FORT LAUDERDALE, FL -- (Marketwire) -- 11/09/12 -- Universal Insurance Holdings, Inc. (UIH) (NYSE MKT: UVE) with its wholly-owned subsidiaries (the Company or Universal), a vertically integrated insurance holding company, reported net income of $8.3 million, or $0.20 per diluted share, an increase of $0.18, for the third quarter of 2012, compared to net income of $1.0 million, or $0.02 per diluted share, for the same period in 2011.
Third-Quarter 2012 Results
Net income during the third quarter of 2012 increased $7.3 million, or $0.18 per diluted share, as a result of an increase in net earned premiums and improved performance in the Company's investment trading portfolio.
Direct premiums written collectively by Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC), Universal's wholly-owned insurance company subsidiaries, rose 12.6 percent during the third quarter of 2012. Net premiums earned grew $9.9 million, or 19.9 percent, in the third quarter of 2012 compared to the same quarter in 2011, primarily as a result of increases in premium rates over the past 24 months, the most recent of which were in January and February of 2012, and a reduction in the quota-share cession rate from 50 percent for the 2011-2012 reinsurance program to 45 percent for the 2012-2013 reinsurance program.
Third-quarter 2012 operating costs increased compared to the same quarter last year, as net losses and loss adjustment expenses (LAE) increased $7.0 million, or 23.7 percent, while general and administrative expenses increased $5.4 million, or 28.9 percent. Also in the third quarter, the Company decided to forego efforts to collect $5.4 million from a reinsurer because the tangible and intangible costs associated with the collection effort appeared likely to exceed the amount claimed.
At September 30, 2012, stockholders' equity was $166.0 million compared to $161.8 million at June 30, 2012, and $156.9 million at September 30, 2011.
Cash Dividends
On September 10, 2012, UIH announced that its board of directors declared a cash dividend of $0.08 per share, which was paid on October 9, 2012, to shareholders of record on September 26, 2012. At that time, the board further indicated that it expects to declare an additional dividend of the same amount to shareholders of record in the fourth quarter, which would bring this year's aggregate declared annual dividend to $0.34 for each share of common stock. Declaration and payment of future dividends is subject to the discretion of UIH's board and will be dependent on future earnings, cash flows, financial requirements and other factors.
First Nine-Months 2012 Results
For the first nine months of 2012, the Company's net income and diluted earnings per share grew by 15.5 percent and 16.4 percent, respectively, compared to the same period of 2011.
Net premiums earned increased 11.3 percent for the first nine months of 2012 compared to the same period of 2011, primarily as a result of the previously mentioned rate increases, which have had a positive effect on premium generated by renewal policies.
Tropical Storm/Hurricane Sandy Update
The Company has received few claims from Tropical Storm/Hurricane Sandy, which recently affected the eastern United States. The insurance company subsidiaries write most of their policies in Florida, which was not severely affected.
About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly owned subsidiary of the Company, is one of the three leading writers of homeowners insurance in Florida and is now fully licensed and has commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts and Maryland. American Platinum Property and Casualty Insurance Company (APPCIC), also a wholly owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.
Forward-Looking Statements and Risk Factors
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Company's operations and future results, refer to the Company's reports filed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2011 and the Form 10-Q for the quarter ended September 30, 2012.
