United Insurance Holdings Corp., a P&C insurance holding company based in St. Petersburg, has reported its financial results for the second quarter and for the six months ended June 30, 2010.
For the second quarter, United said it returned to profitability with net income of $195,000, or $0.02 per diluted share, compared to net income of $2.8 million, or $0.27 per diluted share, during the same period last year. For the six months ended June 30, 2010, the company reported a net loss of $3.5 million, or $0.33 per diluted share, compared to net income of $6.0 million, or $0.57 per diluted share, for the same period last year.
During the quarter, United continued to reduce its outstanding debt by retiring its $18.3 million, 11 percent Merger Notes that were due to mature on Sept. 29, 2011. The company took a $726,000 charge on the early debt retirement; however, the debt retirement is expected to improve net income by approximately $400,000 and $1 million in 2010 and 2011, respectively. In addition to the early debt retirement, the company paid its $4.3 million note payable to Columbus Bank & Trust in full when it matured on Feb. 20, 2010. The company's long-term debt was $18.8 million at June 30, 2010, a 55% reduction from $41.4 million at Dec. 31, 2009.
On June 1, 2010, United entered into new reinsurance agreements with a total cost of $84.6 million for the 2010 storm season compared to the $83.6 million of reinsurance costs for the 2009 storm season. The total cost of the company's reinsurance program remained flat because it purchased additional protection to limit its retention to $15 million for the first catastrophic event and to reduce its retention to $5 million for any second or third catastrophic events. These reinsurance costs will be reflected ratably in the company's earnings through May 2011.
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