HCI 8-K
HCI Group, Inc. (HCI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (or Date of Earliest Event Reported):
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
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(Commission File Number) |
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(I.R.S. Employer Identification Number) |
(Address of Principal Executive Offices)
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(Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Item 2.02 Results of Operations and Financial Condition
On May 8, 2025, we released our earnings for the three months ended March 31, 2025. We plan to host an earnings conference call that same day at 4:45 p.m. Eastern time during which our chief executive officer, chief financial officer and chief operating officer as well as the president and chief financial officer of our subsidiary, Exzeo Group, Inc., will discuss the results.
Interested parties may 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.
Date: Thursday, May 8, 2025
Time: 4:45 p.m. Eastern time (1:45 p.m. Pacific time)
Listen-only toll-free number: (888) 506-0062
Listen-only international number: (973) 528-0011
Entry Code: 325047
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.
Toll-free replay number: (877) 481-4010
International replay number: (919) 882-2331
Replay ID: 52364
Our earnings release appears as Exhibit 99.1 to this form 8-K
Item 9.01 Exhibits.
Exhibit 99.1 Earnings Release
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: May 8, 2025.
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HCI GROUP, INC. |
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BY: |
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/s/ James Mark Harmsworth |
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Name: James Mark Harmsworth Title: Chief Financial Officer |
A signed original of this Form 8-K has been provided to HCI Group, Inc. and will be retained by HCI Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 99.1
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
Investor Relations Contact:
Matt Glover
Gateway Group, Inc.
Tel (949) 574-3860
- Tables to follow -
2
HCI GROUP, INC. AND SUBSIDIARIES
Selected Financial Metrics
(Dollar amounts in thousands, except per share amounts)
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Q1 2025 |
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Q1 2024 |
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FY 2024 |
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(Unaudited) |
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(Unaudited) |
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Insurance Operations |
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Gross Written Premiums: |
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Homeowners Choice |
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$ |
117,133 |
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$ |
91,875 |
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$ |
593,943 |
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TypTap Insurance Company |
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142,396 |
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143,624 |
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491,413 |
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Condo Owners Reciprocal Exchange |
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7,731 |
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19,487 |
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81,411 |
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Tailrow Reciprocal Exchange |
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21,985 |
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- |
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- |
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Total Gross Written Premiums |
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289,245 |
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254,986 |
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1,166,767 |
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Gross Premiums Earned: |
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Homeowners Choice |
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156,489 |
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149,271 |
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589,137 |
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TypTap Insurance Company |
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124,447 |
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103,748 |
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442,876 |
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Condo Owners Reciprocal Exchange |
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15,325 |
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3,625 |
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51,207 |
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Tailrow Reciprocal Exchange |
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4,122 |
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- |
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- |
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Total Gross Premiums Earned |
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300,383 |
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256,644 |
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1,083,220 |
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Gross Premiums Earned Loss Ratio |
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19.7 |
% |
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31.1 |
% |
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34.6 |
% |
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Per Share Metrics |
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Diluted EPS |
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$ |
5.35 |
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$ |
3.81 |
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$ |
8.89 |
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Dividends per share |
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$ |
0.40 |
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$ |
0.40 |
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$ |
1.60 |
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Book value per share at the end of period |
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$ |
48.55 |
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$ |
38.50 |
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$ |
42.10 |
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Shares outstanding at the end of period |
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10,765,336 |
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10,276,463 |
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10,767,184 |
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3
HCI GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollar amounts in thousands)
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March 31, 2025 |
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December 31, 2024 |
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(Unaudited) |
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Assets |
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Fixed-maturity securities, available for sale, at fair value (amortized cost: $651,071 and $719,536, respectively and allowance for credit losses: $0 and $0, respectively) |
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$ |
652,861 |
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$ |
718,537 |
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Equity securities, at fair value (cost: $52,962 and $52,030, respectively) |
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55,226 |
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56,200 |
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Limited partnership investments |
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20,176 |
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20,802 |
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Real estate investments |
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80,151 |
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79,120 |
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Total investments |
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808,414 |
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874,659 |
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Cash and cash equivalents |
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754,481 |
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532,471 |
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Restricted cash |
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3,722 |
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3,714 |
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Accrued interest and dividends receivable |
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7,650 |
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6,008 |
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Income taxes receivable |
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— |
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463 |
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Deferred income taxes, net |
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1,502 |
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72 |
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Premiums receivable, net (allowance: $4,684 and $5,891, respectively) |
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54,704 |
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50,582 |
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Prepaid reinsurance premiums |
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38,009 |
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92,060 |
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Reinsurance recoverable, net of allowance for credit losses: |
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Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively) |
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46,335 |
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36,062 |
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Unpaid losses and loss adjustment expenses (allowance: $151 and $186, respectively) |
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481,434 |
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522,379 |
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Deferred policy acquisition costs |
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56,398 |
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54,303 |
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Property and equipment, net |
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30,237 |
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29,544 |
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Right-of-use-assets - operating leases |
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1,124 |
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1,182 |
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Intangible assets, net |
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4,565 |
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5,206 |
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Funds withheld for assumed business |
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8,451 |
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11,690 |
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Other assets |
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9,642 |
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9,818 |
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Total assets |
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$ |
2,306,668 |
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$ |
2,230,213 |
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Liabilities and Equity |
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Losses and loss adjustment expenses |
