FORT LAUDERDALE, Fla.,
Feb. 21, 2017 /PRNewswire/ --
Universal Insurance Holdings, Inc. (NYSE: UVE) today reported net
income and diluted earnings per share (EPS) of $13.7 million and $0.38, respectively for the fourth quarter of
2016. For the full year 2016, net income was $99.4 million while diluted EPS was $2.79.
Universal Insurance Holdings, Inc. Chairman and Chief Executive
Officer Sean P. Downes commented:
"During the fourth quarter, Universal reported strong top line
growth and meaningful underwriting profit despite the impact of
Hurricane Matthew. This result is a testament to the
fundamental strength of our business model, including the benefits
which our vertically integrated structure afford us, our focus on
maintaining high underwriting standards, our superior claims
handling abilities, and our exceptional catastrophe response team.
Our efforts to produce profitable and rate-adequate organic growth
continue to produce results both within Florida and in our thirteen other
states. Our unique direct-to-consumer platform, Universal
DirectSM, is now online in all of our active states and
will contribute incrementally to this growth going forward, as will
our Commercial Residential product, which saw its first policy
written during the fourth quarter. Universal enters 2017
extremely well positioned on all fronts, and we remain confident in
our ability to deliver outstanding value to our
shareholders."
Fourth Quarter 2016 Highlights
- Strong Growth Continues – Net premiums earned grew
by $13.4 million, or 8.9%, to
$164.0 million, while total revenues
increased by $16.5 million, or 10.2%,
to $178.6 million. Net premiums
earned and total revenues were each higher than any other quarter
in our history.
- Expansion Plan Gaining Steam – Our growth efforts both
within Florida and in our other
states continue to bear fruit, with our non-Florida states demonstrating impressive 43.0%
growth in direct written premium for the full year 2016.
Universal DirectSM is now offered in all of our active
states, and we wrote our first Commercial Residential policy
through our subsidiary, American Platinum Property and Casualty
Insurance Company, during the fourth quarter.
- Profitable Despite Severe Weather – Fourth quarter
results included Hurricane Matthew losses of $26.6 million or $0.46 per share. Net income decreased by
$15.5 million, or 53.2%, to
$13.7 million, while diluted EPS
declined by $0.44 or 53.2%, to
$0.38 per share.
- Balance Sheet Remains Solid – Book value per share grew
by 26.9% from year-end 2015 to $10.59. Our balance sheet remains solid,
and is protected by a robust reinsurance program.
- Focused on Shareholder Returns – Return on Average
Common Equity (ROE) was 14.4% for the fourth quarter and 29.4% for
the full year 2016. We paid dividends of $0.27 per share in the fourth quarter and
$0.69 for the full year 2016
(comprised of a $0.14 per share
regular quarterly cash dividend and an additional fourth quarter
special dividend of $0.13 per share),
equating to a 2.6% dividend yield at current share price
levels.
Fourth Quarter 2016 Results
Direct premiums written grew 6.8% to $212.8 million from the prior year's quarter, and
net premiums earned grew 8.9% to $164.0
million. Premium growth was due to organic growth in
policies in force, both within our Florida book and in our expansion states, and
the continued rollout of Universal DirectSM. Commission
revenue, policy fees, and other revenue each delivered strong
double-digit growth, up 16.8%, 10.2%, and 13.8% respectively versus
the prior year's quarter, driven by increased premium volume and
continued geographic footprint expansion.
The combined ratio was 95.1% in the fourth quarter of 2016
compared to 75.8% in the prior year's quarter. The net loss
and LAE ratio increased to 61.9% for the fourth quarter of 2016,
compared to 40.2% for the same period last year, with the primary
driver of this increase being severe weather during 2016. The
current year's quarter included $26.6
million of pre-tax net losses and loss adjustment expenses,
or 16.2 points on the loss and LAE ratio, attributable to Hurricane
Matthew. Fourth quarter 2016 results also included $16.8 million of increases to current accident
year reserves as well as $4.7 million
of favorable prior year reserve development. General and
administrative expenses as a percentage of net earned premiums
declined to 33.2% in the fourth quarter of 2016 compared to 35.6%
in the prior year's quarter, with the improvement coming
predominantly from a decrease in executive compensation and
economies of scale.
