EX-99.1 2 hci-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

 

img19850711_0.jpg

 

HCI Group Reports First Quarter 2025 Results

 

First Quarter Diluted EPS of $5.35

First Quarter Pre-Tax Income of $100.3 million

Exzeo Ready to be Standalone Company

 

Tampa, Fla. – May 8 , 2025 – HCI Group, Inc. (NYSE:HCI), reported pre-tax income of $100.3 million and net income of $74.2 million for the first quarter of 2025. Net income after noncontrolling interests was $69.7 million compared with $47.6 million in the first quarter of 2024. Diluted earnings per share were $5.35 in the first quarter of 2025, compared with $3.81 diluted earnings per share, in the first quarter of 2024.

Management Commentary

“HCI Group had a terrific first quarter,” said HCI Group Chairman and Chief Executive Officer Paresh Patel. “We are happy to announce that Exzeo is ready to be a standalone company. Consequently, our Board has determined to pursue a potential tax-free spin-off of Exzeo to existing HCI shareholders that, subject to customary conditions, is targeted for completion by the end of the year.”

 

First Quarter 2025 Commentary

Consolidated gross premiums earned in the first quarter of 2025 increased by 17.0% to $300.4 million from $256.6 million in the first quarter of 2024 driven primarily by assumptions of policies from Citizens Property Insurance Corporation.

Premiums ceded for reinsurance in the first quarter of 2025 were $99.6 million compared with $68.1 million in the first quarter of 2024. The increase was primarily attributable to higher reinsurance costs due to growth in the number of policies in force and total insured value.

Net investment income in the first quarter of 2025 was $13.8 million compared with $14.1 million in the first quarter of 2024. The decrease was primarily attributable to a decrease in income from limited partnership investments.

Losses and loss adjustment expenses in the first quarter of 2025 were $59.3 million compared with $79.9 million in the first quarter of 2024 despite the growth in gross premiums earned. The decrease is primarily driven by a decline in claims and litigation frequency. The gross loss ratio in the first quarter was 19.7% compared to 31.1% in the first quarter of 2024.

Policy acquisition and other underwriting expenses in the first quarter of 2025 were $27.3 million compared with $22.1 million in the first quarter of 2024 driven by higher gross premiums earned.

General and administrative personnel expenses in the first quarter of 2025 increased to $20.5 million from $16.3 million in the first quarter of 2024. The increase was primarily attributable to higher accrued discretionary bonus, stock-based compensation and employee health benefits.

 

Conference Call

HCI Group will hold a conference call later today, May 8, 2025, to discuss these financial results. Chairman and Chief Executive Officer Paresh Patel, Chief Operating Officer Karin Coleman and Chief Financial Officer Mark Harmsworth will host the call starting at 4:45 p.m. Eastern time.

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: 325047

1

 

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 8:00 p.m. Eastern time on the same day as the call and via the Investor Information section of the HCI Group website at www.hcigroup.com through May 8, 2026.

Toll-free replay number: (877) 481-4010

International replay number: (919) 882-2331

Replay ID: 52364

About HCI Group, Inc.

HCI Group, Inc. is a holding company with two distinct operating units. The first unit includes four top-performing insurance companies, a captive reinsurance company, and operations in claims management and real estate. The second unit, called Exzeo Group, is a leading innovator of insurance technology that utilizes advanced underwriting algorithms and data analytics. Exzeo empowers property and casualty insurers to transform underwriting outcomes and achieve industry-leading results.

The company's common shares trade on the New York Stock Exchange under the ticker symbol "HCI" and are included in the Russell 2000 and S&P SmallCap 600 Index. HCI Group, Inc. regularly publishes financial and other information in the Investor Information section of the company’s website. For more information about HCI Group and its subsidiaries, visit www.hcigroup.com.

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. In addition, there can be no assurance the Internal Revenue Service will determine the company’s proposed spinoff will be tax free to HCI shareholders. Some of these risks and uncertainties are identified in the company's filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company's business, financial condition and results of operations. HCI Group, Inc. disclaims all obligations to update any forward-looking statements.

 

Company Contact:

Bill Broomall, CFA

Investor Relations

HCI Group, Inc.

Tel (813) 776-1012

[email protected]

Investor Relations Contact:

Matt Glover

Gateway Group, Inc.

