First Quarter Pre-Tax Income of
First Quarter Diluted EPS of
First Quarter Gross Loss Ratio of 31.1%
Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the first quarter of 2024 was
Management Commentary
“The strong results in the first quarter further reinforce the power of the technology that we’ve built. We’ve successfully added a significant amount of premium with almost no added expense, and we’ve launched a new carrier,” said
First Quarter 2024 Commentary
Consolidated gross premiums earned in the first quarter increased to
Premiums ceded for reinsurance in the first quarter decreased to
Net investment income in the first quarter was
Losses and loss adjustment expenses in the first quarter were
Policy acquisition and other underwriting expenses in the first quarter decreased to
General and administrative personnel expenses in the first quarter increased to
Conference Call
Interested parties can listen to the live presentation by dialing the listen-only number below or by clicking the webcast link available on the Investor Information section of the company's website at www.hcigroup.com.
Listen-only toll-free number: (888) 506-0062
Listen-only international number: (973) 528-0011
Entry Code: 682325
Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.
A replay of the call will be available by telephone after
Toll-free replay number: (877) 481-4010
International replay number: (919) 882-2331
Replay ID: 50356
About
The company's common shares trade on the
Forward-Looking Statements
This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "intend," "plan," "confident," "prospects" and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. For example, the estimation of reserves for losses and loss adjustment expenses is an inherently imprecise process involving many assumptions and considerable management judgment. Some of these risks and uncertainties are identified in the company's filings with the
Company Contact:
Investor Relations
Tel (813) 776-1012
wbroomall@typtap.com
Investor Relations Contact:
Tel (949) 574-3860
HCI@gateway-grp.com
- Tables to follow - | |||||||||||
Selected Financial Metrics | |||||||||||
(Dollar amounts in thousands, except per share amounts) | |||||||||||
Q1 2024 | Q1 2023 | FY 2023 | |||||||||
(Unaudited) | (Unaudited) | ||||||||||
Insurance Operations | |||||||||||
Gross Written Premiums: | |||||||||||
Homeowners Choice | $ | 91,875 | $ | 85,153 | $ | 535,070 | |||||
143,624 | 114,701 | 363,552 | |||||||||
Condo Owners Reciprocal Exchange | 19,487 | - | - | ||||||||
Total Gross Written Premiums | 254,986 | 199,854 | 898,622 | ||||||||
Gross Premiums Earned: | |||||||||||
Homeowners Choice | 149,271 | 92,456 | 417,202 | ||||||||
103,748 | 87,612 | 348,310 | |||||||||
Condo Owners Reciprocal Exchange | 3,625 | - | - | ||||||||
Total Gross Premiums Earned | 256,644 | 180,068 | 765,512 | ||||||||
Gross Premiums Earned Loss Ratio | 31.1 | % | 33.6 | % | 33.3 | % | |||||
Per Share Metrics | |||||||||||
GAAP Diluted EPS | $ | 3.81 | $ | 1.54 | $ | 7.62 | |||||
Non-GAAP Adjusted Diluted EPS | $ | 3.65 | $ | 1.50 | $ | 7.41 | |||||
Dividends per share | $ | 0.40 | $ | 0.40 | $ | 1.60 | |||||
Book value per share at the end of period | $ | 38.50 | $ | 20.97 | $ | 33.36 | |||||
Shares outstanding at the end of period | 10,276,463 | 8,596,673 | 9,738,183 |
Consolidated Balance Sheets | |||||||
(Dollar amounts in thousands) | |||||||
(Unaudited) | |||||||
Assets | |||||||
Fixed-maturity securities, available for sale, at fair value (amortized cost: | $ | 470,805 | $ | 383,238 | |||
Equity securities, at fair value (cost: | 52,013 | 45,537 | |||||
Limited partnership investments | 24,015 | 23,583 | |||||
Real estate investments | 69,096 | 67,893 | |||||
Total investments | 615,929 | 520,251 | |||||
Cash and cash equivalents | 655,384 | 536,478 | |||||
Restricted cash | 3,303 | 3,287 | |||||
Receivable from maturities of fixed-maturity securities | — | 91,085 | |||||
Accrued interest and dividends receivable | 4,052 | 3,507 | |||||
