Newly public Homeowners Choice posts profit gain
Nov 13, 2008
Tampa Bay Business Journal–Wednesday, November 12, 2008
Homeowners Choice Inc. reported net income of $802,000, or 12 cents a share, for the third quarter of 2008, compared to a net loss of $114,000, or 2 cents a share, in the same period a year earlier.
Revenue for the third quarter of 2008 was $8.7 million, compared to $1.9 million in the year-ago period.
For the nine months ended Sept. 30, Homeowners Choice posted $7.5 million, or $1.33 a share, in net income on revenue of $28.3 million. In the first nine months of 2007, the company had a $393,000 net loss, or 12 cents a share, on revenue of $1.7 million.
Homeowners Choice (NASDAQ: HCII), a property and casualty insurance company headquartered in Clearwater, said in a release that certain period-to-period results are not comparable. The company began operations in July 2007 and became a public company July 31.
The company ended the third quarter with about 17,000 policies outstanding but during October assumed about 45,000 policies from state-sponsored Citizens Property Insurance Corp under Florida’s take-out program, designed to reduce the state’s risk exposure.
The assumption of the Citizens’ policies qualified Homeowners Choice for a reduction of commissions ceded to Citizens from 16 percent to 6 percent, Richard Allen, chief financial officer of Homeowners Choice, said in the release. The commission reduction is expected to result in recognition of a pre-tax gain of about $3.6 million during the fourth quarter of this year, Allen said.