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HCI, Walter Investment profit

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  • | 6:40 p.m. March 9, 2011
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Homeowners Choice Inc.
CLEARWATER — Homeowners Choice Inc. (symbol: HCII) was profitable in 2010, but the Clearwater-based insurer's annual net income shrank by roughly 50% over the year.

Total revenues were roughly equal from year to year, with $68.6 million in business generated in 2010, against $68.4 million in 2009. But expenses grew from $50.6 million to $60 million.

CEO F.X. McCahill said higher reinsurance rates were the specific expense that hurt the company's 2010 profits, particularly in the first five months of the year. But those higher costs will not impact the company's 2011 plans.

“We believe we are well positioned for our expansion into Alabama,” McCahill said. “In addition, we recently announced our intention to issue our second quarterly dividend of $.10 per share, which will be paid in March 2011.”

Founded in 2006, Homeowners Choice currently serves roughly 65,000 Florida policyholders. The company's stock was being valued at a per-share value of $8.50 in early Wednesday trading, near the high side of its 52-week range between $5.15 and $9.15 per share.

Walter Investment Management Corp.
TAMPA — Business at Walter Investment Management Corp. (symbol: WAC) was steady in 2010 relative to the prior year. The Tampa-based investment firm, which manages a sizeable portfolio of diverse mortgage debt, saw a 2% increase in its pre-tax income over the year.

Investors looking only at after-tax net income would see a different picture. In 2009, Walter Investment took advantage of an $81.3 million tax benefit after converting to a real estate investment trust (REIT), which absolved it of its corporate income tax obligations.

But outside of that tax benefit, several segments of Walter Investment's operations showed gains. The investment firm's net interest income after loan losses grew 1%, and its non-interest income grew 14%.

The company ended 2010 with $114.3 million in cash and cash equivalents on its balance sheet, up 15% over the year.

Walter Investment stock approached its 52-week high in early morning trading, reaching a temporary per-share value of $20.15. Its highest price point over the past year was $20.19.



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