Exhibit 99.1
UNIVERSAL INSURANCE HOLDINGS, INC. REPORTS
FIRST-QUARTER 2011 FINANCIAL RESULTS
FIRST-QUARTER 2011 FINANCIAL RESULTS
First-Quarter 2011 Diluted Earnings Per Share Doubled Over Last Year;
Stockholders’ Equity Increased 7.4 Percent During The First Quarter
Stockholders’ Equity Increased 7.4 Percent During The First Quarter
Fort Lauderdale, Fla., May 9, 2011 — Universal Insurance Holdings, Inc. (the Company or Universal)
(NYSE AMEX: UVE), a vertically integrated insurance holding company, reported net income of $13.9
million, or $0.34 per diluted share, in the first quarter of 2011, compared to net income of $6.9
million, or $0.17 per diluted share, for the same period in 2010.
First-Quarter 2011 Results
Net income and diluted earnings per share both doubled in the 2011 first quarter compared to the same period last year. The improvement in operating results is primarily attributable to an increase in net premiums earned. Net realized and unrealized gains on investments also positively contributed to the overall financial results. The improved profitability was moderated by state-mandated wind mitigation credits within the state of Florida and higher operating costs and expenses.
Net income and diluted earnings per share both doubled in the 2011 first quarter compared to the same period last year. The improvement in operating results is primarily attributable to an increase in net premiums earned. Net realized and unrealized gains on investments also positively contributed to the overall financial results. The improved profitability was moderated by state-mandated wind mitigation credits within the state of Florida and higher operating costs and expenses.
Homeowners’ and dwelling fire insurance policies serviced by Universal Property & Casualty
Insurance Company (UPCIC), the Company’s wholly-owned subsidiary, and the related direct premiums
written, increased during the first quarter of 2011 compared to the same period of 2010. The
fourth-quarter 2009 premium rate increases in Florida, which were 14.6 percent statewide for
UPCIC’s homeowners’ program and 14.8 percent statewide for its dwelling fire policies, increased
premiums and improved profitability in the first quarter of 2011. Additionally, the premium rate
increase of 14.9 percent statewide for UPCIC’s homeowners’ insurance program within the state of
Florida announced February 2011 has started to flow through UPCIC’s book of business. The
effective dates for the rate increase were February 7, 2011, for new business and March 28, 2011,
for renewal business. UPCIC expects the approved premium rate increase to have a favorable effect
on premiums written and earned in future months, as new and renewal policies are written at the
higher rates.
During the 2011 first quarter, UPCIC’s policy count continued to grow. At March 31, 2011, UPCIC
serviced approximately 593,000 homeowners’ and dwelling fire insurance policies, up from
approximately 584,000 policies at December 31, 2010, and approximately 544,000 policies at March
31, 2010. The increase in the number of policies in-force is the result of strengthened
relationships with existing agents, an increase in the number of new agents, as well as continued
expansion within Florida, South Carolina, North Carolina, and Hawaii. Within South Carolina,
North Carolina, and Hawaii, UPCIC had approximately 10,000 policies totaling approximately $13.7
million of in-force premiums at March 31, 2011.
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UIH Q1 2011 Results
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Net premiums earned increased 44.1 percent in the first quarter of 2011 compared to the same
quarter in 2010, primarily as a result of greater net premiums written, which were positively
affected by policy count growth and the premium rate increases in Florida.
Operating costs and expenses for the first quarter of 2011 were higher compared to the first
quarter of last year, as losses and loss adjustment expenses (LAE) increased 10.7 percent, and
general and administrative expenses increased 47.9 percent. The increase in losses and LAE is due
to the growth in policy count on a year-over-year basis. General and administrative expenses
increased primarily in response to an increase in commissions paid on direct written premium and
the associated premium taxes thereon. Commissions and premium taxes are directly related to the
volume of direct written premium. As noted previously, direct written premium has increased in
response to an increase in the number of policies-in-force and the increase in in-force premium per
policy. Increased expenses were partially offset by an increase in ceding commissions.
At March 31, 2011, stockholders’ equity increased to $150.1 million from $139.8 million at December
31, 2010, and $114.8 million at March 31, 2010, representing growth of 7.4 percent and 30.8
percent, respectively.
Investment Portfolio Update
For the first quarter of 2011, net realized gains on investments were $3.7 million, and net unrealized gains on investments were $2.6 million. As of March 31, 2011, the Company’s investment securities, at fair value, totaled $139.1 million, compared to $224.5 million at December 31, 2010. At March 31, 2011, 58 percent of the investment securities, at fair value, were in equity securities and 42 percent were in debt securities. At March 31, 2011, the Company’s cash and cash equivalents totaled $281.1 million as compared to $147.6 million at December 31, 2010.
For the first quarter of 2011, net realized gains on investments were $3.7 million, and net unrealized gains on investments were $2.6 million. As of March 31, 2011, the Company’s investment securities, at fair value, totaled $139.1 million, compared to $224.5 million at December 31, 2010. At March 31, 2011, 58 percent of the investment securities, at fair value, were in equity securities and 42 percent were in debt securities. At March 31, 2011, the Company’s cash and cash equivalents totaled $281.1 million as compared to $147.6 million at December 31, 2010.
About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc. is a vertically integrated insurance holding company, which through its subsidiaries, covers substantially all aspects of insurance underwriting, distribution, claims processing and exposure management. Universal Property & Casualty Insurance Company (UPCIC), a wholly owned subsidiary of the Company, is one of the five leading writers of homeowners’ insurance in Florida and is now fully licensed and has commenced its operations in Hawaii, North Carolina and South Carolina. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.
