Fourth Quarter Diluted EPS of
Fourth Quarter Gross Loss Ratio of 30.4%
Fourth Quarter Pre-Tax Income of
Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the fourth quarter of 2023 was
Management Commentary
“Several major achievements were accomplished since the end of the third quarter, including completing four assumptions from Citizens, growing premiums-in-force by approximately 30%, further reducing the gross loss ratio to 30%, and commencing operations of a new insurance carrier,” said
Fourth Quarter 2023 Commentary
Consolidated gross premiums earned in the fourth quarter increased to
Premiums ceded for reinsurance in the fourth quarter decreased to
Net investment income in the fourth quarter was
Losses and loss adjustment expenses in the fourth quarter decreased to
Policy acquisition and other underwriting expenses in the fourth quarter decreased to
Full Year 2023 Results
For the year ended
Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the twelve-month period was
Consolidated gross premiums earned for the twelve months of 2023 increased to
Premiums ceded for reinsurance for the twelve months of 2023 increased to
Net investment income for the twelve months of 2023 increased to
Losses and loss adjustment expenses for the twelve months of 2023 decreased to
Policy acquisition and other underwriting expenses for the twelve months of 2023 decreased 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: 409252
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: 49845
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@gatewayir.com
- Tables to follow -
Selected Financial Metrics (Dollar amounts in thousands, except per share amounts) | |||||||||||||||||||||||||
FY 2023 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | FY 2022 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
Insurance Operations | |||||||||||||||||||||||||
Gross Written Premiums: | |||||||||||||||||||||||||
Homeowners Choice | $ | 535,070 | $ | 182,038 | $ | 127,334 | $ | 140,544 | $ | 85,153 | $ | 377,860 | |||||||||||||
363,552 | 138,482 | 70,931 | 39,438 | 114,701 | 348,159 | ||||||||||||||||||||
Total Gross Written Premiums | 898,622 | 320,520 | 198,265 | 179,982 | 199,854 | 726,019 | |||||||||||||||||||
Gross Premiums Earned: | |||||||||||||||||||||||||
Homeowners Choice | 417,202 | 125,796 | 102,075 | 96,875 | 92,456 | 426,501 | |||||||||||||||||||
348,310 | 89,394 | 86,233 | 85,071 | 87,612 | 298,215 | ||||||||||||||||||||
Total Gross Premiums Earned | 765,512 | 215,190 | 188,308 | 181,946 | 180,068 | 724,716 | |||||||||||||||||||
Gross Premiums Earned Loss Ratio | 33.3 | % | 30.4 | % | 35.4 | % | 34.0 | % | 33.6 | % | 51.3 | % | |||||||||||||
Per Share Metrics | |||||||||||||||||||||||||
GAAP Diluted EPS | $ | 7.62 | $ | 3.40 | $ | 1.34 | $ | 1.28 | $ | 1.54 | $ | (6.24 | ) | ||||||||||||
Non-GAAP Adjusted Diluted EPS | $ | 7.41 | $ | 3.22 | $ | 1.41 | $ | 1.22 | $ | 1.50 | $ | (5.48 | ) | ||||||||||||
Dividends per share | $ | 1.60 | $ | 0.40 | $ | 0.40 | $ | 0.40 | $ | 0.40 | $ | 1.60 | |||||||||||||
Book value per share at the end of period | $ | 33.36 | $ | 33.36 | $ | 23.27 | $ | 21.92 | $ | 20.97 | $ | 18.91 | |||||||||||||
Shares outstanding at the end of period | 9,738,183 | 9,738,183 | 8,590,824 | 8,594,764 | 8,596,673 | 8,598,682 |
Consolidated Balance Sheets (Dollar amounts in thousands) | ||||||||
Assets | ||||||||
Fixed-maturity securities, available for sale, at fair value (amortized cost: | $ | 383,238 | $ | 483,901 | ||||
Equity securities, at fair value (cost: | 45,537 | 34,583 | ||||||
Limited partnership investments | 23,583 | 25,702 | ||||||
Investment in unconsolidated joint venture, at equity | — | 18 | ||||||
Real estate investments | 67,893 | 71,388 | ||||||
Total investments | 520,251 | 615,592 | ||||||
Cash and cash equivalents | 536,478 | 234,863 | ||||||
Restricted cash | 3,287 | 2,900 | ||||||
Receivable from maturities of fixed-maturity securities | 91,085 | — | ||||||
Accrued interest and dividends receivable | 3,507 | 1,952 | ||||||
Income taxes receivable | — | 2,807 | ||||||
Deferred income taxes, net | 512 | — | ||||||
Premiums receivable, net (allowance: | 38,037 | 34,998 | ||||||
