UVE Universal Insurance Holdings Inc

• Diluted earnings per common share of $0.93; diluted adjusted* earnings per common share of $0.87
• Annualized return on average common equity (“ROCE”) of 34.8%, annualized adjusted* return on average common equity of 25.3%
• Direct premiums written of $547.1 million, up 2.7% from the prior year quarter
• Net combined ratio of 99.1%, down 1.8 points from the prior year quarter
• Book value per share of $11.12, up 17.4% from fourth quarter 2022; adjusted book value per share of $14.31, up 11.0% from fourth quarter 2022
• Repurchased approximately 396 thousand shares for $6.1 million. Total capital returned to shareholders of $11.1 million, including $0.16 per share regular quarterly dividend

Universal Insurance Holdings (NYSE: UVE) (“Universal” or the “Company”) reported second quarter 2023 results.

“Results were solid, including a 25.3% annualized adjusted return on common equity and 85.1% adjusted diluted EPS growth year-over-year,” said Stephen J. Donaghy, Chief Executive Officer. “While it’s still early days, we’re encouraged by favorable claims and litigation trends that are beginning to emerge as a result of recent legislative reforms and give us optimism as we look forward to 2024 and beyond. We continue to benefit from rate-driven premium growth and an improving spread of risk across our geographic footprint. I’m proud of the reinsurance program we put together for the 2023-2024 treaty year. Our program’s terms, conditions and coverage are consistent with the prior year, but we reduced our consolidated retention and ceded premium ratio.”

*Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

 

Quarterly Financial Results

 

Summary Financial Results

 

($thousands, except per share data)

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

Change

 

 

 

2023

 

 

 

2022

 

 

Change

GAAP comparison

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$

339,570

 

 

$

292,006

 

 

16.3

%

 

 

$

656,078

 

 

$

579,488

 

 

13.2

%

Operating income

$

39,168

 

 

$

12,411

 

 

215.6

%

 

 

$

73,595

 

 

$

36,490

 

 

101.7

%

Operating income margin

 

11.5

%

 

 

4.3

%

 

7.2 pts

 

 

 

11.2

%

 

 

6.3

%

 

4.9 pts

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

$

28,564

 

 

$

7,368

 

 

287.7

%

 

 

$

52,734

 

 

$

24,902

 

 

111.8

%

Diluted earnings per common share

$

0.93

 

 

$

0.24

 

 

287.5

%

 

 

$

1.72

 

 

$

0.80

 

 

115.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized ROCE

 

34.8

%

 

 

7.7

%

 

27.1 pts

 

 

 

33.9

%

 

 

12.5

%

 

21.4 pts

Book value per share, end of period

$

11.12

 

 

$

11.93

 

 

(6.8

)%

 

 

 

11.12

 

 

$

11.93

 

 

(6.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP comparison1

 

 

 

 

 

 

 

 

 

 

 

 

Core revenue

$

336,957

 

 

$

301,615

 

 

11.7

%

 

 

$

653,296

 

 

$

592,435

 

 

10.3

%

Adjusted operating income

$

36,555

 

 

$

22,020

 

 

66.0

%

 

 

$

70,813

 

 

$

49,437

 

 

43.2

%

Adjusted operating income margin

 

10.8

%

 

 

7.3

%

 

3.5 pts

 

 

 

10.8

%

 

 

8.3

%

 

2.5 pts

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income available to common stockholders

$

26,594

 

 

$

14,648

 

 

81.6

%

 

 

$

50,636

 

 

$

34,711

 

 

45.9

%

Adjusted diluted earnings per common share

$

0.87

 

 

$

0.47

 

 

85.1

%

 

 

$

1.65

 

 

$

1.12

 

 

47.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized adjusted ROCE

 

25.3

%

 

 

12.8

%

 

12.5 pts

 

 

 

24.7

%

 

 

15.3

%

 

9.4 pts

Adjusted book value per share, end of period

$

14.31

 

 

$

14.80

 

