Heritage Insurance Holdings, Inc 10-Q for FY2025 Q1

Heritage Insurance Holdings, Inc. (HRTG)

10-Q 2025-05-09 For: 2025-03-31

Added on April 09, 2026

About this 10-Q

Heritage Insurance Holdings, Inc filed this 10-Q on May 9, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).

Headline figures

Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $211.52M; up 10.6% from $191.3M a year earlier
Net income: $30.47M; up 114.2% from net income of $14.23M a year earlier
Diluted EPS: $0.99; up 110.6% from $0.47 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware						45-5338504
(State of Incorporation)						(IRS Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	HRTG	New York Stock Exchange


						Page
PART I – FINANCIAL INFORMATION
Item 1 Unaudited Financial Statements
Condensed Consolidated Balance Sheets: March 31, 202 5 (unaudited) and December 31, 2024						2
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss): Three Months Ended March 31, 202 5 and 202 4 (unaudited)						3
Condensed Consolidated Statements of Stockholders’ Equity: Three Months Ended March 31, 202 5 and 202 4 (unaudited)						4
Condensed Consolidated Statements of Cash Flows: Three Months Ended March 31, 202 5 and 202 4 (unaudited)						5
Notes to Unaudited Condensed Consolidated Financial Statements						7
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations						2 5
Item 3 Quantitative and Qualitative Disclosures about Market Risk						3 5
Item 4 Controls and Procedures						3 5
PART II – OTHER INFORMATION
Item 1 Legal Proceedings						3 6
Item 1A Risk Factors						3 6
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds						3 6
Item 5 Other Information						3 6
Item 6 Exhibits						3 6
Signatures						3 8



	March 31, 2025		December 31, 2024
ASSETS	(unaudited)
Fixed maturities, available-for-sale, at fair value (amortized cost of $696,141 and $692,790)	$	667,390	$	655,555
Equity securities, at fair value, (cost $1,064 and $1,936)	1,064		1,936
Other investments, net	4,930		5,952
Total investments	673,384		663,443
Cash and cash equivalents	425,908		452,666
Restricted cash	13,454		10,979
Accrued investment income	5,230		5,592
Premiums receivable, net	109,336		102,134
Reinsurance recoverable on paid and unpaid claims, net of allowance for credit losses of $197	593,083		740,204
Prepaid reinsurance premiums	196,228		309,802
Deferred income tax asset, net	22,055		13,876
Deferred policy acquisition costs, net	63,906		63,204
Property and equipment, net	38,843		38,080
Right-of-use lease asset, finance	14,459		15,082
Right-of-use lease asset, operating	5,540		5,850
Intangibles, net	34,826		36,372
Other assets	16,845		11,640
Total Assets	$	2,213,097	$	2,468,924
LIABILITIES AND STOCKHOLDERS' EQUITY
Unpaid losses and loss adjustment expenses	$	848,928	$	1,042,687
Unearned premiums	704,857		702,707
Reinsurance payable	123,065		227,060
Long-term debt, net	94,808		116,319
Advance premiums	21,635		15,186
Income taxes payable, net	20,577		846
Accrued compensation	10,436		8,926
Lease liability, finance	17,481		18,071
Lease liability, operating	6,595		6,945
Accounts payable and other liabilities	35,712		39,378
Total Liabilities	$	1,884,094	$	2,178,124
Commitments and contingencies (Note 17)
Stockholders’ Equity:
Common stock, $0.0001 par value, 50,000,000 shares authorized, 43,224,944 shares issued and 30,993,270 outstanding at March 31, 2025 and 42,838,713 shares issued and 30,607,039 outstanding at December 31, 2024	3		3
Additional paid-in capital	363,909		362,644
Accumulated other comprehensive income, net of taxes	(22,139)		(28,604)
Treasury stock, at cost, 12,231,674 shares at March 31, 2025 and December 31, 2024	(130,900)		(130,900)
Retained earnings	118,130		87,656
Total Stockholders' Equity	329,003		290,799
Total Liabilities and Stockholders' Equity	$	2,213,097	$	2,468,924


	For the Three Months Ended March 31,
		2025		2024
REVENUES:
Gross premiums written		$	355,997	$	356,684
Change in gross unearned premiums		(2,169)		(15,295)
Gross premiums earned		353,828		341,389
Ceded premiums		(153,794)		(161,963)
Net premiums earned		200,034		179,426
Net investment income		8,575		8,551
Net realized losses		(4)		(1)
Other revenue		2,915		3,326
Total revenues		211,520		191,302
EXPENSES:
Losses and loss adjustment expenses		99,407		102,035
Policy acquisition costs, net of ceding commission income (1)		45,815		46,929
General and administrative expenses, net of ceding commission income (2)		23,862		19,634
Total expenses		169,084		168,598
Operating income		42,436		22,704
Interest expense, net		2,426		2,830

