Universal Insurance Holdings, Inc. Reports Record Financial Results for the Second Quarter of 2016

Universal Insurance Holdings, Inc. Reports Record Financial Results for the Second Quarter of 2016

Achieved Highest Quarterly Net Income and Diluted EPS in Company History

PR Newswire

FORT LAUDERDALE, Fla., July 28, 2016 /PRNewswire/ -- Universal Insurance Holdings, Inc. (NYSE: UVE) today reported record quarterly net income of $33.6 million, an increase of 36.2%, or $8.9 million, over the same quarter in 2015.  Diluted earnings per share (EPS) were $0.94 for the second quarter of 2016, an increase of 36.2%, or $0.25 per share, over the same quarter in 2015. 

"Our record second quarter results reflect the strength of our integrated business model and consistent operational execution across the company," said Sean P. Downes, Universal's Chairman and Chief Executive Officer. "We are pleased with our continued geographic expansion efforts, with our recent launch in Alabama marking the thirteenth state of operation for Universal Property & Casualty Insurance Company. The early results from our Direct-to-Consumer online platform, Universal DirectSM, that is now available in five states with the recent additions of South Carolina and Indiana have been extremely positive, and we are encouraged by the future prospects of this innovative source of organic business.  As we move forward into the second half of the year, we are confident in our positioning and ability to generate profitable growth and value creation for all shareholders."

Second-Quarter 2016 & Recent Highlights

  • Net earned premiums grew by $43.6 million, or 38.6%, to $156.5 million.
  • Total revenues increased by $46.2 million, or 37.4%, to $169.8 million.
  • Net income increased by $8.9 million, or 36.2%, to $33.6 million.
  • Diluted EPS grew by $0.25, or 36.2%, to $0.94 per share.
  • Declared dividend of $0.14 per share.
  • Completed our 2016-2017 reinsurance programs.
  • Wrote our first policy in Alabama.
  • Expanded Universal DirectSM, a Direct-to-Consumer online platform for homeowners insurance, into five states.

Second-Quarter 2016 Results

Net income for the second quarter of 2016 of $33.6 million reflects an improvement in multiple revenue measures. The increase in net earned premiums includes both organic growth in policies in force and the elimination of quota share reinsurance arrangements effective June 2015. 

Earned premiums, total revenues, net income and diluted EPS were higher than any other quarter in the Company's history.

Stockholders' equity reached an all-time high of $351.4 million as of June 30, 2016 compared to $293.1 million as of December 31, 2015.  Book value per common share also reached an all-time high of $10.02 as June 30, 2016 compared to $8.34 as of December 31, 2015.

Share Repurchases

On June 13, 2016, the Company announced the completion of a $10 million share repurchase program with 527,107 shares repurchased at an average price of $18.93 per share on the open market pursuant to the Board authorized share repurchase program announced on November 19, 2015.

The Company also announced that its Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $20 million of its outstanding shares of common stock through December 31, 2017. Pursuant to this program, the Company has repurchased 25,000 shares of its common stock at an average price of $19.42 per share, with $19.5 million remaining to be deployed.

Cash Dividends

On April 13, 2016, the Company announced that its Board of Directors had declared a cash dividend of $0.14 per share of common stock, which was paid on July 5, 2016 to shareholders of record on June 15, 2016.

Conference Call

Members of the Universal management team will host a conference call on Thursday, July 28, 2016 at 4:45 PM ET to discuss the second quarter 2016 financial results.  Following prepared remarks, management will conduct a question and answer session.  

The call will be accessible by dialing toll free at (888) 887-7180 or toll at (270) 823-1518 (using the Conference I.D.: 52662993).  A live audio webcast of the call will also be accessible on the Universal Insurance website at www.universalinsuranceholdings.com.  A replay of the call can be accessed toll free at (855) 859-2056 or toll at (404) 537-3406 (using the Conference I.D.: 52662993), and will be available through August 12, 2016.

About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance 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 leading writers of homeowners insurance in Florida and is now fully licensed and has commenced operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts, Maryland, Delaware, Indiana, Pennsylvania, Minnesota, Michigan and Alabama.  American Platinum Property and Casualty Insurance Company, 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 by 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 Form 10-K for the year ended December 31, 2015.