Assumed premium receivable | 19,954 | — | ||||||
Prepaid reinsurance premiums | 86,232 | 66,627 | ||||||
Reinsurance recoverable, net of allowance for credit losses: | ||||||||
Paid losses and loss adjustment expenses (allowance: | 19,690 | 71,594 | ||||||
Unpaid losses and loss adjustment expenses (allowance: | 330,604 | 616,765 | ||||||
Deferred policy acquisition costs | 42,910 | 45,522 | ||||||
Property and equipment, net | 29,251 | 17,910 | ||||||
Right-of-use-assets - operating leases | 1,407 | 777 | ||||||
Intangible assets, net | 7,659 | 10,578 | ||||||
Funds withheld for assumed business | 30,087 | 48,772 | ||||||
Other assets | 50,365 | 31,671 | ||||||
Total assets | $ | 1,811,316 | $ | 1,803,328 | ||||
Liabilities and Equity | ||||||||
Losses and loss adjustment expenses | $ | 585,073 | $ | 863,765 | ||||
Unearned premiums | 501,157 | 368,047 | ||||||
Advance premiums | 15,895 | 18,587 | ||||||
Reinsurance payable on paid losses and loss adjustment expenses | 3,145 | 8,606 | ||||||
Ceded reinsurance premiums payable | 8,921 | 17,646 | ||||||
Assumed premiums payable | 850 | — | ||||||
Accrued expenses | 19,722 | 14,534 | ||||||
Income tax payable | 7,702 | — | ||||||
Deferred income taxes, net | — | 1,704 | ||||||
Reinsurance recovered in advance on unpaid losses | — | 19,863 | ||||||
Long-term debt | 208,495 | 211,687 | ||||||
Lease liabilities - operating leases | 1,408 | 721 | ||||||
Other liabilities | 35,623 | 23,361 | ||||||
Total liabilities | 1,387,991 | 1,548,521 | ||||||
Commitments and contingencies | ||||||||
Redeemable noncontrolling interest | 96,160 | 93,553 | ||||||
Equity: | ||||||||
Common stock, (no par value, 40,000,000 shares authorized, 9,738,183 and 8,598,682 shares issued and outstanding in 2023 and 2022, respectively) | — | — | ||||||
Additional paid-in capital | 89,568 | — | ||||||
Retained income | 238,438 | 172,482 | ||||||
Accumulated other comprehensive loss, net of taxes | (3,163 | ) | (9,886 | ) | ||||
Total stockholders' equity | 324,843 | 162,596 | ||||||
Noncontrolling interests | 2,322 | (1,342 | ) | |||||
Total equity | 327,165 | 161,254 | ||||||
Total liabilities, redeemable noncontrolling interest, and equity | $ | 1,811,316 | $ | 1,803,328 |
Consolidated Statements of Income (Unaudited) (Dollar amounts in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended | Years Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenue | ||||||||||||||||
Gross premiums earned | $ | 215,190 | $ | 182,954 | $ | 765,512 | $ | 724,716 | ||||||||
Premiums ceded | (66,576 | ) | (77,036 | ) | (269,627 | ) | (261,144 | ) | ||||||||
Net premiums earned | 148,614 | 105,918 | 495,885 | 463,572 | ||||||||||||
Net investment income | 10,341 | 7,365 | 46,234 | 32,447 | ||||||||||||
Net realized investment (losses) gains | (410 | ) | 17 | (1,996 | ) | (1,187 | ) | |||||||||
Net unrealized investment gains (losses) | 2,830 | 1,004 | 3,215 | (7,153 | ) | |||||||||||
Policy fee income | 1,053 | 1,099 | 4,704 | 4,279 | ||||||||||||
Gain from remeasurement of contingent liabilities | — | 3,117 | — | 3,117 | ||||||||||||
Other | 242 | 1,423 | 2,628 | 4,488 | ||||||||||||
Total revenue | 162,670 | 119,943 | 550,670 | 499,563 | ||||||||||||
Expenses | ||||||||||||||||
Losses and loss adjustment expenses | 65,398 | 72,135 | 254,579 | 371,463 | ||||||||||||
Policy acquisition and other underwriting expenses | 22,716 | 24,028 | 90,822 | 104,977 | ||||||||||||
General and administrative personnel expenses | 12,230 | 11,328 | 53,868 | 56,511 | ||||||||||||
Interest expense | 2,822 | 2,839 | 11,117 | 7,768 | ||||||||||||
Impairment loss | — | 2,284 | — | 2,284 | ||||||||||||
Other operating expenses | 5,344 | 4,586 | 22,634 | 24,978 | ||||||||||||
Total expenses | 108,510 | 117,200 | 433,020 | 567,981 | ||||||||||||
Income (loss) before income taxes | 54,160 | 2,743 | 117,650 | (68,418 | ) | |||||||||||
Income tax expense (benefit) | 13,247 | 92 | 28,393 | (13,815 | ) | |||||||||||
Net income (loss) | $ | 40,913 | $ | 2,651 | $ | 89,257 | $ | (54,603 | ) | |||||||
Net income attributable to redeemable noncontrolling interest | (2,360 | ) | (2,305 | ) | (9,370 | ) | (9,106 | ) | ||||||||
