EX-99.1 2 exh991er30sep19.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1

uhiclogorta17.gif

FOR IMMEDIATE RELEASE
 
UNITED INSURANCE HOLDINGS CORP. REPORTS FINANCIAL RESULTS
FOR ITS THIRD QUARTER ENDED SEPTEMBER 30, 2019
 
Company to Host Quarterly Conference Call at 9:00 A.M. ET on October 31, 2019
The information in this press release should be read in conjunction with an investor presentation that is available on our website at investors.upcinsurance.com/Presentations.
 
St. Petersburg, FL - October 30, 2019: United Insurance Holdings Corp. (Nasdaq: UIHC) (UPC Insurance or the Company), a property and casualty insurance holding company, today reported its financial results for the third quarter ended September 30, 2019.
($ in thousands, except for per share data)
Three Months Ended
 
Nine Months Ended
September 30,
 
September 30,
 
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Gross premiums written
$
317,184

 
$
295,935

 
7.2
 %
 
$
1,085,505

 
$
960,214

 
13.0
 %
Gross premiums earned
$
344,683

 
$
303,956

 
13.4
 %
 
$
986,521

 
$
872,547

 
13.1
 %
Net premiums earned
$
192,920

 
$
171,330

 
12.6
 %
 
$
564,046

 
$
507,536

 
11.1
 %
Total revenues
$
207,598

 
$
187,652

 
10.6
 %
 
$
614,695

 
$
542,853

 
13.2
 %
Earnings before income tax
$
(36,074
)
 
$
(15,870
)
 
(127.3
)%
 
$
(27,346
)
 
$
15,177

 
(280.2
)%
Net income (loss) attributable to UIHC
$
(28,280
)
 
$
(11,708
)
 
(141.5
)%
 
$
(21,714
)
 
$
11,361

 
(291.1
)%
Net income (loss) available to UIHC common stockholders per diluted share
$
(0.66
)
 
$
(0.27
)
 
(144.4
)%
 
$
(0.51
)
 
$
0.27

 
(288.9
)%
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of net income (loss) to core income (loss):
 
 
 
 
 
 
 
 
 
 
 
Plus: Non-cash amortization of intangible assets
$
1,326

 
$
1,365

 
(2.9
)%
 
$
4,030

 
$
12,555

 
(67.9
)%
Less: Net realized gains (losses) on investment portfolio
$
18

 
$
(447
)
 
104.0
 %
 
$
186

 
$
(674
)
 
127.6
 %
Less: Unrealized gains on equity securities
$
2,609

 
$
6,109

 
(57.3
)%
 
$
15,519

 
$
5,046

 
207.6
 %
Less: Net tax impact(1)
$
(359
)
 
$
(1,074
)
 
66.6
 %
 
$
(3,220
)
 
$
2,046

 
(257.4
)%
Core income (loss)(2)
$
(29,222
)
 
$
(14,931
)
 
(95.7
)%
 
$
(30,169
)
 
$
17,498

 
(272.4
)%
Core income (loss) per diluted share(2)
$
(0.68
)
 
$
(0.35
)
 
(94.3
)%
 
$
(0.71
)
 
$
0.41

 
(273.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
Book value per share
 
 
 
 

 
$
11.93

 
$
12.33

 
(3.2
)%
(1) In order to reconcile net income (loss) to the core income (loss) measure, we included the tax impact of all adjustments using the effective rate at the end of each period.
(2) Core income (loss) and core income (loss) per diluted share, measures that are not based on GAAP, are reconciled above to net income (loss) and net income (loss) per diluted share, respectively, the most directly comparable GAAP measures. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

"We recorded solid improvements in our underlying loss and combined ratios during the quarter, while continuing to grow our book at an annualized rate of over 10%," said John Forney, President & CEO of UPC Insurance. "However, we booked over $1.00 per share in after-tax CAT losses from a combination of current and prior year events, which explains our poor results. We're still in strong financial shape and I'm confident that the rate and underwriting actions working their way through our book will enable us to finish strong this year and into 2020."


