HCI Group, Inc. (NYSE:HCI), a holding company with
operations in homeowners insurance, information technology
services, real estate, and reinsurance, reported pre-tax income of
$20.1 million and net income of $15.7 million, or $1.34 diluted
earnings per share, in the third quarter of 2023, compared with net
loss of $51.5 million, or $5.66 loss per share, in the third
quarter of 2022.
Adjusted net income (a non-GAAP measure which excludes net
unrealized gains or losses on equity securities) for the third
quarter of 2023 was $16.5 million, or $1.41 diluted earnings per
share compared with adjusted net loss of $51.2 million, or $5.62
loss per share, in the third quarter of 2022. This press release
includes an explanation of adjusted net income as well as a
reconciliation to net income and earnings per share calculated in
accordance with generally accepted accounting principles (known as
“GAAP”).
Management Commentary “HCI delivered another
quarter of strong earnings as the company benefited from an
improved operating environment in Florida, and rising interest
rates on our interest-bearing investments,” said HCI Group Chairman
and Chief Executive Officer Paresh Patel. “We believe we are seeing
the impact of insurance reforms recently enacted by the Florida
Legislature. Our loss ratios, for example, are improving to
profitable and sustainable levels. Ultimately, as a result of these
reforms, we expect Florida consumers will benefit from a stabilized
homeowners insurance market with greater choice and more
competition. With a more favorable operating environment, we are
currently expanding our Florida insurance businesses, which
includes the assumption of policies from Citizens.”
Third Quarter 2023 CommentaryConsolidated gross
premiums earned in the third quarter increased to $188.3 million
from $181.7 million in the third quarter of 2022. The increase was
primarily due to higher average premiums per policy offset in part
by attrition in the number of policies in force.
Premiums ceded for reinsurance in the third quarter decreased to
$66.2 million from $74.7 million in the third quarter of 2022.
Ceded premiums represented 35.1% of gross premiums earned in the
third quarter of 2023 compared with 36.5% in the prior quarter and
41.1% in the third quarter of 2022.
Net investment income for the third quarter was $9.4 million
compared with $18.5 million in the third quarter of 2022. Results
for the third quarter of 2022 included a $13.4 million gain from
the sale of real estate investment property. Excluding the real
estate gain in the prior year quarter, net investment income
increased to $9.4 million from $5.1 million in the third quarter of
2022. The increase was primarily attributable to higher yields on
fixed maturity securities, cash, and cash equivalents.
Losses and loss adjustment expenses in the third quarter
decreased to $66.7 million from $139.8 million in the third quarter
of 2022. The third quarter of 2023 included $6.5 million of loss
expense related to Hurricane Idalia and the third quarter of 2022
included $64.6 million of loss expense related to Hurricane Ian.
After adjusting for these events, the gross loss ratio declined to
32% in the third quarter of 2023 from 41% in the third quarter of
2022 reflecting the continued improvement in claims experience in
Florida driven by lower claims frequency as well as lower
litigation.
Policy acquisition and other underwriting expenses in the third
quarter decreased to $22.8 million from $24.7 million in the third
quarter of 2022 and declined to 12.1% of gross premiums earned from
13.6%, reflecting lower commissions and the transition of business
from United Property & Casualty Insurance Company.
General and administrative personnel expenses in the third
quarter decreased to $13.9 million from $15.8 million in the third
quarter of 2022.
Year-to-Date 2023 Results For the nine months
ended September 30, 2023, the company reported net income of $48.3
million, or $4.16 diluted earnings per share, compared with a net
loss of $57.3 million, or $6.26 loss per share, for the nine months
ended September 30, 2022.
Adjusted net income (a non-GAAP measure which excludes net
unrealized gains or losses on equity securities) for the nine-month
period was $48.1 million, or $4.13 diluted earnings per share
compared with adjusted net loss of $49.1 million, or $5.42 loss per
share, in the same period of 2022. An explanation of this non-GAAP
financial measure and reconciliations to the applicable GAAP
numbers accompany this press release.