Income before income taxes		40,010		19,874
Income tax expense		9,536		5,649
Net income		$	30,474	$	14,225
OTHER COMPREHENSIVE INCOME (LOSS)
Change in net unrealized gains (losses) on investments		8,477		(284)
Reclassification adjustment for net realized investment losses		4		1
Income tax (expense) benefit related to items of other comprehensive income		(2,016)		67
Total comprehensive income		$	36,939	$	14,009
Weighted average shares outstanding
Basic		30,697,826		30,376,682
Diluted		30,757,089		30,435,945
Earnings per share
Basic		$	0.99	$	0.47
Diluted		$	0.99	$	0.47


	Common Shares	Par Value		Additional Paid-In Capital		Retained Earnings		Treasury Shares		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balance at December 31, 2024	30,607,039	$	3	$	362,644	$	87,656	$	(130,900)	$	(28,604)	$	290,799
Net unrealized change in investments, net of tax	—	—		—		—		—		6,465		6,465
Issuance of restricted stock	386,231	—		—		—		—		—		—
Stock-based compensation on restricted stock	—	—		1,265		—		—		—		1,265
Net Income	—	—		—		30,474		—		—		30,474
Balance at March 31, 2025	30,993,270	$	3	$	363,909	$	118,130	$	(130,900)	$	(22,139)	$	329,003


	For the Three Months Ended March 31,
	2025		2024
OPERATING ACTIVITIES
Net income	$	30,474	$	14,225
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation	1,265		595
Bond amortization and accretion	(92)		(739)
Amortization of original issuance discount on debt	140		213
Depreciation and amortization	2,879		2,226
Allowance for bad debt	6		(798)
Net realized losses	4		1
Deferred income taxes	(10,195)		(4,330)
Changes in operating assets and liabilities:
Accrued investment income	362		(515)
Premiums receivable, net	(7,208)		(4,038)
Prepaid reinsurance premiums	113,574		117,496
Reinsurance recoverable on paid and unpaid claims	147,121		(83,265)
Income taxes receivable	—		9,979
Deferred policy acquisition costs, net	(702)		(3,411)
Right of use leased asset, net	933		808
Other assets	(5,205)		(5,221)
Unpaid losses and loss adjustment expenses	(193,759)		(2,268)
Unearned premiums	2,150		15,253
Reinsurance payable	(103,995)		(57,285)
Accrued interest	17		(479)
Accrued compensation	1,510		(5,585)
Advance premiums	6,449		13,119
Income tax payable	19,731		—
Leased liabilities, net	(940)		(764)
Other liabilities	(3,682)		(909)
Net cash provided by operating activities	837		4,308
INVESTING ACTIVITIES
Fixed maturity securities sales, maturities and paydowns	18,763		29,770
Fixed maturity securities purchases	(22,097)		(112,746)
Redemption of equity securities	960		—
Return on other investments	1,022		180
Equity securities reinvestment of dividends	(21)		(270)
Cost of property and equipment acquired	(2,096)		(229)
Net cash used in investing activities	(3,469)		(83,295)
FINANCING ACTIVITIES
Repayment of term note	(2,375)		(2,375)
Mortgage loan payments	(76)		(63)
Payment on loan agreement	(19,200)		—
Proceeds from loan agreement	—		5,500
Additional costs associated with public offering	—		(3)
Dividends forfeited	—		54
Net cash (used in) provided by financing activities	(21,651)		3,113
Decrease in cash, cash equivalents, and restricted cash	(24,283)		(75,874)
Cash, cash equivalents and restricted cash, beginning of period	463,645		473,339
Cash, cash equivalents and restricted cash, end of period	$	439,362	$	397,465
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid	$	—	$	—
Interest paid	$	2,090	$	2,400


	March 31, 2025		December 31, 2024
	(In thousands)
Cash and cash equivalents	$	425,908	$	452,666
Restricted cash	13,454		10,979
Total	$	439,362	$	463,645


March 31, 2025	Cost or Adjusted / Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt Securities Available-for-sale	(In thousands)
U.S. government and agency securities (1)	$	97,678	$	728	$	500	$	97,906
States, municipalities and political subdivisions	331,889		502		21,715		310,676
Corporate bonds	241,405		1,731		7,092		236,044
Mortgage-backed securities (1)	16,823		—		2,333		14,490
Asset-backed securities	2,341		—		70		2,271
Other	6,005		—		2		6,003
Total	$	696,141	$	2,961	$	31,712	$	667,390


