Through our wholly-owned subsidiaries, we write and service property and casualty insurance policies in Florida, South Carolina and Massachusetts. We incorporated three of our subsidiaries under Florida law, including United Property and Casualty Insurance Company (UPC), which writes insurance policies; United Insurance Management, L.C. (UIM), the managing general agent that manages substantially all aspects of UPC's business; and Skyway Claims Services, LLC (SCS), a claims adjusting company that provides services to UPC. In April 2011, we formed a fourth subsidiary, UPC Re. Operating as a reinsurer under the laws of the Cayman Islands, UPC Re provides reinsurance protection to UPC.
Though we have authorization to write a commercial line of business in Florida that includes auto and multi-peril coverage, we do not currently write such policies.
On July 1, 2010, UPC began writing policies in South Carolina and assumed a book of business in that state. On November 1, 2011, UPC began writing policies in Massachusetts. Also during 2011, the insurance regulatory authority in Rhode Island authorized UPC to write and service property and casualty lines in that state, and we currently expect UPC to begin writing policies in Rhode Island during the first quarter of 2012. We have applied to insurance regulatory authorities in two additional states to allow UPC to write property and casualty lines. We began operating in new states in an effort to reduce our geographic concentration of exposure to catastrophic losses, as well as our geographic concentration of credit risk.
To reach a broad range of prospective policyholders, we use numerous independent agents to produce policies for us, and we also assume policies from Citizens Property Insurance Corporation and from other carriers. We refer to policies produced by our agents as direct policies or direct business. As of December 31, 2011, policies we originally assumed from Citizens represented only 13% of our homeowner in-force policies, while direct policies and policies we assumed from other carriers represent 87% of our homeowner in-force policies. At December 31, 2011, we had approximately 101,800 homeowner policyholders, compared to 80,500 at December 31, 2010.
year, and then we must recognize the increased premium pro rata over 12 months; therefore, rate increases may take as long as two years to fully impact net income. The rate increases we implemented during 2009 and 2010 have now been applied to all policies in force; the 2009 rate increases have already fully affected earned premium, but the 2010 rate increases will continue to impact earned premium into the first quarter of 2012. We continue to apply the rate increases we implemented during 2011 to renewals of policies in force, and the 2011 rate increases will continue to affect our earned premium through the fourth quarter of 2013.
We file for rate increases when necessary to ensure that we collect enough premium to pay valid insured claims, reinsurance costs and other expenses. Insurance regulatory authorities must approve or deny any proposed rate increase we file. We currently do not have any pending rate increases.
Effective June 1, 2011, we commuted our 2005 contract with the FHCF; any catastrophe losses we incur (in excess of amounts we reported to the FHCF as of June 1, 2011) on events that occurred during the 2005 contract year that would otherwise have been covered by the FHCF contract prior to commutation will not be reimbursed by the FHCF, though our contracts with our private reinsurers remain in effect with respect to such losses. We settled all outstanding claims with the FHCF related to Hurricane Wilma for $12,738, which we received during the third quarter of 2011. At the time we commuted the contract, our reinsurance recoverable included $13,630 of unpaid losses related to Hurricane Wilma. As a result of settling for less than what we had already recorded as ceded losses, our losses incurred increased by $892.
result from judgments that can be subjective and complex; therefore, our actual results may differ, perhaps substantially, from the estimates.
When we establish our reserves, we analyze various factors such as our historical loss experience and that of the insurance industry, claims frequency and severity, our business mix, our claims processing procedures, legislative enactments, judicial decisions and legal developments in imposition of damages, and general economic conditions, including inflation. A change in any of these factors from the assumptions implicit in our estimates will cause our ultimate loss experience to be better or worse than indicated by our reserves, and the difference could be material. Due to the interaction of the aforementioned factors, there is no precise method for evaluating the impact of any one specific factor in isolation, and an element of judgment is ultimately required. Due to the uncertain nature of any projection of the future, the ultimate amount we will pay for losses will be different from the reserves we record.
We determine our ultimate loss reserves by selecting a point estimate within a relevant range of indications that we calculate using generally accepted actuarial techniques. Our selection of the point estimate is influenced by the analysis of our paid losses and incurred losses since inception. For each accident year, we estimate the ultimate incurred losses for both known and unknown claims. In establishing this estimate, we calculate high, low, and expected values from the distribution of ultimate loss estimates compiled from the results of the actuarial models discussed below.
