Universal Insurance Holdings, Inc. Reports Fourth-Quarter and Full-Year 2012 Financial Results

Fri Mar 8, 2013 4:21pm EST

* Reuters is not responsible for the content in this press release.

  FORT LAUDERDALE, FL, Mar 08 (Marketwire) -- 
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
312-780-7240
pkranz@dresnerco.com 

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