1






Return on Equity and Core Return on Equity

The calculations of the Company's return on equity and core return on equity are shown below.

($ in thousands)
Three Months Ended
 
Nine Months Ended
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
Net income (loss) attributable to UIHC
$
(28,280
)
 
$
(11,708
)
 
$
(21,714
)
 
$
11,361

Return on equity based on GAAP net income (loss) attributable to UIHC (1)
(21.3
)%
 
(8.8
)%
 
(5.5
)%
 
2.8
%
 
 
 
 
 
 
 
 
Core income (loss)
$
(29,222
)
 
$
(14,931
)
 
$
(30,169
)
 
$
17,498

Core return on equity (1)(2)
(22.0
)%
 
(11.2
)%
 
(7.6
)%
 
4.4
%
(1) Return on equity for the three and nine months ended September 30, 2019 and 2018 is calculated on an annualized basis by dividing the net income (loss) or core net income (loss) for the period by the average stockholders' equity for the trailing twelve months.
(2) Core return on equity, a measure that is not based on GAAP, is calculated based on core income (loss), which is reconciled on the first page of this press release to net income (loss), the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

Combined Ratio and Underlying Ratio

The calculations of the Company's combined ratio and underlying combined ratio are shown below.

($ in thousands)
Three Months Ended
 
Nine Months Ended
September 30,
 
September 30,
 
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Loss ratio, net(1)
76.8
%
 
70.4
 %
 
6.4
 pts
 
65.4
%
 
56.4
 %
 
9.0
 pts
Expense ratio, net(2)
48.3
%
 
47.0
 %
 
1.3
 pts
 
47.1
%
 
46.1
 %
 
1.0
 pts
Combined ratio (CR)(3)
125.1
%
 
117.4
 %
 
7.7
 pts
 
112.5
%
 
102.5
 %
 
10.0
 pts
Effect of current year catastrophe losses on CR
26.0
%
 
20.2
 %
 
5.8
 pts
 
13.8
%
 
11.5
 %
 
2.3
 pts
Effect of prior year unfavorable (favorable) development on CR
6.3
%
 
(1.6
)%
 
7.9
 pts
 
5.9
%
 
(0.8
)%
 
6.7
 pts
Underlying combined ratio(4)
92.8
%
 
98.8
 %
 
(6.0
) pts
 
92.8
%
 
91.8
 %
 
1.0
 pts
(1) Loss ratio, net is calculated as losses and loss adjustment expenses (LAE), net of losses ceded to reinsurers, relative to net premiums earned.
(2) Expense ratio, net is calculated as the sum of all operating expenses less interest expense relative to net premiums earned.
(3) Combined ratio is the sum of the loss ratio, net and expense ratio, net.
(4) Underlying combined ratio, a measure that is not based on GAAP, is reconciled above to the combined ratio, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

2


Quarterly Financial Results
 
Net loss attributable to the Company for the third quarter of 2019 was $28.3 million, or $0.66 per diluted share, compared to $11.7 million, or $0.27 per diluted share, for the third quarter of 2018. The increase in net loss was primarily due to an increase in loss and loss adjustment expenses (LAE) during the third quarter of 2019 compared to the third quarter of 2018.

The Company's total gross written premium increased by $21.3 million, or 7.2%, to $317.2 million for the third quarter of 2019, from $295.9 million for the third quarter of 2018, primarily reflecting organic growth in new and renewal business generated in all regions. The breakdown of the quarter-over-quarter changes in both direct written and assumed premiums by region and gross written premium by line of business are shown in the table below.
($ in thousands)
 
Three Months Ended September 30,
 
 
 
 
 
 
2019
 
2018
 
Change $
 
Change %
Direct Written and Assumed Premium by Region (1)
 
 
 
 
 
 
 
