FORT LAUDERDALE, FL--(Marketwire - Mar 8, 2013) - Universal Insurance Holdings, Inc. (Company) (NYSE MKT: UVE), a vertically integrated insurance holding company, reported net income of $4.4 million, or $0.11 per diluted share, an increase of $0.17, for the fourth quarter of 2012, compared to a net loss of $2.3 million, or $0.06 per diluted share, for the same period in 2011.
For the full year of 2012, the Company reported net income of $30.3 million and diluted earnings per share of $0.75, an increase of 50.0 percent, compared to net income of $20.1 million, or $0.50 per diluted share, for the same period of 2011.
President and CEO Sean Downes commented, "Our full-year 2012 results reflect the successful execution of our business plan leading to better underwriting margins compared to a year ago. Through successful growth initiatives and favorable rate changes, we were able to grow our top line by 8.1 percent in 2012 while maintaining underwriting discipline and managing our overall exposure to catastrophic risk. We are pleased that this 2012 profitability led to 9.0 percent growth in stockholders' equity and allowed us to declare and pay dividends totaling $0.46 per share during the year."
Fourth-Quarter 2012 Results
Net income during the fourth quarter of 2012 increased $6.7 million, or $0.17 per diluted share, primarily as a result of an increase in net earned premiums. The improvement in fourth quarter 2012 profitability was somewhat mitigated by pre-tax charges of $6.3 million related to the previously disclosed mandatory assessment by the Florida Insurance Guaranty Association (FIGA). The Company will recover the assessment from the policyholders of Universal Property & Casualty Insurance Company (UPCIC) over an estimated twelve-month period which began on February 1, 2013.
Direct premiums written collectively by UPCIC and American Platinum Property and Casualty Insurance Company, the Company's wholly-owned insurance company subsidiaries, rose 6.8 percent during the fourth quarter of 2012. Net premiums earned grew $15.5 million, or 29.8 percent, in the fourth quarter of 2012 compared to the same quarter in 2011, primarily as a result of increases in premium rates over the past 24 months, 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.
Fourth-quarter 2012 operating costs increased by 5.9 percent compared to the same quarter last year, as general and administrative expenses increased $12.4 million, or 64.2 percent, partly attributable to the FIGA assessment mentioned above. Meanwhile, somewhat mitigating the rise in operating costs was a reduction in losses and loss adjustment expenses of $8.7 million, or 20.2 percent.
At December 31, 2012, stockholders' equity was $163.5 million compared to $166.0 million at September 30, 2012, and $150.0 million at December 31, 2011.
Full-Year 2012 Results
For the full year of 2012, the Company's net income and diluted earnings per share grew by 50.7 percent and 50.0 percent, respectively, compared to the same period of 2011.
Net premiums earned increased 16.1 percent for the full year 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, and the reduction in the quota-share cession rate.
Cash Dividends
On November 28, 2012, the Company announced that its board of directors declared a cash dividend of $0.20 per share of common stock, which was paid on December 28, 2012 to shareholders of record on December 14, 2012. In total, $0.46 per share in cash dividends were declared and paid in 2012.
Also, on February 8, 2013, the Company announced that its board of directors declared a cash dividend of $0.08 per share of common stock to be paid on April 5, 2013 to shareholders of record on March 14, 2013. The board further indicated that it expects to declare additional quarterly dividends in the same amount to shareholders of record in the second, third and fourth quarters of 2013. If declared and paid as intended, the annual dividend in 2013 would be $0.32 for each common share.
Premium Rate Update
On February 7, 2013, the Company announced that UPCIC received approval from the Florida Office of Insurance Regulation for premium rate increases for its homeowners and dwelling fire programs within Florida. The premium rate increases are expected to average approximately 14.1 percent statewide for its homeowners program and 14.5 percent statewide for its dwelling fire program. The effective dates for the homeowners program rate increase are January 18, 2013, for new business and March 9, 2013, for renewal business. The effective dates for the dwelling fire program rate increase are January 14, 2013, for new business and March 3, 2013, for renewal business.
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, 2012.