Tel (949) 574-3860

[email protected]

 

- Tables to follow -

2

 

HCI GROUP, INC. AND SUBSIDIARIES

Selected Financial Metrics

(Dollar amounts in thousands, except per share amounts)

 

 

 

Q1 2025

 

 

 

Q1 2024

 

 

FY 2024

 

 

 

(Unaudited)

 

 

 

(Unaudited)

 

 

 

 

Insurance Operations

 

 

 

 

 

 

 

 

 

 

Gross Written Premiums:

 

 

 

 

 

 

 

 

 

 

Homeowners Choice

 

$

117,133

 

 

 

$

91,875

 

 

$

593,943

 

TypTap Insurance Company

 

 

142,396

 

 

 

 

143,624

 

 

 

491,413

 

Condo Owners Reciprocal Exchange

 

 

7,731

 

 

 

 

19,487

 

 

 

81,411

 

Tailrow Reciprocal Exchange

 

 

21,985

 

 

 

 

-

 

 

 

-

 

Total Gross Written Premiums

 

 

289,245

 

 

 

 

254,986

 

 

 

1,166,767

 

 

 

 

 

 

 

 

 

 

 

 

Gross Premiums Earned:

 

 

 

 

 

 

 

 

 

 

Homeowners Choice

 

 

156,489

 

 

 

 

149,271

 

 

 

589,137

 

TypTap Insurance Company

 

 

124,447

 

 

 

 

103,748

 

 

 

442,876

 

Condo Owners Reciprocal Exchange

 

 

15,325

 

 

 

 

3,625

 

 

 

51,207

 

Tailrow Reciprocal Exchange

 

 

4,122

 

 

 

 

-

 

 

 

-

 

Total Gross Premiums Earned

 

 

300,383

 

 

 

 

256,644

 

 

 

1,083,220

 

 

 

 

 

 

 

 

 

 

 

 

Gross Premiums Earned Loss Ratio

 

 

19.7

%

 

 

 

31.1

%

 

 

34.6

%

 

 

 

 

 

 

 

 

 

 

 

Per Share Metrics

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$

5.35

 

 

 

$

3.81

 

 

$

8.89

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.40

 

 

 

$

0.40

 

 

$

1.60

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share at the end of period

 

$

48.55

 

 

 

$

38.50

 

 

$

42.10

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding at the end of period

 

 

10,765,336

 

 

 

 

10,276,463

 

 

 

10,767,184

 

3

 

HCI GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Dollar amounts in thousands)

 

 

 

March 31, 2025

 

 

December 31, 2024

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Fixed-maturity securities, available for sale, at fair value (amortized cost: $651,071 and $719,536, respectively and allowance for credit losses: $0 and $0, respectively)

 

$

652,861

 

 

$

718,537

 

Equity securities, at fair value (cost: $52,962 and $52,030, respectively)

 

 

55,226

 

 

 

56,200

 

Limited partnership investments

 

 

20,176

 

 

 

20,802

 

Real estate investments

 

 

80,151

 

 

 

79,120

 

Total investments

 

 

808,414

 

 

 

874,659

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

754,481

 

 

 

532,471

 

Restricted cash

 

 

3,722

 

 

 

3,714

 

Accrued interest and dividends receivable

 

 

7,650

 

 

 

6,008

 

Income taxes receivable

 

 

—

 

 

 

463

 

Deferred income taxes, net

 

 

1,502

 

 

 

72

 

Premiums receivable, net (allowance: $4,684 and $5,891, respectively)

 

 

54,704

 

 

 

50,582

 

Prepaid reinsurance premiums

 

 

38,009

 

 

 

92,060

 

Reinsurance recoverable, net of allowance for credit losses:

 

 

 

 

 

 

Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively)

 

 

46,335

 

 

 

36,062

 

Unpaid losses and loss adjustment expenses (allowance: $151 and $186, respectively)

 

 

481,434

 

 

 

522,379

 

Deferred policy acquisition costs

 

 

56,398

 

 

 

54,303

 

Property and equipment, net

 

 

30,237

 

 

 

29,544

 

Right-of-use-assets - operating leases

 

 

1,124

 

 

 

1,182

 

Intangible assets, net

 

 

4,565

 

 

 

5,206

 

Funds withheld for assumed business

 

 

8,451

 

 

 

11,690

 

Other assets

 

 

9,642

 

 

 

9,818

 

 

 

 

 

 

 

 

Total assets

 

$

2,306,668

 

 

$

2,230,213

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

Losses and loss adjustment expenses

 

$

798,146

 

 

$

845,900

 

Unearned premiums

 

 

573,565

 

 

 

584,703

 

Advance premiums

 

 

37,807

 

 

 

18,867

 

Reinsurance payable on paid losses and loss adjustment expenses

 

 

—

 

 

 

2,496

 

Ceded reinsurance premiums payable

 

 

19,779

 

 

 

18,313

 

Assumed premiums payable

 

 

3,582

 

 

 

2,176

 

Accrued expenses

 

 

29,110

 

 

 

17,677

 

Income tax payable

 

 

33,378

 

 

 

5,451

 

Deferred income taxes, net

 

 

3,661

 

 

 

2,830

 

Revolving credit facility

 

 

42,000

 

 

 

44,000

 

Long-term debt

 

 

185,332

 

 

 

185,254

 

Lease liabilities - operating leases

 

 

1,131

 

 

 

1,185

 

Other liabilities

 

 

34,708

 

 

 

32,320

 

 

 

 

 

 

 

 

Total liabilities

 