 
Florida
 
$
157,278

 
$
141,524

 
$
15,754

 
11.1
 %
Gulf
 
62,970

 
58,632

 
4,338

 
7.4

Northeast
 
55,665

 
50,695

 
4,970

 
9.8

Southeast
 
32,047

 
27,854

 
4,193

 
15.1

Total direct written premium by region
 
307,960

 
278,705

 
29,255

 
10.5
 %
Assumed premium (2)
 
9,224

 
17,230

 
(8,006
)
 
(46.5
)
Total gross written premium by region
 
$
317,184

 
$
295,935

 
$
21,249

 
7.2
 %
 
 
 
 
 
 
 
 
 
Gross Written Premium by Line of Business
 
 
 
 
 
 
 
 
Personal property
 
$
259,187

 
$
240,456

 
$
18,731

 
7.8
 %
Commercial property
 
57,997

 
55,479

 
2,518

 
4.5

Total gross written premium by line of business
 
$
317,184

 
$
295,935

 
$
21,249

 
7.2
 %
(1) "Gulf" is comprised of Hawaii, Louisiana and Texas; "Northeast" is comprised of Connecticut, Massachusetts, New Jersey, New York and Rhode Island; and "Southeast" is comprised of Georgia, North Carolina and South Carolina.
(2) Assumed premium written for 2019 and 2018 primarily included commercial property business assumed from unaffiliated insurers.


Loss and LAE increased by $27.5 million, or 22.8%, to $148.1 million for the third quarter of 2019, from $120.6 million for the third quarter of 2018. Loss and LAE expense as a percentage of net earned premiums increased 6.4 points to 76.8% for the third quarter of 2019, compared to 70.4% for the third quarter of 2018. Excluding catastrophe losses and reserve development, the Company's gross underlying loss and LAE ratio for the third quarter of 2019 would have been 24.9%, a decrease of 4.3 points from 29.2% during the third quarter of 2018.

Policy acquisition costs increased by $7.6 million, or 14.0%, to $61.8 million for the third quarter of 2019, from $54.2 million for the third quarter of 2018. The primary driver of the increase in costs was an increase in agent commissions which were generally consistent with the Company's growth in premium production and higher average market commission rates outside of Florida.

Operating and underwriting expenses increased by $1.2 million, or 10.9%, to $12.2 million for the third quarter of 2019, from $11.0 million for the third quarter of 2018, primarily due to increased investments in technology.

General and administrative expenses increased by $3.7 million, or 24.0%, to $19.1 million for the third quarter of 2019, from $15.4 million for the third quarter of 2018, primarily due to an increase in salaries and related benefits as the number of personnel has increased and an increase in amortization expense related to our capitalized software.


3


Combined Ratio Analysis

The calculations of the Company's loss ratios and underlying loss ratios are shown below.
($ in thousands)
Three Months Ended
 
Nine Months Ended
September 30,
 
September 30,
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Loss and LAE
$
148,125

 
$
120,552

 
$
27,573

 
$
368,924

 
$
286,393

 
$
82,531

% of Gross earned premiums
43.0
%
 
39.7
%
 
3.3
 pts
 
37.4
%
 
32.8
%
 
4.6
 pts
% of Net earned premiums
76.8
%
 
70.4
%
 
6.4
 pts
 
65.4
%
 
56.4
%
 
9.0
 pts
Less:
 
 
 
 
 
 
 
 
 
 
 
Current year catastrophe losses
$
50,168

 
$
34,593

 
$
15,575

 
$
77,627

 
$
58,250

 
$
19,377

Prior year reserve unfavorable (favorable) development
12,249

 
(2,656
)
 
14,905

 
33,216

 
(4,207
)
 
37,423

Underlying loss and LAE (1)
$
85,708

 
$
88,615

 
$
(2,907
)
 
$
258,081

 
$
232,350

 
$
25,731

% of Gross earned premiums
24.9
%
 
29.2
%
 
(4.3
) pts
 
26.2
%
 
26.6
%
 
(0.4
) pts
% of Net earned premiums
44.4
%
 
51.7
%
 
(7.3
) pts
 
45.8
%
 
45.8
%
 
—

(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

The calculations of the Company's expense ratios are shown below.
($ in thousands)
Three Months Ended
 
