Hilltop Holdings Inc. (HTH, Financial) filed Amended Quarterly Report for the period ended 2008-09-30.
Affordable Residential Communities is a fully integrated self-administered self-managed equity real estate investment trust focused primarily on the acquisition renovation repositioning and operation of all-age manufactured home communities with headquarters in Denver Colo. ARC also rents and sells manufactured homes finances sales of manufactured homes and acts as an agent in the sale of homeowners' insurance and other related insurance products all exclusively to residents of its communities. Hilltop Holdings Inc. has a market cap of $628.9 million; its shares were traded at around $11.14 with and P/S ratio of 4.8.
In connection with and as a result of the error in the application of that prepayment to loss and loss adjustment expense, reinsurance payable, as set forth in the balance sheet at September 30, 2008, was understated by $4.1 million, reinsurance receivable was understated by $1.0 million and income taxes receivable was understated by $1.1 million.
For the nine months ended September 30, 2008, net loss attributable to common stockholders was $36.7 million, or $0.65 per share, as compared to net income of $272.8 million, or $4.95 per share, for the same period in 2007. Continuing operations accounted for $29.0 million of the net loss for the nine months ended September 30, 2008, compared to $3.8 million of the net income for the nine months ended September 30, 2007. Net loss from continuing operations increased by $32.7 million for the nine months ended September 30, 2008, as compared to the same period in 2007, primarily due to the loss on investment of $41.9 million ($27.2 million net of tax) recorded for equity securities held at HTH and $1.4 million of costs associated with acquisition activities being expensed due to the determination that HTH would no longer pursue such target during the second quarter of 2008. Additionally, the net loss increased due to increase in loss and loss adjustment expenses related to Hurricane Dolly, Gustav and Ike of approximately $13.0 million, net of reinsurance recoveries, and the decrease in net premiums earned due to reinstatement premiums related to Hurricane Dolly, Ike and Gustav of $8.2 million. Those losses and expenses were partially offset by additional interest income generated on the cash from the sale of the assets related to the manufactured housing business segment that closed on July 31, 2007 and the fact that NLASCO had nine months of revenue in 2008, as compared to eight months in 2007.
Overview. For the quarter ended September 30, 2008, the Company experienced three significant catastrophes that resulted in losses in excess of retention. As of September 30, 2008, the total loss and loss adjustment expenses incurred associated with Hurricane Dolly was $6.4 million, however, since the losses exceeded retention, net exposure to the Company was $6.0 million retention and $14,000 in reinstatement premiums. Total loss and loss adjustment expenses incurred associated with Hurricane Gustav was $3.9 million, however, since the losses exceeded retention, net exposure to the Company was $1.0 million retention and $36,000 in reinstatement premiums. Total loss and loss adjustment expenses incurred associated with Hurricane Ike was $98.0 million, however, since the losses exceeded retention, net exposure to the Company was $6.0 million retention and $8.2 million in reinstatement premiums. Additionally, the Company wrote down securities owned by NLASCO, Inc. of $1.1 million.
As a result of the allocation of the purchase price for the real estate assets we sold in 2007 by the purchaser, we reallocated $34.1 million of gain recognized to those assets in the quarter ended September 30, 2008, the period in which the purchase price allocation was finalized. This reallocation allowed us to utilize $34.1 million of our net operating loss carry forwards, which reduced our deferred tax asset by $11.9 million and increased our income tax receivable by the same amount. In addition, we were able to utilize $13.2 million of net operating losses that previously were limited under special IRS rules (the "Section 382 Limitations"), resulting in a deferred tax benefit of $4.6 million.
Revenue. Revenue for the three months ended September 30, 2008 was $29.8 million, as compared to $38.0 million for the same period in 2007. Net premiums earned were $22.7 million for the third quarter in 2008, as compared to $26.3 million for 2007. Net investment income was $6.7 million for the third quarter of 2008, as compared to $10.0 million for the same period in 2007, primarily due to higher cash balances and higher yield in 2007. We had a net realized loss on investments of $1.2 million in the third quarter of 2008, due to the write down of securities owned by NLASCO, Inc. Other income was $1.5 million for the third quarter in 2008, as compared to $1.8 million for 2007. Revenues related to the manufactured housing business lines have been reclassified to discontinued operations and are presented net in the caption "Loss from discontinued operations."
Read the The complete ReportHTH is in the portfolios of Michael Price of MFP Investors LLC.
