Exhibit 99.1
FOR IMMEDIATE RELEASE
UNITED INSURANCE HOLDINGS CORP. REPORTS FINANCIAL RESULTS FOR ITS SECOND QUARTER AND SIX-MONTHS ENDED JUNE 30, 2012
Company to Host Quarterly Conference Call at 10:00 A.M. on August 9, 2012
Financial and Operational Highlights
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| • | Second quarter 2012 net income of $3.0 million, or $0.29 per share |
| |
| • | Year-to-date 2012 net income of $7.7 million, or $0.75 per share |
| |
| • | Second quarter 2012 gross premiums written increased 19% to $77.9 million |
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| • | Homeowners policies in force totaling 114,800 at June 30, 2012 |
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| • | Cash and investment holdings of $219.5 million at June 30, 2012 |
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| • | Book value per share of $6.09 at June 30, 2012 |
St. Petersburg, FL - August 9, 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
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| 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.
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| CONTACT: | | OR | | INVESTOR RELATIONS: |
| United Insurance Holdings Corp. | | | | The Equity Group |
| John Rohloff | | | | Adam Prior |
| Interim Chief Financial Officer | | | | Vice President |
| (727) 895-7737 / jrohloff@upcic.com | | | | (212) 836-9606 / aprior@equityny.com |
| | | | | |
| | | | | Terry Downs |
| | | | | Account Executive |
| | | | | (212) 836-9615 / tdowns@equityny.com |
Condensed 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: |
|
|
|
|
|
|
|
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| 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 |
| 966 |
|
| 1,091 |
|
| 1,600 |
|
| 1,029 |
|
| Reclassification adjustment for net realized investment gains |
| (37 | ) |
| (112 | ) |
| (118 | ) |
| (112 | ) |
| Reclassification adjustment for note impairment |
| — |
|
| — |
|
| — |
|
| — |
|
| 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
(Unaudited)
|
| | | | | | | | |
|
| 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 |
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