HCI Group Reports Fourth Quarter and Full Year 2021 Results
HCI Group, a multi-faceted holding company, reported a net income of $1.4 million for Q4 2021, a drop from $2.7 million in Q4 2020. The adjusted net loss was $0.1 million, compared to an adjusted net income of $1.8 million a year earlier. Despite this, gross written premiums rose 35.9% to $189.3 million. For the full year, net income totaled $7.2 million, sharply down from $27.6 million in 2020, attributed to a prior one-time gain. However, gross written premiums increased 33.8% to $674.4 million.
- Gross written premiums rose 35.9% in Q4 2021 to $189.3 million.
- Gross premiums earned increased 43.8% in Q4 2021 to $156.8 million.
- Full year gross written premiums increased 33.8% to $674.4 million.
- Net investment income grew to $2.6 million in Q4 2021, up from $1.3 million.
- Net income for Q4 2021 dropped to $1.4 million from $2.7 million in Q4 2020.
- Adjusted net loss of $0.1 million in Q4 2021 compared to an adjusted net income of $1.8 million in Q4 2020.
- Full year net income decreased to $7.2 million from $27.6 million in 2020.
TAMPA, Fla., March 08, 2022 (GLOBE NEWSWIRE) -- HCI Group, Inc. (NYSE:HCI), a holding company with operations in homeowners insurance, information technology services, real estate, and reinsurance, reported results for the three and twelve months ended December 31, 2021.
Fourth Quarter 2021 - Financial Results
Net income for the fourth quarter of 2021 totaled
Consolidated gross written premiums of
Consolidated gross premiums earned of
Premiums ceded for reinsurance for the fourth quarter of 2021 increased to
Net investment income increased to
Net unrealized investment gains were
Losses and loss adjustment expenses for the fourth quarter of 2021 were
Policy acquisition and other underwriting expenses for the fourth quarter of 2021 were
General and administrative personnel expenses increased to
Full Year 2021 - Financial Results
Net income for the year ended December 31, 2021 totaled
Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the year ended December 31, 2021 was
Consolidated gross written premiums for the twelve-month periods increased
Consolidated gross premiums earned for the year ended December 31, 2021 increased to
Premiums ceded for the year ended December 31, 2021 were
Net investment income for the year ended December 31, 2021 was
Net realized investment gains for the year ended December 31, 2021 increased to
Losses and loss adjustment expenses for the years ended December 31, 2021 and 2020 were
Policy acquisition and other underwriting expenses for the year ended December 31, 2021 were
Management Commentary
“In 2021 we grew our premiums by a third and we reported a profit for the year,” said HCI Group Chairman and Chief Executive Officer Paresh Patel. “Further, we deleveraged our balance sheet and grew book value by
Conference Call
HCI Group will hold a conference call tomorrow, March 9, 2022, 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 8:30 a.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: 823326
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 April 8, 2022.
Toll-free replay number: (877) 481-4010
International replay number: (919) 882-2331
Replay ID: 44444
About HCI Group, Inc.
HCI Group, Inc. owns subsidiaries engaged in diverse, yet complementary business activities, including homeowners insurance, reinsurance, real estate and information technology services. HCI’s leading insurance operation, TypTap Insurance Company, is a rapidly growing, technology-driven insurance company that is expanding nationwide to provide homeowners and flood insurance. 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 Statements
This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "intend," "plan," "confident," "prospects" and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. For example, the estimation of reserves for losses and loss adjustment expenses is an inherently imprecise process involving many assumptions and considerable management judgment. Some of these risks and uncertainties are identified in the company's filings with the 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.
Investor Relations Contact:
Matt Glover
Gateway Group, Inc.
Tel (949) 574-3860
HCI@gatewayir.com
Media Contact:
Catherine Adcock
Gateway Group, Inc.