Net investment income grew by 96.1% from the prior year's
quarter to $3.5 million, with the
growth driven by the increasing size of our investment portfolio
and a shift in asset mix throughout the year. Realized
investment gains were $1.0 million in
the fourth quarter of 2016, a modest increase versus $0.8 million in the prior year's quarter.
Total invested assets were $651.6
million at year-end 2016, up from $489.4 million at year-end 2015.
The effective tax rate for the fourth quarter was 39.9%, up
modestly from 39.1% in the prior year's quarter, while the full
year 2016 tax rate of 39.0% declined slightly from 39.2% in
2015.
During the fourth quarter, the Company repurchased 3,929 shares
for $0.1 million, or an average cost
of $24.07 per share, and during the
full year 2016 repurchases were 0.4 million shares for $8.5 million, or an average cost of $19.30 per share. $17.9 million remains on our current repurchase
authorization.
Stockholders' equity was $371.2
million as of December 31,
2016, or 26.6% growth from $293.1
million as of December 31, 2015. Book value per
common share grew 26.9% to $10.59 at
December 31, 2016 compared to
$8.34 at December 31, 2015. Return on Average Common
Equity (ROE) was 14.4% for the fourth quarter and 29.4% for the
full year 2016.
On November 15, 2016, the Company
announced that its Board of Directors had declared a cash dividend
of $0.27 per share of common stock,
comprised of a $0.14 per share
regular quarterly dividend and an additional fourth quarter special
dividend of $0.13 per share, which
was paid on December 12, 2016 to
shareholders of record on December 1,
2016. On January 23, 2017, the
Company announced that its Board of Directors had declared a cash
dividend of $0.14 per share of common
stock payable on March 2, 2017 to
shareholders of record on February 17,
2017.
Conference Call
Members of the Universal management team will host a conference
call on Wednesday, February 22, 2017
at 10:00 AM ET to discuss fourth
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 internationally (toll) at (270) 823-1518 using
the Conference I.D.: 70825474. 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 I.D.: 70825474, and will be
available through March 9, 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, 2015.
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
|
2016
|
|
2015
|
PREMIUMS EARNED AND
OTHER REVENUES
|
|
|
|
|
Direct premiums
written
|
|
$
212,835
|
|
$
199,262
|
Change in unearned
premium
|
|
25,821
|
|
21,286
|
Direct premium
earned
|
|
238,656
|
|
220,548
|
Ceded premium
earned
|
|
(74,683)
|
|
(69,950)
|
Premiums earned,
net
|
|
163,973
|
|
150,598
|
Net investment income
(expense)
|
|
3,489
|
|
1,779
|
Net realized gains (losses)
on investments
|
|
950
|
|
768
|
Commission
revenue
|
|
4,806
|
|
4,113
|
Policy fees
|
|
3,787
|
|
3,436
|
Other revenue
|
|
1,600
|
|
1,406
|
Total premiums earned
and other revenues
|
|
178,605
|
|
162,100
|
OPERATING COSTS AND
EXPENSES
|
|
|
|
|
Losses and loss adjustment
expenses
|
|
101,480
|
|
60,591
|
General and administrative
expenses
|
|
54,398
|
|
53,629
|
Total operating costs
and expenses
|
|
155,878
|
|
114,220
|
INCOME BEFORE INCOME
TAXES
|
|
22,727
|
|
47,880
|
Income tax
expense
|
|
9,072
|
|
18,728
|
NET INCOME
|
|
$
13,655
|
|
$
29,152
|
|
|
|
|
|
Basic earnings per
common share
|
|
$
0.39
|
|
$
0.84
|
Weighted average
common shares outstanding - Basic
|
|
35,042
|
|
34,567
|
Diluted earnings per
common share
|
|
$
0.38
|
|
$
0.82
|
Weighted average
common shares outstanding - Diluted
|
|
35,802
