Homeowners Choice Reports Second Quarter Earnings

• Strong balance sheet: $112 million in investments and cash and cash equivalents with no debt
• Book value of $7.48 per share increased 9.5 percent from second quarter 2009

CLEARWATER, Fla., Aug. 10, 2010 (GLOBE NEWSWIRE) -- Homeowners Choice, Inc. (Nasdaq:HCII), a Florida-based provider of homeowners' insurance, today announced its results of operations for the three and six months ended June 30, 2010.

Net income for the second quarter of 2010 was $1.3 million, or $0.19 per diluted share, compared with net income of $3.0 million, or $0.42 per diluted share, for the second quarter of 2009. Book value per share increased from $7.03 at Dec. 31, 2009 to $7.48 at June 30, 2010, an increase of 6.4 percent.

Gross premiums earned were $30.0 million for the quarter ended June 30, 2010 compared with $28.6 million for the quarter ended June 30, 2009. Net premiums earned (gross premiums earned reduced by premiums ceded to reinsurance companies that cover certain of the risks from hurricanes and other catastrophes) for the second quarter of 2010 decreased 20.2 percent to $15.6 million from $19.6 million in the prior year quarter.

Homeowners Choice also reported investment income of $569,000 for the second quarter compared with $361,000 in the prior year second quarter. In addition, the company recognized a gain on investments sold during the quarter ended June 30, 2010 of $505,000. The company had no investment sales during 2009.

Losses and loss adjustment expenses for the second quarter were $10.9 million compared with $12.6 million in the prior year quarter. Policy acquisition and other underwriting expenses for the second quarter of 2010 were $2.7 million compared with $1.3 million during the second quarter of 2009.

For the six months ended June 30, 2010, net income was $2.0 million, or $0.29 per diluted share compared with $9.3 million, or $1.28 per diluted share, in the prior year  same period. Net premiums earned for the first six months of 2010 decreased 22.1 percent to $31.9 million from $40.9 million in the prior year same period.  Investment income for the six month period ended June 30, 2010 was $1.1 million compared with $0.7 million in the prior year same period.  Losses and loss adjustment expenses for the six months ended June 30, 2010 were $20.7 million compared with $22.6 million for the six months ended June 30, 2009. Policy acquisition and other underwriting expenses for the six months ended June 30, 2010 and 2009 were $7.0 million and $2.2 million, respectively. 

During the six months ended June 30, 2010 and 2009, the company repurchased a total of 374,401 and 117,257 shares, respectively, of its common stock as part of the company's repurchase plans.   For the quarter ended June 30, 2010, the company's weighted average diluted shares totaled 6.7 million, an 8.1 percent decrease from the 7.2 million weighted average shares reported for the quarter ended June 30, 2009.

"We are delighted to report continued profitability this quarter and a significant bottom-line improvement in comparison to the first quarter of 2010," said Homeowners Choice Chief Executive Officer, F.X. McCahill. "We continue to expect profitability and bottom-line improvement in 2010 primarily as a result of an average rate increase of 14 percent, which began rolling through our book of business in April 2010."

Conference Call

The company will host an earnings conference call Tuesday, Aug. 10, 2010, at 4:30 p.m. E.D.T. to discuss its second quarter 2010 results.  Interested parties are invited to listen to the call live over the Internet at http://www.ir-site.com/hcpci/events.asp">http://www.ir-site.com/hcpci/events.asp. The call is also available by dialing (877) 407-9210 (toll-free). International participants should instead call (201) 689-8049. Participants should dial into the conference call approximately 10 minutes before the scheduled start time. Replays of the webcast will be available until Nov. 10, 2010.

About Homeowners Choice, Inc.

Homeowners Choice, Inc. (http://www.hcpci.com) is a Florida-based insurance holding company headquartered in Clearwater.  Through its subsidiary corporations, Homeowners Choice provides property and casualty homeowners' insurance, condominium owners' insurance and tenants' insurance solely to Florida property owners.  Founded in 2006, Homeowners Choice today serves approximately 63,000 policyholders throughout Florida representing approximately $127 million in annualized premiums. The company's common shares trade on the NASDAQ Global Market under the ticker symbol HCII and are included in the Russell Microcap Index. Warrants trade on the same market under the ticker symbol HCIIW. More information about Homeowners Choice, Inc. is available at www.hcpci.com.

The Homeowners Choice, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6712

Forward-Looking Statements

This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "intend," "plan" and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. For example, there can be no assurance that the company will obtain improved profitability or bottom-line improvement during 2010. Some of these risks and uncertainties are identified in the company's filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company's business, financial condition and results of operations. Homeowners Choice, Inc. disclaims all obligations to update any forward-looking statements.