COLUMBUS, Ohio, May 2, 2007 (PRIME NEWSWIRE) -- ProCentury Corporation (Nasdaq:PROS), a specialty property and casualty insurance holding company, reported net income for the quarter ended March 31, 2007, of $5.4 million, or $0.40 per diluted share compared to net income of $4.6 million, or $0.35 per diluted share for the first quarter of 2006.
The Company's results for the first quarter of 2007 include:
* An increase of 16.9% in net income for the first quarter of 2007 compared to the same period of 2006. * An increase in earned premiums of 11.0% for the first quarter of 2007 compared to the first quarter of 2006. * An increase of 0.7% in gross premiums written for the first quarter of 2007 compared to the first quarter of 2006. * A combined ratio of 94.6% compared to a combined ratio of 95.0% for the first quarter of 2006. * Book value per share of $11.02.
Edward Feighan, ProCentury's Chief Executive Officer, said, "We are pleased with our net income growth and we continue to have opportunities for new products and lines of business. Our ocean marine offering is gaining traction and we are excited about our prospects in the environmental contractor and consultant market. The modest premium growth in the first quarter is due primarily to actions we took late last year to tighten up our underwriting criteria on an underperforming program and also to the heightened level of competition we are experiencing in some of our markets."
Financial Results for the First Quarter 2007
For the quarter ended March 31, 2007, ProCentury's net income increased by 16.9% to $5.4 million or $0.40 per diluted share, compared to net income of $4.6 million or $0.35 per diluted share for the same period in 2006.
The combined ratio for the first quarter of 2007 was 94.6% compared to 95.0% for the first quarter of 2006. The loss ratio for the first quarter of 2007 was 62.3% and the expense ratio was 32.3%. This compares to a loss ratio of 62.1% and expense ratio of 32.9% for the first quarter of 2006.
Gross premiums written for the first quarter of 2007 increased by 0.7% to $58.5 million compared to $58.0 million for the same period in 2006. Premiums earned were $54.4 million for the period ended March 31, 2007, an increase of 11.0% compared to the same period last year. Investment income for the first quarter of 2007 increased by 22.8% to $5.4 million compared to $4.4 million in the first quarter of 2006.
Other First Quarter 2007 ProCentury News
* On March 21, 2007, A.M. Best reaffirmed the A- (Excellent) rating of the Company's primary subsidiary, Century Surety Company with a stable outlook. * Century Surety Company announced that it will offer a new product for environmental contractors and consultants. * On April 18, 2007, ProCentury paid a dividend of $0.04 per share to shareholders of record as of March 27, 2007.
First Quarter 2007 Conference Call Information
ProCentury's 2007 first quarter results will be discussed by management in more detail on Thursday, May 3, 2007 at 10:00 a.m. EDT.
To listen to the call, please dial 1-877-407-0782, approximately five minutes prior to the start of the call. Additionally, the conference call will be broadcast live over the Internet and can be accessed by all interested parties on the Company's website at http://www.procentury.com. For those who cannot listen to the live conference call, a replay will be available from approximately 1:00 p.m. EDT on May 3, 2007 until midnight on May 10, 2007. The access number for the replay is 1-877-660-1687 and the Conference ID code is 293176. The replay will also be accessible through the Company's website at http://www.procentury.com.
About ProCentury Corporation
ProCentury Corporation (Nasdaq:PROS) is a specialty property and casualty insurance holding company. Its subsidiary, Century Surety Company, underwrites property and casualty insurance for small- and mid-sized businesses. Century Surety Company primarily writes excess and surplus lines insurance and markets its products through a select network of general agents.
The ProCentury Corporation logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3677
NOTE ON FORWARD-LOOKING STATEMENTS
Statements in this press release that are not historical statements are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are derived from information that we currently have and assumptions that we make and may be identified by words such as "believes," "anticipates," "expects," "plans," "should," "estimates" and similar expressions. Our forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those stated or implied in our forward-looking statements, including but not limited to: 1) risks inherent in establishing loss and loss adjustment expense reserves; 2) uncertainties related to the ratings of our insurance subsidiary; 3) uncertainties related to governmental and regulatory policies; 4) uncertainties relating to the cyclical nature of our business; 5) changes in our relationships with, and the capacity of, our general agents; and 6) the risk that our reinsurers may not be able to fulfill their obligations to us; and 7) the continued functionality of our online services. You are cautioned not to place undue reliance on forward-looking statements, which are made only as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For additional disclosure regarding potential risks, please refer to documents we file with the Securities and Exchange Commission.
PROCENTURY CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(dollars in thousands, except per share data)
Quarter Ended Quarter Ended
March 31, 2007 March 31, 2006
-------------- --------------
Gross premiums written $ 58,455 58,029
Net premiums written $ 50,060 50,432
Premiums earned $ 54,388 49,002
Net investment income 5,433 4,426
Net realized investment
gains (losses) (201) 21
Other income 123 134
------------ ------------
Total revenues 59,743 53,583
------------ ------------
Losses and loss expenses 33,877 30,439
Amortization of deferred
policy acquisition costs 13,699 12,066
Other operating expenses 3,851 4,057
Interest expense 686 543
------------ ------------
Total expenses 52,113 47,105
------------ ------------
Income before income taxes 7,630 6,478
Income tax expense 2,251 1,878
------------ ------------
Net income $ 5,379 4,600
============ ============
Basic income per share $ 0.41 0.35
Diluted income per share $ 0.40 0.35
============ ============
Weighted average of shares
outstanding - basic 13,227,427 13,100,705
============ ============
Weighted average of shares
outstanding - diluted 13,421,607 13,200,571
============ ============
Loss and loss expense ratio 62.3% 62.1%
Expense ratio 32.3 32.9
------------ ------------
Combined ratio 94.6% 95.0%
============ ============
PROCENTURY CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(dollars in thousands, except per share data)
Assets March 31, December 31,
2007 2006
------------ ------------
Investments $ 439,419 428,102
Cash 9,764 7,960
Premiums in course of
collection, net 36,017 37,428
Deferred policy acquisition
costs 25,996 26,915
Prepaid reinsurance premiums 14,457 14,051
Reinsurance recoverable on
paid and unpaid losses, net 42,233 43,628
Other assets 23,492 20,964
----------- -----------
Total assets $ 591,378 579,048
=========== ===========
Liabilities and Shareholders' Equity
Loss and loss expense reserves $ 260,181 250,672
Unearned premiums 123,698 127,620
Long term debt 25,000 25,000
Other liabilities 35,251 33,368
----------- -----------
Total liabilities 444,130 436,660
----------- -----------
Shareholders' equity:
Capital stock, without
par value -- --
Additional paid-in capital 102,370 100,954
Retained earnings 48,675 43,830
Accumulated other
comprehensive loss, net
of tax expense (3,797) (2,396)
----------- -----------
Total shareholders'
equity 147,248 142,388
----------- -----------
Total liabilities and
shareholders' equity $ 591,378 579,048
=========== ===========
Book value per share $ 11.02 10.75
=========== ===========
Number of common shares
outstanding 13,358,867 13,248,323
=========== ===========