Affordable Residential Communities is a fully integrated self-administered self-managed equity real estate investment trust focused primarily on the acquisition renovation repositioning and operation of all-age manufactured home communities with headquarters in Denver Colo. ARC also rents and sells manufactured homes finances sales of manufactured homes and acts as an agent in the sale of homeowners' insurance and other related insurance products all exclusively to residents of its communities. Hilltop Holdings Inc. has a market cap of $628.9 million; its shares were traded at around $11.14 with and P/S ratio of 4.8.
Highlight of Business Operations:
Due to an error in the application of a prepayment from a reinsurer related to catastrophe losses incurred and in recording the ultimate retention per catastrophic event in the third quarter of 2008 to loss and loss adjustment expense, loss and loss adjustment expense, as set forth in the unaudited consolidated statements of operations for the three and nine months ended September 30, 2008, was understated by $3.1 million. This understatement of loss and loss adjustment expense resulted in net loss for the three and nine months ended September 30, 2008 being understated by $2.0 million, net of tax.In connection with and as a result of the error in the application of that prepayment to loss and loss adjustment expense, reinsurance payable, as set forth in the balance sheet at September 30, 2008, was understated by $4.1 million, reinsurance receivable was understated by $1.0 million and income taxes receivable was understated by $1.1 million.
For the nine months ended September 30, 2008, net loss attributable to common stockholders was $36.7 million, or $0.65 per share, as compared to net income of $272.8 million, or $4.95 per share, for the same period in 2007. Continuing operations accounted for $29.0 million of the net loss for the nine months ended September 30, 2008, compared to $3.8 million of the net income for the nine months ended September 30, 2007. Net loss from continuing operations increased by $32.7 million for the nine months ended September 30, 2008, as compared to the same period in 2007, primarily due to the loss on investment of $41.9 million ($27.2 million net of tax) recorded for equity securities held at HTH and $1.4 million of costs associated with acquisition activities being expensed due to the determination that HTH would no longer pursue such target during the second quarter of 2008. Additionally, the net loss increased due to increase in loss and loss adjustment expenses related to Hurricane Dolly, Gustav and Ike of approximately $13.0 million, net of reinsurance recoveries, and the decrease in net premiums earned due to reinstatement premiums related to Hurricane Dolly, Ike and Gustav of $8.2 million. Those losses and expenses were partially offset by additional interest income generated on the cash from the sale of the assets related to the manufactured housing business segment that closed on July 31, 2007 and the fact that NLASCO had nine months of revenue in 2008, as compared to eight months in 2007.
Overview. For the quarter ended September 30, 2008, the Company experienced three significant catastrophes that resulted in losses in excess of retention. As of September 30, 2008, the total loss and loss adjustment expenses incurred associated with Hurricane Dolly was $6.4 million, however, since the losses exceeded retention, net exposure to the Company was $6.0 million retention and $14,000 in reinstatement premiums. Total loss and loss adjustment expenses incurred associated with Hurricane Gustav was $3.9 million, however, since the losses exceeded retention, net exposure to the Company was $1.0 million retention and $36,000 in reinstatement premiums. Total loss and loss adjustment expenses incurred associated with Hurricane Ike was $98.0 million, however, since the losses exceeded retention, net exposure to the Company was $6.0 million retention and $8.2 million in reinstatement premiums. Additionally, the Company wrote down securities owned by NLASCO, Inc. of $1.1 million.
As a result of the allocation of the purchase price for the real estate assets we sold in 2007 by the purchaser, we reallocated $34.1 million of gain recognized to those assets in the quarter ended September 30, 2008, the period in which the purchase price allocation was finalized. This reallocation allowed us to utilize $34.1 million of our net operating loss carry forwards, which reduced our deferred tax asset by $11.9 million and increased our income tax receivable by the same amount. In addition, we were able to utilize $13.2 million of net operating losses that previously were limited under special IRS rules (the "Section 382 Limitations"), resulting in a deferred tax benefit of $4.6 million.
Revenue. Revenue for the three months ended September 30, 2008 was $29.8 million, as compared to $38.0 million for the same period in 2007. Net premiums earned were $22.7 million for the third quarter in 2008, as compared to $26.3 million for 2007. Net investment income was $6.7 million for the third quarter of 2008, as compared to $10.0 million for the same period in 2007, primarily due to higher cash balances and higher yield in 2007. We had a net realized loss on investments of $1.2 million in the third quarter of 2008, due to the write down of securities owned by NLASCO, Inc. Other income was $1.5 million for the third quarter in 2008, as compared to $1.8 million for 2007. Revenues related to the manufactured housing business lines have been reclassified to discontinued operations and are presented net in the caption "Loss from discontinued operations."
Read the The complete ReportHTH is in the portfolios of Michael Price of MFP Investors LLC.