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)
For the Three Months Ended December 31,
2012
2011
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written
$
174,571
$
163,438
Ceded premiums written
(118,961
)
(119,306
)
Net premiums written
55,610
44,132
(Increase) decrease in net unearned premium
11,664
7,691
Premiums earned, net
67,274
51,823
Net investment income
278
430
Net realized gains (losses) on investments
353
(10,146
)
Net unrealized gains (losses) on investments
(2,047
)
4,627
Net foreign currency gains (losses) on investments
(1
)
1,916
Commission revenue
4,889
5,194
Policy Fees
3,041
3,188
Other revenue
1,440
1,411
Total premiums earned and other revenues
75,227
58,443
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses
34,275
42,929
General and administrative expenses
31,588
19,236
Total operating costs and expenses
65,863
62,165
INCOME BEFORE INCOME TAXES
9,364
(3,722
)
Income taxes, current
7,950
(2,538
)
Income taxes, deferred
(2,992
)
1,129
Income taxes, net
4,958
(1,409
)
NET INCOME
$
4,406
$
(2,313
)
Basic earnings per common share
$
0.11
$
(0.06
)
Weighted average number of common shares outstanding - basic
39,719
39,207
Diluted earnings per common share
$
0.11
$
(0.06
)
Weighted average number of common shares outstanding - diluted
41,091
40,165
Cash dividend declared per common share
$
0.20
$
0.18
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the Years Ended December 31,
2012
2011
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written
$
780,128
$
721,462
Ceded premiums written
(517,604
)
(512,979
)
Net premiums written
262,524
208,483
(Increase) decrease in net unearned premium
(31,404
)
(9,498
)
Premiums earned, net
231,120
198,985
Net investment income
441
788
Net realized gains (losses) on investments
(11,943
)
2,350
Net unrealized gains (losses) on investments
9,443
(18,410
)
Net foreign currency gains (losses) on investments
22
1,532
Commission revenue
20,383
19,507
Policy Fees
14,475
15,298
Other revenue
5,998
5,811
Total premiums earned and other revenues
269,939
225,861
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses
126,187
124,309
General and administrative expenses
91,193
67,834
Total operating costs and expenses
217,380
192,143
INCOME BEFORE INCOME TAXES
52,559
33,718
Income taxes, current
18,434
23,152
Income taxes, deferred
3,813
(9,543
)
Income taxes, net
22,247
13,609
NET INCOME
$
30,312
$
20,109
Basic earnings per common share
$
0.76
$
0.51
Weighted average number of common shares outstanding - basic
39,614
39,184
Diluted earnings per common share
$
0.75
$
0.50
Weighted average number of common shares outstanding - diluted
40,616
40,442
Cash dividend declared per common share
$
0.46
$
0.32
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
December 31,
ASSETS
2012
2011
Cash and cash equivalents
$
347,392
$
229,685
Restricted cash and cash equivalents
33,009
78,312
Fixed maturities, at fair value
4,009
3,801
Equity securities, at fair value
85,041
95,345
Prepaid reinsurance premiums
239,921
243,095
Reinsurance recoverable
89,191
85,706
Reinsurance receivable, net
24,334
55,205
Premiums receivable, net
50,125
45,828
Receivable from securities sold
1,096
9,737
Other receivables
2,017
2,732
Property and equipment, net
8,968
7,116
Deferred policy acquisition costs, net
17,282
12,996
Income taxes recoverable
2,594
-
Deferred income tax asset, net
19,178
22,991
Other assets
1,578
1,477
Total assets
$
925,735
$
894,026
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses
$
193,241
$
187,215
Unearned premiums
388,071
359,842
Advance premium
15,022
19,390
Accounts payable
4,368
4,314
Bank overdraft
25,994
25,485
Payable for securities purchased
1,275
1,067
Reinsurance payable, net
85,259
87,497
Income taxes payable
699
12,740
Other liabilities and accrued expenses
28,071
24,780
Long-term debt
20,221
21,691
Total liabilities
762,221
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
38,684
36,536
Retained earnings
127,511
116,158
Total stockholders' equity
163,514
150,005
Total liabilities and stockholders' equity
$
925,735
$
894,026
Investor Contact:Philip Kranz
Dresner Corporate Services
312-780-7240Email Contact
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