Nine Months Ended
September 30,
 
September 30,
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Policy acquisition costs
$
61,849

 
$
54,200

 
$
7,649

 
$
178,717

 
$
153,716

 
$
25,001

Operating and underwriting
12,167

 
10,976

 
1,191

 
33,577

 
28,976

 
4,601

General and administrative
19,105

 
15,358

 
3,747

 
53,488

 
51,326

 
2,162

Total Operating Expenses
$
93,121

 
$
80,534

 
$
12,587

 
$
265,782

 
$
234,018

 
$
31,764

% of Gross earned premiums
27.0
%
 
26.5
%
 
0.5
 pts
 
26.9
%
 
26.8
%
 
0.1
 pts
% of Net earned premiums
48.3
%
 
47.0
%
 
1.3
 pts
 
47.1
%
 
46.1
%
 
1.0
 pts


Reinsurance Costs as a Percentage of Earned Premium

Excluding the Company's business for which it cedes 100% of the risk of loss, reinsurance costs in the third quarter of 2019 were 42.3% of gross premiums earned, compared to 42.0% of gross premiums earned for the third quarter of 2018. The increase in this ratio was driven by the Company's quota share agreement that was renewed on June 1, 2019. The Company modified the terms of its quota share agreement in 2019 to include its subsidiary, Family Security Insurance Company, Inc. in addition to its subsidiary United Property & Casualty Insurance Company. Also, the ceding percentage increased from 20.0% in 2018 to 22.5% in 2019.

Investment Portfolio Highlights

The Company's cash, restricted cash and investment holdings increased 21.6% to $1.4 billion at September 30, 2019 from $1.1 billion at December 31, 2018. UPC Insurance's cash and investment holdings consist of investments in U.S. government and agency securities, corporate debt and 100% investment grade money market instruments. Fixed maturities represented approximately 88.9% of total investments at September 30, 2019, compared to 90.6% at December 31, 2018. At September 30, 2019 our fixed maturity investments had a modified duration of 3.4 years, compared to 3.5 years at December 31, 2018.







4


Book Value Analysis

Book value per share decreased 1.4% from $12.10 at December 31, 2018, to $11.93 at September 30, 2019. Underlying book value per share decreased 5.7% from $12.31 at December 31, 2018 to $11.61 at September 30, 2019. A decrease in the Company's retained earnings as the result of a net loss in 2019 drove the decrease in our book value per share. This was partially offset by an increase in accumulated other comprehensive income (AOCI). As shown in the table below, removing the effect of AOCI further decreases our book value per share.
($ in thousands, except for share and per share data)
 
September 30,
 
December 31,
 
 
2019
 
2018
Book Value per Share
 
 
 
 
Numerator:
 
 
 
 
Common stockholders' equity attributable to UIHC
 
$
515,842

 
$
520,230

Denominator:
 
 
 
 
Total Shares Outstanding
 
43,234,488

 
42,984,578

Book Value Per Common Share
 
$
11.93

 
$
12.10

 
 
 
 
 
Book Value per Share, Excluding the Impact of Accumulated Other Comprehensive Income (AOCI)
 
 
 
 
Numerator:
 
 
 
 
Common stockholders' equity attributable to UIHC
 
$
515,842

 
$
520,230

Less: Accumulated other comprehensive income (loss)
 
13,714

 
(9,030
)
Stockholders' Equity, excluding AOCI
 
$
502,128

 
$
529,260

Denominator:
 
 
 
 
Total Shares Outstanding
 
43,234,488

 
42,984,578

Underlying Book Value Per Common Share(1)
 
$
11.61

 
$
12.31

(1) Underlying book value per common share is a non-GAAP financial measure and is reconciled above to book value per common share, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

5


Definitions of Non-GAAP Measures

We believe that investors' understanding of UPC Insurance's performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