 

(3.3

)%

 

 

$

14.31

 

 

$

14.80

 

 

(3.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwriting Summary

 

 

 

 

 

 

 

 

 

 

 

 

Premiums:

 

 

 

 

 

 

 

 

 

 

 

 

Premiums in force

$

1,879,053

 

 

$

1,766,542

 

 

6.4

%

 

 

$

1,879,053

 

 

$

1,766,542

 

 

6.4

%

Policies in force

 

809,685

 

 

 

894,618

 

 

(9.5

)%

 

 

 

809,685

 

 

 

894,618

 

 

(9.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums written

$

547,126

 

 

$

532,527

 

 

2.7

%

 

 

$

957,228

 

 

$

929,008

 

 

3.0

%

Direct premiums earned

$

463,324

 

 

$

428,805

 

 

8.1

%

 

 

$

918,692

 

 

$

843,408

 

 

8.9

%

Ceded premiums earned

$

(160,050

)

 

$

(151,744

)

 

5.5

%

 

 

$

(333,194

)

 

$

(297,283

)

 

12.1

%

Ceded premium ratio

 

34.5

%

 

 

35.4

%

 

(0.9) pts

 

 

 

36.3

%

 

 

35.2

%

 

1.1 pts

Net premiums earned

$

303,274

 

 

$

277,061

 

 

9.5

%

 

 

$

585,498

 

 

$

546,125

 

 

7.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Loss ratio

 

73.8

%

 

 

72.3

%

 

1.5 pts

 

 

 

73.4

%

 

 

70.6

%

 

2.8 pts

Expense ratio

 

25.3

%

 

 

28.6

%

 

(3.3) pts

 

 

 

26.1

%

 

 

28.8

%

 

(2.7) pts

Combined ratio

 

99.1

%

 

 

100.9

%

 

(1.8) pts

 

 

 

99.5

%

 

 

99.4

%

 

0.1 pts

1 Reconciliation of GAAP to non-GAAP financial measures are provided in the attached tables. Adjusted net income available to common stockholders, adjusted diluted earnings per common share and core revenue exclude net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities. Adjusted operating income excludes the items above and interest and amortization of debt issuance costs. Adjusted book value per share excludes accumulated other comprehensive income, net of taxes. Adjusted ROCE is calculated by dividing annualized adjusted net income available to common stockholders by average adjusted book value per share, with the denominator further excluding current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities.

Net Income and Adjusted Net Income

Net income available to common stockholders was $28.6 million, up from $7.4 million in the prior year quarter, and adjusted net income available to common stockholders was $26.6 million, up from $14.6 million in the prior year quarter. The increase in adjusted net income available to common stockholders mostly stems from higher underwriting income, net investment income and commission revenue.

Revenues

Revenue was $339.6 million, up 16.3% from the prior year quarter and core revenue was $337.0 million, up 11.7% from the prior year quarter. The increase in core revenue primarily stems from higher net premiums earned, net investment income and commission revenue.

Direct premiums written were $547.1 million, up 2.7% from the prior year quarter. The increase stems from 0.8% growth in Florida and 13.6% growth in other states. Growth reflects rate increases, partly offset by lower policies in force.

Direct premiums earned were $463.3 million, up 8.1% from the prior year quarter. The increase stems from rate-driven direct premiums written growth over the past twelve months.

The ceded premium ratio was 34.5%, down from 35.4% in the prior year quarter. The decrease primarily reflects a lower ceded premium ratio associated with the 2023-2024 reinsurance program, direct premiums earned growth associated with primary rate increases and reinsurance savings associated with leveraging our self-insurance captive, partly offset by reinstatement premiums associated with Hurricane Ian and higher reinsurance pricing and higher reinsurance costs associated with the increase in insured values.

Net premiums earned were $303.3 million, up 9.5% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned and a lower ceded premium ratio, as described above.

Net investment income was $11.3 million, up from $5.2 million in the prior year quarter. The increase primarily stems from higher fixed income reinvestment yields and higher yields on cash.