	2025				2024
Three Months Ended March 31,	Gains (Losses)		Fair Value at Sale		Gains (Losses)		Fair Value at Sale
	(In thousands)
Debt Securities Available-for-Sale
Total realized gains	$	5	$	—	$	—	$	—
Total realized losses	(9)		110		(1)		46
Net realized losses	$	(4)	$	110	$	(1)	$	46


	At March 31, 2025
	Cost or Amortized Cost		Percent of Total		Fair Value		Percent of Total
Maturity dates:	(In thousands)				(In thousands)
Due in one year or less	$	117,571	16.9	%	$	116,426	17.4	%
Due after one year through five years	401,980		57.8	%	389,943		58.5	%
Due after five years through ten years	142,256		20.4	%	129,645		19.4	%
Due after ten years	34,334		4.9	%	31,376		4.7	%
Total	$	696,141	100.0	%	$	667,390	100.0	%


	Less Than Twelve Months					Twelve Months or More
March 31, 2025	Number of Securities	Gross Unrealized Losses		Fair Value		Number of Securities	Gross Unrealized Losses		Fair Value
Debt Securities Available-for-sale
U.S. government and agency securities	6	$	34	$	15,357	15	$	466	$	14,941
States, municipalities and political subdivisions	13	469		16,181		338	21,246		249,985
Corporate bonds	23	116		18,188		164	6,976		110,668
Mortgage-backed securities	—	—		—		119	2,333		14,489
Asset-backed securities	—	—		—		29	70		2,271
Other	1	2		1,998		—	—		—
Total	43	$	621	$	51,724	665	$	31,091	$	392,354


	As of March 31, 2025				As of December 31, 2024
	Carrying Value		Maximum Loss Exposure		Carrying Value		Maximum Loss Exposure
Investments in non-consolidated VIEs - Equity Method	$	920	$	920	$	920	$	920
Investments in non-consolidated VIEs -Method Alternative	$	4,010	$	4,010	$	5,032	$	5,032
Total non-consolidated VIEs	$	4,930	$	4,930	$	5,952	$	5,952


March 31, 2025	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:	(in thousands)
Cash and cash equivalents	$	425,908	$	425,908	$	—	$	—
Restricted cash	13,454		13,454		$	—	$	—
Total assets:	$	439,362	$	439,362	$	—	$	—
Debt Securities Available-for-sale
U.S. government and agency securities	$	97,906	$	—	$	97,906	$	—
States, municipalities and political subdivisions	310,676		—		310,676		—
Corporate bonds	236,044		—		236,044		—
Mortgage-backed securities	14,490		—		14,490		—
Asset-backed securities	2,271		—		2,271		—
Other	6,003		—		6,003		—
Total debt securities	$	667,390	$	—	$	667,390	$	—
Equity Securities
Common stock	1,064		1,064		—		—
Total debt securities and equity securities	$	668,454	$	1,064	$	667,390	$	—


Operating Leases	March 31, 2025		December 31, 2024
Right of use assets	$	5,540	$	5,850
Lease liability	$	6,595	$	6,945
Finance Leases
Right of use assets	$	14,459	$	15,082
Lease liability	$	17,481	$	18,071


	Financing Lease		Operating Lease
2025 - remaining	$	2,403	$	1,267
2026	3,216		1,688
2027	3,190		1,599
2028	3,270		1,633
2029	3,352		1,197
2030 and thereafter	4,299		16
Total lease payments	19,730		7,400
Less: imputed interest	2,249		805
Present value of lease liabilities	$	17,481	$	6,595


	March 31, 2025		December 31, 2024
	(In thousands)
Land	$	2,582	$	2,582
Building	9,599		9,599
Computer hardware and software	35,316		33,236
Office furniture and equipment	1,514		1,498
Tenant and leasehold improvements	11,023		11,023
Vehicle fleet	515		515
Total, at cost	60,549		58,453
Less: accumulated depreciation and amortization	(21,706)		(20,373)
Property and equipment, net	$	38,843	$	38,080


Year	Amount
2025 − remaining	$	4,638
2026	$	6,033
2027	$	5,836
2028	$	3,913
2029	$	3,813
Thereafter	$	9,278
Total	$	33,511


Weighted-average remaining lease term	March 31, 2025		December 31, 2024
Operating lease	4.38	yrs.	4.6	yrs.
Finance lease	6.1	yrs.	6.19	yrs.
Weighted-average discount rate
Operating lease	5.42	%	5.36	%
Finance lease	4.13	%	4.14	%


Operating Leases	March 31, 2025		March 31, 2024
Lease liability payments	$	(350)	$	(560)
Finance Leases
Lease liability payments	$	(590)	$	(211)
Total lease liability payments	$	(940)	$	(771)