Core return on equity is a non-GAAP ratio calculated using non-GAAP measures. It is calculated by dividing the core income for the period by the average stockholders’ equity for the trailing twelve months (or one quarter of such average, in the case of quarterly periods). Core income is an after-tax non-GAAP measure that is calculated by excluding from net income the effect of non-cash amortization of intangible assets, unrealized gains or losses on the Company's equity security investments and net realized gains or losses on the Company's investment portfolio. In the opinion of the Company’s management, core income, core income per share and core return on equity are meaningful indicators to investors of the Company's underwriting and operating results, since the excluded items are not necessarily indicative of operating trends. Internally, the Company’s management uses core income, core income per share and core return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis. The most directly comparable GAAP measure is return on equity. The core return on equity measure should not be considered a substitute for return on equity and does not reflect the overall profitability of the Company's business.

Combined ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying combined ratio) is a non-GAAP measure, which is computed by subtracting the effect of current year catastrophe losses and prior year development from the combined ratio. The Company believes that this ratio is useful to investors and it is used by management to highlight the trends in the Company's business that may be obscured by current year catastrophe losses and prior year development. Current year catastrophe losses cause the Company's loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year development is caused by unexpected loss development on historical reserves. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered as a substitute for the combined ratio and does not reflect the overall profitability of the Company's business.

Net loss and LAE excluding the effects of current year catastrophe losses and prior year reserve development (underlying loss and LAE) is a non-GAAP measure which is computed by subtracting the effect of current year catastrophe losses and prior year reserve development from net loss and LAE. The Company uses underlying loss and LAE figures to analyze the Company's loss trends that may be impacted by current year catastrophe losses and prior year development on the Company's reserves. As discussed previously, these two items can have a significant impact on the Company's loss trends in a given period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net loss and LAE. The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of the Company's business.

Net income excluding the effects of amortization of intangible assets, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income) is a non-GAAP measure which is computed by adding amortization, net of tax, to net income and subtracting realized gains (losses) on our investment portfolio, net of tax, and unrealized gains (losses) on our equity securities, net of tax, from net income. Amortization expense is related to the amortization of intangible assets acquired through mergers and therefore the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of our operations. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. The most directly comparable GAAP measure is net income. The core income measure should not be considered a substitute for net income and does not reflect the overall profitability of our business.

Book value per common share, excluding the impact of accumulated other comprehensive income (underlying book value per common share), is a non-GAAP measure which is computed by dividing common stockholders' equity after excluding accumulated other comprehensive income, by total common shares outstanding plus dilutive potential common shares outstanding. We use the trend in book value per common share, excluding the impact of accumulated other comprehensive income, in conjunction with book value per common share to identify and analyze the change in net worth attributable to management efforts between periods. We believe the non-GAAP measure is useful to investors because it eliminates the effect of interest rates that can fluctuate significantly from period to period and are generally driven by economic and financial factors which are not influenced by management. Book value per

6


common share is the most directly comparable GAAP measure. Book value per common share, excluding the impact of accumulated other comprehensive income, should not be considered a substitute for book value per common share, and does not reflect the recorded net worth of our business.

Conference Call Details

Date and Time:    October 31, 2019 - 9:00 A.M. ET

Participant Dial-In:    (United States): 877-407-8829
(International): 201-493-6724

Webcast:
To listen to the live webcast, please go to investors.upcinsurance.com (News & Market Data - Event Calendar) and click on the conference call link, or go to: https://78449.themediaframe.com/dataconf/productusers/unin/mediaframe/33028/indexl.html.
An archive of the webcast will be available for a limited period of time thereafter.

Presentation:
The information in this press release should be read in conjunction with an investor presentation that is available on our website at investors.upcinsurance.com/Presentations.