Universal Insurance Holdings, Inc. is a vertically integrated insurance holding company, which through its subsidiaries, covers substantially all aspects of insurance underwriting, distribution, claims processing and exposure management. Universal Property & Casualty Insurance Company (UPCIC), a wholly owned subsidiary of the Company, is one of the five leading writers of homeowners’ insurance in Florida and is now fully licensed and has commenced its operations in Hawaii, North Carolina and South Carolina. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.
UIH Q1 2011 Results
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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, 2010 and the Form 10-Q for the quarter ended March 31, 2011.
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, 2010 and the Form 10-Q for the quarter ended March 31, 2011.
Investor Contact:
Philip Kranz, Dresner Corporate Services, 312-780-7240, pkranz@dresnerco.com
Philip Kranz, Dresner Corporate Services, 312-780-7240, pkranz@dresnerco.com
UIH Q1 2011 Results
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)
| For the Three | ||||||||
| Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
PREMIUMS EARNED AND OTHER REVENUES |
||||||||
Direct premiums written |
$ | 173,175 | $ | 160,100 | ||||
Ceded premiums written |
(123,891 | ) | (127,568 | ) | ||||
Net premiums written |
49,284 | 32,532 | ||||||
(Increase) decrease in net unearned premium |
(1,280 | ) | 782 | |||||
Premiums earned, net |
48,004 | 33,314 | ||||||
Net investment income |
257 | 193 | ||||||
Net realized gains on investments |
3,652 | 1,287 | ||||||
Net unrealized gains on investments |
2,588 | — | ||||||
Net foreign currency gains on investments |
71 | 684 | ||||||
Commission revenue |
4,180 | 4,802 | ||||||
Policy fees |
4,173 | 3,936 | ||||||
Other revenue |
1,408 | 1,004 | ||||||
Total premiums earned and other revenues |
64,333 | 45,220 | ||||||
OPERATING COSTS AND EXPENSES |
||||||||
Losses and loss adjustment expenses |
26,185 | 23,652 | ||||||
General and administrative expenses |
15,072 | 10,189 | ||||||
Total operating costs and expenses |
41,257 | 33,841 | ||||||
INCOME BEFORE INCOME TAXES |
23,076 | 11,379 | ||||||
Income taxes, current |
8,737 | 3,484 | ||||||
Income taxes, deferred |
441 | 951 | ||||||
Income taxes, net |
9,178 | 4,435 | ||||||
NET INCOME |
$ | 13,898 | $ | 6,944 | ||||
Basic net income per common share |
$ | 0.35 | $ | 0.18 | ||||
Weighted average of common shares
outstanding — Basic |
39,388 | 38,889 | ||||||
Fully diluted net income per share |
$ | 0.34 | $ | 0.17 | ||||
Weighted average of common shares
outstanding — Diluted |
40,509 | 40,434 | ||||||
Cash dividend declared per common share |
$ | 0.10 | $ | 0.12 | ||||
| For the Three | ||||||||
| Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
Comprehensive Income: |
||||||||
Net income |
$ | 13,898 | $ | 6,944 | ||||
Change in net unrealized losses on investments, net of tax |
— | (1,758 | ) | |||||
Comprehensive Income |
$ | 13,898 | $ | 5,186 | ||||
UIH Q1 2011 Results
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except per share data)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except per share data)
| March 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 281,113 | $ | 147,585 | ||||
Investment securities, at fair value |
139,084 | 224,532 | ||||||
Prepaid reinsurance premiums |
228,395 | 221,086 | ||||||
Reinsurance recoverables |
79,126 | 79,552 | ||||||
Premiums receivable, net |
43,417 | 43,622 | ||||||
Receivable from securities |
38,056 | 17,556 | ||||||
Other receivables |
2,253 | 2,864 | ||||||
Property and equipment, net |
5,624 | 5,407 | ||||||
Deferred policy acquisition costs, net |
10,139 | 9,446 | ||||||
Deferred income taxes |
13,006 | 13,448 | ||||||
Other assets |
2,236 | 1,132 | ||||||
Total assets |
$ | 842,449 | $ | 766,230 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
LIABILITIES: |
||||||||
Unpaid losses and loss adjustment expenses |
$ | 158,250 | $ | 158,929 | ||||
Unearned premiums |
336,923 | 328,334 | ||||||
Advance premium |
30,058 | 19,840 | ||||||
Accounts payable |
5,271 | 3,767 | ||||||
Bank overdraft |
26,863 | 23,030 | ||||||
Reinsurance payable, net |
73,479 | 37,946 | ||||||
Income taxes payable |
10,894 | 8,282 | ||||||
Dividend payable to shareholders |
3,939 | — | ||||||
Other accrued expenses |
23,468 | 23,150 | ||||||
Long-term debt |
23,162 | 23,162 | ||||||
Total liabilities |
692,307 | 626,440 | ||||||
STOCKHOLDERS’ EQUITY: |
||||||||
Cumulative convertible preferred stock, $.01 par value |
1 | 1 | ||||||
Authorized shares - 1,000 |
||||||||
Issued shares - 108 |
||||||||
Outstanding shares - 108 |
||||||||
Minimum liquidation preference — $288 |
||||||||
Common stock, $.01 par value |
404 | 404 | ||||||
Authorized shares - 55,000 |
||||||||
Issued shares - 40,407 |
||||||||
Outstanding shares - 39,388 |
||||||||
Treasury shares, at cost - 1,019 |
(3,109 | ) | (3,109 | ) | ||||
Additional paid-in capital |
34,073 | 33,675 | ||||||
Retained earnings |
118,773 | 108,819 | ||||||
Total stockholders’ equity |
150,142 | 139,790 | ||||||
Total liabilities and stockholders’ equity |
$ | 842,449 | $ | 766,230 | ||||