Consolidated gross premiums earned for the nine months of 2023
of $550.3 million increased from $541.8 million in the first nine
months of 2022.The increase was primarily due to higher average
premium per policy offset in part by attrition in the number of
policies in force.
Premiums ceded for reinsurance for the nine months of 2023 of
$203.1 million increased from $184.1 million in the first nine
months of 2022. Ceded premiums represented 36.9% and 34.0% of gross
premiums earned in the first nine months of 2023 and 2022,
respectively.
Net investment income for the nine months of 2023 increased to
$35.9 million from $25.1 million in the first nine months of 2022.
Results for the first nine months of 2023 included a $8.9 million
gain from the sale of two real estate investment properties and
results for the first nine months of 2022 included a $13.4 million
gain from the sale of real estate investment property. Excluding
real estate gains, net investment income increased to $27.0 million
for the first nine months of 2023 from $11.7 million for the first
nine months of 2022. The increase was primarily attributable to
higher yields on fixed maturity securities, cash, and cash
equivalents.
Losses and loss adjustment expenses for the nine months of 2023
decreased to $189.2 million from $299.3 million in the first nine
months of 2022. The nine months of 2023 included $6.5 million of
loss expense related to Hurricane Idalia and the nine months of
2022 included $64.6 million of loss expense related to Hurricane
Ian. After adjusting for these events, the gross loss ratio
declined to 33% for the nine months of 2023 from 43% for the nine
months of 2022 reflecting the continued improvement in claims
experience in Florida driven by lower claims frequency as well as
lower litigation.
Policy acquisition and other underwriting expenses for the nine
months of 2023 decreased to $68.1 million from $80.9 million in the
first nine months of 2022 and declined to 12.4% of gross premiums
earned from 14.9%, reflecting lower commissions and the transition
of business from United Property & Casualty Insurance
Company.
General and administrative expenses for the nine months of 2023
decreased to $41.6 million from $45.2 million in the first nine
months of 2022.
Conference CallHCI Group will hold a conference
call later today, November 7, 2023, 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) 506-0062Listen-only
international number: (973) 528-0011Entry Code: 414822
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 November 7, 2024.
Toll-free replay number: (877) 481-4010International replay
number: (919) 882-2331 Replay ID: 49088
About HCI Group, Inc.HCI Group, Inc. owns
subsidiaries engaged in diverse, yet complementary business
activities, including homeowners insurance, information technology
services, insurance management, real estate, and reinsurance. HCI’s
leading insurance operation, TypTap Insurance Company, is a
technology-driven homeowners insurance company. TypTap’s operations
are powered in large part by insurance-related information
technology developed by HCI’s software subsidiary, Exzeo USA, Inc.
HCI’s largest subsidiary, Homeowners Choice Property & Casualty
Insurance Company, Inc., provides homeowners insurance primarily in
Florida. HCI’s real estate subsidiary, Greenleaf Capital, LLC, owns
and operates multiple properties in Florida, including office
buildings, retail centers and marinas.