Commissions, policy fees and other revenue were $22.4 million, up 15.9% from the prior year quarter. The increase primarily reflects higher reinsurance brokerage commission revenue, which benefited from higher ceded premiums, including reinstatement premiums associated with Hurricane Ian, and the difference in our reinsurance program’s structure relative to the prior year quarter, partly offset by a decline in policy fees associated with lower policies in force.

Margins

The GAAP operating income margin was 11.5%, up from a GAAP operating income margin of 4.3% in the prior year quarter and the adjusted operating income margin was 10.8%, up from an adjusted operating income margin of 7.3% in the prior year quarter. The higher adjusted operating income margin primarily reflects higher net investment income and commission revenue and a lower net combined ratio.

The net loss ratio was 73.8%, up 1.5 points compared to the prior year quarter. The increase primarily reflects higher unfavorable prior year reserve development, partly offset by a lower consolidated current accident year net loss ratio.

The net expense ratio was 25.3%, down 3.3 points from 28.6% in the prior year quarter. The reduction primarily reflects lower renewal commission rates paid to distribution partners.

The net combined ratio was 99.1%, down 1.8 points compared to the prior year quarter. The decrease reflects a lower net expense ratio, partly offset by a higher net loss ratio, as described above.

Capital Deployment

During the second quarter, the Company repurchased approximately 396 thousand shares at an aggregate cost of $6.1 million. The Company currently has $20.1 million of share repurchase authorization remaining.

On July 20, 2023, the Board of Directors declared a quarterly cash dividend of 16 cents per share of common stock, payable on August 11, 2023, to shareholders of record as of the close of business on August 4, 2023.

Conference Call and Webcast

• Friday, July 28, 2023 at 10:00 a.m. ET
• Investors and other interested parties may listen to the call by accessing the online, real-time webcast at universalinsuranceholdings.com/investors or by registering in advance via teleconference at https://register.vevent.com/register/BI4ff80513f7174714bca5653f1ea2cd34. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. An online replay of the call will be available at universalinsuranceholdings.com/investors soon after the investor call concludes.

About Universal

Universal Insurance Holdings, Inc. (NYSE: UVE) is a holding company providing property and casualty insurance and value-added insurance services. We develop, market, and write insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management and distribution. We provide insurance products through both our appointed independent agents and through our direct online distribution channels in the United States across 19 states (primarily Florida). Learn more at universalinsuranceholdings.com.

Non-GAAP Financial Measures and Key Performance Indicators

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the U.S. Securities and Exchange Commission (“SEC”), including core revenue, adjusted net income available to common stockholders and diluted adjusted earnings (loss) per common share, which exclude the impact of net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities. Adjusted operating income and adjusted operating income margin exclude the impact of net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities and interest and amortization of debt issuance costs. Adjusted common stockholders’ equity and adjusted book value per share exclude accumulated other comprehensive income (AOCI), net of taxes. Adjusted return on common equity excludes after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities from the numerator and AOCI, net of taxes, and current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities from the denominator. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). UVE management believes that these non-GAAP financial measures are meaningful, as they allow investors to evaluate underlying revenue and profitability trends and enhance comparability across periods. When considered together with the GAAP financial measures, management believes these metrics provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. UVE management also believes that these non-GAAP financial measures enhance the ability of investors to analyze UVE’s business trends and to understand UVE’s operational performance. UVE’s management utilizes these non-GAAP financial measures as guides in long-term planning. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP. For more information regarding our key performance indicators, please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” in our forthcoming Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

Forward-Looking Statements

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,” “will,” “plan,” 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, including those risks and uncertainties described under the heading “Risk Factors” and “Liquidity and Capital Resources” in our 2022 Annual Report on Form 10-K, and supplemented in our subsequent Quarterly Reports on Form 10-Q. Future results could differ materially from those described, and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 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 the Company’s Annual Report on Form 10-K and the most recent quarterly reports on Form 10-Q.

