TAMPA, Fla., May 8, 2012 (GLOBE NEWSWIRE) -- Homeowners Choice, Inc. (
Income available to common stockholders for the first quarter of 2012 was $6.8 million, or $0.88 diluted earnings per common share, compared with $0.8 million, or $0.12 diluted earnings per common share, for the first quarter of 2011.
Gross premiums earned during the first quarter of 2012 increased to $54.7 million from $30.9 million during the prior year first quarter. Net premiums earned (gross premiums earned reduced by premiums ceded to reinsurance companies) during the first quarter of 2012 increased approximately 142 percent to $40.4 million from $16.7 million in the prior year first quarter. During the first quarter of 2012, reinsurance costs were 26 percent of the company's gross premiums earned, compared with 46 percent during the prior year first quarter. This percentage difference is due to the substantial increase in gross revenues from the assumption of approximately 70,000 policies from HomeWise Insurance Company in November 2011. According to the company, reinsurance costs as a percentage of gross premiums should return to a more comparable range beginning in June 2012.
During the first quarter of 2012, net investment income decreased seven percent to $522,000 from $564,000 during the same period a year ago. The company reported realized investment gains of $21,000 on investments sold during the first quarter of 2012 as compared with realized investment gains of $153,000 during the same period a year ago. Losses and loss adjustment expenses during the first quarter of 2012 were $19.2 million compared with $10.4 million during the prior year first quarter as the base of policies doubled year over year. Policy acquisition and other underwriting expenses during the three months ended March 31, 2012 and 2011 were $6.6 million and $4.3 million, respectively. Other operating expenses, which include a variety of general and administrative costs, for the three months ended March 31, 2012 and 2011, were $4.5 million and $2.1 million, respectively.
The company's loss ratio applicable to the quarter ended March 31, 2012 (loss and loss adjustment expenses related to net premiums earned) was 47.5 percent compared with 62.4 percent in the prior year. The expense ratio applicable to the quarter ended March 31, 2012 (policy acquisition and other underwriting expenses related to net premiums earned plus compensation, employee benefits and other operating expenses) was 27.5 percent compared with 38.3 percent for the quarter ended March 31, 2011. The decrease in the loss ratio and the expense ratio is attributable to the significant increase in gross premiums earned.
The company's combined ratio to net premiums earned for the quarter ended March 31, 2012 was 75.0 percent compared with 100.7 percent for the quarter ended March 31, 2011. Expressed as a percentage of gross premiums earned, the combined loss and expense ratio for the quarter ended March 31, 2012 was 55.3 percent compared with 54.4 percent for the quarter ended March 31, 2011.
"We had a very good quarter, which is largely due to our assumption of policies from HomeWise last year," said Homeowners Choice Chief Executive Officer and Chairman Paresh Patel.
The company recently announced the appointment of Scott Wallace, former head of state-run Citizens Property Insurance Corporation, as president of its property and casualty division.
Financial information is included below.
The Company will host an earnings conference call today, May 8, 2012 at 4:30 ET to discuss its financial results for the first quarter 2012. Interested parties are invited to listen to the call live over the Internet at http://www.ir-site.com/hcpci/events.asp. The call is also available by dialing (877) 407-9210 (toll-free). International participants should instead call (201) 689-8049. Participants should dial into the conference call approximately 10 minutes before the scheduled start time. Replays of the webcast will be available until July 9, 2012.
Homeowners Choice, Inc. is a Florida-based insurance holding company headquartered in Tampa. Through its subsidiary corporations, Homeowners Choice provides property and casualty homeowners' insurance, condominium owners' insurance and tenants' insurance. Founded in 2006, Homeowners Choice serves approximately 118,000 policyholders throughout Florida representing approximately $224 million in annualized premiums. The company's common shares trade on the NASDAQ Global Select Market under the ticker symbol HCII and are included in the Russell Microcap Index. Its warrants trade on the NASDAQ Global Market under the ticker symbol HCIIW. Its Series A, cumulative redeemable preferred shares trade on the NASDAQ Capital Market under the ticker symbol HCIIP. More information about Homeowners Choice, Inc. is available at www.hcpci.com.
The Homeowners Choice, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6712
This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "intend," "plan" and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. For example, there can be no assurance the company's reinsurance costs will return to more normal levels beginning in June 2012. Some of these risks and uncertainties are identified in the company's filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company's business, financial condition and results of operations. Homeowners Choice, Inc. disclaims all obligations to update any forward-looking statements.
|HOMEOWNERS CHOICE, INC. AND SUBSIDIARIES|
|Condensed Consolidated Balance Sheets|
|(Dollars in thousands, except share amounts)|
|At March 31, 2012||At December 31, 2011|
|Fixed-maturity securities, available-for-sale, at fair value (amortized cost $37,228 and $34,147)||$ 38,832||34,642|
|Equity securities, available-for-sale, at fair value||8,124||5,207|
|Cash and cash equivalents||110,876||100,355|
|Accrued interest and dividends receivable||315||408|
|Assumed reinsurance balances receivable||1,189||1,687|
|Prepaid reinsurance premiums||3,094||14,169|
|Deferred policy acquisition costs||9,350||12,321|
|Property and equipment, net||10,605||10,499|
|Deferred income taxes||3,081||2,368|
|Total assets||$ 221,109||214,818|
|Liabilities and Stockholders' Equity|
|Losses and loss adjustment expenses||33,476||27,424|
|Income taxes payable||5,097||4,956|
|7% Series A cumulative convertible preferred stock (liquidation preference $10.00 per share), no par value, 1,500,000 shares authorized, 1,046,559 and 1,247,700 shares issued and outstanding in 2012 and 2011||—||—|
|Preferred stock (no par value 18,500,000 shares authorized, no shares issued or outstanding)||—||—|
|Common stock, (no par value, 40,000,000 shares authorized, 6,581,141 and 6,202,485 shares issued and outstanding in 2012 and 2011)||—||—|
|Additional paid-in capital||30,321||29,636|
|Accumulated other comprehensive income||978||208|
|Total stockholders' equity||69,798||63,830|
|Total liabilities and stockholders' equity||$ 221,109||214,818|
|HOMEOWNERS CHOICE, INC. AND SUBSIDIARIES|
|Condensed Consolidated Statements of Income|
|(Dollars in thousands, except per share amounts)|
|Three Months Ended|
|Gross premiums earned||$ 54,698||30,896|
|Net premiums earned||40,369||16,674|
|Net investment income||522||564|
|Realized investment gains||21||153|
|Policy fee income||515||187|
|Losses and loss adjustment expenses||19,168||10,403|
|Policy acquisition and other underwriting expenses||6,585||4,263|
|Other operating expenses||4,518||2,128|
|Income before income taxes||11,381||1,255|
|Net income||$ 6,968||793|
|Preferred stock dividends||(181)||(17)|
|Income available to common stockholders||$ 6,787||776|
|Basic earnings per common share||$ 1.07||0.13|
|Diluted earnings per common share||$ 0.88||0.12|
|Dividends per common share||$ 0.15||0.10|
CONTACT: Media Contact: Suzie Boland RFB Communications Group 813.259.0345 firstname.lastname@example.org Investor Relations Contact: Jay Madhu Homeowners Choice, Inc. 727.213.3660 email@example.com