BALA CYNWYD, Pa., July 23 /PRNewswire-FirstCall/ -- Philadelphia
Consolidated Holding Corp. (NASDAQ:PHLY) today reported net income
for the quarter ended June 30, 2008 of $52.9 million ($0.73 diluted
earnings per share and $0.76 basic earnings per share). This
compares to $94.4 million of net income ($1.27 diluted earnings per
share and $1.34 basic earnings per share) for the quarter ended
June 30, 2007. After-tax net realized investment gains (losses)
were $(7.5) million ($(0.10) diluted loss per share) for the
quarter ended June 30, 2008 compared to $18.2 million ($0.25
diluted earnings per share) for the quarter ended June 30, 2007.
Gross written premiums for the quarter ended June 30, 2008
increased 11.7% to $445.3 million from $398.5 million for the
quarter ended June 30, 2007, and the combined ratio for the quarter
ended June 30, 2008 was 86.2% compared to 74.2% for the quarter
ended June 30, 2007. The Company's book value per share as of June
30, 2008 increased to $22.30 from $21.47 as of December 31, 2007.
Financial results for the quarter ended June 30, 2008 included: --
An $18.5 million pre-tax benefit ($12.0 million after-tax, or $0.17
diluted earnings per share) from a decrease in net unpaid loss and
loss adjustment expenses due to favorable trends in prior years'
claim emergence. This benefit compares to a $20.8 million pre-tax
benefit ($13.5 million after-tax, or $0.18 diluted earnings per
share) recognized in the quarter ended June 30, 2007 from a
decrease in net unpaid loss and loss adjustment expenses due to
favorable trends in prior years' claims emergence. -- $20.6 million
of pre-tax losses ($13.4 million after-tax, or $0.18 diluted loss
per share) resulting from hail, tornado, and wind losses which
occurred in Minnesota, Nebraska, Kansas, and Oklahoma during the
period of May 22, 2008 through May 26, 2008, and which occurred in
Illinois, Indiana, Kansas, Minnesota, Nebraska, and Oklahoma during
the period of May 29, 2008 through June 1, 2008. -- An $11.6
million pre-tax non-cash realized investment loss ($7.5 million
after-tax, or $0.10 diluted loss per share) resulting from other
than temporary impairment evaluations related to the Company's
equity holdings. Net income for the six months ended June 30, 2008
was $115.6 million ($1.59 diluted earnings per share and $1.65
basic earnings per share). This compares to $160.4 million of net
income ($2.16 diluted earnings per share and $2.28 basic earnings
per share) for the six months ended June 30, 2007. After-tax net
realized investment gains (losses) were $(14.9) million ($0.20
diluted loss per share) for the six months ended June 30, 2008
compared to $19.4 million ($0.26 diluted earnings per share) for
the six months ended June 30, 2007. Gross written premiums for the
six months ended June 30, 2008 increased 12.1% to $888.4 million
from $792.6 million for the six months ended June 30, 2007, and the
combined ratio for the six months ended June 30, 2008 was 83.7%
compared to 75.9% for the six months ended June 30, 2007. Financial
results for the six months ended June 30, 2008 included: -- A $24.4
million pre-tax benefit ($15.9 million after-tax, or $0.22 diluted
earnings per share) from a decrease in net unpaid loss and loss
adjustment expenses due to favorable trends in prior years' claim
emergence. This benefit compares to a $33.7 million pre-tax benefit
($21.9 million after-tax, or $0.30 diluted earnings per share)
recognized in the six months ended June 30, 2007 from a decrease in
net unpaid loss and loss adjustment expenses due to favorable
trends in prior years' claims emergence. -- The hail, tornado, and
wind losses as referred to above. -- A $23.3 million pre-tax
non-cash realized investment loss ($15.1 million after-tax, or
$0.21 diluted loss per share) resulting from other than temporary
impairment evaluations related to the Company's equity holdings.
James J. Maguire, Jr., CEO, said: "I am very pleased with our
performance in this quarter and I sincerely thank our more than
1,400 employees for continuing to execute on our business plan
through a challenging market. Gross written premiums grew by nearly
12%, with our core Commercial Lines Segment growing by 13.3%. Our
combined ratio for the quarter was an impressive 86.2%. We
continued to maintain our profitable renewal business with
retention ratios of 95% on quoted business for our Commercial and
Specialty Segments." As a result of the Company's announcement
today that it has entered into a merger agreement with Tokio Marine
Holdings, Inc., the earnings call previously scheduled for Friday
July 25th has been cancelled. Forward-Looking Information This
release may contain forward-looking statements that are based on
management's estimates, assumptions and projections. In connection
with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company provides the following
cautionary remarks regarding important factors which, among others,
could cause the Company's actual results and experience to differ
materially from the anticipated results or other expectations
expressed in the Company's forward-looking statements. The risks
and uncertainties that may affect the operations, performance,