We calculate our estimate of ultimate losses by using the following actuarial models. We separately calculate the models using paid loss data and incurred loss data. In the versions of these models based on incurred loss data, the incurred losses are defined as paid losses plus case reserves. For this discussion of our loss reserving process, the word "segment" refers to a subgrouping of our claims data, such as by geographic area and/or by particular line of business; it does not refer to operating segments.
for each accident year as of the current period's balance sheet date and dividing by the total incurred or paid losses for each accident year as of the prior period's balance sheet date. We then calculate averages of the resulting loss development factors in each age period, such as the three-year average, five-year average, cumulative average, and cumulative average excluding the high and low. Finally, we evaluate the calculated loss development factors and their resulting averages and use judgment to select a particular loss development factor per age period, which we then use to project expected ultimate losses by accident year.
Quarterly, we perform an assessment of our available-for-sale investments to determine if any are other-than-temporarily impaired. See Note 2(b) in our Notes to Consolidated Financial Statements for further information regarding our impairment testing.
We classify all of our investments as available-for-sale. Our investments at December 31, 2011 and 2010 consisted mainly of U.S. government and agency securities and securities of high-quality corporate issuers. Our equity holdings consist mainly of securities issued by companies in the energy, consumer products, healthcare, technology and telecommunications industries. Most of the corporate bonds we hold reflect a similar diversification. At December 31, 2011, approximately 85% of our fixed maturities are U.S. Treasuries or corporate bonds rated “A” or better, and 15% are corporate bonds rated “BBB”.
During the fourth quarters of 2011 and 2010, we recorded impairment charges of $31 and $97, respectively, after determining that impairments related to one of our equity securities and three of our equity securities, respectively, were other-than-temporary.
The overall change in our net unrealized holding gains (losses) primarily resulted from the realization of gains on sales of our fixed maturities in December 2010. At December 31, 2011, securities in an unrealized loss position for a period of twelve months or longer reflected gross unrealized losses of $64; approximately $42 of the total related to five fixed maturities for which we have no plan to sell and for which we expect to fully recover our cost basis. The other four securities are equity securities with total unrealized losses of $22. We reviewed these securities and determined that we did not need to record impairment charges at December 31, 2011.
Property Catastrophe Excess of Loss Reinsurance Agreement (Private Agreement) between United Property & Casualty Insurance Company and Various Reinsurance Companies,
Florida Hurricane Catastrophe Fund Reimbursement Contract (FHCF Agreement) between United Property & Casualty Insurance Company and the State Board of Administration of Florida,
Reinstatement Premium Protection Reinsurance Agreement (RPP Agreement) between United Property & Casualty Insurance Company and Various Reinsurance Companies, and
Multi-Line Per Risk Excess of Loss Reinsurance Agreement (Per Risk Agreement) between United Property & Casualty Insurance Company and Various Reinsurance Companies.
Reinsurance recoverable decreased from the amount at December 31, 2010 primarily as a result of our commutation of the 2005 FHCF contract. We collected $3,347 from the FHCF in 2011 prior to the commutation, and the FHCF paid us $12,738 directly related to the commutation during the third quarter of 2011. The remaining decrease resulted from collections of 2010's reinsurance recoverable amounts and the continually decreasing number of open claims subject to reimbursement by our reinsurers.
We wrote approximately 22,250 more policies during 2011 than we did during 2010. Though we renewed approximately 2,700 policies during the year that we originally assumed from Citizens, the remainder of the increase in policies written resulted from our efforts to increase writings in less risk-prone geographic areas of Florida, as well as from writing for a full year in South Carolina during 2011 versus only six months during 2010. An increase in policyholder retention to 90% from 85% also contributed to the increase in policies written.
Losses decreased $3,672 because, during 2011, we paid less than we expected to pay for non-catastrophe claims incurred in prior years and for catastrophe claims incurred in prior years. The favorable development we experienced totaled approximately $3,564, consisting of $1,414 favorable development on non-catastrophe claims incurred in prior years and $2,150 on catastrophe claims incurred in prior years. As a result of the favorable development, we reduced our estimate of ultimate non-catastrophe losses and catastrophe-related losses, most of which we no longer cede to reinsurers. In addition, our loss ratio improved from the prior year's loss ratio; therefore, losses and LAE did not increase in conjunction with the increase in policies written as they otherwise would have if the loss ratio had remained the same as in the same period of the prior year.