About UPC Insurance

Founded in 1999, UPC Insurance is an insurance holding company that sources, writes and services personal and commercial residential property and casualty insurance policies using a group of wholly owned insurance subsidiaries and one majority owned insurance subsidiary through a variety of distribution channels. The Company currently writes policies in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina and Texas, and is licensed to write in Alabama, Delaware, Maryland, Mississippi, New Hampshire and Virginia. From its headquarters in St. Petersburg, Florida, UPC Insurance's team of dedicated professionals manages a completely integrated insurance company, including sales, underwriting, customer service and claims. UPC Insurance is a company committed to financial stability and solvency.


Forward-Looking Statements

Statements made in this press release, or on the conference call identified above, and otherwise, that are not historical facts are “forward-looking statements” that anticipate results based on our estimates, assumptions and plans and are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words such as “may,” “will,” “expect,” "endeavor," "project," “believe,” “anticipate,” “intend,” “could,” “would,” “estimate” or “continue” or the negative variations thereof or comparable terminology. We believe these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements may be found in our filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” section in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made, and, except as required by applicable law, we undertake no obligation to update or revise any forward-looking statement.


 ### #### ###

CONTACT:
 
OR
 
INVESTOR RELATIONS:
United Insurance Holdings Corp.
 
 
 
The Equity Group
Jessica Strathman
 
 
 
Adam Prior
Director of Financial Reporting
 
 
 
Senior Vice-President
(727) 895-7737 / jstrathman@upcinsurance.com
 
 
 
(212) 836-9606 / aprior@equityny.com


7


Condensed Consolidated Statements of Comprehensive Income (Loss)
In thousands, except share and per share amounts

 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
REVENUE:
 
 
 
 
 
 
 
 
Gross premiums written
 
$
317,184

 
$
295,935

 
$
1,085,505

 
$
960,214

Change in gross unearned premiums
 
27,499

 
8,021

 
(98,984
)
 
(87,667
)
Gross premiums earned
 
344,683

 
303,956

 
986,521

 
872,547

Ceded premiums earned
 
(151,763
)
 
(132,626
)
 
(422,475
)
 
(365,011
)
Net premiums earned
 
192,920

 
171,330

 
564,046

 
507,536

Net investment income
 
7,803

 
6,888

 
22,668

 
19,665

Net realized investment gains (losses)
 
18

 
(447
)
 
186

 
(674
)
Net unrealized gains on equity securities
 
2,609

 
6,109

 
15,519

 
5,046

Other revenue
 
4,248

 
3,772

 
12,276

 
11,280

Total revenues
 
$
207,598

 
$
187,652

 
$
614,695

 
$
542,853

EXPENSES:
 
 
 
 
 
 
 
 
Losses and loss adjustment expenses
 
148,125

 
120,552

 
368,924

 
286,393

Policy acquisition costs
 
61,849

 
54,200

 
178,717

 
153,716

Operating expenses
 
12,167

 
10,976

 
33,577

 
28,976

General and administrative expenses
 
19,105

 
15,358

 
53,488

 
51,326

Interest expense
 
2,443

 
2,455

 
7,379

 
7,371

Total expenses
 
243,689

 
203,541

 
642,085

 
527,782

Income (loss) before other income
 
(36,091
)
 
(15,889
)
 
(27,390
)
 
15,071

Other income
 
17

 
19

 
44

 
106

Income (loss) before income taxes
 
(36,074
)
 
(15,870
)
 
(27,346
)
 
15,177

Provision (benefit) for income taxes
 
(7,859
)
 
(4,163
)
 
(5,912
)
 
3,815

Net income (loss)
 
$
(28,215
)
 
$
(11,707
)
 
$
(21,434
)
 
$
11,362

Less: Net income attributable to noncontrolling interests
 
65

 
1

 
280

 
1

Net income (loss) attributable to UIHC
 
$
(28,280
)
 
$
(11,708
)
 
$
(21,714
)
 
$
11,361

OTHER COMPREHENSIVE INCOME:
 
 
 
 
 
 
 
 
Change in net unrealized gains (losses) on investments
 
5,606

 
(3,354
)
 