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 StatementsThis 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
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, CFAInvestor
RelationsHCI Group, Inc.Tel (813) 776-1012wbroomall@typtap.com
Investor Relations Contact:Matt GloverGateway
Group, Inc.Tel (949) 574-3860HCI@gateway-grp.com
- Tables to follow -
HCI GROUP, INC. AND SUBSIDIARIESSelected
Financial Metrics(Dollar amounts in thousands,
except per share amounts) |
|
|
Q3 2023 |
|
|
Q3 2022 |
|
|
FY 2022 |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
|
|
Insurance
Operations |
|
|
|
|
|
|
|
|
Gross Written Premiums: |
|
|
|
|
|
|
|
|
Homeowners Choice |
$ |
127,334 |
|
|
$ |
119,400 |
|
|
$ |
377,860 |
|
TypTap Insurance Company |
|
70,931 |
|
|
|
71,781 |
|
|
|
348,159 |
|
Total Gross Written Premiums |
|
198,265 |
|
|
|
191,181 |
|
|
|
726,019 |
|
|
|
|
|
|
|
|
|
|
Gross Premiums Earned: |
|
|
|
|
|
|
|
|
Homeowners Choice |
|
102,075 |
|
|
|
98,985 |
|
|
|
426,502 |
|
TypTap Insurance Company |
|
86,233 |
|
|
|
82,728 |
|
|
|
298,214 |
|
Total Gross Premiums Earned |
|
188,308 |
|
|
|
181,713 |
|
|
|
724,716 |
|
|
|
|
|
|
|
|
|
|
Gross Premiums Earned Loss
Ratio |
|
35.4 |
% |
|
|
76.9 |
% |
|
|
51.3 |
% |
|
|
|
|
|
|
|
|
|
Per Share
Metrics |
|
|
|
|
|
|
|
|
GAAP Diluted EPS |
$ |
1.34 |
|
|
$ |
(5.66 |
) |
|
$ |
(6.24 |
) |
Non-GAAP Adjusted Diluted
EPS |
$ |
1.41 |
|
|
$ |
(5.62 |
) |
|
$ |
(5.48 |
) |
|
|
|
|
|
|
|
|
|
Dividends per share |
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
|
|
Book value per share at the end
of period |
$ |
23.27 |
|
|
$ |
19.52 |
|
|
$ |
18.91 |
|
|
|
|
|
|
|
|
|
|
Shares outstanding at the end
of period |
|
8,590,824 |
|
|
|
8,926,845 |
|
|
|
8,598,682 |
|
HCI GROUP, INC. AND
SUBSIDIARIESConsolidated Balance
Sheets(Dollar amounts in thousands) |
|
|
September 30, 2023 |
|
|
December 31, 2022 |
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
Fixed-maturity securities, available for sale, at fair value
(amortized cost: $427,063 and $494,197, respectively and allowance
for credit losses: $0 and $0, respectively) |
$ |
418,676 |
|
|
$ |
483,901 |
|
Equity securities, at fair value
(cost: $41,244 and $36,272, respectively) |
|
39,940 |
|
|
|
34,583 |
|
Limited partnership
investments |
|
23,174 |
|
|
|
25,702 |
|
Investment in unconsolidated
joint venture, at equity |
|
— |
|
|
|
18 |
|
Real estate investments |
|
45,269 |
|
|
|
71,388 |
|
Total investments |
|
527,059 |
|
|
|
615,592 |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
324,019 |
|
|
|
234,863 |
|
Restricted cash |
|
2,987 |
|
|
|
2,900 |
|
Receivable from maturities of
fixed-maturity securities |
|
53,000 |
|
|
|
— |
|
Accrued interest and dividends
receivable |
|
3,891 |
|
|
|
1,952 |
|
Income taxes receivable |
|
4,375 |
|
|
|
2,807 |
|
Premiums receivable, net
(allowance: $3,581 and $5,362, respectively) |
|
42,121 |
|
|
|
34,998 |
|
Prepaid reinsurance premiums |
|
97,225 |
|
|
|
66,627 |
|
Reinsurance recoverable, net
of allowance for credit losses: |
|
|
|
|
|
Paid losses and loss adjustment expenses (allowance: $0 and $0,
respectively) |
|
29,425 |
|
|
|
71,594 |
|
Unpaid losses and loss adjustment expenses (allowance: $319 and
$454, respectively) |
|
462,539 |
|
|
|
616,765 |
|
Deferred policy acquisition
costs |
|
45,032 |
|
|
|
45,522 |
|
Property and equipment, net |
|
