CLEARWATER, Fla., Nov. 9, 2010 (GLOBE NEWSWIRE) -- Homeowners Choice, Inc. (Nasdaq:HCII), a Florida-based provider of homeowners' insurance, today announced its results of operations for the three and nine months ended Sept. 30, 2010.
Net income for the third quarter of 2010 was $1.7 million, or $0.25 per diluted share, compared with net income of $0.8 million, or $0.11 per diluted share, for the third quarter of 2009. Book value per share increased from $7.03 at Dec. 31, 2009 to $7.74 at Sept. 30, 2010, an increase of 10.1 percent.
Gross premiums earned were $29.4 million for the quarter ended Sept. 30, 2010 compared with $25.2 million for the quarter ended Sept. 30, 2009. Net premiums earned (gross premiums earned reduced by premiums ceded to reinsurance companies that cover certain of the risks from hurricanes and other catastrophes) for the third quarter of 2010 increased approximately 25.6 percent to $15.1 million from $12.0 million in the prior year quarter.
Losses and loss adjustment expenses (the expenses associated with investigating and settling claims) for the third quarter were $8.8 million compared with $6.7 million in the prior year quarter. Policy acquisition and other underwriting expenses for the third quarter of 2010 were $3.7 million compared with $3.4 million during the third quarter of 2009.
For the nine months ended Sept. 30, 2010, net income was $3.6 million, or $0.54 per diluted share, compared with $10.1 million, or $1.40 per diluted share, in the prior year same period. Gross premiums earned for the nine month period ended Sept. 30, 2010 were $89.7 million compared with $84.2 million for the nine months ended Sept. 30, 2009. Net premiums earned for the first nine months of 2010 were $47.0 million, down from $53.0 million in the prior year same period. Losses and loss adjustment expenses for the nine months ended Sept, 30, 2010 were $29.5 million compared with $29.3 million for the nine months ended Sept. 30, 2009. Policy acquisition and other underwriting expenses for the nine months ended Sept. 30, 2010 and 2009 were $10.7 million and $5.7 million, respectively.
During the nine months ended Sept. 30, 2010 and 2009, the company repurchased a total of 215,969 and 311,403 shares, respectively, of its common stock as part of the company's share repurchase plan.
"We are pleased to report our 12th consecutive profitable quarter," said Homeowners Choice Chief Executive Officer, F.X. McCahill. "Like others in our industry, we have struggled with reinsurance costs, which rose sharply in 2009 and placed downward pressure on earnings. However, we are now seeing significant beneficial results from our own rate increases which we began implementing earlier this year and which take effect with each policy renewal."
Conference Call
The Company will host an earnings conference call on Nov. 9, 2010, at 4:30 p.m. E.S.T. to discuss its third quarter 2010 results. Interested parties are invited to listen to the call live over the Internet at http://www.ir-site.com/hcpci/events.asp">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 Feb. 9, 2011.
Homeowners Choice, Inc. is a Florida-based insurance holding company headquartered in Clearwater. Through its subsidiary corporations, Homeowners Choice provides property and casualty homeowners' insurance, condominium owners' insurance and tenants' insurance solely to Florida property owners. Founded in 2006, Homeowners Choice today serves approximately 59,000 policyholders throughout Florida representing approximately $120 million in annualized premiums. The company's common shares trade on the NASDAQ Global Market under the ticker symbol HCII and are included in the Russell Microcap Index. Warrants trade on the same market under the ticker symbol HCIIW. 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
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 | ||
| Condensed Consolidated Balance Sheets | ||
| (Dollars in thousands, except share amounts) | ||
| At September 30, 2010 | At December 31, 2009 | |
| (Unaudited) | ||
| Assets | ||
| Investments: | ||
|
Fixed maturity securities, held-to-maturity, at amortized cost (fair value $4,250) |
$ -- | 4,049 |
|
Fixed maturity securities, available-for-sale, at fair value (amortized cost $15,027 and $19,763) |
15,619 | 19,266 |
| Equity securities, available-for-sale, at fair value | 677 | — |
| Time deposits | 13,900 | 13,507 |
| Short-term investments | 1,998 | 11,521 |
| Total investments | 32,194 | 48,343 |
| Cash and cash equivalents | 78,417 | 43,453 |
| Accrued interest and dividends receivable | 110 | 176 |
| Premiums receivable | 9,327 | 4,899 |
| Assumed reinsurance balances receivable | -- | 19,525 |
| Prepaid reinsurance premiums | 16,224 | 7,205 |
| Deferred policy acquisition costs | 10,301 | 10,496 |
| Property and equipment, net | 7,697 | 399 |
| Deferred income taxes | -- | 2,438 |
| Income tax receivable | 1,231 | -- |
| Other assets | 1,167 | 958 |
| Total assets | $ 156,668 | 137,892 |
| Liabilities and Stockholders' Equity | ||
| Losses and loss adjustment expenses | 22,711 | 19,178 |
| Unearned premiums | 72,242 | 68,509 |
| Advance premiums | 4,835 | 713 |
| Assumed reinsurance balances payable | 243 | -- |
| Accrued expenses | 3,175 | 2,906 |
| Income taxes payable | -- | 167 |
| Deferred income taxes | 384 | -- |
| Other liabilities | 6,035 | 1041 |
| Total liabilities | 109,625 | 92,514 |
| Stockholders' equity: | ||
|
Preferred stock (no par value 20,000,000 shares authorized, no shares issued or outstanding) |
-- | -- |
|
Common stock, (no par value, 40,000,000 shares authorized, 6,080,666 and 6,456,635 shares issued and outstanding in 2010 and 2009) |
-- | -- |
| Additional paid-in capital | 18,535 | 21,164 |
| Retained earnings | 28,158 | 24,520 |
| Accumulated other comprehensive income (loss) | 350 | (306) |
| Total stockholders' equity | 47,043 | 45,378 |
| Total liabilities and stockholders' equity | $ 156,668 | 137,892 |
| HOMEOWNERS CHOICE, INC. AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of Earnings | ||||
| (Unaudited) | ||||
| (Dollars in thousands, except per share amounts) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Revenue | ||||
| Gross premiums earned | $ 29,398 | 25,204 | $ 89,720 | 84,155 |
| Premiums ceded | (14,314) | (13,193) | (42,750) | (31,199) |
| Net premiums earned | 15,084 | 12,011 | 46,970 | 52,956 |
| Net investment income | 473 | 517 | 1,572 | 1,237 |
| Realized investment gains | 1,028 | -- | 1,534 | -- |
| Other | 487 | 253 | 1,395 | 1,263 |
| Total revenue | 17,072 | 12,781 | 51,471 | 55,456 |
| Expenses | ||||
| Losses and loss adjustment expenses | 8,783 | 6,650 | 29,459 | 29,277 |
| Policy acquisition and other underwriting expenses | 3,730 | 3,430 | 10,689 | 5,670 |
| Other operating expenses | 2,021 | 1,365 | 5,604 | 4,124 |
| Total expenses | 14,534 | 11,445 | 45,752 | 39,071 |
| Income before income taxes | 2,538 | 1,336 | 5,719 | 16,385 |
| Income taxes | 881 | 521 | 2,081 | 6,282 |
| Net income | $ 1,657 | 815 | $ 3,638 | 10,103 |
| Basic earnings per share | $ 0.27 | 0.12 | $ 0.59 | 1.48 |
| Diluted earnings per share | $ 0.25 | 0.11 | $ 0.54 | 1.40 |
| Dividends per share | $ -- | -- | $ -- | -- |