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$ |
798,146 |
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$ |
845,900 |
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Unearned premiums |
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573,565 |
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584,703 |
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Advance premiums |
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37,807 |
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18,867 |
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Reinsurance payable on paid losses and loss adjustment expenses |
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— |
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2,496 |
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Ceded reinsurance premiums payable |
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19,779 |
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18,313 |
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Assumed premiums payable |
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3,582 |
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2,176 |
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Accrued expenses |
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29,110 |
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17,677 |
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Income tax payable |
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33,378 |
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5,451 |
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Deferred income taxes, net |
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3,661 |
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2,830 |
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Revolving credit facility |
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42,000 |
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44,000 |
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Long-term debt |
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185,332 |
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185,254 |
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Lease liabilities - operating leases |
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1,131 |
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1,185 |
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Other liabilities |
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34,708 |
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32,320 |
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Total liabilities |
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1,762,199 |
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1,761,172 |
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Commitments and contingencies |
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Redeemable noncontrolling interest |
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1,637 |
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1,691 |
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Equity: |
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Common stock, (no par value, 40,000,000 shares authorized, 10,765,336 and 10,767,184 |
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— |
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— |
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Additional paid-in capital |
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124,170 |
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122,289 |
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Retained income |
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397,171 |
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331,793 |
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Accumulated other comprehensive loss, net of taxes |
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1,342 |
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(749 |
) |
Total stockholders' equity |
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522,683 |
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453,333 |
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Noncontrolling interests |
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20,149 |
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14,017 |
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Total equity |
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542,832 |
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467,350 |
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Total liabilities, redeemable noncontrolling interest, and equity |
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$ |
2,306,668 |
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$ |
2,230,213 |
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4
HCI GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(Dollar amounts in thousands, except per share amounts)
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Revenue |
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Gross premiums earned |
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$ |
300,383 |
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$ |
256,644 |
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Premiums ceded |
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(99,635 |
) |
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(68,106 |
) |
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Net premiums earned |
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200,748 |
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188,538 |
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Net investment income |
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13,751 |
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14,067 |
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Net realized investment gains |
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1,167 |
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— |
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Net unrealized investment (losses) gains |
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(1,906 |
) |
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2,635 |
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Policy fee income |
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2,229 |
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1,019 |
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Other |
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444 |
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355 |
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Total revenue |
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216,433 |
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206,614 |
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Expenses |
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Losses and loss adjustment expenses |
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59,291 |
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79,922 |
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Policy acquisition and other underwriting expenses |
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27,287 |
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22,139 |
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General and administrative personnel expenses |
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20,483 |
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16,274 |
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Interest expense |
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3,384 |
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|
3,149 |
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Other operating expenses |
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5,649 |
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7,700 |
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Total expenses |
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116,094 |
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129,184 |
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Income before income taxes |
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100,339 |
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|
77,430 |
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Income tax expense |
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26,109 |
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20,474 |
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Net income |
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$ |
74,230 |
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$ |
56,956 |
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Net income attributable to redeemable noncontrolling interests |
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— |
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(10,149 |
) |
Net (income) loss attributable to noncontrolling interests |
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(4,546 |
) |
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|
804 |
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Net income after noncontrolling interests |
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$ |
69,684 |
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$ |
47,611 |
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Basic earnings per share |
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$ |
6.47 |
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$ |
4.76 |
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Diluted earnings per share |
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$ |
5.35 |
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$ |
3.81 |
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Dividends per share |
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$ |
0.40 |
|
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$ |
0.40 |
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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.
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Three Months Ended |
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Three Months Ended |
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March 31, 2025 |
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March 31, 2024 |
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Income |
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Shares (a) |
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Per Share |
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Income |
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Shares (a) |
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Per Share |
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|
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(Numerator) |
|
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(Denominator) |
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Amount |
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(Numerator) |
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(Denominator) |
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Amount |
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Net income |
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$ |
74,230 |
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$ |
56,956 |
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Less: Net income attributable to redeemable noncontrolling interests |
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— |
|
|
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(10,149 |
) |
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Less: Net (income) loss attributable to noncontrolling interests |
|
|
(4,546 |
) |
|
|
|
|
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|
804 |
|
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Net income attributable to HCI |
|
|
69,684 |
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|
|
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|
|
|
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