|
|
35,747
|
Cash dividend
declared per common share
|
|
$
0.27
|
|
$
0.27
|
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
December
31,
|
|
|
2016
|
|
2015
|
PREMIUMS EARNED AND
OTHER REVENUES
|
|
|
|
|
Direct premiums
written
|
|
$
954,617
|
|
$
883,409
|
Change in unearned
premium
|
|
(33,390)
|
|
(46,617)
|
Direct premium
earned
|
|
921,227
|
|
836,792
|
Ceded premium
earned
|
|
(288,811)
|
|
(332,793)
|
Premiums earned,
net
|
|
632,416
|
|
503,999
|
Net investment income
(expense)
|
|
9,540
|
|
5,155
|
Net realized gains (losses)
on investments
|
|
2,294
|
|
1,060
|
Commission
revenue
|
|
17,733
|
|
14,870
|
Policy fees
|
|
16,880
|
|
15,440
|
Other revenue
|
|
6,426
|
|
6,020
|
Total premiums earned
and other revenues
|
|
685,289
|
|
546,544
|
OPERATING COSTS AND
EXPENSES
|
|
|
|
|
Losses and loss adjustment
expenses
|
|
301,229
|
|
187,739
|
General and administrative
expenses
|
|
221,177
|
|
183,782
|
Total operating costs
and expenses
|
|
522,406
|
|
371,521
|
INCOME BEFORE INCOME
TAXES
|
|
162,883
|
|
175,023
|
Income tax
expense
|
|
63,473
|
|
68,539
|
NET INCOME
|
|
$
99,410
|
|
$
106,484
|
|
|
|
|
|
Basic earnings per
common share
|
|
$
2.85
|
|
$
3.06
|
Weighted average
common shares outstanding - Basic
|
|
34,919
|
|
34,799
|
Diluted earnings per
common share
|
|
$
2.79
|
|
$
2.97
|
Weighted average
common shares outstanding - Diluted
|
|
35,650
|
|
35,884
|
Cash dividend
declared per common share
|
|
$
0.69
|
|
$
0.63
|
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS (Unaudited)
|
(in thousands,
except per share data)
|
ASSETS
|
|
December 31,
2016
|
|
December 31,
2015
|
Cash and cash
equivalents
|
|
$
105,730
|
|
$
197,014
|
Restricted cash and
cash equivalents
|
|
2,635
|
|
2,635
|
Fixed maturities, at
fair value
|
|
584,361
|
|
416,083
|
Equity securities, at
fair value
|
|
50,803
|
|
42,214
|
Short-term
investments, at fair value
|
|
5,002
|
|
25,021
|
Investment real
estate, net
|
|
11,435
|
|
6,117
|
Prepaid reinsurance
premiums
|
|
124,385
|
|
114,673
|
Reinsurance
recoverable
|
|
106
|
|
22,853
|
Premiums receivable,
net
|
|
53,833
|
|
50,980
|
Other
receivables
|
|
5,824
|
|
4,979
|
Property and
equipment, net
|
|
32,162
|
|
27,065
|
Deferred policy
acquisition costs, net
|
|
64,912
|
|
60,019
|
Income taxes
recoverable
|
|
3,262
|
|
5,420
|
Deferred income tax
asset, net
|
|
10,674
|
|
13,912
|
Other
assets
|
|
4,883
|
|
4,563
|
Total assets
|
|
$
1,060,007
|
|
$
993,548
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
Unpaid losses and
loss adjustment expenses
|
|
$
58,494
|
|
$
98,840
|
Unearned
premiums
|
|
475,756
|
|
442,366
|
Advance
premium
|
|
17,796
|
|
24,813
|
Accounts
payable
|
|
3,187
|
|
378
|
Reinsurance payable,
net
|
|
80,891
|
|
73,585
|
Other liabilities and
accrued expenses
|
|
37,665
|
|
36,424
|
Long-term
debt
|
|
15,028
|
|
24,050
|
Total liabilities
|
|
688,817
|
|
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 - 45,324 and
|
|
|
|
|
45,525;
Outstanding shares - 35,052 and 35,110
|
|
|
|
|
Treasury shares,
at cost - 10,272 and 10,415
|
|
(86,982)
|
|
(80,802)
|
Additional paid-in
capital
|
|
82,263
|
|
70,789
|
Accumulated other
comprehensive income (loss), net of taxes
|
|
(6,408)
|
|
(4,006)
|
Retained
earnings
|
|
381,864
|
|
306,656
|
Total stockholders' equity
|
|
371,190
|
|
293,092
|
Total liabilities and stockholders' equity
|
|
$
1,060,007
|
|
$
993,548
|
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-fourth-quarter-and-full-year-2016-financial-results-300411057.html
SOURCE Universal Insurance Holdings, Inc.