Net (income) loss attributable to noncontrolling interests | (457 | ) | 1,180 | (853 | ) | 5,198 | ||||||||||
Net income (loss) after noncontrolling interests | $ | 38,096 | $ | 1,526 | $ | 79,034 | $ | (58,511 | ) | |||||||
Basic earnings (loss) per share | $ | 4.31 | $ | 0.18 | $ | 9.13 | $ | (6.24 | ) | |||||||
Diluted earnings (loss) per share | $ | 3.40 | $ | 0.18 | $ | 7.62 | $ | (6.24 | ) | |||||||
Dividends per share | $ | 0.40 | $ | 0.40 | $ | 1.60 | $ | 1.60 |
(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 | Year Ended | |||||||||||||||||||||||
GAAP | ||||||||||||||||||||||||
Income | Shares (a) | Per Share | Income | Shares (a) | Per Share | |||||||||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | |||||||||||||||||||
Net income | $ | 40,913 | $ | 89,257 | ||||||||||||||||||||
Less: Net income attributable to redeemable noncontrolling interest | (2,360 | ) | (9,370 | ) | ||||||||||||||||||||
Less: | (457 | ) | (853 | ) | ||||||||||||||||||||
Net income attributable to HCI | 38,096 | 79,034 | ||||||||||||||||||||||
Less: Income attributable to participating securities | (1,166 | ) | (2,625 | ) | ||||||||||||||||||||
Basic Earnings Per Share: | ||||||||||||||||||||||||
Income allocated to common stockholders | 36,930 | 8,567 | $ | 4.31 | 76,409 | 8,367 | $ | 9.13 | ||||||||||||||||
Effect of | ||||||||||||||||||||||||
Stock options | — | 155 | — | 83 | ||||||||||||||||||||
Convertible senior notes | 1,938 | 2,538 | 7,732 | 2,538 | ||||||||||||||||||||
Warrants | — | 192 | — | 56 | ||||||||||||||||||||
Diluted Earnings Per Share: | ||||||||||||||||||||||||
Income available to common stockholders and assumed conversions | $ | 38,868 | 11,452 | $ | 3.40 | $ | 84,141 | 11,044 | $ | 7.62 | ||||||||||||||
(a) Shares in thousands. | ||||||||||||||||||||||||
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 | Year Ended | |||||||||||||||
GAAP Net income | $ | 40,913 | $ | 89,257 | ||||||||||||
Net unrealized investment gains | $ | (2,830 | ) | $ | (3,215 | ) | ||||||||||
Less: Tax effect at 25.041% | $ | 709 | $ | 805 | ||||||||||||
Net adjustment to Net income | $ | (2,121 | ) | $ | (2,410 | ) | ||||||||||
Non-GAAP Adjusted Net income | $ | 38,792 | $ | 86,847 |
(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 | Year Ended | |||||||||||||||||||||||
Non-GAAP | ||||||||||||||||||||||||
Income | Shares (a) | Per Share | Income | Shares (a) | Per Share | |||||||||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | |||||||||||||||||||
Adjusted net income (non-GAAP) | $ | 38,792 | $ | 86,847 | ||||||||||||||||||||
Less: Net income attributable to redeemable noncontrolling interest | (2,360 | ) | $ | (9,370 | ) | |||||||||||||||||||
Less: | (433 | ) | (841 | ) | ||||||||||||||||||||
Net income attributable to HCI | 35,999 | 76,636 | ||||||||||||||||||||||
Less: Income attributable to participating securities | (1,101 | ) | (2,545 | ) | ||||||||||||||||||||
Basic Earnings Per Share before unrealized gains/losses on equity securities: | ||||||||||||||||||||||||
Income allocated to common stockholders | 34,898 | 8,567 | $ | 4.07 | 74,091 | 8,367 | $ | 8.86 | ||||||||||||||||
Effect of | ||||||||||||||||||||||||
Stock options | — | 155 | — | 83 | ||||||||||||||||||||
Convertible senior notes | 1,938 | 2,538 | 7,732 | 2,538 | ||||||||||||||||||||
Warrants | — | 192 | — | 56 | ||||||||||||||||||||
Diluted Earnings Per Share before unrealized gains/losses on equity securities: | ||||||||||||||||||||||||
Income available to common stockholders and assumed conversions | $ | 36,836 | $ | 11,452 | $ | 3.22 | $ | 81,823 | $ | 11,044 | $ | 7.41 | ||||||||||||
(a) Shares in thousands. | ||||||||||||||||||||||||
Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS
Three Months Ended | Year Ended | |||||||||||||||
GAAP diluted Earnings Per Share | $ | 3.40 | $ | 7.62 | ||||||||||||
Net unrealized investment gains | $ | (0.25 | ) | $ | (0.29 | ) | ||||||||||
Less: Tax effect at 25.041% | $ | 0.07 | $ | 0.08 | ||||||||||||
Net adjustment to GAAP diluted EPS | $ | (0.18 | ) | $ | (0.21 | ) | ||||||||||
Non-GAAP Adjusted diluted EPS | $ | 3.22 | $ | 7.41 |
Source:
2024 GlobeNewswire, Inc., source