Policy acquisition costs increased $4,155 because, during 2011, we amortized more agents' commissions and policy administration costs as a result of the increase in premiums written that began during the second half of 2010 and continued throughout 2011.
Operating expenses increased $1,122 primarily as a result of our continuing efforts to expand and geographically diversify our book of business. Our efforts caused our marketing and advertising expenses to increase by $258. The resulting increase in premiums written caused our home inspection expenses to increase $388 and our underwriting report expenses to increase $486.
The decrease of $1,219 in interest expense related to the fact that we had the 11% merger-related notes payable during 2010 until we retired those notes in May of that year. We also had a $4,327 loan outstanding until February of 2010. We have not increased our debt since retiring the aforementioned obligations.
We recorded a provision for income taxes for 2011, compared to a benefit in 2010 resulting from our operating loss. Our effective tax rate for 2011 was 37.9%, compared to 34.3% for 2010.
Two factors primarily caused the increase of $2,797 in our gross premiums written: (i) an increase in average in-force premium per policy, partially offset by (ii) a decrease in policies-in-force.
Two factors caused the decrease of $1,086 in our gross premiums earned: (i) a $3,833 increase in gross unearned premiums that resulted from our writing $4,066 more during the fourth quarter of 2010 compared to the fourth quarter of 2009, offset by (ii) an increase in gross written premiums discussed above.
Ceded premiums earned increased $10,240 because the cost of our 2008-2009 contracts was $34,528 lower than the cost of our 2009-2010 contracts. As a result, for the first five months of 2009, our reinsurance costs were substantially less than our reinsurance costs for the first five months of 2010. The effect of the increase described was partially offset because we recorded contractually-allowed reductions to our 2010-2011 reinsurance premium totaling $3,921, while we recorded adjustments to increase our 2009-2010 reinsurance premium by $1,737.
The decrease of $952 in our net investment income primarily resulted from a $556 decrease in bond interest income. Also contributing to the overall decline was a $242 decrease in interest income related to our cash and short-term securities due to lower investment yields.
Net realized investment gains increased $2,509 because, during December 2010, we sold $52,570 of fixed maturities to realize the gains related to those securities. We made the decision to recognize the gains at that time rather than in the future because of the uncertainty regarding capital gains taxes and whether the Federal government would increase such taxes. We also believed that interest rates on fixed maturities would begin to increase; therefore, we wanted to have more cash on hand to buy what we expected would be securities with higher interest rates than the interest rates on the securities we sold. In 2009, we did not sell securities on the scale that we did in 2010.
Other-than-temporary impairments decreased $1,781 because we only recorded an impairment charge of $97 related to three equity securities in 2010 compared to an impairment charge of $1,878 related to 29 equity securities in 2009.
Due to our operating loss for 2010, we recorded a benefit for income taxes compared to recording tax expense for 2009. Our effective tax rate for 2010 was 34.3%, compared to 35.9% for 2009.
We generate cash through premium collections, reinsurance recoveries, investment income and the sale or maturity of invested assets. We use our cash to pay reinsurance premiums, claims and related costs, policy acquisition costs, salaries and employee benefits, other expenses and stockholder dividends, as well as to purchase investments.
we recovered $4,831 more from our reinsurers due to the commutation of the 2005 FHCF contract,
we paid $5,243 more commission to agents as a result of our increased writings, and
As noted earlier, we commuted our 2005 contract with the FHCF; therefore, any catastrophe losses we incur (in excess of amounts we reported to the FHCF as of June 1, 2011) on events that occurred during the 2005 contract year that would otherwise have been covered by the FHCF contract prior to commutation will not be reimbursed by the FHCF. We received the $12,738 related to the commutation during the third quarter of 2011.
During the year ended December 31, 2011, our investing activities used $68,155 of cash compared to providing $79,921 of cash because our purchases of securities totaled $65,870 more than our sales of securities, a result of our reinvestment of the proceeds from the securities we sold in December 2010 as well as a portion of the excess cash provided by operations. We also purchased a $2,250 note receivable from HRM during 2011.
See Note 3 in our Notes to Consolidated Financial statements for a table that summarizes our fixed maturities at December 31, 2011, by contractual maturity periods.
