FORT LAUDERDALE, Fla.,
April 25, 2017 /PRNewswire/ --
Universal Insurance Holdings, Inc. (NYSE: UVE) today reported net
income and diluted earnings per share (EPS) of $31.2 million and $0.86, respectively for the first quarter of
2017.
Universal Insurance Holdings, Inc. Chairman and Chief Executive
Officer Sean P. Downes commented:
"During the first quarter, Universal reported excellent top line
growth and substantial underwriting profit, leading to a strong
bottom line result and a 31.4% return on average equity.
Although the quarter included losses from weather events beyond
plan, our claims handling organization performed up to our high
expectations, and these events had a minimal impact on our
quarterly earnings. We remain focused on producing profitable and
rate-adequate organic growth within Florida and through our Other State expansion
efforts, further enhancing our unique direct-to-consumer platform,
Universal DirectSM, and continuing to leverage our
vertically integrated structure to deliver better service to our
policyholders. First quarter results were a great start to
2017, and Universal is well positioned on all fronts to deliver
outstanding value to our shareholders going forward."
First Quarter 2017 Highlights
- Premium Growth Continues as Expansion
Momentum Builds – Direct premiums written grew 7.7% during
the first quarter of 2017, with 4.3% growth in our Florida book and strong 44.9% growth in
our Other States book. Universal DirectSM
continues to contribute to our growth both within and outside of
Florida. During the quarter we received our Certificate of
Authority from Iowa; Universal is
currently writing business in 14 states and is now licensed in an
additional 5 states.
- Underwriting Profitability Improves – The
net combined ratio was 78.9% in the first quarter, down from 80.8%
in last year's quarter, driven by a lower expense ratio with a
roughly flat loss and LAE ratio. Current quarter results
include $3.0 million of weather
losses beyond plan.
- Strong Bottom Line – Net income grew by
23.7% to $31.2 million and diluted
EPS grew by 21.7% to $0.86 per share,
driven by increases in each major revenue category, a continued
focus on expense discipline, and a lower effective tax rate
compared to the prior year's quarter.
- Balance Sheet Remains Solid – Book value per
share grew by 7.4% from year-end 2016 (or 25.9% from March 31, 2016) to $11.37. Our balance sheet remains solid,
with a stable investment portfolio, minimal debt, and a
conservative reserve position. Importantly, we remain well
protected by a robust reinsurance program.
- Focused on Shareholder Returns – Return on
Average Common Equity (ROE) was 31.4% for the first quarter of
2017. We paid dividends of $0.14 per
share in the first quarter, equating to an annualized dividend
yield of 2.4% at current share price levels. During the first
quarter, we repurchased 100,079 shares for $2.5 million, or an average cost of $25.46 per share.
First Quarter 2017 Results
Direct premiums written grew 7.7% from the prior year's quarter
to $245.4 million, with 4.3% growth
in our Florida book and
strong 44.9% growth in our Other States book. Our
organic growth strategy in Florida
remains on track, and our expansion efforts outside of our home
state continue to build momentum. Each are bolstered by the
continued growth of Universal DirectSM, which we
launched in April 2016. For the quarter, net premiums earned
grew 6.0% to $161.6 million.
Commission revenue, policy fees, and other revenue each delivered
solid growth of 11.8%, 9.0%, and 6.3%, respectively, versus the
prior year's quarter, driven by increased premium volume and
continued geographic footprint expansion.
The net combined ratio was 78.9% in the first quarter of 2017
compared to 80.8% in the prior year's quarter. The
improvement in underwriting profitability was driven by a reduced
expense ratio, while the loss ratio remained essentially flat with
the prior year's quarter.
- The net loss and LAE ratio was 43.7% in the first quarter of
2017, compared to 43.4% for prior year's quarter. First
quarter 2017 results included $3.0
million of pre-tax net losses and loss adjustment expenses
attributable to weather events beyond plan during the quarter. The
prior year's quarter included $8.5
million of pre-tax net losses and loss adjustment expenses
related to weather events beyond plan.
- The net general and administrative expense ratio was 35.2% in
the first quarter of 2017, compared to 37.4% for the same period
last year, driven by a reduction in other operating expenses which
was partially offset by a slight increase in policy acquisition
costs. The net other operating expense ratio was 15.1%
compared to 18.0% in the prior year's quarter, reflecting a
reduction in executive compensation and economies of scale, while
the net policy acquisition cost ratio was 20.1% compared to 19.4%
in the prior year's quarter, with the slight increase due
predominantly to geographic mix shift within our book.
