United Insurance Holdings Corp. Reports Financial Results For Its Second Quarter And Six-Months Ended June 30, 2012

United Insurance Holdings Corp. (OTCBB: UIHC) (United or the Company), a property and casualty insurance holding company, today reported its financial results for the quarter ended June 30, 2012.

2012 Second Quarter

The Company reported net income for the second quarter of $3.0 million, or $0.29 per share, compared to net income of $89 thousand, or $0.01 per share, during the same period of last year. Net premiums earned increased to $29.7 million from $22.3 million for the second quarter of 2012. Net investment income, realized gains and other revenues increased to $1.8 million for the quarter compared to $1.7 million in the prior year quarter.

Losses and loss adjustment expenses increased to $13.0 million for the quarter from $12.6 million during the same period of last year. Policy acquisition costs increased to $8.9 million from $7.2 million for the second quarter of 2012. Operating expenses increased to $1.8 million from $1.5 million during the same period of last year. General and administrative expenses increased to $2.3 million from $2.1 million for the second quarter.

2012 Year-to-Date

For the year-to-date period, net income was $7.7 million, or $0.75 per share, compared to net income of $1.2 million, or $0.12 per diluted share for the same period last year. The Company's net premiums earned increased to $57.5 million, from $41.4 million during the same period of last year. Net investment income and other revenues increased to $3.6 million for the year-to-date period from $3.1 million during the same period of last year.

Losses and adjusting expenses increased to $22.5 million, from $21.0 million, while policy acquisition costs increased to $17.1 million from $13.7 million for the same period last year. Operating expenses increased to $3.2 million from $2.8 million during the same period of last year.

Balance Sheet Highlights

United's cash and investment holdings totaled $219.5 million at June 30, 2012, compared to $165.9 million at December 31, 2011. 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% of United's total investments at June 30, 2012, and December 31, 2011.

Management Comments

John Forney, Chief Executive Officer of United, stated, “This was a good quarter for United. We grew our business in Florida while maintaining strong underwriting discipline as reflected in our favorable loss ratios. At the same time, our efforts in Massachusetts, Rhode Island and South Carolina are beginning to bear fruit, and this policy growth will provide us helpful geographic diversification. These favorable trends aided our risk management team in completing a very successful reinsurance placement this quarter that provides United with even deeper coverage from catastrophe losses than in prior years. Overall, we are well-positioned for this hurricane season, and poised to continue profitable growth as we execute our focused strategy in the coming quarters.”

Conference Call Details
 

Date and Time:
  August 9, 2012 - 10:00 A.M. ET
 

Participant Dial-In:
(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=169262.
 

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, Massachusetts and 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 collectibility 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

June 30,
  Six Months Ended

June 30,
2012   2011   2012   2011
REVENUE:
Gross premiums written $ 77,928 $ 65,296 $ 135,924 $ 116,071
Increase in gross unearned premiums (23,479 ) (21,037 ) (30,799 ) (31,446 )
Gross premiums earned 54,449 44,259 105,125 84,625
Ceded premiums earned (24,727 ) (21,960 ) (47,613 ) (43,218 )
Net premiums earned $ 29,722 $ 22,299 57,512 41,407
Net investment income 777 700 1,524 1,234
Net realized gains 37 112 118 112
Other revenue 1,028   884   1,913   1,710  
Total revenue $ 31,564 $ 23,995 61,067 44,463
EXPENSES:
Losses and loss adjustment expenses 12,969 12,601 22,451 20,985
Policy acquisition costs 8,878 7,181 17,131 13,725
Operating expenses 1,757 1,503 3,190 2,800
General and administrative expenses 2,300 2,054 5,093 4,417
Interest expense 129   157   212   311  
Total expenses $ 26,033 $ 23,496 48,077 42,238
Income before other expenses 5,531 499 12,990 2,225
Other expenses 293   279   269   279  
Income before income taxes $ 5,238 $ 220 12,721 1,946
Provision for income taxes 2,247   131   4,982   733  
Net income $ 2,991   $ 89   $ 7,739   $ 1,213  
OTHER COMPREHENSIVE INCOME:
Change in net unrealized gain on investments 650 1,091 1,284 1,029
Reclassification adjustment for net realized investment gains (37 ) (112 ) (118 ) (112 )
Reclassification adjustment for note impairment 316 316
Income tax expense related to items of other comprehensive income (359 ) (377 ) (572 ) (354 )
Total comprehensive income $ 3,561   $ 691   $ 8,649   $ 1,776  
 
Weighted average shares outstanding
Basic and Diluted 10,361,849   10,473,717   10,361,849   10,523,548  
 
Earnings per share
Basic and Diluted $ 0.29   $ 0.01   $ 0.75   $ 0.12  
 
Dividends declared per share $   $   $ 0.05   $  
 
 

Consolidated Balance Sheets

In thousands
 
  June 30,

2012
 

December 31,2011
ASSETS (Unaudited)
Investments available for sale, at fair value:
Fixed maturities (amortized cost of $118,373 and $116,863, respectively) $ 123,277 $ 120,378
Equity securities (adjusted cost of $3,406 and $3,284, respectively) 3,794 3,581
Other long-term investments 300   300  
Total investments $ 127,371 $ 124,259
Cash and cash equivalents 92,130 41,639
Accrued investment income 983 986
Premiums receivable, net of allowances for credit losses of $86 and $77, respectively 17,938 11,205
Reinsurance recoverable on paid and unpaid losses 3,470 4,458
Prepaid reinsurance premiums 103,834 40,968
Deferred policy acquisition costs 16,779 12,324
Other assets 3,524   4,376  
Total Assets $ 366,029   $ 240,215  
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses $ 33,150 $ 33,600
Unearned premiums 130,929 100,130
Reinsurance payable 106,263 16,571
Other liabilities 16,095 17,866
Notes payable 16,471   17,059  
Total Liabilities $ 302,908   $ 185,226  
Commitments and contingencies
Stockholders' Equity:
Common stock, $0.0001 par value; 50,000,000 shares authorized; 10,573,932 issued; 10,361,849 outstanding 1 1
Additional paid-in capital 75 75
Treasury shares, at cost; 212,083 shares (431 ) (431 )
Accumulated other comprehensive income 3,252 2,341
Retained earnings 60,224   53,003  
Total Stockholders' Equity $ 63,121   $ 54,989  
Total Liabilities and Stockholders' Equity $ 366,029   $ 240,215  

Copyright Business Wire 2010

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