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except per share data)

 

 

 

June 30,

 

December 31,

 

 

 

2023

 

 

 

2022

 

ASSETS:

 

 

 

 

Invested Assets

 

 

 

 

Fixed maturities, at fair value

 

$

1,051,508

 

 

$

1,014,626

 

Equity securities, at fair value

 

 

75,571

 

 

 

85,469

 

Investment real estate, net

 

 

5,618

 

 

 

5,711

 

Total invested assets

 

 

1,132,697

 

 

 

1,105,806

 

Cash and cash equivalents

 

 

291,681

 

 

 

388,706

 

Restricted cash and cash equivalents

 

 

68,636

 

 

 

2,635

 

Prepaid reinsurance premiums

 

 

525,489

 

 

 

282,427

 

Reinsurance recoverable

 

 

590,409

 

 

 

808,850

 

Premiums receivable, net

 

 

79,503

 

 

 

69,574

 

Property and equipment, net

 

 

49,538

 

 

 

51,404

 

Deferred policy acquisition costs

 

 

107,047

 

 

 

103,654

 

Goodwill

 

 

2,319

 

 

 

2,319

 

Other assets

 

 

70,691

 

 

 

74,779

 

TOTAL ASSETS

 

$

2,918,010

 

 

$

2,890,154

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

663,019

 

 

$

1,038,790

 

Unearned premiums

 

 

982,390

 

 

 

943,854

 

Advance premium

 

 

91,011

 

 

 

54,964

 

Reinsurance payable, net

 

 

607,552

 

 

 

384,504

 

Long-term debt, net

 

 

102,387

 

 

 

102,769

 

Other liabilities

 

 

136,979

 

 

 

77,377

 

Total liabilities

 

 

2,583,338

 

 

 

2,602,258

 

STOCKHOLDERS' EQUITY:

 

 

 

 

Cumulative convertible preferred stock ($0.01 par value)2

 

 

—

 

 

 

—

 

Common stock ($0.01 par value)3

 

 

473

 

 

 

472

 

Treasury shares, at cost - 17,186 and 16,790

 

 

(244,846

)

 

 

(238,758

)

Additional paid-in capital

 

 

114,685

 

 

 

112,509

 

Accumulated other comprehensive income (loss), net of taxes

 

 

(95,857

)

 

 

(103,782

)

Retained earnings

 

 

560,217

 

 

 

517,455

 

Total stockholders' equity

 

 

334,672

 

 

 

287,896

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

2,918,010

 

 

$

2,890,154

 

 

 

 

 

 

Notes:

 

 

 

 

2 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.

3 Common stock ($0.01 par value): Authorized - 55,000 shares; Issued - 47,266 and 47,179 shares; Outstanding 30,080 and 30,389 shares.

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2023

 

2022

 

 

2023

 

2022

REVENUES

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned

 

$

303,274

 

 

$

277,061

 

 

 

$

585,498

 

 

$

546,125

 

Net investment income

 

 

11,282

 

 

 

5,221

 

 

 

 

21,980

 

 

 

9,263

 

Net realized gains (losses) on investments

 

 

882

 

 

 

(725

)

 

 

 

94

 

 

 

(667

)

Net change in unrealized gains (losses) of equity securities

 

 

1,731

 

 

 

(8,884

)

 

 

 

2,688

 

 

 

(12,280

)

Commission revenue

 

 

14,986

 

 

 

11,404

 

 

 

 

32,268

 

 

 

22,565

 

Policy fees

 

 

5,384

 

 

 

5,940

 

 

 

 

9,551

 

 

 

10,719

 

Other revenue

 

 

2,031

 

 

 

1,989

 

 

 

 

3,999

 

 

 

3,763

 

Total revenues

 

 

339,570

 

 

 

292,006

 

 

 

 

656,078

 

 

 

579,488

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

 

223,727

 

 

 

200,304

 

 

 

 

429,881

 

 

 