Income taxes receivable | 651 | — | |||||
Deferred income taxes, net | — | 512 | |||||
Premiums receivable, net (allowance: | 43,291 | 38,037 | |||||
Assumed premium receivable | — | 19,954 | |||||
Prepaid reinsurance premiums | 34,125 | 86,232 | |||||
Reinsurance recoverable, net of allowance for credit losses: | |||||||
Paid losses and loss adjustment expenses (allowance: | 25,452 | 19,690 | |||||
Unpaid losses and loss adjustment expenses (allowance: | 305,218 | 330,604 | |||||
Deferred policy acquisition costs | 45,152 | 42,910 | |||||
Property and equipment, net | 29,314 | 29,251 | |||||
Right-of-use-assets - operating leases | 1,352 | 1,407 | |||||
Intangible assets, net | 7,046 | 7,659 | |||||
Funds withheld for assumed business | 14,181 | 30,087 | |||||
Other assets | 57,184 | 50,365 | |||||
Total assets | $ | 1,841,634 | $ | 1,811,316 | |||
Liabilities and Equity | |||||||
Losses and loss adjustment expenses | $ | 578,712 | $ | 585,073 | |||
Unearned premiums | 499,499 | 501,157 | |||||
Advance premiums | 26,518 | 15,895 | |||||
Reinsurance payable on paid losses and loss adjustment expenses | — | 3,145 | |||||
Ceded reinsurance premiums payable | 10,693 | 8,921 | |||||
Assumed premiums payable | 2,681 | 850 | |||||
Accrued expenses | 24,699 | 19,722 | |||||
Income tax payable | 23,184 | 7,702 | |||||
Deferred income taxes, net | 5,113 | — | |||||
Revolving credit facility | 50,000 | — | |||||
Long-term debt | 184,744 | 208,495 | |||||
Lease liabilities - operating leases | 1,357 | 1,408 | |||||
Other liabilities | 36,564 | 35,623 | |||||
Total liabilities | 1,443,764 | 1,387,991 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interest | — | 96,160 | |||||
Equity: | |||||||
Common stock, (no par value, 40,000,000 shares authorized, 10,276,463 and 9,738,183 shares issued and outstanding at | — | — | |||||
Additional paid-in capital | 116,728 | 89,568 | |||||
Retained income | 282,056 | 238,438 | |||||
Accumulated other comprehensive loss, net of taxes | (3,102 | ) | (3,163 | ) | |||
Total stockholders' equity | 395,682 | 324,843 | |||||
Noncontrolling interests | 2,188 | 2,322 | |||||
Total equity | 397,870 | 327,165 | |||||
Total liabilities, redeemable noncontrolling interest, and equity | $ | 1,841,634 | $ | 1,811,316 |
Consolidated Statements of Income | |||||||
(Unaudited) | |||||||
(Dollar amounts in thousands, except per share amounts) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Revenue | |||||||
Gross premiums earned | $ | 256,644 | $ | 180,068 | |||
Premiums ceded | (68,106 | ) | (70,509 | ) | |||
Net premiums earned | 188,538 | 109,559 | |||||
Net investment income | 14,067 | 17,715 | |||||
Net realized investment losses | — | (1,149 | ) | ||||
Net unrealized investment gains | 2,635 | 529 | |||||
Policy fee income | 1,019 | 1,090 | |||||
Other | 355 | 1,285 | |||||
Total revenue | 206,614 | 129,029 | |||||
Expenses | |||||||
Losses and loss adjustment expenses | 79,922 | 60,565 | |||||
Policy acquisition and other underwriting expenses | 22,139 | 22,720 | |||||
General and administrative personnel expenses | 16,274 | 13,502 | |||||
Interest expense | 3,149 | 2,801 | |||||
Other operating expenses | 7,700 | 6,305 | |||||
Total expenses | 129,184 | 105,893 | |||||
Income before income taxes | 77,430 | 23,136 | |||||
Income tax expense | 20,474 | 5,343 | |||||
Net income | $ | 56,956 | $ | 17,793 | |||
Net income attributable to redeemable noncontrolling interest | (10,149 | ) | (2,324 | ) | |||
Net loss (income) attributable to noncontrolling interests | 804 | (131 | ) | ||||
Net income after noncontrolling interests | $ | 47,611 | $ | 15,338 | |||
Basic earnings per share | $ | 4.76 | $ | 1.78 | |||
Diluted earnings per share | $ | 3.81 | $ | 1.54 | |||
Dividends per share | $ | 0.40 | $ | 0.40 | |||
(Amounts in thousands, except per share amounts) |
A summary of the numerator and denominator of basic and diluted earnings per common share calculated in accordance with GAAP is presented below.
