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Stockholders' Equity
 12 Months Ended
Dec. 31, 2016
Equity [Abstract]  
Stockholders' Equity

NOTE 8 – STOCKHOLDERS’ EQUITY

Cumulative Convertible Preferred Stock

As of December 31, 2016 and 2015, the Company had shares outstanding of Series A Preferred Stock. Each share of Series A Preferred Stock is convertible by the Company into shares of Common Stock.

The following table provides certain information for the convertible Series A preferred stock as of the dates presented (in thousands, except conversion factor):

 

 

 

As of December 31,

 

 

 

2016

 

 

2015

 

Shares issued and outstanding

 

 

10

 

 

 

10

 

Conversion factor

 

 

2.50

 

 

 

2.50

 

Common shares resulting if converted

 

 

25

 

 

 

25

 

 

The Series A Preferred Stock pays a cumulative dividend of $0.25 per share per quarter. The Company declared and paid aggregate dividends to holders of record of the Company’s Series A Preferred Stock of $10 thousand for each of the years ended December 31, 2016 and 2015.

Common Stock and Contingently Redeemable Common Stock

 

The following table summarizes the activity relating to shares of the Company’s Common Stock and Contingently Redeemable Common Stock during the periods presented (in thousands):

 

 

 

Issued

 

 

Treasury

 

 

Outstanding

 

 

 

Shares

 

 

Shares

 

 

Shares

 

Balance, as of December 31, 2013

 

 

43,641

 

 

 

(8,275

)

 

 

35,366

 

Conversion of preferred stock

 

 

65

 

 

 

—

 

 

 

65

 

Shares repurchased

 

 

—

 

 

 

(2,392

)

 

 

(2,392

)

Treasury shares reissued and classified as contingently redeemable common stock (1)

 

 

—

 

 

 

1,000

 

 

 

1,000

 

Options exercised

 

 

1,900

 

 

 

—

 

 

 

1,900

 

Restricted stock grant

 

 

950

 

 

 

—

 

 

 

950

 

Shares acquired through cashless exercise (2)

 

 

—

 

 

 

(1,787

)

 

 

(1,787

)

Shares cancelled

 

 

(1,787

)

 

 

1,787

 

 

 

—

 

Balance, as of December 31, 2014

 

 

44,769

 

 

 

(9,667

)

 

 

35,102

 

Shares repurchased

 

 

—

 

 

 

(748

)

 

 

(748

)

Options exercised

 

 

751

 

 

 

—

 

 

 

751

 

Restricted stock grant

 

 

615

 

 

 

—

 

 

 

615

 

Shares acquired through cashless exercise (2)

 

 

—

 

 

 

(610

)

 

 

(610

)

Shares cancelled

 

 

(610

)

 

 

610

 

 

 

—

 

Balance, as of December 31, 2015

 

 

45,525

 

 

 

(10,415

)

 

 

35,110

 

Shares repurchased

 

 

—

 

 

 

(441

)

 

 

(441

)

Shares reissued

 

 

—

 

 

 

584

 

 

 

584

 

Options exercised

 

 

124

 

 

 

—

 

 

 

124

 

Shares acquired through cashless exercise (2)

 

 

—

 

 

 

(325

)

 

 

(325

)

Shares cancelled

 

 

(325

)

 

 

325

 

 

 

—

 

Balance, as of December 31, 2016

 

 

45,324

 

 

 

(10,272

)

 

 

35,052

 

 

(1)

Privately negotiated transaction at $19.00 per share, subject to holding period restrictions as of December 31, 2014. Subsequent to December 31, 2014, such restrictions were removed and contingently redeemable common stock was reclassified to common stock.  

(2)

All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of options exercised or restricted stock (as defined in “—Note 9 (Share-Based Compensation)”) vested. These shares have been cancelled by the Company.

 

 

In April 2016, the Company sold 583,771 shares of UVE common stock in a private placement to RenRe Ventures at a price of $17.13 per share for total consideration of $10 million, which was comprised of $2.965 million in cash and $7.035 million in cancellation of outstanding indebtedness, including accrued interest. See “—Note 7 (Long-Term Debt)” for details of the Company’s debt structure.