	March 31, 2025		December 31, 2024
Deferred tax assets:	(in thousands)
Unearned premiums	$	24,665	$	18,617
Net operating loss	—		1
Tax-related discount on loss reserve	4,730		5,079
Property and equipment	1,877		1,366
Stock-based compensation	983		669
Accrued expenses	1,863		1,536
Convertible note	28		6
Leases	951		959
Unrealized losses	7,797		9,813
Other	3,585		459
Total deferred tax asset	$	46,479	$	38,506
Deferred tax liabilities:
Deferred acquisition costs	15,054		15,028
Prepaid expenses	97		191
Basis in purchased investments	4		6
Basis in purchased intangibles	7,690		8,027
Other	1,579		1,378
Total deferred tax liabilities	$	24,424	$	24,630
Net deferred tax assets	$	22,055	$	13,876


Description	March 31, 2025		December 31, 2024
	(In thousands)
Accounts payable and other payables	$	19,899	$	21,154
Accrued interest and issuance costs	163		146
Other liabilities	212		213
Premium tax	122		438
Commission payables	15,316		17,427
Total other liabilities	$	35,712	$	39,378


		Weighted-Average Grant-Date Fair Value per Share
	Number of shares
Non-vested, at December 31, 2024	1,334,921	$	8.36
Granted - Performance-based restricted stock	285,985	$	11.88
Granted - Time-based restricted stock	100,246	$	11.87
Vested	—	—
Canceled and surrendered	—	—
Non-vested, at March 31, 2025	1,721,152	$	9.15


Grant date	Restricted shares unvested	Share Value at Grant Date Per Share	Remaining Restriction Period (Years)
February 27, 2024	109,094	7.02	0.8
February 27, 2024	253,918	7.02	1.8
June 5, 2024	39,312	8.14	0.3
July 11, 2023	818,627	4.08	0.8
July 11, 2023	113,970	4.08	0.8
January 10, 2025	1,000	10.86	0.8
March 11, 2025	99,246	11.88	2.8
March 11, 2025	285,985	11.88	2.8
	1,721,152


Policies-in-force:	Q1 2025		Q1 2024		% Change

Florida	130,003		147,954		(12.1)	%
Other States	247,818		289,001		(14.3)	%
Total	377,821		436,955		(13.5)	%

Premiums-in-force:	(in thousands)
Florida	$	695,091	$	716,868	(3.0)	%
Other States	737,561		670,195		10.1	%
Total	$	1,432,653	$	1,387,063	3.3	%

Total Insured Value:	(in thousands)
Florida	$	102,648,934	$	103,796,187	(1.1)	%
Other States	260,995,659		284,663,196		(8.3)	%
Total	$	363,644,593	$	388,459,383	(6.4)	%


3.1			Certificate of Incorporation of Heritage Insurance Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 6, 2014
3.2			By-laws of Heritage Insurance Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed on August 6, 2014
4			Form of Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-195409) filed on May 13, 2014)
10.30†*			F orm of Restricted S tock Award A greement (Time-based and Performance-Based Vesting, as of March 2025)*
10.31†*			Form of Amendment to Restricted Stock Award Agreements*
31.1*			Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
31.2*			Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
32.1**			Certification of Chief Executive Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
32.2**			Certification of Chief Financial Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **


101.INS						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104						The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL (included in Exhibit 101)


	HERITAGE INSURANCE HOLDINGS, INC.

Date: May 9, 2025	By:	/s/ ERNESTO GARATEIX
		Ernesto Garateix
		Chief Executive Officer (Principal Executive Officer and Duly Authorized Officer)

Date: May 9, 2025	By:	/s/ KIRK LUSK
		Kirk Lusk
		Chief Financial Officer (Principal Financial Officer)


			HERITAGE INSURANCE HOLDINGS, INC.

			By: Name: Title:
			PARTICIPANT

			[__________]


Participant Name	Award Date	Award Type	No. Shares in Original Award
[__________]	July 11, 2023 (the “2023 Award”)	Time-Based Restricted Stock	[____]
		Performance-Based Restricted Stock	[____]
[__________]	February 26, 2024 (the “2024 Award”)	Time-Based Restricted Stock	[____]
		Performance-Based Restricted Stock	[____]


By:						/s/ ERNESTO GARATEIX
Ernesto Garateix
Chief Executive Officer
(Principal Executive Officer and Duly Authorized Officer)


By:						/s/ KIRK LUSK
Kirk Lusk
Chief Financial Officer
(Principal Financial Officer)


By:			/s/ ERNESTO GARATEIX
Ernesto Garateix
Chief Executive Officer (Principal Executive Officer and Duly Authorized Officer)