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
GAAP | |||||||||||||||||||||||
Income | Shares (a) | Per Share | Income | Shares (a) | Per Share | ||||||||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||||||||
Net income | $ | 56,956 | $ | 17,793 | |||||||||||||||||||
Less: Net income attributable to redeemable noncontrolling interest | (10,149 | ) | (2,324 | ) | |||||||||||||||||||
Less: Net loss (income) attributable to noncontrolling interests | 804 | (131 | ) | ||||||||||||||||||||
Net income attributable to HCI | 47,611 | 15,338 | |||||||||||||||||||||
Less: Income attributable to participating securities | (1,218 | ) | (564 | ) | |||||||||||||||||||
Basic Earnings Per Share: | |||||||||||||||||||||||
Income allocated to common stockholders | 46,393 | 9,751 | $ | 4.76 | 14,774 | 8,278 | $ | 1.78 | |||||||||||||||
Effect of | |||||||||||||||||||||||
Stock options | — | 280 | — | 45 | |||||||||||||||||||
Convertible senior notes | 1,640 | 2,282 | 1,921 | 2,537 | |||||||||||||||||||
Warrants | — | 305 | — | — | |||||||||||||||||||
Diluted Earnings Per Share: | |||||||||||||||||||||||
Income available to common stockholders and assumed conversions | $ | 48,033 | 12,618 | $ | 3.81 | $ | 16,695 | 10,860 | $ | 1.54 | |||||||||||||
(a) Shares in thousands. | |||||||||||||||||||||||
*For the three months ended |
Non-GAAP Financial Measures
Adjusted net income is a Non-GAAP financial measure that removes from net income of HCI's portion of the effect of unrealized gains or losses on equity securities required to be included in results of operations in accordance with Accounting Standards Codification 321.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
GAAP Net income | $ | 56,956 | $ | 17,793 | |||||||||||||||||||
Net unrealized investment gains | $ | (2,635 | ) | $ | (529 | ) | |||||||||||||||||
Less: Tax effect at 25.041% (Q1 2024) & 25.345% (Q1 2023) | $ | 660 | $ | 134 | |||||||||||||||||||
Net adjustment to Net income | $ | (1,975 | ) | $ | (395 | ) | |||||||||||||||||
Non-GAAP Adjusted Net income | $ | 54,981 | $ | 17,398 | |||||||||||||||||||
(Amounts in thousands, except per share amounts) |
A summary of the numerator and denominator of the basic and diluted earnings per common share calculated with the Non-GAAP financial measure Adjusted net income is presented below.
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
Non-GAAP | |||||||||||||||||||||||
Income | Shares (a) | Per Share | Income | Shares (a) | Per Share | ||||||||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||||||||
Adjusted net income (non-GAAP) | $ | 54,981 | $ | 17,398 | |||||||||||||||||||
Less: Net income attributable to redeemable noncontrolling interest | (10,149 | ) | $ | (2,324 | ) | ||||||||||||||||||
Less: Net loss (income) attributable to noncontrolling interests | 815 | (127 | ) | ||||||||||||||||||||
Net income attributable to HCI | 45,647 | 14,947 | |||||||||||||||||||||
Less: Income attributable to participating securities | (1,168 | ) | (550 | ) | |||||||||||||||||||
Basic Earnings Per Share before unrealized gains/losses on equity securities: | |||||||||||||||||||||||
Income allocated to common stockholders | 44,479 | 9,751 | $ | 4.56 | 14,397 | 8,278 | $ | 1.74 | |||||||||||||||
Effect of | |||||||||||||||||||||||
Stock options | — | 280 | — | 45 | |||||||||||||||||||
Convertible senior notes | 1,640 | 2,282 | 1,921 | 2,537 | |||||||||||||||||||
Warrants | — | 305 | — | — | |||||||||||||||||||
Diluted Earnings Per Share before unrealized gains/losses on equity securities: | |||||||||||||||||||||||
Income available to common stockholders and assumed conversions | $ | 46,119 | $ | 12,618 | $ | 3.65 | $ | 16,318 | $ | 10,860 | $ | 1.50 | |||||||||||
(a) Shares in thousands. | |||||||||||||||||||||||
*For the three months ended |
Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
GAAP diluted Earnings Per Share | $ | 3.81 | $ | 1.54 | |||||||||||||||||||
Net unrealized investment gains | $ | (0.21 | ) | $ | (0.05 | ) | |||||||||||||||||
Less: Tax effect at 25.041% (Q1 2024) & 25.345% (Q1 2023) | $ | 0.05 | $ | 0.01 | |||||||||||||||||||
Net adjustment to GAAP diluted EPS | $ | (0.16 | ) | $ | (0.04 | ) | |||||||||||||||||
Non-GAAP Adjusted diluted EPS | $ | 3.65 | $ | 1.50 |
Source:
2024 GlobeNewswire, Inc., source