florida Office of
Insurance Regulation.
Conference Call Details |
| November 10, 2011 - 10:00 A.M. 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=166311.
About United Insurance Holdings Corp.
Founded in 1999, United Property and Casualty Insurance Company, a
subsidiary of United Insurance Holdings Corp., writes and services
property and casualty insurance in Florida, South Carolina and
Massachusetts, and was recently licensed to write property and casualty
insurance in Rhode Island. 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 four
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 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.
|
|
| Consolidated Statements of Income |
| (Unaudited) |
|
|
|
|
| Three Months Ended |
| Nine Months Ended |
| | | September 30, | | September 30, |
| | | 2011 |
| 2010 | | 2011 |
| 2010 |
|
REVENUE:
| | | | | | | | | |
|
Gross premiums written
| | |
$
|
44,266
| | |
$
|
36,017
| | |
$
|
160,337
| | |
$
|
127,259
| |
|
Decrease (increase) in gross unearned premiums
| | |
2,861
|
| |
3,440
|
| |
(28,585
|
)
| |
(11,472
|
)
|
|
Gross premiums earned
| | |
47,127
| | |
39,457
| | |
131,752
| | |
115,787
| |
|
Ceded premiums earned
| | |
(23,267
|
)
| |
(21,592
|
)
| |
(66,485
|
)
| |
(66,929
|
)
|
|
Net premiums earned
| | |
23,860
| | |
17,865
| | |
65,267
| | |
48,858
| |
|
Net investment income
| | |
807
| | |
1,037
| | |
2,041
| | |
3,053
| |
|
Net realized gains
| | |
—
| | |
206
| | |
112
| | |
234
| |
|
Other revenue
| | |
826
|
| |
891
|
| |
2,536
|
| |
4,171
|
|
|
Total revenue
| | |
25,493
| | |
19,999
| | |
69,956
| | |
56,316
| |
|
EXPENSES:
| | | | | | | | | |
|
Losses and loss adjustment expenses
| | |
8,414
| | |
11,451
| | |
29,399
| | |
32,466
| |
|
Policy acquisition costs
| | |
7,568
| | |
6,185
| | |
21,293
| | |
18,801
| |
|
Operating expenses
| | |
1,146
| | |
769
| | |
3,946
| | |
3,114
| |
|
General and administrative expenses
| | |
2,368
| | |
1,910
| | |
6,785
| | |
5,669
| |
|
Interest expense
| | |
142
|
| |
155
|
| |
453
|
| |
1,637
|
|
|
Total expenses
| | |
19,638
| | |
20,470
| | |
61,876
| | |
61,687
| |
|
Income (loss) before other (income) expenses
| | |
5,855
| | |
(471
|
)
| |
8,080
| | |
(5,371
|
)
|
|
Other (income) expenses
| | |
(23
|
)
| |
—
|
| |
256
|
| |
726
|
|
|
Income (loss) before income taxes
| | |
5,878
| | |
(471
|
)
| |
7,824
| | |
(6,097
|
)
|
|
Provision for (benefit from) income taxes
| | |
2,228
|
| |
(155
|
)
| |
2,961
|
| |
(2,277
|
)
|
|
Net income (loss)
| | |
$
|
3,650
|
| |
$
|
(316
|
)
| |
$
|
4,863
|
| |
$
|
(3,820
|
)
|
|
OTHER COMPREHENSIVE INCOME (LOSS):
| | | | | | | | | |
|
Change in net unrealized gain on investments
| | |
2,441
| | |
2,362
| | |
3,470
| | |
4,158
| |
|
Reclassification adjustment for net realized investment gains
| | |
—
| | |
(206
|
)
| |
(112
|
)
| |
(234
|
)
|
|
Income tax expense related to items of other
| | | | | | | | | | | | | |
|
comprehensive income
| | |
(941
|
)
| |
(831
|
)
| |
(1,295
|
)
| |
(1,513
|
)
|
|
Total comprehensive income (loss)
| | |
$
|
5,150
|
| |
$
|
1,009
|
| |
$
|
6,926
|
| |
$
|
(1,409
|
)
|
| | | | | | | | |
|
|
Weighted average shares outstanding
| | | | | | | | | |
|
Basic and Diluted
| | |
10,361,849
|
| |
10,573,932
|
| |
10,469,056
|
| |
10,573,932
|
|
| | | | | | | | |
|
|
Earnings (loss) per share
| | | | | | | | | |
|
Basic and Diluted
| | |
$
|
0.35
|
| |
$
|
(0.03
|
)
| |
$
|
0.46
|
| |
$
|
(0.36
|
)
|
| | | | | | | | |
|
|
Dividends declared per share
| | |
$
|
—
|
| |
$
|
—
|
| |
$
|
—
|
| |
$
|
0.05
|
|
|
|
Consolidated Balance Sheets |
|
|
|
|
| September 30, |
| December 31, |
| | | 2011 | | 2010 |
|
ASSETS
| | | (Unaudited) | | |
|
Investments available for sale, at fair value:
| | | | | |
|
Fixed maturities (amortized cost of $128,995 and $50,984,
respectively)
| | |
$
|
132,070
| | |
$
|
50,683
| |
|
Equity securities (adjusted cost of $3,579 and $3,666, respectively)
| | |
3,510
| | |
3,615
| |
|
Other long-term investments
| | |
300
|
| |
300
|
|
|
Total investments
| | |
135,880
| | |
54,598
| |
|
Cash and cash equivalents
| | |
49,703
| | |
71,644
| |
|
Accrued investment income
| | |
904
| | |
414
| |
|
Premiums receivable, net of allowances for credit losses of $72 and
| | | | | | | |
| $61, respectively
| | |
12,010
| | |
7,825
| |
|
Reinsurance recoverable on paid and unpaid losses
| | |
6,643
| | |
27,304
| |
|
Prepaid reinsurance premiums
| | |
63,152
| | |
38,307
| |
|
Deferred policy acquisition costs
| | |
13,088
| | |
9,342
| |
|
Other assets
| | |
4,753
|
| |
4,187
|
|
|
Total Assets
| | |
$
|
286,133
|
| |
$
|
213,621
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
| | | | | |
|
Liabilities:
| | | | | |
|
Unpaid losses and loss adjustment expenses
| | |
$
|
39,857
| | |
$
|
47,414
| |
|
Unearned premiums
| | |
105,746
| | |
77,161
| |
|
Reinsurance payable
| | |
55,665
| | |
14,982
| |
|
Other liabilities
| | |
15,724
| | |
10,536
| |
|
Notes payable
| | |
17,353
|
| |
18,235
|
|
|
Total Liabilities
| | |
234,345
|
| |
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
| | |
1,847
| | |
(216
|
)
|
|
Retained earnings
| | |
50,296
|
| |
45,433
|
|
|
Total Stockholders' Equity
| | |
51,788
|
| |
45,293
|
|
|
Total Liabilities and Stockholders' Equity
| | |
$
|
286,133
|
| |
$
|
213,621
|
|
United Insurance Holdings Corp.
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
or
Terry
Downs, 212-836-9615
Account Executive
tdowns@equityny.com
Source: United Insurance Holdings Corp.