CLEARWATER, Fla., Nov. 4, 2009 (GLOBE NEWSWIRE) -- Homeowners Choice, Inc. (Nasdaq:HCII), a Florida-based insurance holding company, announced today that its proposal to merge with 21st Century Holding Company (Nasdaq:TCHC) expired on Monday, Nov. 2, 2009, and it has ended for now its efforts to effect the merger. The proposal, publicly disclosed on Oct. 13, 2009, was an offer by Homeowners Choice of $1.00 in cash and one-half share of Homeowners Choice common stock for each share of 21st Century common stock. 21st Century announced its rejection of the proposed offer on Oct. 29, 2009.

In conjunction with the announcement, Paresh Patel, Chairman of the Board of Homeowners Choice, issued a statement addressed to the company's shareholders. In the statement, presented in a question and answer format, he explains the rationale behind the proposed merger, discusses the performance of Homeowners Choice and anticipates future profits.

In answer to the question "Will Homeowners Choice consider a hostile acquisition of 21st Century?" Patel's responds, "We may do so at a later date, but the current answer is no." On performance and future profits, Patel states, "Homeowners Choice has been profitable for eight consecutive quarters. And, I am pleased to state that we expect to be profitable in the third and fourth quarters of 2009."

Following is the full text of the statement.

 To my fellow shareholders of Homeowners Choice, Inc.:
 As you probably are aware, Homeowners Choice proposed a merger
 with 21st Century Holding Company several weeks ago. A number of
 you had questions about the transaction and the future of our
 company.  At the time, we asked for your patience as we thought it
 inappropriate to discuss an ongoing situation.  We noted your
 questions and believe this is now the appropriate time for our
 response.
 What is the rationale behind the proposal?
   When Homeowners Choice was founded, management outlined a
   strategy for steady, prudent growth.  We continue to implement
   that strategy, which has produced the following results over the
   past two years:
   -- Increased book value from $2.50 to $6.83
   -- Eight consecutive quarters of profitability
   -- More than 53,000 policyholders
   -- Proven capability of our management team to grow the business
   A merger of Homeowners Choice and 21st Century represented an
   opportunity to enhance shareholder value in continuance of our
   growth strategy.  21st Century has an array of business lines
   and geographic markets which would provide a combined entity
   with diversification and avenues for growth.  21st Century,
   however, has struggled in managing these valuable assets.
   According to 21st Century Chief Executive Officer Michael Braun,
   21st Century will not be profitable during the third and fourth
   quarters of 2009.  That means 21st Century will report losses in
   four out of six quarters.
   Mr. Braun blames these losses on the economic environment,
   reinsurance costs and wind mitigation credits.  We of course
   sympathize with 21st Century since we face that same economic
   environment and the same challenges of reinsurance costs and
   wind mitigation credits.  However, Homeowners Choice has been
   profitable for eight consecutive quarters. And I am pleased to
   state that we expect to be profitable in the third and fourth
   quarters of 2009, reaching 10 consecutive quarters of
   profitability.
   Frankly, our track record indicates we could add substantial
   Value to 21st Century's assets.
   Beyond that, the combined entity would be larger, stronger and
   better able to pursue growth.  Also, a larger market
   capitalization should be accompanied by greater share trading
   volume and liquidity, which would make the shares more
   attractive to institutional investors and ultimately lead to
   a greater overall market valuation.
 Did you undervalue 21st Century?
   No.  We believe we offered a fair price to 21st Century
   shareholders.  Publicly-held companies are valued each day
   through their share prices. Those valuations are based on, among
   other things, their assets, the performance of the management
   team and future prospects.
   21st Century has been trading below book value for more than a
   year.