385,410

 

Policy acquisition costs

 

 

52,006

 

 

 

54,100

 

 

 

 

103,697

 

 

 

108,823

 

Other operating expenses

 

 

24,669

 

 

 

25,191

 

 

 

 

48,905

 

 

 

48,765

 

Total operating costs and expenses

 

 

300,402

 

 

 

279,595

 

 

 

 

582,483

 

 

 

542,998

 

Interest and amortization of debt issuance costs

 

 

1,629

 

 

 

1,731

 

 

 

 

3,265

 

 

 

3,339

 

Income before income tax expense

 

 

37,539

 

 

 

10,680

 

 

 

 

70,330

 

 

 

33,151

 

Income tax expense

 

 

8,973

 

 

 

3,310

 

 

 

 

17,591

 

 

 

8,244

 

NET INCOME

 

$

28,566

 

 

$

7,370

 

 

 

$

52,739

 

 

$

24,907

 

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SHARE AND PER SHARE INFORMATION

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Weighted average common shares outstanding - basic

 

 

30,265

 

 

 

30,829

 

 

 

 

30,323

 

 

 

30,987

 

Weighted average common shares outstanding - diluted

 

 

30,659

 

 

 

30,883

 

 

 

 

30,633

 

 

 

31,060

 

Shares outstanding, end of period

 

 

30,080

 

 

 

30,716

 

 

 

 

30,080

 

 

 

30,716

 

Basic earnings per common share

 

$

0.94

 

 

$

0.24

 

 

 

$

1.74

 

 

$

0.80

 

Diluted earnings per common share

 

$

0.93

 

 

$

0.24

 

 

 

$

1.72

 

 

$

0.80

 

Cash dividend declared per common share

 

$

0.16

 

 

$

0.16

 

 

 

$

0.32

 

 

$

0.32

 

Book value per share, end of period

 

$

11.12

 

 

$

11.93

 

 

 

$

11.12

 

 

$

11.93

 

Annualized return on average common equity (ROCE)

 

 

34.8

%

 

 

7.7

%

 

 

 

33.9

%

 

 

12.5

%

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SUPPLEMENTARY INFORMATION

(in thousands, except for Policies In Force data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Premiums

 

 

 

 

 

 

 

 

 

Direct premiums written - Florida

 

$

456,984

 

 

$

453,168

 

 

 

$

794,349

 

 

$

787,605

 

Direct premiums written - Other States

 

 

90,142

 

 

 

79,359

 

 

 

 

162,879

 

 

 

141,403

 

Direct premiums written - Total

 

$

547,126

 

 

$

532,527

 

 

 

$

957,228

 

 

$

929,008

 

Direct premiums earned

 

$

463,324

 

 

$

428,805

 

 

 

$

918,692

 

 

$

843,408

 

Net premiums earned

 

$

303,274

 

 

$

277,061

 

 

 

$

585,498

 

 

$

546,125

 

 

 

 

 

 

 

 

 

 

 

Underwriting Ratios - Net

 

 

 

 

 

 

 

 

 

Loss and loss adjustment expense ratio

 

 

73.8

%

 

 

72.3

%

 

 

 

73.4

%

 

 

70.6

%

Policy acquisition cost ratio

 

 

17.2

%

 

 

19.5

%

 

 

 

17.7

%

 

 

19.9

%

Other operating expense ratio

 

 

8.1

%

 

 

9.1

%

 

 

 

8.4

%

 

 

8.9

%

Expense ratio

 

 

25.3

%

 

 

28.6

%

 

 

 

26.1

%

 

 

28.8

%

Combined ratio

 

 

99.1

%

 

 

100.9

%

 

 

 

99.5

%

 

 

99.4

%

 

 

 

 

 

 

 

 

 

 

Other Items

 

 

 

 

 

 

 

 

 

Net prior years’ reserve development

 

$

13,825

 

 

$

3,710

 

 

 

$

17,143

 

 

$

4,365

 

