Homeowners Choice Reports Results for 2012 Fourth Quarter and Full Year

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TAMPA, Fla., March 5, 2013 (GLOBE NEWSWIRE) -- Homeowners Choice, Inc. (NYSE:HCI), a Florida-based
insurance holding company, reported its financial results for the fourth quarter and year ended
December 31, 2012.

Fourth Quarter 2012 - Financial Results

Income available to common stockholders in the fourth quarter of 2012 totaled $13.1 million or
$1.19 diluted earnings per common share, compared with $4.6 million or $0.62 diluted earnings per
common share in the fourth quarter of 2011.

Gross premiums earned in the fourth quarter of 2012 increased 44.8% to $72.0 million from $49.8
million in the same year-ago period. The increase was primarily due to policies acquired from
Citizens Property Insurance Corporation in November 2012.

Net premiums earned (defined as gross premiums earned less premiums ceded to reinsurance
companies) in the fourth quarter of 2012 increased 38.3% to $49.6 million from $35.8 million in
the same year-ago period. Premiums ceded in the fourth quarter of 2012 were 31.2% of the company's
gross premiums earned, compared with 28.0% during the same year-ago period.

Net investment income in the fourth quarter of 2012 was $109,000 compared with $504,000 in the
same year-ago period. The decrease was primarily due to operating losses incurred by certain of
the company's real estate investments.

Losses and loss adjustment expenses in the fourth quarter of 2012 were $15.9 million compared with
$16.9 million in the same year-ago period.

Policy acquisition and other underwriting expenses in the fourth quarter of 2012 were $6.2 million
compared with $7.6 million in the comparable period in 2011. The decrease was primarily the result
of the minimal acquisition costs related to the November 2012 Citizens assumption transaction,
which was not subject to commission. Other operating expenses, which include a variety of general
and administrative costs, totaled $7.7 million in the fourth quarter of 2012 compared with $4.1
million in Q4 2011.

Fourth Quarter 2012 - Financial Ratios

The company's loss ratio for the fourth quarter of 2012 (defined as loss and loss adjustment
expenses related to net premiums earned) was 32.1% compared with 47.1% in the fourth quarter of
2011.

The expense ratio applicable to the fourth quarter of 2012 (defined as policy acquisition and
other underwriting expenses plus compensation, employee benefits and other operating expenses
related to net premiums earned) was 28.4% compared with 32.5% in the fourth quarter of 2011.

Expressed as the total of all expenses related to net premiums earned, the combined loss and
expense ratio to net premiums earned was 60.6% for the fourth quarter of 2012 compared with 79.7%
in the same period in 2011.

Full Year 2012 - Financial Results

Income available to common stockholders for 2012 totaled $29.8 million or $3.02 diluted earnings
per common share compared with $9.1 million or $1.34 diluted earnings per common share for 2011.

Gross premiums earned in 2012 increased 62.7% to $233.6 million from $143.6 million in 2011. The
increase was primarily related to additional premiums in 2012 on the renewal of policies assumed
from HomeWise Insurance Company in November 2011 combined with policies assumed from Citizens in
November 2012.

Net premiums earned for 2012 increased 79.0% to $157.7 million from $88.1 million in 2011.
Premiums ceded for 2012 were 32.5% of the company's gross premiums earned compared with 38.7%
during 2011. The ratio decreased because the November 2011 and 2012 assumptions occurred late in
Florida's hurricane season, requiring minimal reinsurance coverage for the remainder of the 2012
reinsurance contract year.

Net investment income for 2012 was $980,000 compared with $2.1 million in 2011.

Losses and loss adjustment expenses in 2012 were $66.3 million compared with $48.2 million in the
same year-ago period. Losses and loss adjustment expenses in 2012 included approximately $3.5
million related to case reported claims from Tropical Storm Debby and Tropical Storm Isaac, which
occurred in June and August 2012.

Policy acquisition and other underwriting expenses for 2012 were $25.9 million compared with $18.1
million for 2011. Other operating expenses totaled $21.1 million in 2012 compared with $11.0
million in 2011.

Full Year 2012 - Financial Ratios

The company's loss ratio applicable to 2012 was 42.1% compared with 54.8% in 2011.

The expense ratio applicable to 2012 was 29.9% compared with 33.1% in the same period in 2011.

The combined loss and expense ratio to net premiums earned in 2012 was 72.0% compared with 87.9%
in the same period in 2011.

Management Commentary

"2012 was a good year for our company," said Paresh Patel, Homeowners Choice chairman and chief
executive officer. "We achieved 30 percent growth in policy count and record earnings. Our policy
growth was fueled primarily by the 2011 HomeWise and 2012 Citizens assumption transactions. Most
important, we achieved growth while maintaining diligent underwriting standards. Our balance sheet
remains strong with $230 million in cash and cash equivalents at year end."

Conference Call

Homeowners Choice will hold a conference call later today (March 5, 2013) to discuss these
financial results. The company's chairman and chief executive officer, Paresh Patel, and chief
financial officer, Richard Allen, will host the call starting at 4:30 p.m. Eastern time. A
question and answer session will follow management's presentation.

