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Forward-looking statements made during this presentation speak only as of the date of which they are made. The 21st Century Holding Company specifically disclaims any obligation to update or revise any forward-looking statements to reflect new information, future events or circumstances or otherwise. Now, at this time I would 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 second quarter 2012 financial results. I’m 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. Second quarter net income improved $1.4 million, or $0.18 per share, for the second quarter 2012, compared with $1.1 million, or $0.13 per share, for the first quarter 2012, at a net loss of $800,000 or $0.10 per share in the second quarter of 2012. Net income for the 2012 six-month period improved at $0.31 per share, compared with net loss of $0.35 per share in the same six-month period last year. Book value increased at $7.89 per share at June 30, 2012, compared with $7.61 per share at March 31, 2012, and $7.05 per share at June 30, 2011. Gross written premiums increased by $5.1 million, or 18.1%, compared with the same three-month period last year. Net premiums earned increased by $3 million, or 26%, compared with the same three-month period last year. Homeowners policy count has grown from 43,793 at the start of 2012, to 52,908 at June 30, 2012, or 20.8%. Our continued focus on writing sustainable quality business and controlling expenses has led to another profitable quarter.
The growth in our policy count, gross written premiums and net earned premiums are notable after tightly controlling our book of business over the prior two years. While we have taken a prudent path towards growth, we feel these decisions have set the course for future success. With that, we are glad to open up the call to your questions.Question-and-Answer Session Operator Thank you. (Operator Instructions) First question comes from Casey Alexander from Gilford Securities. Michael Braun Hi Casey, how are you today? Casey Alexander – Gilford Securities I’m fine, thanks. I have a couple questions. One, can you – was there a single event on the net realized loss for the quarter, the investment loss? Pete Prygelski Casey, this is Pete Prygelski. What specific number are you looking at? Casey Alexander – Gilford Securities The $218,000 net realized investment loss for the quarter? Pete Prygelski No, there was no single one event as we’ve – I don’t know – you haven’t been on the call in a while. But we’ve outsourced a lot of the equity – that would be all equities $200,000 loss and we’ve outsourced the management of our equity portfolio to three different equity managers in three different asset classes and it was just normal selling on their part. Casey Alexander – Gilford Securities Okay, that’s fine. Secondly, I’m a little curious about the minus 44% loss ratio in the commercial general liability business. Was there a claw back of a previous claim that was made? Or how did that come about? Pete Prygelski I’ll answer that one too, Casey. Basically what we did in the second quarter is we looked at our total IBNR for all lines, CGL had been performing better than expected. We reallocated some of our incurred but not reported reserves from CGL over to property
So you can see property went up 5% and CGL, which didn’t have much unearned premium, went down dramatically because it was almost moving $2 million to 3 million over to property and removing it from CGL, so it’s probably more helpful to look at it on the total basis of all lines combined.Read the rest of this transcript for free on seekingalpha.com