30,561

 
(30,706
)
Reclassification adjustment for net realized investment losses (gains)
 
(18
)
 
447

 
(186
)
 
674

Income tax benefit (expense) related to items of other comprehensive income
 
(1,486
)
 
699

 
(7,374
)
 
7,110

Total comprehensive income (loss)
 
$
(24,113
)
 
$
(13,915
)
 
$
1,567

 
$
(11,560
)
Less: Comprehensive income attributable to noncontrolling interests
 
101

 
1

 
537

 
1

Comprehensive income (loss) attributable to UIHC
 
$
(24,214
)
 
$
(13,916
)
 
$
1,030

 
$
(11,561
)
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
 
Basic
 
42,795,414

 
42,677,893

 
42,750,710

 
42,636,515

Diluted
 
42,795,414

 
42,677,893

 
42,750,710

 
42,791,208

 
 
 
 
 
 
 
 
 
Earnings available to UIHC common stockholders per share

 
 
 
 
 
 
 
 
Basic
 
$
(0.66
)
 
$
(0.27
)
 
$
(0.51
)
 
$
0.27

Diluted
 
$
(0.66
)
 
$
(0.27
)
 
$
(0.51
)
 
$
0.27

 
 
 
 
 
 
 
 
 
Dividends declared per share
 
$
0.06

 
$
0.06

 
$
0.18

 
$
0.18


8


Condensed Consolidated Balance Sheets
In thousands, except share amounts



 
 
September 30, 2019
 
December 31, 2018
ASSETS
 
 
 
 
Investments, at fair value:
 
 
 
 
Fixed maturities, available-for-sale
 
$
921,212

 
$
862,345

Equity securities
 
104,629

 
80,978

Other investments
 
10,024

 
8,513

Total investments
 
$
1,035,865

 
$
951,836

Cash and cash equivalents
 
270,563

 
112,679

Restricted cash
 
74,849

 
71,441

Accrued investment income
 
6,037

 
6,017

Property and equipment, net
 
28,874

 
17,137

Premiums receivable, net
 
86,365

 
95,816

Reinsurance recoverable on paid and unpaid losses
 
648,372

 
625,998

Ceded unearned premiums
 
367,550

 
217,885

Goodwill
 
73,045

 
73,045

Deferred policy acquisition costs
 
115,158

 
105,582

Intangible assets
 
27,403

 
31,351

Other assets
 
20,590

 
12,641

Total Assets
 
$
2,754,671

 
$
2,321,428

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
Liabilities:
 
 
 
 
Unpaid losses and loss adjustment expenses
 
$
824,147

 
$
661,203

Unearned premiums
 
726,297

 
627,313

Reinsurance payable
 
321,994

 
175,272

Payments outstanding
 
56,761

 
56,534

Accounts payable and accrued expenses
 
79,201

 
71,048

Lease liability
 
356

 
—

Other liabilities
 
49,874

 
29,571

Notes payable
 
159,523

 
160,118

Total Liabilities
 
$
2,218,153

 
$
1,781,059

Commitments and contingencies
 
 
 
 
Stockholders' Equity:
 
 
 
 
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued or outstanding
 
—

 
—

Common stock, $0.0001 par value; 50,000,000 shares authorized; 43,056,310 and 43,029,845 issued, respectively; 43,234,488 and 42,984,578 outstanding, respectively

 
4

 
4

Additional paid-in capital
 
391,433

 
389,141

Treasury shares, at cost; 212,083 shares
 
(431
)
 
(431
)
Accumulated other comprehensive income (loss)
 
13,714

 
(9,030
)
Retained earnings
 
111,122

 
140,546

Total stockholders' equity attributable to UIHC stockholders
 
$
515,842

 
$
520,230

Noncontrolling interests
 
20,676

 
20,139

Total Stockholders' Equity
 
$
536,518

 
$
540,369

Total Liabilities and Stockholders' Equity
 
$
2,754,671

 
$
2,321,428


9