Net investment income grew by 68.5% from the prior year's
quarter to $2.7 million, driven by
the increasing size of our investment portfolio and a shift in
asset mix. Net realized investment losses were $63 thousand in the first quarter of 2017,
compared to net realized gains of $667
thousand in the prior year's quarter. Total invested
assets were $666.1 million at
March 31, 2017, growth of 2.2% from
$651.6 million at year-end 2016 and
23.1% since March 31, 2016.
Interest expense was $103 thousand
for the first quarter of 2017, down from $196 thousand in the prior year's quarter, as we
continue to reduce our level of outstanding debt. Long term
debt was $14.0 million as of
March 31, 2017, down from
$15.0 million at December 31, 2016 and $23.1 million as of March
31, 2016.
The effective tax rate for the first quarter of 2017 was 34.1%,
down from 38.6% in the prior year's quarter. Two discrete items
combined to lower the effective tax rate by 4.3% for the current
quarter: (1) a credit of $0.8 million
reflecting the application of a new accounting pronouncement for
excess tax benefits resulting from stock-based awards that vested
and/or were exercised during the quarter, and (2) a credit of
$1.3 million resulting from
anticipated recoveries of income taxes paid for the 2013-2015 tax
years.
During the first quarter, the Company repurchased 100,079 shares
for $2.5 million, or an average cost
of $25.46 per share.
$15.4 million remains on our current
repurchase authorization.
Stockholders' equity was $398.8
million at March 31, 2017,
growth of 7.4% from year-end 2016 and 26.9% from March 31,
2016. Book value per common was $11.37 at March 31,
2017 compared to $9.03 at
March 31, 2016, or growth of
25.9%. Return on Average Common Equity (ROE) was 31.4% for
the first quarter of 2017.
On January 23, 2017, the Company
announced that its Board of Directors declared a cash dividend of
$0.14 per share of common stock paid
on March 2, 2017 to shareholders of
record on February 17, 2017. On
April 12, 2017, the Company announced
that the Board of Directors declared a cash dividend of
$0.14 per share of common stock
payable on July 3, 2017 to
shareholders of record on June 14,
2017.
Conference Call
Members of the Universal management
team will host a conference call on Wednesday, April 26, 2017 at 10:00 AM ET to discuss first quarter
2017 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 internationally (toll) at
(270) 823-1518 using the Conference ID: 8913744. 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
internationally (toll) at (404) 537-3406 using the Conference ID:
8913744, and will be available through May
11, 2017.
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 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, Maryland, Delaware, Indiana, Pennsylvania, Minnesota, Michigan, Alabama and Virginia. 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.
APPCIC is additionally licensed to write Fire, Commercial
Multi-Peril, and Other Liability lines of business in Florida. 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, 2016.
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS (UNAUDITED)
|
(in thousands,
except per share data)
|
|
March
31,
|
December
31,
|
|
2017
|
2016
|
ASSETS
|
|
|
Invested
Assets
|
|
|
Fixed
maturities, at fair value
|
$
597,675
|
$
584,361
|
Equity
securities, at fair value
|
50,286
|
50,803
|
Short-term
investments, at fair value
|
5,001
|
5,002
|
Investment in
real estate, net
|
13,104
|
11,435
|
Total
invested assets
|
666,066
|
651,601
|
|
|
|
Cash and cash
equivalents
|
160,364
|
105,730
|
Restricted cash and
cash equivalents
|
2,635
|
2,635
|
Prepaid reinsurance
premiums
|
49,754
|
124,385
|
Reinsurance
recoverable
|
605
|
106
|
Premiums receivable,
net
|
56,224
|
53,833
|
Property and
equipment, net
|
32,507
|
32,162
|
Deferred policy
acquisition costs
|
66,524
|
64,912
|
Deferred income tax
asset, net
|
15,389
|
10,674
|
Other
assets
|
10,371
|
13,969
|
TOTAL
ASSETS
|
$
1,060,439
|
$
1,060,007
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
LIABILITIES:
|
|
|
Unpaid losses and
loss adjustment expenses
|
$
31,463
|
$
58,494
|
Unearned
premiums
|
484,796
|
475,756
|
Advance
premium
|
28,397
|
17,796
|
Reinsurance payable,
net
|
42,270
|
80,891
|
Long-term
debt
|
13,971
|
15,028
|
Other
liabilities
|
60,777
|
40,852
|
Total
liabilities
|
661,674
|
688,817
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
Cumulative
convertible preferred stock ($0.01 par value)
1
|
—
|
—
|
Common stock ($0.01
par value) 2
|
454
|
453
|
Treasury shares, at
cost - 10,372 and 10,272
|
(89,530)
|
(86,982)
|
Additional paid-in
capital
|
83,657
|
82,263
|
Accumulated other
comprehensive income (loss), net of taxes
|
(3,944)
|
(6,408)
|
Retained
earnings
|
408,128
|
381,864
|
Total stockholders'
equity
|
398,765
|
371,190
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
1,060,439
|
$
1,060,007
|
|
|
|
Notes:
|
|
|
1 - Cumulative
convertible preferred stock ($0.01 par value): Authorized - 1,000
shares; Issued - 10 and 10 shares; Outstanding - 10 and 10 shares;
Minimum liquidation preference - $9.99 and $9.99 per
share.