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(in thousands, except per share data)
Three Months Ended Nine Months
September 30, Ended September 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
PREMIUMS EARNED AND OTHER
REVENUES
Direct premiums written $ 192,986 $ 171,370 $ 605,557 $ 558,024
Ceded premiums written (132,776) (123,984) (398,643) (393,673)
--------- --------- --------- ---------
Net premiums written 60,210 47,386 206,914 164,351
Change in net unearned premium (698) 2,248 (43,068) (17,189)
--------- --------- --------- ---------
Premiums earned, net 59,512 49,634 163,846 147,162
Net investment income
(expense) 215 122 163 358
Net realized gains (losses) on
investments (3,142) 5,884 (12,296) 12,496
Net unrealized gains (losses)
on investments 8,091 (15,985) 11,490 (23,037)
Net foreign currency gains
(losses) on investments - (455) 23 (384)
Commission revenue 4,822 5,192 15,494 14,313
Policy fees 3,461 3,535 11,434 12,110
Other revenue 1,578 1,486 4,558 4,400
--------- --------- --------- ---------
Total premiums earned and other
revenues 74,537 49,413 194,712 167,418
--------- --------- --------- ---------
OPERATING COSTS AND EXPENSES
Losses and loss adjustment
expenses 36,301 29,343 91,912 81,380
General and administrative
expenses 24,262 18,827 59,605 48,598
--------- --------- --------- ---------
Total operating costs and
expenses 60,563 48,170 151,517 129,978
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 13,974 1,243 43,195 37,440
Income taxes, current 624 7,331 10,484 25,690
Income taxes, deferred 5,094 (7,063) 6,805 (10,672)
--------- --------- --------- ---------
Income taxes, net 5,718 268 17,289 15,018
--------- --------- --------- ---------
NET INCOME AND COMPREHENSIVE
INCOME $ 8,256 $ 975 $ 25,906 $ 22,422
========= ========= ========= =========
Basic earnings per common share $ 0.21 $ 0.02 $ 0.65 $ 0.57
========= ========= ========= =========
Weighted average of common
shares
outstanding - Basic 39,679 39,190 39,579 39,177
========= ========= ========= =========
Fully diluted earnings per
common share $ 0.20 $ 0.02 $ 0.64 $ 0.55
========= ========= ========= =========
Weighted average of common
shares
outstanding - Diluted 40,450 40,330 40,458 40,536
========= ========= ========= =========
Cash dividends declared per
common share $ 0.08 $ 0.08 $ 0.26 $ 0.18
========= ========= ========= =========
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except per share data)
As of
----------------------------
September 30, December 31,
ASSETS: 2012 2011
------------- -------------
Cash and cash equivalents $ 365,675 $ 229,685
Restricted cash and cash equivalents 95,135 78,312
Fixed maturities, at fair value 4,008 3,801
Equity securities, at fair value 48,875 95,345
Prepaid reinsurance premiums 248,899 243,095
Reinsurance recoverables 80,800 85,706
Reinsurance receivable, net 30,528 55,205
Premiums receivable, net 56,044 45,828
Receivable from securities sold 1,750 9,737
Other receivables 3,197 2,732
Property and equipment, net 8,838 7,116
Deferred policy acquisition costs, net 18,019 12,996
Income taxes recoverable 406 -
Deferred income tax asset, net 16,185 22,991
Other assets 1,553 1,477
------------- -------------
Total assets $ 979,912 $ 894,026
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses $ 172,674 $ 187,215
Unearned premiums 408,714 359,842
Advance premium 18,468 19,390
Accounts payable 4,252 4,314
Bank overdraft 29,198 25,485
Payable for securities purchased 4,706 1,067
Reinsurance payable 123,934 87,497
Income taxes payable 23 12,740
Dividends payable to shareholders 3,287 -
Other liabilities and accrued expenses 28,054 24,780
Long-term debt 20,588 21,691
------------- -------------
Total liabilities 813,898 744,021
------------- -------------
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $.01
par value 1 1
Authorized shares - 1,000
Issued shares - 108
Outstanding shares - 108
Minimum liquidation preference, $2.66 per
share
Common stock, $.01 par value 419 411
Authorized shares - 55,000
Issued shares - 41,889 and 41,100
Outstanding shares - 40,871 and 40,082
Treasury shares, at cost - 1,018 (3,101) (3,101)
Additional paid-in capital 37,408 36,536
Retained earnings 131,287 116,158
------------- -------------
Total stockholders' equity 166,014 150,005
------------- -------------
Total liabilities and stockholders' equity $ 979,912 $ 894,026
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