The conference call will be broadcast live at www.ir-site.com/hcpci/events.asp
http://www.globenewswire.com/newsroom/ctr?d=10024118&l=28&a=www.ir-site.com%2Fhcpci%2Fevents.asp&u=http%3A%2F%2Fwww.ir-site.com%2Fhcpci%2Fevents.asp
and will be available for replay until June 6, 2013.

Those who wish to participate on the conference call, please contact Jay Madhu, Homeowners Choice
vice president of investor relations, at 813-405-3660 or jmadhu@hcpci.com
http://www.globenewswire.com/newsroom/ctr?d=263579&l=6&a=jmadhu%40hcpci.com&u=mailto%3Ajmadhu%40hcpci.com
.

For those who wish to listen to the call via telephone, please dial the listen-only telephone
number below at least 5-10 minutes before the scheduled start time:

Toll-Free Number: 877-407-9210

International Number: 201-689-8049

About Homeowners Choice, Inc
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.

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. The company's common shares and
8% senior notes trade on the New York Stock Exchange under the ticker symbols "HCI" and "HCJ." Its
common shares are included in the Russell 2000 Index. Its 7% Series A, cumulative redeemable
preferred shares trade on the NASDAQ Capital Market under the ticker symbol "HCIIP." More
information about Homeowners Choice is available at www.hcigroup.com
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Forward-Looking Statements

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. 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
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)

At December 31, 2012 At December 31, 2011
(Unaudited)
Assets

Fixed-maturity securities, available-for-sale, at fair value $ 35,953 35,788
Equity securities, available-for-sale, at fair value 8,876 4,061
Time deposits - 12,427
Other investments 16,087 6,483
Total investments 60,916 58,759
Cash and cash equivalents 230,214 100,355
Accrued interest and dividends receivable 375 408
Premiums and reinsurance receivable 10,642 13,909
Prepaid reinsurance premiums 9,112 14,169
Deferred policy acquisition costs 10,032 12,321
Property and equipment, net 10,853 10,499
Goodwill - 161
Deferred income taxes 3,848 2,368
Other assets 2,296 1,869

Total assets $ 338,288 214,818

Liabilities and Stockholders' Equity

Losses and loss adjustment expenses 41,168 27,424
Unearned premiums 154,249 108,677
Advance premiums 4,029 2,132
Assumed reinsurance balances payable 1,377 -
Accrued expenses 3,041 3,478
Dividends payable 42 218
Income taxes payable 8,813 4,956
Other liabilities 4,316 4,103

Total liabilities 217,035 150,988

Stockholders' equity:
7% Series A cumulative convertible preferred stock (liquidation preference $10.00 per share), no par value, 1,500,000 shares authorized, 241,182 and 1,247,700 shares issued and outstanding in 2012 and 2011, respectively - -
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, 10,877,537 and 6,202,485 shares issued and outstanding in 2012 and 2011, respectively) - -
Additional paid-in capital 63,875 29,636
Retained income 55,758 33,986
Accumulated other comprehensive income 1,620 208

Total stockholders' equity 121,253 63,830

Total liabilities and stockholders' equity $ 338,288 214,818

HOMEOWNERS CHOICE, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)

Three Months Ended Years Ended
December 31, December 31,
2012 2011 2012 2011
(Unaudited) (Unaudited)

Revenue

Gross premiums earned $ 72,028 49,751 $ 233,607 143,606
Premiums ceded (22,464) (13,918) (75,939) (55,525)

Net premiums earned 49,564 35,833 157,668 88,081

Net investment income 109 504 980 2,061
Policy fee income 371 160 2,538 1,438
Realized investment gains (losses) 250 (126) 276 290
Gain on bargain purchase - - 179 936
Other 783 195 1,424 1,003

Total revenue 51,077 36,566 163,065 93,809

Expenses

Losses and loss adjustment expenses 15,928 16,886 66,310 48,243
Policy acquisition and other underwriting expenses 6,240 7,557 25,930 18,129
Goodwill impairment loss 161 - 161 -
Other operating expenses 7,683 4,100 21,084 11,032

Total expenses 30,012 28,543 113,485 77,404

Income before income taxes 21,065 8,023 49,580 16,405

Income taxes 7,964 3,227 19,423 6,441

Net income $ 13,101 4,796 $ 30,157 9,964

Preferred stock dividends (36) (218) (322) (815)

Income available to common stockholders $ 13,065 4,578 $ 29,835 9,149

Basic earnings per common share $ 1.27 0.74 $ 3.45 1.49

Diluted earnings per common share $ 1.19 0.62 $ 3.02 1.34

Dividends per common share $ 0.33 0.23 $ 0.88 0.53

CONTACT: Company Contact:
Jay Madhu, V.P. of Investor Relations
Homeowners Choice, Inc.
Tel (813) 405-3660
jmadhu@hcpci.com

Investor Relations Contact:
Matt Glover or Michael Koehler
Liolios Group, Inc.
Tel (949) 574-3860
hci@liolios.com