|
2 - Common stock
($0.01 par value): Authorized - 55,000 shares; Issued -
45,445 and 45,324 shares; Outstanding 35,073 and 35,052
shares.
|
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
|
(in
thousands)
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2017
|
|
2016
|
REVENUES
|
|
|
|
|
Net premiums
earned
|
|
$
161,559
|
|
$
152,448
|
Net investment
income
|
|
2,704
|
|
1,605
|
Net realized
gains/(losses) on investments
|
|
(63)
|
|
667
|
Commission
revenue
|
|
4,598
|
|
4,113
|
Policy
fees
|
|
4,483
|
|
4,114
|
Other
revenue
|
|
1,593
|
|
1,499
|
Total
revenues
|
|
$
174,874
|
|
$
164,446
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
Losses and loss
adjustment expenses
|
|
$
70,570
|
|
$
66,117
|
Policy acquisition
costs
|
|
32,428
|
|
29,596
|
Other operating
expenses
|
|
24,402
|
|
27,438
|
Interest
expense
|
|
103
|
|
196
|
Total expenses
|
|
$
127,503
|
|
$
123,347
|
|
|
|
|
|
Income before income
tax expense
|
|
$
47,371
|
|
$
41,099
|
Income tax
expense
|
|
16,172
|
|
15,873
|
NET
INCOME
|
|
$
31,199
|
|
$
25,226
|
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
SHARE AND PER
SHARE INFORMATION
|
(in thousands,
except per share data)
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
35,140
|
|
34,527
|
Weighted average
common shares outstanding - diluted
|
|
36,180
|
|
35,594
|
Shares outstanding,
end of period
|
|
35,073
|
|
34,800
|
|
|
|
|
|
Basic earnings per
common share
|
|
$
0.89
|
|
$
0.73
|
Diluted earnings per
common share
|
|
$
0.86
|
|
$
0.71
|
|
|
|
|
|
Cash dividend
declared per common share
|
|
$
0.14
|
|
$
0.14
|
|
|
|
|
|
Book value per
share
|
|
$
11.37
|
|
$
9.03
|
|
|
|
|
|
Return on average
equity (ROE)
|
|
31.4%
|
|
32.6%
|
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
SUPPLEMENTARY
INFORMATION
|
(in thousands,
except Policies In-Force)
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2017
|
|
2016
|
Premiums
|
|
|
|
|
Direct premiums written -
Florida
|
|
$
218,438
|
|
$
209,360
|
Direct premiums written -
Other States
|
|
26,977
|
|
18,613
|
Direct premiums
written - Total
|
|
$
245,415
|
|
$
227,973
|
|
|
|
|
|
Direct premiums
earned
|
|
$
236,375
|
|
$
221,252
|
Net premiums
earned
|
|
$
161,559
|
|
$
152,448
|
|
|
|
|
|
Policies
In-Force
|
|
|
|
|
Florida
|
|
585,359
|
|
556,437
|
Other
States
|
|
114,116
|
|
81,325
|
Total
|
|
699,475
|
|
637,762
|
|
|
|
|
|
Total Insured
Value
|
|
|
|
|
Florida
|
|
$136,641,073
|
|
$129,066,992
|
Other
States
|
|
38,986,908
|
|
26,712,841
|
Total
|
|
$175,627,981
|
|
$155,779,833
|
|
|
|
|
|
Underwriting
Ratios - Net
|
|
|
|
|
Loss and loss
adjustment expense ratio
|
|
43.7%
|
|
43.4%
|
Policy
acquisition cost ratio
|
|
20.1%
|
|
19.4%
|
Other
operating expense ratio
|
|
15.1%
|
|
18.0%
|
General and
administrative expense ratio
|
|
35.2%
|
|
37.4%
|
Combined
ratio
|
|
78.9%
|
|
80.8%
|
Contacts:
Investors
Dean
Evans
VP Investor Relations
954-958-1306
de0130@universalproperty.com
Media
Andy Brimmer /
Mahmoud Siddig
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/universal-insurance-holdings-inc-reports-first-quarter-2017-financial-results-300445492.html
SOURCE Universal Insurance Holdings, Inc.