We have audited the accompanying consolidated balance sheets of United Insurance Holdings Corp. and subsidiaries (the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2011. Our audits also included the financial statement schedules of United Insurance Holdings Corp. listed in Item 15. These consolidated financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and schedules based on our audits.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of United Insurance Holdings Corp. and subsidiaries as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.
We write our policies utilizing our agency network, though we occasionally supplement those writings by assuming policies from Citizens Property Insurance Corporation (Citizens), an insurer supported by the State of Florida.
We currently classify all of our investments in fixed maturities and equity securities as available-for-sale, and report them at fair value. Subsequent to our acquisition of available-for-sale securities, we record changes in value through the date of disposition as unrealized holding gains and losses, net of tax effects, and include them as a component of accumulated other comprehensive income included in stockholders’ equity. We include realized gains and losses, which we calculate using the specific-identification method for determining the cost of securities sold, in net income. We amortize any premium or discount on fixed maturities over the remaining maturity period of the related securities using the effective interest method, and we report the amortization in net investment income. We recognize dividends and interest income when earned.
Quarterly, we perform an assessment of our investments to determine if any are other-than-temporarily impaired. An investment is impaired when the fair value of the investment declines to an amount less than the cost or amortized cost of that investment. As part of our assessment process, we determine whether the impairment is temporary or other-than-temporary. We base our assessment on both quantitative criteria and qualitative information, considering a number of factors including, but not limited to: how long the security has been impaired; the amount of the impairment; whether, in the case of equity securities, we intend to hold, and have the ability to hold, the security for a period sufficient for us to recover our cost basis, or whether, in the case of debt securities, we intend to sell the security or it is more likely than not that we will have to sell the security before we recover the amortized cost; the financial condition and near-term prospects of the issuer; whether the issuer is current on contractually-obligated interest and principal payments; key corporate events pertaining to the issuer and whether the market decline was affected by macroeconomic conditions.
Premiums receivable represents amounts due from our policyholders for billed premiums and related policy fees. We perform a policy-level evaluation to determine the extent to which the balance of premium receivable exceeds the balance of unearned premium. We then age any resulting exposure based on the last date the policy was billed to the policyholder, and we establish an allowance for credit losses for any amounts outstanding for more than 90 days. When we receive payments on amounts previously charged off, we credit bad debt expense in the period we receive the payment. The balances of our allowance for uncollectible premiums totaled $77 and $61 at December 31, 2011, and 2010, respectively.
Our reserves for unpaid losses represent the estimated ultimate cost of settling all reported claims plus all claims we incurred related to insured events that have occurred as of the reporting date, but that policyholders have not yet reported to us (incurred but not reported, or IBNR, claims).
income on a pro rata basis over the term of the underlying policies. We record our pay-plan fees, which we charge to all policyholders that pay their premium in more than one installment, as income when collected. We report all policy-related fees in other revenue on our Consolidated Statements of Income.
We record guaranty fund and other insurance-related assessments imposed upon us as an expense in the period the regulatory agency imposes the assessment. To recover the assessment, we use a process, created by Florida statute, known as Use and File (neither South Carolina nor Massachusetts have imposed any assessments upon us). We calculate and begin collecting a policy surcharge that will allow us to collect the entire assessment over a 12-month period, based on our estimate of the number of policies we expect to write. We then submit a filing to the insurance regulatory authority requesting formal approval of the policy surcharge. The process may be repeated in successive 12-month periods until we collect the entire assessment. We record the recoveries as revenue in the period that we collect the cash. While current regulations allow us to recover from policyholders the amount of assessments imposed upon us, our payment of the assessments and our recoveries may not offset each other in the same fiscal period in our financial statements.
We collect assessments imposed upon policyholders as a policy surcharge and we record the amounts collected as a liability until we remit the amounts to the regulatory agency that imposed the assessment.
Under a tax sharing agreement we entered into with each of our subsidiaries, we file consolidated tax returns. We allocate taxes to each subsidiary in proportion to the amount of taxable income that each subsidiary contributes to the consolidated taxable income.
We expense all advertising costs when we incur those costs. For the years ended December 31, 2011, 2010 or 2009, we incurred advertising costs of $1,041, $783, and $712, respectively.