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)













Three Months Ended



June 30,



2016


2015

PREMIUMS EARNED AND OTHER REVENUES





Direct premiums written


$             271,921


$            249,971

Ceded premiums written


(72,874)


(7,933)

Net premiums written


199,047


242,038

Change in net unearned premiums


(42,586)


(129,150)

     Premiums earned, net


156,461


112,888

     Net investment income (expense)


2,142


1,207

     Net realized gains (losses) on investments


576


110

     Commission revenue


4,210


3,474

     Policy fees


4,753


4,352

     Other revenue


1,660


1,560

Total premiums earned and other revenues


169,802


123,591

OPERATING COSTS AND EXPENSES





     Losses and loss adjustment expenses


60,083


39,704

     General and administrative expenses


54,825


42,667

Total operating costs and expenses


114,908


82,371

INCOME BEFORE INCOME TAXES


54,894


41,220

Income tax expense


21,247


16,516

NET INCOME


$               33,647


$               24,704

Basic earnings per common share


$                   0.96


$                   0.71

Weighted average common shares outstanding - Basic


35,062


35,019

Fully diluted earnings per common share


$                   0.94


$                   0.69

Weighted average common shares outstanding - Diluted


35,649


36,002

Cash dividend declared per common share


$                   0.14


$                   0.12

 


 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)













Six Months Ended



June 30,



2016


2015

PREMIUMS EARNED AND OTHER REVENUES





Direct premiums written


$           499,894


$          461,576

Ceded premiums written


(146,933)


(114,430)

Net premiums written


352,961


347,146

Change in net unearned premiums


(44,052)


(139,898)

     Premiums earned, net


308,909


207,248

     Net investment income (expense)


3,747


2,069

     Net realized gains (losses) on investments


1,243


281

     Commission revenue


8,323


6,642

     Policy fees


8,867


8,184

     Other revenue


3,159


2,977

Total premiums earned and other revenues


334,248


227,401

OPERATING COSTS AND EXPENSES





     Losses and loss adjustment expenses


126,200


73,294

     General and administrative expenses


112,055


74,864

Total operating costs and expenses


238,255


148,158

INCOME BEFORE INCOME TAXES


95,993


79,243

Income tax expense


37,120


32,209

NET INCOME


$            58,873


$            47,034

Basic earnings per common share


$                1.69


$                1.35

Weighted average common shares outstanding - Basic


34,795


34,800

Fully diluted earnings per common share


$                1.65


$                1.31

Weighted average common shares outstanding - Diluted


35,575


35,987

Cash dividend declared per common share


$                0.28


$                0.24

 


 


UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)








June 30,


December 31,

ASSETS


2016


2015

Cash and cash equivalents


$          215,283


$       197,014

Restricted cash and cash equivalents


2,635


2,635

Fixed maturities, at fair value


577,810


416,083

Equity securities, at fair value


35,543


42,214

Short-term investments, at fair value


5,004


25,021

Investment real estate, net


8,102


6,117

Prepaid reinsurance premiums


122,444


114,673

Reinsurance recoverable


6,355


22,853

Premiums receivable, net


61,433


50,980

Other receivables


6,203


4,979

Property and equipment, net


29,706


27,065

Deferred policy acquisition costs, net


67,190


60,019

Income taxes recoverable


156


5,420

Deferred income tax asset, net


6,599


13,912

Other assets


5,046


4,563

          Total assets


$       1,149,509


$       993,548






LIABILITIES AND STOCKHOLDERS' EQUITY





LIABILITIES:





Unpaid losses and loss adjustment expenses


$            60,144


$         98,840

Unearned premiums


494,189


442,366

Advance premium


29,589


24,813

Accounts payable


2,926


378

Book overdraft


539


Reinsurance payable, net


147,444


73,585

Dividends payable


4,912


Other liabilities and accrued expenses


42,640


36,424

Long-term debt


15,763


24,050

          Total liabilities


798,146


700,456






STOCKHOLDERS' EQUITY:





Cumulative convertible preferred stock, $.01 par value



Authorized shares - 1,000





Issued shares - 10 and 10





Outstanding shares - 10 and 10





Minimum liquidation preference, $9.99 and $9.99 per share





Common stock, $.01 par value


453


455

Authorized shares - 55,000





Issued shares - 45,262 and 45,525





Outstanding shares - 35,064 and 35,110





Treasury shares, at cost - 10,198 and 10,415


(85,399)


(80,802)

Additional paid-in capital


78,496


70,789

Accumulated other comprehensive income (loss), net of taxes


2,116


(4,006)

Retained earnings


355,697


306,656

          Total stockholders' equity


351,363


293,092

          Total liabilities and stockholders' equity


$       1,149,509


$       993,548






 

Investor Contact: 

Andy Brimmer / Mahmoud Siddig
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

 

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SOURCE Universal Insurance Holdings, Inc.

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