Points on the net loss and loss adjustment expense ratio

 

4.6 pts

 

1.3 pts

 

 

2.9 pts

 

0.8 pts

 

 

As of

 

 

June 30,

 

 

2023

 

2022

Policies in force

 

 

 

 

 

 

Florida

 

 

576,407

 

 

 

654,276

 

Other States

 

 

233,278

 

 

 

240,342

 

Total

 

 

809,685

 

 

 

894,618

 

 

 

 

 

 

 

 

Premiums in force

 

 

 

 

 

 

Florida

 

$

1,549,410

 

 

$

1,473,193

 

Other States

 

 

329,643

 

 

 

293,349

 

Total

 

$

1,879,053

 

 

$

1,766,542

 

 

 

 

 

 

 

 

Total Insured Value

 

 

 

 

 

 

Florida

 

$

192,324,456

 

 

$

202,691,987

 

Other States

 

 

126,539,944

 

 

 

118,766,758

 

Total

 

$

318,864,400

 

 

$

321,458,745

   

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except for per share data)

 

GAAP revenue to core revenue

 

Three Months Ended

 

 

Six Months Ended

 

June 30,

 

 

June 30,

 

2023

 

2022

 

 

2023

 

2022

GAAP revenue

$

339,570

 

 

$

292,006

 

 

 

$

656,078

 

 

$

579,488

 

less: Net realized gains (losses) on investments

 

882

 

 

 

(725

)

 

 

 

94

 

 

 

(667

)

less: Net change in unrealized gains (losses) of equity securities

 

1,731

 

 

 

(8,884

)

 

 

 

2,688

 

 

 

(12,280

)

Core revenue

$

336,957

 

 

$

301,615

 

 

 

$

653,296

 

 

$

592,435

 

GAAP operating income to adjusted operating income

 

Three Months Ended

 

 

Six Months Ended

 

June 30,

 

 

June 30,

 

2023

 

2022

 

 

2023

 

2022

GAAP income before income tax expense

$

37,539

 

 

$

10,680

 

 

 

$

70,330

 

 

$

33,151

 

add: Interest and amortization of debt issuance costs

 

1,629

 

 

 

1,731

 

 

 

 

3,265

 

 

 

3,339

 

GAAP operating income

 

39,168

 

 

 

12,411

 

 

 

 

73,595

 

 

 

36,490

 

less: Net realized gains (losses) on investments

 

882

 

 

 

(725

)

 

 

 

94

 

 

 

(667

)

less: Net change in unrealized gains (losses) of equity securities

 

1,731

 

 

 

(8,884

)

 

 

 

2,688

 

 

 

(12,280

)

Adjusted operating income

$

36,555

 

 

$

22,020

 

 

 

$

70,813

 

 

$

49,437

 

GAAP operating income margin to adjusted operating income margin

 

Three Months Ended

 

 

Six Months Ended

 

June 30,

 

 

June 30,

 

 

2023

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

GAAP operating income (a)

$

39,168

 

 

$

12,411

 

 

 

$

73,595

 

 

$

36,490

 

GAAP revenue (b)

 

339,570

 

 

 

292,006

 

 

 

 

656,078

 

 

 

579,488

 

GAAP operating income margin (a÷b)

 

11.5

%

 

 

4.3

%

 

 

 

11.2

%

 

 

6.3

%

Adjusted operating income (c)

 

36,555

 

 

 

22,020

 

 

 

 

70,813

 

 

 

49,437

 

Core revenue (d)

 

336,957

 

 

 

301,615

 

 

 

 

653,296

 

 

 

592,435

 

Adjusted operating income margin (c÷d)

 

10.8

%

 

 

7.3

%

 

 

 

10.8

%

 

 

8.3

%

GAAP net income (NI) to adjusted NI available to common stockholders

 

Three Months Ended

 

 

Six Months Ended

 

June 30,

 

 

June 30,

 

2023

 

2022

 

 

2023

 

2022

GAAP NI

$

28,566

 