28,768 |
|
|
|
17,910 |
|
Right-of-use-assets - operating
leases |
|
1,460 |
|
|
|
777 |
|
Intangible assets, net |
|
8,272 |
|
|
|
10,578 |
|
Funds withheld for assumed
business |
|
44,761 |
|
|
|
48,772 |
|
Other assets |
|
48,698 |
|
|
|
31,671 |
|
|
|
|
|
|
|
Total assets |
$ |
1,723,632 |
|
|
$ |
1,803,328 |
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
Losses and loss adjustment
expenses |
$ |
709,089 |
|
|
$ |
863,765 |
|
Unearned premiums |
|
395,827 |
|
|
|
368,047 |
|
Advance premiums |
|
32,250 |
|
|
|
18,587 |
|
Reinsurance payable on paid
losses and loss adjustment expenses |
|
7,043 |
|
|
|
8,606 |
|
Ceded reinsurance premiums
payable |
|
3 |
|
|
|
17,646 |
|
Accrued expenses |
|
25,934 |
|
|
|
14,534 |
|
Reinsurance recovered in advance
on unpaid losses |
|
— |
|
|
|
19,863 |
|
Deferred income taxes, net |
|
4,945 |
|
|
|
1,704 |
|
Long-term debt |
|
208,331 |
|
|
|
211,687 |
|
Lease liabilities - operating
leases |
|
1,457 |
|
|
|
721 |
|
Other liabilities |
|
43,895 |
|
|
|
23,361 |
|
|
|
|
|
|
|
Total liabilities |
|
1,428,774 |
|
|
|
1,548,521 |
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
Redeemable noncontrolling
interest |
|
93,801 |
|
|
|
93,553 |
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Common stock, (no par value, 40,000,000 shares authorized,
8,590,824 and 8,598,682shares issued and outstanding at September
30, 2023 and December 31, 2022, respectively) |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
2,171 |
|
|
|
— |
|
Retained income |
|
203,766 |
|
|
|
172,482 |
|
Accumulated other comprehensive loss, net of taxes |
|
(5,997 |
) |
|
|
(9,886 |
) |
Total stockholders' equity |
|
199,940 |
|
|
|
162,596 |
|
Noncontrolling interests |
|
1,117 |
|
|
|
(1,342 |
) |
Total equity |
|
201,057 |
|
|
|
161,254 |
|
|
|
|
|
|
|
Total liabilities, redeemable noncontrolling interest, and
equity |
$ |
1,723,632 |
|
|
$ |
1,803,328 |
|
HCI GROUP, INC. AND
SUBSIDIARIESConsolidated Statements of
Income(Unaudited)(Dollar amounts
in thousands, except per share amounts) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums earned |
$ |
188,308 |
|
|
$ |
181,713 |
|
|
$ |
550,322 |
|
|
$ |
541,762 |
|
Premiums ceded |
|
(66,152 |
) |
|
|
(74,741 |
) |
|
|
(203,051 |
) |
|
|
(184,108 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
|
122,156 |
|
|
|
106,972 |
|
|
|
347,271 |
|
|
|
357,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
9,384 |
|
|
|
18,530 |
|
|
|
35,893 |
|
|
|
25,082 |
|
Net realized investment
losses |
|
(207 |
) |
|
|
(884 |
) |
|
|
(1,586 |
) |
|
|
(1,204 |
) |
Net unrealized investment
(losses) gains |
|
(1,041 |
) |
|
|
(347 |
) |
|
|
385 |
|
|
|
(8,157 |
) |
Policy fee income |
|
1,092 |
|
|
|
1,071 |
|
|
|
3,651 |
|
|
|
3,180 |
|
Other |
|
260 |
|
|
|
1,312 |
|
|
|
2,386 |
|
|
|
3,065 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
131,644 |
|
|
|
126,654 |
|
|
|
388,000 |
|
|
|
379,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment
expenses |
|
66,726 |
|
|
|
139,794 |
|
|
|
189,181 |
|
|
|
299,328 |
|
Policy acquisition and other
underwriting expenses |
|
22,768 |
|
|
|
24,678 |
|
|
|
68,106 |
|
|
|
80,949 |
|
General and administrative
personnel expenses |
|
13,864 |
|
|
|
15,848 |
|
|
|
41,638 |
|
|
|
45,183 |
|
Interest expense |
|
2,827 |
|
|
|
2,813 |
|
|
|
8,295 |
|
|
|
4,929 |
|
Other operating expenses |
|
5,371 |
|
|
|
7,123 |
