Stockholders' Equity

12 Months Ended

Dec. 31, 2018

STOCKHOLDERS’ EQUITY

Cumulative Convertible Preferred Stock

As of December 31, 2018 and 2017, 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,
	2018	2017
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 the holder of record of the Company’s Series A Preferred Stock of $10 thousand for each of the years ended December 31, 2018 and 2017.

Common Stock

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



	Issued Shares		Treasury Shares		Outstanding Shares
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 (1)	—		(325	)	(325	)
Shares cancelled	(325	)	325		—
Balance, as of December 31, 2016	45,324		(10,272	)	35,052
Shares repurchased	—		(771	)	(771	)
Vesting of performance share units	115		—		115
Options exercised	804		—		804
Common stock issued	26		—		26
Shares acquired through cashless exercise (1)	—		(491	)	(491	)
Shares cancelled	(491	)	491		—
Balance, as of December 31, 2017	45,778		(11,043	)	34,735
Shares repurchased	—		(688	)	(688	)
Vesting of performance share units	127		—		127
Options exercised	1,890		—		1,890
Restricted stock grant	80		—		80
Shares acquired through cashless exercise (1)	—		(1,361	)	(1,361	)
Shares cancelled	(1,361	)	1,361		—
Balance, as of December 31, 2018	46,514		(11,731	)	34,783


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

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 Exchange Act Rule 10b-18 up to $20 million of its outstanding shares of common stock through December 31, 2017. UVE repurchased 861,296 shares, at an aggregate price of approximately $20.0 million, pursuant to such repurchase program through December 31, 2017.

In September 2017, the Board of Directors authorized a share repurchase program under which UVE may repurchase in the open market in compliance with Exchange Act Rule 10b-18, up to $20 million of the Company’s outstanding shares of common stock through December 31, 2018. UVE repurchased 558,647 shares, at an aggregate price of approximately $20.0 million, pursuant to such repurchase program through December 31, 2018.

In December 2018, UVE announced that its Board of Directors authorized a share repurchase program under which UVE may repurchase in the open market in compliance with Exchange Act Rule 10b-18 up to $20 million of its outstanding shares of common stock through May 31, 2020. UVE repurchased 138,234 shares, at an aggregate price of approximately $5.5 million, pursuant to such repurchase program through December 31, 2018.

During the year ended December 31, 2018, UVE repurchased an aggregate of 688,689 shares of its common stock in the open market in compliance with Exchange Act Rule 10b-18 at a total cost of $25.3 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,
	2018				2017				2016
	Per Share Amount		Aggregate Amount (1)		Per Share Amount		Aggregate Amount (1)		Per Share Amount		Aggregate Amount
First Quarter	$	0.14	$	4,904	$	0.14	$	4,932	$	0.14	$	4,915
Second Quarter	$	0.14	$	4,920	$	0.14	$	4,887	$	0.14	$	4,913
Third Quarter	$	0.16	$	5,592	$	0.14	$	4,830	$	0.14	$	4,903
Fourth Quarter	$	0.29	$	10,130	$	0.27	$	9,392	$	0.27	$	9,461


(1)	Includes dividend equivalents due to certain employees who hold Performance Share Units which are subject to time-vesting conditions.

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 $96.6 million, $122.2 million and $46.9 million during the years ended December 31, 2018, 2017 and 2016, respectively. During the year ended December 31, 2016, UVE made a capital contribution of $2.0 million to 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, 2018 and 2017. The Company prepares and files a consolidated federal tax return for UVE and its consolidated subsidiaries.