 

$

7,370

 

 

 

$

52,739

 

 

$

24,907

 

less: Preferred dividends

 

2

 

 

 

2

 

 

 

 

5

 

 

 

5

 

GAAP NI available to common stockholders (e)

 

28,564

 

 

 

7,368

 

 

 

 

52,734

 

 

 

24,902

 

less: Net realized gains (losses) on investments

 

882

 

 

 

(725

)

 

 

 

94

 

 

 

(667

)

less: Net change in unrealized gains (losses) of equity securities

 

1,731

 

 

 

(8,884

)

 

 

 

2,688

 

 

 

(12,280

)

add: Income tax effect on above adjustments

 

643

 

 

 

(2,329

)

 

 

 

684

 

 

 

(3,138

)

Adjusted NI available to common stockholders (f)

$

26,594

 

 

$

14,648

 

 

 

$

50,636

 

 

$

34,711

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted common shares outstanding (g)

 

30,659

 

 

 

30,883

 

 

 

 

30,633

 

 

 

31,060

 

Diluted earnings per common share (e÷g)

$

0.93

 

 

$

0.24

 

 

 

$

1.72

 

 

$

0.80

 

Diluted adjusted earnings per common share (f÷g)

$

0.87

 

 

$

0.47

 

 

 

$

1.65

 

 

$

1.12

 

GAAP stockholders’ equity to adjusted common stockholders’ equity

 

As of

 

June 30,

 

June 30,

 

 

December 31,

 

 

2023

 

 

 

2022

 

 

 

 

2022

 

GAAP stockholders’ equity

$

334,672

 

 

$

366,551

 

 

 

$

287,896

 

less: Preferred equity

 

100

 

 

 

100

 

 

 

 

100

 

Common stockholders’ equity (h)

 

334,572

 

 

 

366,451

 

 

 

 

287,796

 

less: Accumulated other comprehensive (loss), net of taxes

 

(95,857

)

 

 

(88,134

)

 

 

 

(103,782

)

Adjusted common stockholders’ equity (i)

$

430,429

 

 

$

454,585

 

 

 

$

391,578

 

 

 

 

 

 

 

 

Shares outstanding (j)

 

30,080

 

 

 

30,716

 

 

 

 

30,389

 

Book value per common share (h÷j)

$

11.12

 

 

$

11.93

 

 

 

$

9.47

 

Adjusted book value per common share (i÷j)

$

14.31

 

 

$

14.80

 

 

 

$

12.89

 

GAAP return on common equity (ROCE) to adjusted ROCE

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Year Ended

 

June 30,

 

 

June 30,

 

 

December 31,

 

 

2023

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

 

 

 

2022

 

Actual or Annualized NI available to common stockholders (k)

$

114,256

 

 

$

29,472

 

 

 

$

105,468

 

 

$

49,804

 

 

 

$

(22,267

)

Average common stockholders’ equity (l)

 

328,139

 

 

 

381,346

 

 

 

 

311,184

 

 

 

398,027

 

 

 

 

358,699

 

ROCE (k÷l)

 

34.8

%

 

 

7.7

%

 

 

 

33.9

%

 

 

12.5

%

 

 

 

(6.2

)%

Actual or Annualized adjusted NI available to common stockholders (m)

$

106,376

 

 

$

58,592

 

 

 

$

101,272

 

 

$

69,422

 

 

 

$

(12,618

)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted average common stockholders’ equity4 (n)

 

420,078

 

 

 

458,292

 

 

 

 

409,955

 

 

 

454,782

 

 

 

 

423,199

 

Adjusted ROCE (m÷n)

 

25.3

%

 

 

12.8

%

 

 

 

24.7

%

 

 

15.3

%

 

 

 

(3.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

4 Adjusted average common stockholders’ equity excludes current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727988425/en/

Investors: Arash Soleimani, CFA, CPA, CPCU, ARe Chief Strategy Officer 954-804-8874 asoleimani@universalproperty.com