Company to Host Quarterly Conference Call at 10:00 A.M. on March 15,
2012
Financial and Operational Highlights
-
Fourth quarter 2011 net income of $3.2 million, or $0.31 per diluted
share
-
Year-to-date 2011 net income of $8.1 million, or $0.77 per diluted
share
-
Fourth quarter 2011 gross premiums written increased 39% to $43.5
million
-
Homeowners policies in force totaling 101,800 at December 31, 2011
-
Cash and investment holdings of $165.9 million at December 31, 2011
-
Book value per share of $5.31 at December 31, 2011
-
Quarterly dividend of $0.05 per share approved by Board of Directors
and will be payable on April 5, 2012 to shareholders of record as of
March 26, 2012
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 fourth quarter and for the year
ended December 31, 2011.
2011 Fourth Quarter
Net income for the fourth quarter was $3.2 million, or $0.31 per diluted
share, compared to net income of $2.9 million or $0.27 per diluted
share, during the same period last year. Net premiums earned increased
to $24.8 million from $18.0 million for the fourth quarter of 2010. Net
investment income, realized gains, and other revenues decreased to $1.6
million for the quarter compared to $5.7 million in the prior year
quarter.
Losses and loss adjustment expenses decreased to $9.5 million for the
quarter from $10.1 million during the same period of last year. Policy
acquisition costs increased to $7.8 million from $6.1 million for the
fourth quarter of 2010. Operating expenses increased to $1.1 million
from $854,000 during the same period of last year. General and
administrative expenses increased to $2.9 million from $1.8 million for
the fourth quarter of last year.
2011 Year-to-Date
For the year-to-date period, net income was $8.1 million, or $0.77 per
diluted share, compared to a net loss of $925,000, or $0.09 per diluted
share for the same period last year. The Company's net premiums earned
increased to $90.1 million, from $66.9 million during the same period of
last year. Net investment income, realized gains, and other revenues
decreased to $6.3 million for the year-to-date period from $13.1 million
during the same period of last year.
Losses and loss adjustment expenses decreased to $38.9 million from
$42.5 million while policy acquisition costs increased to $29.1 million
from $24.9 million for the same period last year. Operating expenses
increased to $5.1 million from $4.0 million during the same period of
last year. General and administrative expenses increased to $9.7 million
from $7.5 million while interest expense decreased to $548,000 from $1.8
million for the year ended December 31, 2010.
Balance Sheet Highlights
United's cash and investment holdings totaled $165.9 million at December
31, 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 December 31, 2011, and
December 31, 2010, respectively.
The Company returned to profitability as it continued to benefit from
the various rate increases it has implemented since 2009, including
average rate increases during 2011 of 15.9% and 7.5% on its Florida
homeowners’ policies, 15.0% on its Florida dwelling policies and 6% on
its South Carolina homeowner policies. Because rate increases may take
as long as two years to fully impact net income, United expects to
benefit from the additional impact of its rate increases through
December 2013.
“Overall, 2011 has been a year of solid and consistent growth for us,”
said Mel Russell, United’s Executive Vice President. “We are finally
seeing the benefit from the necessary rate increases we have been
implementing.”
In addition to the positive impact of the rate increases, the Company
continued its geographic expansion. During the fourth quarter of 2011,
United Property & Casualty Insurance Company (UPC), one of the Company’s
wholly-owned subsidiaries, began writing policies in Massachusetts, and
gained approval from the Rhode Island Department of Business Regulation
to write property and casualty insurance in the state as an admitted
carrier. During the first quarter of 2012, UPC will begin writing
policies in Rhode Island, and it is currently awaiting the approval of
applications pending in two additional states.
“We have been working hard to continue our successful expansion into
other states without compromising our conservative underwriting
criteria,” continued Mr. Russell, “and our efforts are progressing well.
We look forward to continuing our strong momentum into 2012 and beyond.”
The Company also benefited from improvement in losses and loss
adjustment expenses, which decreased during 2011 as a result of positive
development on prior accident years.
Management Changes
Today the Board announced that it has expanded the size of the board to
9 members and has appointed William W. Hood III and Kern M. Davis as
directors. The Board also announced that Mel Russell has been promoted
to Executive Vice President of United Insurance Holdings Corp. and has
been appointed President of United Property & Casualty Insurance Company.
Conference Call Details
| March 15, 2012 -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=167502.