development, results of the Company's business, and the other
matters referred to above include, but are not limited to: (i)
changes in the business environment in which the Company operates,
including inflation and interest rates; (ii) changes in taxes,
governmental laws, and regulations; (iii) competitive product and
pricing activity; (iv) difficulties of managing growth profitably;
(v) claims development and the adequacy of the Company's liability
for unpaid loss and loss adjustment expenses; (vi) severity of
natural disasters and other catastrophe losses; (vii) adequacy of
reinsurance coverage which may be obtained by the Company; (viii)
ability and willingness of the Company's reinsurers to pay; (ix)
future terrorist attacks; and (x) the outcome of the Securities and
Exchange Commission's industry-wide investigation relating to the
use of non-traditional insurance products, including finite risk
reinsurance arrangements. The Company does not intend to publicly
update any forward looking statement, except as may be required by
law. In operation since 1962, PHLY designs, markets, and
underwrites commercial property/casualty and professional liability
insurance products incorporating value added coverages and services
for select industries. The Company, whose commercial lines
insurance subsidiaries are rated A+ (Superior) by A.M. Best Company
and A1 for insurance financial strength by Moody's Investors
Service, is nationally recognized as a member of Ward's Top 50,
Forbes' Platinum 400 list of America's Best Big Companies and
Forbes' 100 Best Mid-Cap Stocks in America. The organization has 47
offices strategically located across the United States to provide
superior local service. PHILADELPHIA CONSOLIDATED HOLDING CORP. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT
SHARE DATA) As of June 30, 2008 December 31, (Unaudited) 2007
ASSETS INVESTMENTS: FIXED MATURITIES AVAILABLE FOR SALE AT MARKET
(AMORTIZED COST $2,864,732 AND $2,639,471) $2,844,209 $2,659,197
EQUITY SECURITIES AT MARKET (COST $339,169 AND $322,877) 348,374
356,026 TOTAL INVESTMENTS 3,192,583 3,015,223 CASH AND CASH
EQUIVALENTS 89,657 106,342 ACCRUED INVESTMENT INCOME 28,300 24,964
PREMIUMS RECEIVABLE 399,896 378,217 PREPAID REINSURANCE PREMIUMS
AND REINSURANCE RECEIVABLES 301,012 280,110 DEFERRED INCOME TAXES
81,717 42,855 DEFERRED ACQUISITION COSTS 187,389 184,446 PROPERTY
AND EQUIPMENT, NET 21,992 26,330 OTHER ASSETS 100,964 41,451 TOTAL
ASSETS $4,403,510 $4,099,938 LIABILITIES AND SHAREHOLDERS' EQUITY
POLICY LIABILITIES AND ACCRUALS: UNPAID LOSS AND LOSS ADJUSTMENT
EXPENSES $1,613,322 $1,431,933 UNEARNED PREMIUMS 866,596 847,485
TOTAL POLICY LIABILITIES AND ACCRUALS 2,479,918 2,279,418 PREMIUMS
PAYABLE 77,770 97,674 OTHER LIABILITIES 251,135 175,373 TOTAL
LIABILITIES 2,808,823 2,552,465 COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY: PREFERRED STOCK, $.01 PAR VALUE, 10,000,000
SHARES AUTHORIZED, NONE ISSUED AND OUTSTANDING - - COMMON STOCK, NO
PAR VALUE, 125,000,000 SHARES AUTHORIZED, 71,503,346 AND 72,087,287
SHARES ISSUED AND OUTSTANDING 399,704 423,379 NOTES RECEIVABLE FROM
SHAREHOLDERS (22,565) (19,595) ACCUMULATED OTHER COMPREHENSIVE
INCOME (7,356) 34,369 RETAINED EARNINGS 1,224,904 1,109,320 TOTAL
SHAREHOLDERS' EQUITY 1,594,687 1,547,473 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $4,403,510 $4,099,938 PHILADELPHIA
CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF OPERATIONS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(Unaudited) For the Three Months For the Six Months Ended June 30,
Ended June 30, 2008 2007 2008 2007 REVENUE: NET EARNED PREMIUMS
$393,037 $337,315 $772,425 $656,033 NET INVESTMENT INCOME 32,299
28,522 64,304 55,495 NET REALIZED INVESTMENT GAIN (LOSS) (11,513)
28,064 (22,907) 29,821 OTHER INCOME 3,654 850 5,007 1,680 TOTAL
REVENUE 417,477 394,751 818,829 743,029 LOSSES AND EXPENSES: LOSS
AND LOSS ADJUSTMENT 266,106 172,234 489,492 332,753 EXPENSES NET
REINSURANCE RECOVERIES (42,836) (23,645) (72,803) (33,659) NET LOSS
AND LOSS ADJUSTMENT EXPENSES 223,270 148,589 416,689 299,094
ACQUISITION COSTS AND OTHER UNDERWRITING EXPENSES 115,479 101,746
229,635 198,650 OTHER OPERATING EXPENSES 4,376 2,981 7,965 6,136
TOTAL LOSSES AND EXPENSES 343,125 253,316 654,289 503,880 INCOME
BEFORE INCOME TAXES 74,352 141,435 164,540 239,149 INCOME TAX
EXPENSE (BENEFIT): CURRENT 30,072 56,511 65,350 93,330 DEFERRED
(8,628) (9,477) (16,394) (14,562) TOTAL INCOME TAX EXPENSE 21,444
47,034 48,956 78,768 NET INCOME $52,908 $94,401 $115,584 $160,381
PER AVERAGE SHARE DATA: NET INCOME - BASIC $0.76 $1.34 $1.65 $2.28
NET INCOME - DILUTED $0.73 $1.27 $1.59 $2.16 WEIGHTED-AVERAGE
COMMON SHARES OUTSTANDING 69,809,174 70,361,554 70,128,823
70,255,758 WEIGHTED-AVERAGE SHARE EQUIVALENTS OUTSTANDING 2,608,996
3,835,617 2,597,895 3,966,198 WEIGHTED-AVERAGE SHARES AND SHARE
EQUIVALENTS OUTSTANDING 72,418,170 74,197,171 72,726,718 74,221,956
DATASOURCE: Philadelphia Consolidated Holding Corp. CONTACT:
Investor Relations: Joseph Barnholt, Assistant Vice President of
Philadelphia Consolidated Holding Corp., +1-610-617-7626, Web site:
http://www.phly.com/
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