Tel (949) 574-6860
catherine@gatewayir.com
- Tables to follow -
HCI GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollar amounts in thousands)
| December 31, 2021 | December 31, 2020 | |||||||
| Assets | ||||||||
| Fixed-maturity securities, available for sale, at fair value (amortized cost: | $ | 42,583 | $ | 71,722 | ||||
| Equity securities, at fair value (cost: | 51,740 | 51,130 | ||||||
| Limited partnership investments | 28,133 | 27,691 | ||||||
| Investment in unconsolidated joint venture, at equity | 363 | 705 | ||||||
| Real estate investments | 73,896 | 74,472 | ||||||
| Total investments | 196,715 | 225,720 | ||||||
| Cash and cash equivalents | 628,943 | 431,341 | ||||||
| Restricted cash | 2,400 | 2,400 | ||||||
| Accrued interest and dividends receivable | 353 | 588 | ||||||
| Income taxes receivable | 4,084 | 4,554 | ||||||
| Premiums receivable, net (allowance: | 68,157 | 68,382 | ||||||
| Prepaid reinsurance premiums | 26,355 | 36,376 | ||||||
| Reinsurance recoverable, net of allowance for credit losses: | ||||||||
| Paid losses and loss adjustment expenses (allowance: | 11,985 | 14,127 | ||||||
| Unpaid losses and loss adjustment expenses (allowance: | 64,665 | 71,019 | ||||||
| Deferred policy acquisition costs | 57,695 | 43,858 | ||||||
| Property and equipment, net | 14,232 | 12,767 | ||||||
| Right-of-use-assets - operating leases | 2,204 | 4,002 | ||||||
| Intangible assets, net | 10,636 | 3,568 | ||||||
| Funds withheld for assumed business | 73,716 | — | ||||||
| Other assets | 14,717 | 22,611 | ||||||
| Total assets | $ | 1,176,857 | $ | 941,313 | ||||
| Liabilities and Equity | ||||||||
| Losses and loss adjustment expenses | $ | 237,165 | $ | 212,169 | ||||
| Unearned premiums | 366,744 | 269,399 | ||||||
| Advance premiums | 13,771 | 11,370 | ||||||
| Assumed reinsurance balances payable | — | 87 | ||||||
| Reinsurance payable on paid losses and loss adjustment expenses | 4,017 | — | ||||||
| Ceded reinsurance premiums payable | 19,318 | 9,764 | ||||||
| Accrued expenses | 15,453 | 10,181 | ||||||
| Deferred income taxes, net | 11,739 | 11,925 | ||||||
| Revolving credit facility | 15,000 | 23,750 | ||||||
| Long-term debt | 45,504 | 156,511 | ||||||
| Lease liabilities - operating leases | 2,203 | 4,014 | ||||||
| Other liabilities | 31,485 | 31,007 | ||||||
| Total liabilities | 762,399 | 740,177 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interest | 89,955 | — | ||||||
| Equity: | ||||||||
| Common stock, (no par value, 40,000,000 shares authorized, 10,131,399 and 7,785,617 shares issued and outstanding in 2021 and 2020, respectively) | — | — | ||||||
| Additional paid-in capital | 76,077 | — | ||||||
| Retained income | 246,790 | 199,592 | ||||||
| Accumulated other comprehensive income, net of taxes | 498 | 1,544 | ||||||
| Total stockholders' equity | 323,365 | 201,136 | ||||||
| Noncontrolling interests | 1,138 | — | ||||||
| Total equity | 324,503 | 201,136 | ||||||
| Total liabilities, redeemable noncontrolling interest, and equity | $ | 1,176,857 | $ | 941,313 | ||||
HCI GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(Dollar amounts in thousands, except per share amounts)
| Three Months Ended | Years Ended | ||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| Revenue | |||||||||||||||||||
| Gross premiums earned | $ | 156,853 | $ | 109,056 | $ | 577,044 | $ | 415,918 | |||||||||||