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, 2011. 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 In thousands, except share and per share amounts |
|
| |
| |
| | Three Months Ended
December 31, | | Year Ended
December 31, |
| | 2011 |
| 2010 | | 2011 |
| 2010 |
|
REVENUE:
| | | | | | | | |
|
Gross premiums written
| |
$
|
43,469
| | |
$
|
31,378
| | |
$
|
203,806
| | |
$
|
158,637
| |
|
Decrease (increase) in gross unearned premiums
| |
5,616
|
| |
8,142
|
| |
(22,969
|
)
| |
(3,330
|
)
|
|
Gross premiums earned
| |
49,085
| | |
39,520
| | |
180,837
| | |
155,307
| |
|
Ceded premiums earned
| |
(24,272
|
)
| |
(21,523
|
)
| |
(90,757
|
)
| |
(88,452
|
)
|
|
Net premiums earned
| |
24,813
| | |
17,997
| | |
90,080
| | |
66,855
| |
|
Net investment income
| |
782
| | |
826
| | |
2,823
| | |
3,879
| |
|
Net realized investment gains
| |
46
| | |
4,112
| | |
158
| | |
4,346
| |
|
Other-than-temporary impairment of investments
| |
(31
|
)
| |
(97
|
)
| |
(31
|
)
| |
(97
|
)
|
|
Other revenue
| |
852
|
| |
837
|
| |
3,388
|
| |
5,008
|
|
|
Total revenue
| |
26,462
| | |
23,675
| | |
96,418
| | |
79,991
| |
|
EXPENSES:
| | | | | | | | |
|
Losses and loss adjustment expenses
| |
9,462
| | |
10,067
| | |
38,861
| | |
42,533
| |
|
Policy acquisition costs
| |
7,761
| | |
6,098
| | |
29,054
| | |
24,899
| |
|
Operating expenses
| |
1,144
| | |
854
| | |
5,090
| | |
3,968
| |
|
General and administrative expenses
| |
2,889
| | |
1,837
| | |
9,674
| | |
7,506
| |
|
Interest expense
| |
95
|
| |
130
|
| |
548
|
| |
1,767
|
|
|
Total expenses
| |
21,351
| | |
18,986
| | |
83,227
| | |
80,673
| |
|
Income (loss) before other expenses
| |
5,111
| | |
4,689
| | |
13,191
| | |
(682
|
)
|
|
Other (income) expenses
| |
(81
|
)
| |
—
|
| |
175
|
| |
726
|
|
|
Income (loss) before income taxes
| |
5,192
| | |
4,689
| | |
13,016
| | |
(1,408
|
)
|
|
Provision for (benefit from) income taxes
| |
1,967
|
| |
1,794
|
| |
4,928
|
| |
(483
|
)
|
|
Net income (loss)
| |
$
|
3,225
|
| |
$
|
2,895
|
| |
$
|
8,088
|
| |
$
|
(925
|
)
|
|
OTHER COMPREHENSIVE INCOME (LOSS):
| | | | | | | | |
|
Change in net unrealized gain on investments
| |
821
| | |
(2,065
|
)
| |
4,291
| | |
2,093
| |
|
Reclassification adjustment for net realized investment gains
| |
(46
|
)
| |
(4,112
|
)
| |
(158
|
)
| |
(4,346
|
)
|
|
Reclassification adjustment for recognized other-than-temporary
impairments
| |
31
| | |
97
| | |
31
| | |
97
| |
|
Income tax expense related to items of other comprehensive income
| |
(312
|
)
| |
2,345
|
| |
(1,607
|
)
| |
832
|
|
|
Total comprehensive income (loss)
| |
$
|
3,719
|
| |
$
|
(840
|
)
| |
$
|
10,645
|
| |
$
|
(2,249
|
)
|
| | | | | | | |
|
|
Weighted average shares outstanding
| | | | | | | | |
|
Basic and Diluted
| |
10,361,849
|
| |
10,573,932
|
| |
10,442,034
|
| |
10,573,932
|
|
| | | | | | | |
|
|
Earnings (loss) per share
| | | | | | | | |
|
Basic and Diluted
| |
$
|
0.31
|
| |
$
|
0.27
|
| |
$
|
0.77
|
| |
$
|
(0.09
|
)
|
| | | | | | | |
|
|
Dividends declared per share
| |
$
|
0.05
|
| |
$
|
0.00
|
| |
$
|
0.05
|
| |
$
|
0.05
|
|
Consolidated Balance Sheets In thousands, except share amounts |
|
| |
| |
| | | December 31, |
| | | 2011 |
| 2010 |
|
ASSETS
| | | | |
|
Investments available for sale, at fair value:
| | | | |
|
Fixed maturities (amortized cost of $116,863 and $50,984,
respectively)
| |
$
|
120,378
| | |
$
|
50,683
| |
|
Equity securities (adjusted cost of $3,284 and $3,666, respectively)
| |
3,581
| | |
3,615
| |
|
Other long-term investments
| |
300
|
| |
300
|
|
|
Total investments
| |
124,259
| | |
54,598
| |
|
Cash and cash equivalents
| |
41,639
| | |
71,644
| |
|
Accrued investment income
| |
986
| | |
414
| |
|
Premiums receivable, net
| |
11,205
| | |
7,825
| |
|
Reinsurance recoverable on paid and unpaid losses
| |
4,458
| | |
27,304
| |
|
Prepaid reinsurance premiums
| |
40,968
| | |
38,307
| |
|
Deferred policy acquisition costs
| |
12,324
| | |
9,342
| |
|
Other assets
| |
4,376
|
| |
4,187
|
|
|
Total Assets
| |
$
|
240,215
|
| |
$
|
213,621
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
| | | | |
|
Liabilities:
| | | | |
|
Unpaid losses and loss adjustment expenses
| |
$
|
33,600
| | |
$
|
47,414
| |
|
Unearned premiums
| |
100,130
| | |
77,161
| |
|
Reinsurance payable
| |
16,571
| | |
14,982
| |
|
Other liabilities
| |
17,866
| | |
10,536
| |
|
Notes payable
| |
17,059
|
| |
18,235
|
|
|
Total Liabilities
| |
185,226
|
| |
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; 10,361,849 and 10,573,932 outstanding,
respectively
| |
1
| | |
1
| |
|
Additional paid-in capital
| |
75
| | |
75
| |
|
Treasury shares, at cost; 212,083 and zero shares, respectively
| |
(431
|
)
| |
—
| |
|
Accumulated other comprehensive income
| |
2,341
| | |
(216
|
)
|
|
Retained earnings
| |
53,003
|
| |
45,433
|
|
|
Total Stockholders' Equity
| |
54,989
|
| |
45,293
|
|
|
Total Liabilities and Stockholders' Equity
| |
$
|
240,215
|
| |
$
|
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.