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Now at this time I’d like to turn the conference over to Mr. Michael Braun, Chief Executive Officer and President of 21st Century Holding Company. Please go ahead, sir.Michael Braun Good afternoon. And thank you for joining us to discuss 21st Century Holding Company’s first quarter 2012 financial results. I am joined on the call by Pete Prygelski, our Chief Financial Officer. Our financial results for the quarter can be found in our earnings press release. I will go over some brief highlights from the quarter and then Pete and I will open up the line for questions. First quarter net income was $1.1 million or $0.13 per share. Earnings from insurance operations improved to $0.13 per share for the first quarter 2012 compared with $0.08 per share for the fourth quarter 2011 and versus a loss of $0.25 per share in the first quarter of 2011. Book value increased to $7.61 per share compared with $7.32 per share in the prior quarter and $7.09 per share in the first quarter of 2011. Gross written premiums increased by $4.2 million or 15.2%, compared with the same three-month period last year. Continued improvement of the underwriting results, our loss ratio improved to 44.7% for the first quarter 2012, compared with 75.8% for the first quarter of 2011. With that, we are glad to open up the call to your questions. Question-and-Answer Session Operator (Operator Instructions) Our first question comes from Douglas Ruth of Lenox Financial Services. Your line is open. Douglas Ruth - Lenox Financial Services Congratulations, Mike and Pete, on a very nice report. I have a few questions for you. I was wondering if you could tell us why you feel the book of business is better today than it was a year ago. Michael Braun Yeah, good afternoon, Doug. The book of business continues to have significant improvements. And what's different about the book today is, is that everything that we have been writing in the business for the last couple of years, we have improved our analytics to ensure that profitable policies are coming in. Policies that were in our book of business can become unprofitable for different reasons as we model them. And we have had a fairly robust process of non-renewals over the last couple of years. Those non-renewals have been negated by new business that’s come in, but in 2010 that was about $12 million of premium that was non-renewed which is substantial. 2011, it was another $12 million. In this year it’s about $8 million. And really we see the non-renewals slowing significantly. There will always be some non-renewals but I would say they would be pretty much immaterial after -- on a go forward after 2012.
New business has replaced that so the book has appeared to be fairly stagnant over the last two to three years although it has change considerably. And now what we are also seeing is that the volume is increasing significantly. Where we have been around 44000-45000 policies, we are up at about 49000 policies. So we continue to see great demand for our product but we remain committed to the discipline of only writing those policies that we know are accretive to our book of business.Douglas Ruth - Lenox Financial Services It sounds wonderful. And can you give us an update as far as what's happening with the reinsurance and the reinsurance cost. Michael Braun Yeah, absolutely. I said on the last call that we anticipated our reinsurance spend to be approximately $40 million. We stand by that at this point, while we won't know until we truly purchase it which happens from now up until July one. It looks favorable. There’s two things. All of the incumbents on our program have expressed interest to stay on the program. We believe that the pricing will be stable. And on the last call when I said that $40 million, I think it will be around $40 million. Last year’s program at today's prices, meaning the change primarily in the FHCF, that’s the cover that we get from the state. Had we had that same program this year, it would have been about a $44 million spend. Read the rest of this transcript for free on seekingalpha.com