HCII Hudson Executive Investment Corporation II

Homeowners Choice, Inc. (Nasdaq:HCII), a Florida-based provider of homeowners insurance, today announced its results of operations for the three months ended March 31, 2012.

Income available to common stockholders for the first quarter of 2012 was $6.8 million, or $0.88 diluted earnings per common share, compared with $0.8 million, or $0.12 diluted earnings per common share, for the first quarter of 2011.

Gross premiums earned during the first quarter of 2012 increased to $54.7 million from $30.9 million during the prior year first quarter. Net premiums earned (gross premiums earned reduced by premiums ceded to reinsurance companies) during the first quarter of 2012 increased approximately 142 percent to $40.4 million from $16.7 million in the prior year first quarter. During the first quarter of 2012, reinsurance costs were 26 percent of the company's gross premiums earned, compared with 46 percent during the prior year first quarter. This percentage difference is due to the substantial increase in gross revenues from the assumption of approximately 70,000 policies from HomeWise Insurance Company in November 2011. According to the company, reinsurance costs as a percentage of gross premiums should return to a more comparable range beginning in June 2012.

During the first quarter of 2012, net investment income decreased seven percent to $522,000 from $564,000 during the same period a year ago. The company reported realized investment gains of $21,000 on investments sold during the first quarter of 2012 as compared with realized investment gains of $153,000 during the same period a year ago. Losses and loss adjustment expenses during the first quarter of 2012 were $19.2 million compared with $10.4 million during the prior year first quarter as the base of policies doubled year over year. Policy acquisition and other underwriting expenses during the three months ended March 31, 2012 and 2011 were $6.6 million and $4.3 million, respectively. Other operating expenses, which include a variety of general and administrative costs, for the three months ended March 31, 2012 and 2011, were $4.5 million and $2.1 million, respectively.

Ratios

The company's loss ratio applicable to the quarter ended March 31, 2012 (loss and loss adjustment expenses related to net premiums earned) was 47.5 percent compared with 62.4 percent in the prior year. The expense ratio applicable to the quarter ended March 31, 2012 (policy acquisition and other underwriting expenses related to net premiums earned plus compensation, employee benefits and other operating expenses) was 27.5 percent compared with 38.3 percent for the quarter ended March 31, 2011. The decrease in the loss ratio and the expense ratio is attributable to the significant increase in gross premiums earned.

The company's combined ratio to net premiums earned for the quarter ended March 31, 2012 was 75.0 percent compared with 100.7 percent for the quarter ended March 31, 2011. Expressed as a percentage of gross premiums earned, the combined loss and expense ratio for the quarter ended March 31, 2012 was 55.3 percent compared with 54.4 percent for the quarter ended March 31, 2011.

"We had a very good quarter, which is largely due to our assumption of policies from HomeWise last year," said Homeowners Choice Chief Executive Officer and Chairman Paresh Patel.

The company recently announced the appointment of Scott Wallace, former head of state-run Citizens Property Insurance Corporation, as president of its property and casualty division.

Financial information is included below.

Conference Call

The Company will host an earnings conference call today, May 8, 2012 at 4:30 ET to discuss its financial results for the first quarter 2012. Interested parties are invited to listen to the call live over the Internet at 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 July 9, 2012.

About Homeowners Choice, Inc.

Homeowners Choice, Inc. is a Florida-based insurance holding company headquartered in Tampa. Through its subsidiary corporations, Homeowners Choice provides property and casualty homeowners' insurance, condominium owners' insurance and tenants' insurance. Founded in 2006, Homeowners Choice serves approximately 118,000 policyholders throughout Florida representing approximately $224 million in annualized premiums. The company's common shares trade on the NASDAQ Global Select Market under the ticker symbol HCII and are included in the Russell Microcap Index. Its warrants trade on the NASDAQ Global Market under the ticker symbol HCIIW. Its Series A, cumulative redeemable preferred shares trade on the NASDAQ Capital Market under the ticker symbol HCIIP. 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. For example, there can be no assurance the company's reinsurance costs will return to more normal levels beginning in June 2012. 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 March 31, 2012	At December 31, 2011
	(Unaudited)
Assets
Fixed-maturity securities, available-for-sale, at fair value (amortized cost $37,228 and $34,147)	$ 38,832	34,642
Equity securities, available-for-sale, at fair value	8,124	5,207
Time deposits	12,546	12,427
Other investments	6,585	6,483
Total investments	66,087	58,759
Cash and cash equivalents	110,876	100,355
Accrued interest and dividends receivable	315	408
Premiums receivable	13,747	12,222
Assumed reinsurance balances receivable	1,189	1,687
Prepaid reinsurance premiums	3,094	14,169
Deferred policy acquisition costs	9,350	12,321
Property and equipment, net	10,605	10,499
Goodwill	161	161
Deferred income taxes	3,081	2,368
Other assets	2,604	1,869
Total assets	$ 221,109	214,818
Liabilities and Stockholders' Equity
Losses and loss adjustment expenses	33,476	27,424
Unearned premiums	90,875	108,677
Advance premiums	11,204	2,132
Accrued expenses	3,984	3,478
Dividends payable	1,499	218
Income taxes payable	5,097	4,956
Other liabilities	5,176	4,103
Total liabilities	151,311	150,988
Stockholders' equity:
7% Series A cumulative convertible preferred stock (liquidation preference $10.00 per share), no par value, 1,500,000 shares authorized, 1,046,559 and 1,247,700 shares issued and outstanding in 2012 and 2011	—	—
Preferred stock (no par value 18,500,000 shares authorized, no shares issued or outstanding)	—	—
Common stock, (no par value, 40,000,000 shares authorized, 6,581,141 and 6,202,485 shares issued and outstanding in 2012 and 2011)	—	—
Additional paid-in capital	30,321	29,636
Retained earnings	38,499	33,986
Accumulated other comprehensive income	978	208
Total stockholders' equity	69,798	63,830
Total liabilities and stockholders' equity	$ 221,109	214,818

HOMEOWNERS CHOICE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
	Three Months Ended
	March 31,
	2012	2011
	(Unaudited)
Revenue
Gross premiums earned	$ 54,698	30,896
Premiums ceded	(14,329)	(14,222)
Net premiums earned	40,369	16,674
Net investment income	522	564
Realized investment gains	21	153
Policy fee income	515	187
Other	225	471
Total revenue	41,652	18,049
Expenses
Losses and loss adjustment expenses	19,168	10,403
Policy acquisition and other underwriting expenses	6,585	4,263
Other operating expenses	4,518	2,128
Total expenses	30,271	16,794
Income before income taxes	11,381	1,255
Income taxes	4,413	462
Net income	$ 6,968	793
Preferred stock dividends	(181)	(17)
Income available to common stockholders	$ 6,787	776
Basic earnings per common share	$ 1.07	0.13
Diluted earnings per common share	$ 0.88	0.12
Dividends per common share	$ 0.15	0.10

CONTACT: Media Contact:
         Suzie Boland
         RFB Communications Group
         813.259.0345
         sboland@rfbcommunications.com
         
         Investor Relations Contact:
         Jay Madhu
         Homeowners Choice, Inc.
         727.213.3660
         jmadhu@hcpci.com