The following table details the difference between cost or adjusted/amortized cost and estimated fair value, by major investment category, at December 31, 2011, and 2010:
Various states in which we operate or will be operating require us, by statute, to maintain deposits to secure the payment of claims. The table below summarizes our statutorily-required deposits at December 31, 2011.
* This amount represents the actual number of discrete securities, not the number of shares of those securities. The number is not presented in thousands.
During our quarterly evaluations of our securities for impairment, we determined that, other than the one security on which we recorded an other-than-temporary impairment charge, none of our investments in debt and equity securities that reflected an unrealized loss position were other-than-temporarily impaired. The issuers of our debt securities continue to make interest payments on a timely basis and have not suffered any credit rating reductions. We do not intend to sell nor is it likely that we would be required to sell the debt securities before we recover our amortized cost basis. All the issuers of the equity securities we own had near-term prospects that indicated we could recover our cost basis, and we also have the ability and the intent to hold these securities until their value equals or exceeds their cost.
For the policy year beginning June 1, 2011, we have a private catastrophe reinsurance agreement structured into layers. The coverage provided by one layer picks up, or “attaches”, at the point where coverage under the previous layer ends. Our agreement with the FHCF divides our coverage into three layers: the Limited-Apportionment Company layer, the Mandatory layer and the Temporary-Increase-in-Coverage-Limit layer.
Ceded losses incurred decreased by $19,944 during the year ended December 31, 2011 compared to the year ended December 31, 2010 primarily for two reasons: i) favorable loss development on prior-year claims allowed us to reduce our estimate of ultimate losses, and ii) we commuted the 2005 FHCF contract during 2011 and the 2004 FHCF contract in 2010. Additionally, the statute of limitations related to insured events occurring during the 2005 and 2004 storm years expired, so policyholders cannot report new claims as they could in the prior year, nor are policyholders reopening as many previously-closed claims as in the prior year. The losses we incurred in 2011, 2010 or 2009 related to storms that occurred in those same years did not exceed our retained loss threshold.
As reflected by our losses incurred related to prior years, we had a reserve redundancy in 2011 compared to a reserve deficiency in 2010. Since we place substantial reliance on loss-development-based actuarial models when determining our estimate of ultimate losses, the redundancy in 2011 resulted from reductions to our estimate of ultimate losses because of continued favorable loss development on claims incurred in prior years.
Our long-term debt at December 31, 2011 and 2010 consisted of a note payable to the Florida State Board of Administration. As of December 31, 2011 and 2010, we owed $17,059 and $18,235, respectively, on the note and the interest rate was 1.99% and 2.77%, respectively.
At December 31, 2011, the annual maturities of our long-term debt are as follows:
During 2011, and at December 31, 2011, we complied with all covenants as specified in the SBA note, though we paid some additional interest during the first quarter of 2011 as a result of violating the writing ratio covenant during the fourth quarter of 2010.
Florida law permits an insurer to pay dividends or make distributions out of that part of statutory surplus derived from net operating profit and net realized capital gains. The law further provides calculations to determine the amount of dividends or distributions that can be made without the prior approval of the insurance regulatory authority and the amount of dividends or distributions that would require prior approval of the insurance regulatory authority. Statutory risk-based capital requirements may further restrict UPC’s ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause statutory surplus to fall below minimum risk-based capital requirements.
We have reported our insurance subsidiary’s assets, liabilities and results of operations in accordance with GAAP, which varies from statutory accounting principles prescribed or permitted by state laws and regulations, as well as by general industry practices. The following items are principal differences between statutory accounting and GAAP:
Statutory accounting requires that we exclude certain assets, called non-admitted assets, from the balance sheet.
Statutory accounting requires that we record certain investments at cost or amortized cost, while we record other investments at fair value; however, GAAP requires that we record all investments at fair value.
The table below reconciles our consolidated GAAP stockholders’ equity to the surplus as regards policyholders of UPC:
We lease office space and office equipment under operating leases. In June 2008, we entered into a six-year operating lease agreement for office space for our corporate headquarters. The lease provides us with an option for two renewal periods of five years each. The office equipment leases have various expiration dates. Lease expense amounted to $508, $433, and $433 for the years ended December 31, 2011, 2010 and 2009, respectively.
At December 31, 2011, our minimum future lease payments under non-cancellable operating leases are:
In February 2010, we paid the remaining principal balance of $4,327 to Columbus Bank & Trust, a bank owned by Synovus. Under the loan agreement, we incurred interest of $19 and $147 for the years ended December 31, 2010 and 2009, respectively. CB&T charged us standard industry interest rates.