 

 

In June 2016, UVE announced that its Board of Directors authorized a share repurchase program under which UVE may repurchase in the open market in compliance with the Exchange Act Rule 10b-18 up to $20.0 million of its outstanding shares of common stock through December 31, 2017. UVE repurchased 98,929 shares, at an aggregate price of approximately $2.1 million, pursuant to such repurchase program through December 2016.

During the year ended December 31, 2016, UVE repurchased an aggregate of 441,036 shares of its common stock in the open market in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, at a total cost of $8.5 million.

Dividends Declared

The Company declared dividends on its outstanding shares of common stock to its shareholders of record as follows for the periods presented (in thousands, except per share amounts):

 

 

For the Years Ended December 31,

 

 

 

2016

 

 

2015

 

 

2014

 

 

 

Per Share

 

 

Aggregate

 

 

Per Share

 

 

Aggregate

 

 

Per Share

 

 

Aggregate

 

 

 

Amount

 

 

Amount

 

 

Amount

 

 

Amount

 

 

Amount

 

 

Amount

 

First Quarter

 

$

0.14

 

 

$

4,915

 

 

$

0.12

 

 

$

4,237

 

 

$

0.10

 

 

$

3,464

 

Second Quarter

 

$

0.14

 

 

$

4,913

 

 

$

0.12

 

 

$

4,283

 

 

$

0.10

 

 

$

3,502

 

Third Quarter

 

$

0.14

 

 

 

4,903

 

 

$

0.12

 

 

$

4,275

 

 

$

0.10

 

 

$

3,429

 

Fourth Quarter

 

$

0.27

 

 

 

9,461

 

 

$

0.27

 

 

$

9,492

 

 

$

0.25

 

 

$

8,845

 

 

Applicable provisions of the Delaware General Corporation Law may affect the ability of the Company to declare and pay dividends on its Common Stock. In particular, pursuant to the Delaware General Corporation Law, a company may pay dividends out of its surplus, as defined, or out of its net profits, for the fiscal year in which the dividend is declared and/or the preceding year. Surplus is defined in the Delaware General Corporation Law to be the excess of net assets of the company over capital. Capital is defined to be the aggregate par value of shares issued. Moreover, the ability of the Company to pay dividends, if and when declared by its Board of Directors, may be restricted by regulatory limits on the amount of dividends, which the Insurance Entities are permitted to pay the Company.

Restrictions limiting the payment of dividends by UVE

UVE pays dividends to shareholders, which are funded by earnings on investments and distributions from the earnings of its consolidated subsidiaries. Generally, other than as disclosed above and in “—Note 7 (Long-Term Debt),” there are no restrictions for UVE limiting the payment of dividends. However, UVE’s ability to pay dividends to shareholders may be affected by restrictions on the ability of the Insurance Entities to pay dividends to UVE through UVECF. See “—Note 5 (Insurance Operations),” for a discussion of these restrictions. There are no such restrictions for UVE’s non-insurance consolidated subsidiaries. Notwithstanding the restriction on the net assets of the Insurance Entities, UVE received distributions from the earnings of its non-insurance consolidated subsidiaries of $46.9 million, $58.2 million and $55.8 million during the years ended December 31, 2016, 2015 and 2014, respectively. During the year ended December 31, 2016, UVE made a capital contribution of $2.0 million to one of our Insurance Entities, APPCIC, in conjunction with APPCIC’s plan to begin writing commercial residential products in Florida. There were no capital contributions by UVE to the Insurance Entities during the years ended December 31, 2015 and 2014. The Company prepares and files a consolidated federal tax return for UVE and its consolidated subsidiaries with all GAAP tax related entries recorded on the books of UVE. Since the GAAP tax related entries are not recorded at the subsidiary level, the Company does not have the ability to produce the amount of net assets for each of its subsidiaries in accordance with GAAP.