|
|
|
17,290 |
|
|
|
20,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
111,556 |
|
|
|
190,256 |
|
|
|
324,510 |
|
|
|
450,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
|
20,088 |
|
|
|
(63,602 |
) |
|
|
63,490 |
|
|
|
(71,161 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
4,419 |
|
|
|
(12,099 |
) |
|
|
15,146 |
|
|
|
(13,907 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
15,669 |
|
|
$ |
(51,503 |
) |
|
$ |
48,344 |
|
|
$ |
(57,254 |
) |
Net income attributable to redeemable noncontrolling interest |
|
(2,349 |
) |
|
|
(2,285 |
) |
|
|
(7,010 |
) |
|
|
(6,801 |
) |
Net (income) loss attributable to noncontrolling interests |
|
(163 |
) |
|
|
2,829 |
|
|
|
(396 |
) |
|
|
4,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) after noncontrolling interests |
$ |
13,157 |
|
|
$ |
(50,959 |
) |
|
$ |
40,938 |
|
|
$ |
(60,037 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
$ |
1.53 |
|
|
$ |
(5.66 |
) |
|
$ |
4.76 |
|
|
$ |
(6.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share |
$ |
1.34 |
|
|
$ |
(5.66 |
) |
|
$ |
4.16 |
|
|
$ |
(6.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share |
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
1.20 |
|
|
$ |
1.20 |
|
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 calculated in accordance with GAAP is
presented below.
|
Three Months Ended |
|
|
Nine Months Ended |
|
GAAP |
September 30, 2023 |
|
|
September 30, 2023 |
|
|
Income |
|
|
Shares (a) |
|
|
Per Share |
|
|
Income |
|
|
Shares (a) |
|
|
Per Share |
|
|
(Numerator) |
|
|
(Denominator) |
|
|
Amount |
|
|
(Numerator) |
|
|
(Denominator) |
|
|
Amount |
|
Net income |
$ |
15,669 |
|
|
|
|
|
|
|
|
$ |
48,344 |
|
|
|
|
|
|
|
Less: Net income attributable to
redeemable noncontrolling interest |
|
(2,349 |
) |
|
|
|
|
|
|
|
|
(7,010 |
) |
|
|
|
|
|
|
Less: TypTap Group's net (income)
attributable to non-HCI common stockholders and TypTap Group's
participating securities |
|
(163 |
) |
|
|
|
|
|
|
|
|
(396 |
) |
|
|
|
|
|
|
Net income attributable to
HCI |
|
13,157 |
|
|
|
|
|
|
|
|
|
40,938 |
|
|
|
|
|
|
|
Less: Income attributable to
participating securities |
|
(411 |
) |
|
|
|
|
|
|
|
|
(1,395 |
) |
|
|
|
|
|
|
Basic Earnings Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income allocated to common stockholders |
|
12,746 |
|
|
|
8,317 |
|
|
$ |
1.53 |
|
|
|
39,543 |
|
|
|
8,299 |
|
|
$ |
4.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Dilutive
Securities: * |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options |
|
— |
|
|
|
88 |
|
|
|
|
|
|
— |
|
|
|
68 |
|
|
|
|
Convertible senior notes |
|
1,927 |
|
|
|
2,538 |
|
|
|
|
|
|
5,771 |
|
|
|
2,538 |
|
|
|
|
Warrants |
|
— |
|
|
|
32 |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income available to common
stockholders and assumed conversions |
$ |
14,673 |
|
|
|
10,975 |
|
|
$ |
1.34 |
|
|
$ |
45,314 |
|
|
|
10,905 |
|
|
$ |
4.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Shares in
thousands. |
|
* For the nine
months ended September 30, 2023, warrants were excluded due to
anti-dilutive effect. |
|
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. HCI Group believes net income without the effect of volatility
in equity prices more accurately depicts operating results. This
financial measurement is not recognized in accordance with
accounting principles generally accepted in the United States of