On September 29, 2008, we issued notes payable to two of our former stockholders as well as a note payable to United Noteholders, LLC, which is owned in part by one of our directors and is managed by two of our other directors. All three notes are part of the note agreement we entered into on August 15, 2008, with various accredited investors. For the years ended December 31, 2010 and 2009, total interest incurred related to these notes was $308 and $892, respectively, and total discount amortized related to these notes was $70 and $185, respectively. We paid these 11% merger-related notes in full on May 5, 2010, recognizing a loss on extinguishment of $726.
Effective March 30, 2011, UPC purchased $2,250 of up to $3,000 aggregate principal amount of promissory notes offered by Hamilton Risk Management Co., a Florida corporation engaged in the business of providing automobile insurance in Florida through its wholly-owned subsidiaries. The HRM notes bear interest at the rate of two percent per annum. All outstanding principal of and interest on the HRM notes is due on March 30, 2014. In consideration for its purchase of the HRM notes, UPC received a Class A limited partnership interest in Acadia Acquisition Partners, L.P., the parent company of Hamilton Risk Management. Our director, James R. Zuhlke, is acting as Executive Chairman of Hamilton Risk Management on an interim basis. Another of our directors, Larry G. Swets, serves as one of two managers of the limited liability company that serves as general partner of Acadia Acquisition Partners. We bifurcated the cash consideration of $2,250 by allocating $1,948 to the note receivable based on its fair value (using a discounted cash flow model) and allocating the residual amount of $302 to our limited partnership interest. During the year ended December 31, 2011, we recorded interest income of $34 and we recorded $70 of amortization of the note discount using the effective interest method. During the second quarter of 2011, we reduced the carrying amount of the limited partnership interest to zero by recording a $302 charge to other expenses because our share of Acadia's losses for the quarter exceeded the carrying amount of the partnership interest. We report the note receivable as part of other assets on the Consolidated Balance Sheets.
Effective August 29, 2011, we entered into a Management Services Agreement (MSA) with 1347 Advisors, LLC, a wholly-owned subsidiary of Kingsway Financial Services, Inc., a property and casualty insurance company. One of our directors, Larry Swets, serves as the President and Chief Executive Officer of Kingsway, as well as a Managing Director of 1347 Advisors. The MSA, which is effective for a six-month period with automatic three-month extensions unless otherwise terminated, stipulates that 1347 Advisors shall provide us with the services of an interim CFO, in addition to actuarial and other services. Hassan Baqar serves as our interim CFO under the MSA. Mr. Baqar also serves as a Managing Director of 1347 Advisors and a Vice President of Kingsway America, Inc., a wholly-owned subsidiary of Kingsway Financial Services, Inc. In exchange for the services, we will pay 1347 Advisors a monthly consulting fee of $60 plus any reasonable expenses. For the year ended December 31, 2011, we incurred $240 under the MSA.
We provide a 401(k) plan for substantially all of our employees. We match 100% of the first 5% of employees’ contributions to the plan. For the years ended December 31, 2011, 2010 and 2009, our contributions to the plan on behalf of the participating employees were $97, $87, and $81, respectively.
On March 25, 2009, the Compensation Committee of our Board voted to award 12,500 shares of our common stock each to our CEO and our then CFO as a bonus for services performed. We valued the 25,000 total shares at $3.00 per share, which was the closing price of UIHC common stock on March 25, 2009, when the shares were authorized. As a result, we recorded $75 of compensation expense during the year ended December 31, 2009. We do not have a formal stock compensation program as of December 31, 2011.
On May 6, 2009, our Board declared a $0.05 per share dividend. We paid the $528 dividend on June 15, 2009 to shareholders of record on May 31, 2009.
On November 11, 2009, our Board declared a $0.05 per share dividend. We paid the $529 dividend on December 15, 2009 to shareholders of record on November 30, 2009.
On March 25, 2010, our Board declared a $0.05 per share dividend. We paid the $529 dividend on April 15, 2010 to shareholders of record on March 31, 2010.
On May 19, 2011, we purchased a total of 212,083 shares of our common stock at a per-share price of $2.00. Inclusive of fees and commissions, we paid a total of $431, or $2.03 per share.