Release Details

Net Income of $.20 per Share; Book Value of $4.32 per Share;

Dividend Declared; Annual Meeting Date Set

HEWLETT, N.Y.--(BUSINESS WIRE)-- Kingstone Companies, Inc. (NASDAQ: KINS) reported its results for the period ended March 31, 2012. First quarter 2012 net income was $765,418, or $.20 per share, and net operating income¹ was $739,000, or $.20 per share.

The Company announced that its board declared a quarterly dividend of $.03 per share payable on June 15, 2012 to shareholders of record at the close of business on May 31, 2012. This marks the fourth consecutive quarter of dividend distributions.

Kingstone also announced that it will be holding its Annual Meeting of Shareholders on August 8, 2012. The meeting will be held at the offices of Kingstone Insurance Company, 15 Joys Lane, Kingston, New York commencing at 10 a.m. Shareholders of record as of the close of business on June 14, 2012 will be entitled to notice of, and to vote at, the meeting.

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¹ This measure is not based on U.S. generally accepted accounting principles (“GAAP”) and is defined and reconciled to the most directly comparable GAAP measure in “Information Regarding Non-GAAP Measures.”

Operating Highlights

• Direct premiums written in the first quarter 2012 were up by 17.9% over the same quarter of 2011. Net premiums written were up 8.5% over 2011.
• Q1 net loss ratio was 57.4% as compared to 75.7% in Q1 2011.
• Q1 combined ratio was 70.2% as compared to 91.7% in Q1 2011.

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¹ These measures are not based on GAAP and are defined and reconciled to the most directly comparable GAAP measures in “Information Regarding Non-GAAP Measures.”

Management Commentary

Barry Goldstein, Kingstone’s Chairman and CEO, stated “The first calendar quarter is generally harder on KICO. Snow and ice usually translate into frozen pipes and more frequent fender benders. This winter was quite mild and resulted in an exceptionally low loss ratio of 57.4%. This led to a combined ratio for Q1 2012 of 70.2%, far below last year’s 91.7%.”

Mr. Goldstein continued, “Net premiums earned plus ceding commission revenue totaled $6,876,000, or 21% more than the same totals in 2011. Since our premium growth is now centered on those lines of business that are subject to quota share reinsurance, the total of these two items is the best representation of the company’s revenue growth.”

Mr. Goldstein stated further, “Investment income has grown rapidly as more money has been put to work over time. We maintain a conservative investment philosophy geared towards capital preservation and current income, centered around a fixed income portfolio of primarily corporate and municipal bonds.”

Victor Brodsky, Kingstone CFO, added “Our increase in the first quarter’s profitability is due to the increases in earned premiums and ceding commissions, coupled with a low loss ratio. We are watching our operating expenses very closely and have been able to maintain them at acceptable levels.”

Mr. Brodsky added, “Our book value per share of $4.32 represents the excess of our assets over liabilities. However, it should be noted that our liabilities include a $1.2 million deferred tax liability relating to the accounting for our acquisition of Kingstone Insurance Company (“KICO”). Under GAAP accounting rules, we are required to carry this amount, which equates to $.31 per share, but such amount is not payable by us so long as we own KICO. Our book value per share as of March 31, 2012, exclusive of this deferred tax liability, would be $4.63 per share.”

Information Regarding Non-GAAP Measures

Direct premiums written - represents the total premiums charged on policies issued by the Company during the fiscal period in question.

Net premiums written - represents direct premiums written less premiums ceded to reinsurers.

Net premiums earned is the GAAP measure most closely comparable to direct premiums written and net premiums written. A reconciliation of the difference between (i) direct premiums written and net premiums written and (ii) net premiums earned follows:

Net operating income - is net income exclusive of realized investment gains, net of tax. Net income is the GAAP measure most closely comparable to operating income. Management uses net operating income, along with other measures, to gauge the Company’s performance and evaluate results, which can be skewed when including realized investment gains, which may vary significantly between periods. Net operating income is provided as supplemental information, is not a substitute for net income and does not reflect the Company’s overall profitability. A reconciliation of the difference between net operating income and net income follows:

Forward Looking Statements

Statements in this press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those included in forward-looking statements due to a variety of factors. More information about these factors can be found in Kingstone’s filings with the Securities and Exchange Commission, including its latest Annual Report filed with the Securities and Exchange Commission on Form 10-K. Kingstone undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Kingstone Companies, Inc.
Barry Goldstein, 516-374-7600
CEO
Fax: 516-295-7216
www.kingstonecompanies.com

Source: Kingstone Companies, Inc.