America ("GAAP") and should not be viewed as an alternative to GAAP
measures of performance. A reconciliation of GAAP Net income to
Non-GAAP Adjusted net income and GAAP diluted earnings per share to
Non-GAAP Adjusted diluted earnings per share is provided below.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted
Net Income
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2023 |
GAAP Net income |
|
|
|
|
$ |
15,669 |
|
|
|
|
|
|
$ |
48,344 |
|
Net unrealized investment losses
(gains) |
$ |
1,041 |
|
|
|
|
|
$ |
(385 |
) |
|
|
|
Less: Tax effect at 25.345% |
$ |
(264 |
) |
|
|
|
|
$ |
98 |
|
|
|
|
Net adjustment to Net income |
|
|
|
$ |
777 |
|
|
|
|
|
|
$ |
(287 |
) |
Non-GAAP Adjusted Net income |
|
|
|
$ |
16,446 |
|
|
|
|
|
|
$ |
48,057 |
|
HCI GROUP, INC. AND
SUBSIDIARIES(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 |
|
|
Nine Months Ended |
|
Non-GAAP |
September 30, 2023 |
|
|
September 30, 2023 |
|
|
Income |
|
|
Shares (a) |
|
|
Per Share |
|
|
Income |
|
|
Shares (a) |
|
|
Per Share |
|
|
(Numerator) |
|
|
(Denominator) |
|
|
Amount |
|
|
(Numerator) |
|
|
(Denominator) |
|
|
Amount |
|
Adjusted net income
(non-GAAP) |
$ |
16,446 |
|
|
|
|
|
|
|
|
$ |
48,057 |
|
|
|
|
|
|
|
Less: Net income attributable to
redeemable noncontrolling interest |
|
(2,349 |
) |
|
|
|
|
|
|
|
$ |
(7,010 |
) |
|
|
|
|
|
|
Less: TypTap Group's net (income)
loss attributable to non-HCI common stockholders and TypTap Group's
participating securities |
|
(166 |
) |
|
|
|
|
|
|
|
|
(393 |
) |
|
|
|
|
|
|
Net income attributable to
HCI |
|
13,931 |
|
|
|
|
|
|
|
|
|
40,654 |
|
|
|
|
|
|
|
Less: Income attributable to
participating securities |
|
(437 |
) |
|
|
|
|
|
|
|
|
(1,385 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share
before unrealized gains/losses on equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income allocated to common stockholders |
|
13,494 |
|
|
|
8,317 |
|
|
$ |
1.62 |
|
|
|
39,269 |
|
|
|
8,299 |
|
|
$ |
4.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Dilutive
Securities: * |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options |
|
— |
|
|
|
88 |
|
|
|
|
|
|
— |
|
|
|
68 |
|
|
|
|
Convertible senior notes |
|
1,927 |
|
|
|
2,538 |
|
|
|
|
|
|
5,771 |
|
|
|
2,538 |
|
|
|
|
Warrants |
|
— |
|
|
|
32 |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share before unrealized gains/losses on equity
securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income available to common
stockholders and assumed conversions |
$ |
15,421 |
|
|
$ |
10,975 |
|
|
$ |
1.41 |
|
|
$ |
45,040 |
|
|
$ |
10,905 |
|
|
$ |
4.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Shares in
thousands. |
|
* For the nine
months ended September 30, 2023, warrants were excluded due to
anti-dilutive effect. |
|
Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted
Diluted EPS
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2023 |
GAAP diluted Earnings Per Share |
|
|
|
|
$ |
1.34 |
|
|
|
|
|
|
$ |
4.16 |
|
Net unrealized investment losses
(gains) |
$ |
0.09 |
|
|
|
|
|
|
$ |
(0.04 |
) |
|
|
|
|
Less: Tax effect at 25.345% |
$ |
(0.02 |
) |
|
|
|
|
|
$ |
0.01 |
|
|
|
|
|
Net adjustment to GAAP diluted
EPS |
|
|
|
|
$ |
0.07 |
|
|
|
|
|
|
$ |
(0.03 |
) |
Non-GAAP Adjusted diluted
EPS |
|
|
|
|
$ |
1.41 |
|
|
|
|
|
|
$ |
4.13 |
|
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