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Kingstone Companies Announces Year To Date And Third Quarter Results

Stocks in this article: KINS

Kingstone Companies, Inc. (NASDAQ: KINS) reported its results for the period ended September 30, 2012. Year to date net income was $2.24 million, or $.59 per share, up from the $1.12 million and $.29 per share earned during the comparable period in 2011. Third quarter net income was $914,000, or $.23 per share, as compared to $220,000 and $.06 per share in the third quarter of 2011. Net operating income 1 for the nine months ended September 30, 2012 was $2,166,000, or $.56 per share, as compared to $884,000 and $.23 per share generated during the comparable period in 2011. Third quarter net operating income was $871,000, or $.22 per share, while third quarter 2011 amounts were $89,000 and $.02 per share.

The Company also announced that its board declared a quarterly dividend of $.04 per share payable on December 14, 2012 to shareholders of record at the close of business on November 30, 2012. This marks the sixth consecutive quarter of dividend distributions.

_____________ 1This measure is not based on U.S. generally accepted accounting principles (“GAAP”) and is defined and reconciled to the most directly comparable GAAP measure in “Information Regarding Non-GAAP Measures.”

Operating Highlights

  • Direct premiums written in the third quarter 2012 were up by 22.9% over the third quarter of 2011. For the nine months ended September 30, 2012, direct premiums written increased 19.5% over the prior year’s amount.
  • Net premiums written in the third quarter were up 30.4% over 2011. Year to date the increase was 19.0%.
  • Net premiums earned in the third quarter were up by 34.2% over 2011. Year to date the increase was 24.0%.
  • Ceding commission revenue earned in the third quarter increased by 17.5% over 2011. Year to date the increase was 16.0%
  • Q3 net loss ratio was 51.0% as compared to 74.5% in Q3 2011.
  • Q3 combined ratio was 74.5% as compared to 97.7% in Q3 2011.
         

Financial Highlights

 
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2012   2011   $   Change   % Change 2012   2011   $   Change   % Change
(000's except per share

amounts and percentages)

Direct premiums written (1) $ 12,765 $ 10,383 $   2,382 22.9 % $ 36,440 $ 30,503 $   5,937 19.5 %
Net premiums written (1) $ 5,565 $ 4,267 $ 1,298 30.4 % $ 14,762 $ 12,410 $ 2,352 19.0 %
Net premiums earned $ 5,282 $ 3,937 $ 1,345 34.2 % $ 13,418 $ 10,822 $ 2,596 24.0 %
Ceding commission revenue $ 2,711 $ 2,307 $ 404 17.5 % $ 8,526 $ 7,348 $ 1,178 16.0 %
Net investment income $ 242 $ 172 $ 70 40.7 % $ 740 $ 510 $ 230 45.1 %
Interest expense $ 20 $ 24 $ (4 ) (16.7 ) % $ 61 $ 108 $ (47 ) (43.5 ) %
Net income $ 914 $ 220 $ 694 315.5 % $ 2,240 $ 1,120 $ 1,120 100.0 %
Net income per diluted share $ 0.23 $ 0.06 $ 0.17 283.3 % $ 0.59 $ 0.29 $ 0.30 103.4 %
Comprehensive income $ 1,266 $ 109 $ 1,157 1,061.5 % $ 3,082 $ 1,230 $ 1,852 150.6 %
Net operating income (1) $ 871 $ 89 $ 782 878.7 % $ 2,166 $ 884 $ 1,282 145.0 %
Operating income per diluted share (1) $ 0.22 $ 0.02 $ 0.20 863.3 % $ 0.56 $ 0.23 $ 0.33 143.5 %
 

____________________ 1These measures are not based on GAAP and are defined and reconciled to the most directly comparable GAAP measures in “Information Regarding Non-GAAP Measures.”

Management Commentary

Barry Goldstein, Kingstone’s Chairman and CEO, stated “The third quarter results were excellent. Our written premium growth continues, and in fact has accelerated some. Coupled with the reduction to the quota share percentage for Commercial Lines, our Q3 net earned premiums grew by 34.2% over 2011 to an all-time high. The quarter’s loss ratio and combined ratio were 51.0% and 74.5%, respectively, both far better than the third quarter of 2011. With our portfolio heavily weighted in investment grade corporate bonds, we have been the beneficiary of the increase in market prices of this asset class. Overall, our net income for the first nine months of $2.24 million is twice what we earned at this time last year.

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