 

1,762,199

 

 

 

1,761,172

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

1,637

 

 

 

1,691

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Common stock, (no par value, 40,000,000 shares authorized, 10,765,336 and 10,767,184
shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively)

 

 

—

 

 

 

—

 

Additional paid-in capital

 

 

124,170

 

 

 

122,289

 

Retained income

 

 

397,171

 

 

 

331,793

 

Accumulated other comprehensive loss, net of taxes

 

 

1,342

 

 

 

(749

)

Total stockholders' equity

 

 

522,683

 

 

 

453,333

 

Noncontrolling interests

 

 

20,149

 

 

 

14,017

 

Total equity

 

 

542,832

 

 

 

467,350

 

 

 

 

 

 

 

 

Total liabilities, redeemable noncontrolling interest, and equity

 

$

2,306,668

 

 

$

2,230,213

 

 

4

 

HCI GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

(Dollar amounts in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2025

 

 

2024

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums earned

 

$

300,383

 

 

$

256,644

 

Premiums ceded

 

 

(99,635

)

 

 

(68,106

)

 

 

 

 

 

 

 

Net premiums earned

 

 

200,748

 

 

 

188,538

 

 

 

 

 

 

 

 

Net investment income

 

 

13,751

 

 

 

14,067

 

Net realized investment gains

 

 

1,167

 

 

 

—

 

Net unrealized investment (losses) gains

 

 

(1,906

)

 

 

2,635

 

Policy fee income

 

 

2,229

 

 

 

1,019

 

Other

 

 

444

 

 

 

355

 

 

 

 

 

 

 

 

Total revenue

 

 

216,433

 

 

 

206,614

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

 

59,291

 

 

 

79,922

 

Policy acquisition and other underwriting expenses

 

 

27,287

 

 

 

22,139

 

General and administrative personnel expenses

 

 

20,483

 

 

 

16,274

 

Interest expense

 

 

3,384

 

 

 

3,149

 

Other operating expenses

 

 

5,649

 

 

 

7,700

 

 

 

 

 

 

 

 

Total expenses

 

 

116,094

 

 

 

129,184

 

 

 

 

 

 

 

 

Income before income taxes

 

 

100,339

 

 

 

77,430

 

 

 

 

 

 

 

 

Income tax expense

 

 

26,109

 

 

 

20,474

 

 

 

 

 

 

 

 

Net income

 

$

74,230

 

 

$

56,956

 

Net income attributable to redeemable noncontrolling interests

 

 

—

 

 

 

(10,149

)

Net (income) loss attributable to noncontrolling interests

 

 

(4,546

)

 

 

804

 

 

 

 

 

 

 

 

Net income after noncontrolling interests

 

$

69,684

 

 

$

47,611

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

6.47

 

 

$

4.76

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

5.35

 

 

$

3.81

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.40

 

 

$

0.40

 

 

5

 

HCI GROUP, INC. AND SUBSIDIARIES

(Amounts in thousands, except per share amounts)

 

A summary of the numerator and denominator of basic and diluted earnings per common share is presented below.

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2025

 

 

March 31, 2024

 

 

 

Income

 

 

Shares (a)

 

 

Per Share

 

 

Income

 

 

Shares (a)

 

 

Per Share

 

 

 

(Numerator)

 

 

(Denominator)

 

 

Amount

 

 

(Numerator)

 

 

(Denominator)

 

 

Amount

 

Net income

 

$

74,230

 

 

 

 

 

 

 

 

$

56,956

 

 

 

 

 

 

 

Less: Net income attributable to redeemable noncontrolling interests

 

 

—

 

 

 

 

 

 

 

 

 

(10,149

)

 

 

 

 

 

 

Less: Net (income) loss attributable to noncontrolling interests

 

 

(4,546

)

 

 

 

 

 

 

 

 

804

 

 

 

 

 

 

 

Net income attributable to HCI

 

 

69,684

 

 

 

 

 

 

 

 

 

47,611

 

 

 

 

 

 

 

Less: Income attributable to participating securities

 

 

(3,103

)

 

 

 

 

 

 

 

 

(1,218

)

 

 

 

 

 

 

Basic Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income allocated to common stockholders

 

 

66,581

 

 

 

10,286

 

 

$

6.47

 

 

 

46,393

 

 

 

9,751

 

 

$

4.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

—

 

 

 

350

 

 

 

 

 

 

—

 

 

 

280

 

 

 

 

Convertible senior notes

 

 

1,873

 

 

 

2,142

 

 

 

 

 

 

1,640

 

 

 

2,282

 

 

 

 

Warrants

 

 

—

 

 

 

7

 

 

 

 

 

 

—

 

 

 

305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income available to common stockholders and assumed conversions

 

$

68,454

 

 

 

12,785

 

 

$

5.35

 

 

$

48,033

 

 

 

12,618

 

 

$

3.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Shares in thousands.

 

 

 

 

6