LAUDERDALE LAKES, Fla., Aug. 6, 2008 (PRIME NEWSWIRE) -- 21st Century Holding Company (the "Company") (Nasdaq:TCHC) today reported results for the quarter ended June 30, 2008 (see attached tables).
For the three months ended June 30, 2008, the Company reported a net loss of $2,500,031, or $0.31 per share on 7,974,053 average undiluted shares outstanding, as compared to net income of $10,478,429, or $1.32 per share on 7,930,964 average undiluted shares outstanding in the same three month period last year. On a diluted share basis, the Company reported a net loss of $0.31 per share, based on 7,974,053 average diluted shares outstanding for the same three month period, as compared to $1.31 per share, based on 8,014,947 average diluted shares outstanding for the three months ended June 30, 2007. Included in the loss for the three months ended June 30, 2008 is the recognition of an "other than temporary loss" in our investment portfolio in accordance with Financial Accounting Standard 115. The recognition of this loss resulted in a $4.7 million write down in securities held by the Company. Without this write down earnings would have been approximately $0.06 cents per share on a fully diluted basis.
For the six months ended June 30, 2008, the Company reported net income of $1,808,558, or $0.23 per share on 7,944,305 undiluted shares versus net income of $11,321,234, or $1.42 per share on 7,944,933 undiluted shares in the same six month period last year. On a diluted share basis, the Company reported earnings of $0.23 per share, based on 7,975,057 average diluted shares outstanding for the same six month period, as compared to $1.40 per share, based on 8,099,187 average diluted shares outstanding for the six months ended June 30, 2007.
Net premiums earned decreased $9.4 million or 37.7% to $15.5 million for the three months ended June 30, 2008, as compared to $24.8 million for the same three-month period last year. Net premiums earned decreased $13.1 million or 27.8% to $34.1 million for the six months ended June 30, 2008, as compared to $47.2 million for the same six month period last year. The erosion of premium is due primarily to the soft market conditions prevailing in the state of Florida, led by Citizens Property Insurance Corporation ("Citizens"), the state run insurance company.
Total revenues decreased $19.1 million or 55.3% to $15.4 million for the three months ended June 30, 2008, as compared to $34.5 million for the same three-month period last year. Total revenues decreased $24.6 million or 41.0% to $35.5 million for the six months ended June 30, 2008, as compared to $60.1 million for the same six month period last year.
The Company is pleased to announce the following growth strategies scheduled to be implemented by year end 2008.
Federated National Insurance Company ("Federated National"), a wholly owned subsidiary of the Company, is currently in the process of seeking approval from the Florida Office of Insurance Regulation ("OIR") to assume up to approximately $45 million in premiums from Citizens. Pending OIR approval, Federated National is expected to assume these policies during the fourth quarter of this year.
Federated National is in the process of expanding its certificate of authority and is applying for approval to write the Commercial Multi-Peril line of business. This authority will allow for the sale of commercial residential policies and, if granted, should start with an initial Citizens assumption of up to approximately $15 million in premiums. Federated National also has a separate application in process to assume up to approximately $30 million in premiums from personal residential polices. Pending the required regulatory approvals, this should result in an immediate increase in premiums starting in the fourth quarter of 2008 and, due to reinsurance optimization, improve Federated National's ability to deliver a profitable and more competitive rate in the marketplace.
American Vehicle Insurance Company ("American Vehicle"), another wholly owned subsidiary of the Company, expects to sign an agreement with a carrier that has an "A" rating from A.M. Best. This agreement would increase American Vehicle's marketability of its insurance policies and assist in expanding its current products into new states.
Michael H. Braun, the Company's Chief Executive Officer, said, "While second quarter earnings were disappointing, I feel that we are well positioned to grow our company by executing these strategies, while continuing our practice of disciplined underwriting."
The Company will hold an investor conference call at 4:30 p.m. (ET) today, August 6, 2008. Mr. Braun and Mr. Peter J. Prygelski, the Company's CFO, will discuss the financial results and review the outlook for the Company. Messrs. Braun and Prygelski invite interested parties to participate in the conference call. Listeners can access the conference call by dialing toll free 888-460-6235, conference ID #57711029. Please call at least five minutes in advance to ensure that you are connected prior to the presentation. A replay of the conference call will be available for 7 days at 800-642-1687.
About the Company
The Company, through its subsidiaries, underwrites commercial general liability insurance, homeowners' property and casualty insurance, flood insurance and personal automobile insurance in the State of Florida. The Company underwrites general liability coverage as an admitted carrier in the states of Alabama, Louisiana and Texas for more than 300 classes of business, including special events.