| Premiums ceded | (54,629 | ) | (44,154 | ) | (199,741 | ) | (153,458 | ) | |||||||||||
| Net premiums earned | 102,224 | 64,902 | 377,303 | 262,460 | |||||||||||||||
| Net investment income | 2,586 | 1,320 | 12,335 | 4,564 | |||||||||||||||
| Net realized investment gains (losses) | 1,520 | 1,632 | 6,472 | 1,000 | |||||||||||||||
| Net unrealized investment gains | 2,012 | 1,260 | 1,363 | 679 | |||||||||||||||
| Credit losses on investments | — | (15 | ) | — | (611 | ) | |||||||||||||
| Policy fee income | 1,033 | 951 | 3,995 | 3,522 | |||||||||||||||
| Gain on involuntary conversion | — | — | — | 36,969 | |||||||||||||||
| Other | 2,945 | 263 | 6,447 | 1,854 | |||||||||||||||
| Total revenue | 112,320 | 70,313 | 407,915 | 310,437 | |||||||||||||||
| Expenses | |||||||||||||||||||
| Losses and loss adjustment expenses | 63,193 | 40,372 | 227,525 | 160,036 | |||||||||||||||
| Policy acquisition and other underwriting expenses | 24,158 | 14,832 | 93,732 | 53,859 | |||||||||||||||
| General and administrative personnel expenses | 13,695 | 5,860 | 45,428 | 33,829 | |||||||||||||||
| Interest expense | 657 | 2,888 | 6,400 | 11,734 | |||||||||||||||
| Loss on repurchases of convertible senior notes | — | — | — | 150 | |||||||||||||||
| Loss on extinguishment of debt | — | — | — | 98 | |||||||||||||||
| Debt conversion expense | 481 | — | 1,754 | — | |||||||||||||||
| Other operating expenses | 7,598 | 3,449 | 21,843 | 13,803 | |||||||||||||||
| Total expenses | 109,782 | 67,401 | 396,682 | 273,509 | |||||||||||||||
| Income before income taxes | 2,538 | 2,912 | 11,233 | 36,928 | |||||||||||||||
| Income tax expense | 1,103 | 205 | 3,991 | 9,348 | |||||||||||||||
| Net income | $ | 1,435 | $ | 2,707 | $ | 7,242 | $ | 27,580 | |||||||||||
| Net income attributable to redeemable noncontrolling interest | (2,224 | ) | — | (7,399 | ) | — | |||||||||||||
| Net loss attributable to noncontrolling interests | 817 | — | 2,013 | — | |||||||||||||||
| Net income after noncontrolling interests | $ | 28 | $ | 2,707 | $ | 1,856 | $ | 27,580 | |||||||||||
| Basic earnings per share | $ | 0.01 | $ | 0.35 | $ | 0.23 | $ | 3.55 | |||||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.35 | $ | 0.21 | $ | 3.49 | |||||||||||
| Dividends per share | $ | 0.40 | $ | 0.40 | $ | 1.60 | $ | 1.60 | |||||||||||
HCI GROUP, INC. AND SUBSIDIARIES
(Amounts in thousands, except per share amounts)
A summary of the numerator and denominator of basic and diluted income per common share calculated in accordance with GAAP is presented below.
| Three Months Ended | Year Ended | |||||||||||||||||||||||
| GAAP | December 31, 2021 | December 31, 2021 | ||||||||||||||||||||||
| Loss | Shares (a) | Per Share | Income | Shares (a) | Per Share | |||||||||||||||||||
| (Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | |||||||||||||||||||
| Net income | $ | 1,435 | $ | 7,242 | ||||||||||||||||||||
| Less: Net income attributable to redeemable noncontrolling interest | (2,224 | ) | (7,399 | ) | ||||||||||||||||||||
| Less: TypTap Group's net loss attributable to non-HCI common stockholders and TypTap Group's participating securities | 882 | 2,013 | ||||||||||||||||||||||
| Net income attributable to HCI | 93 | 1,856 | ||||||||||||||||||||||
| Less: (loss) income attributable to participating securities | 1 | (24 | ) | |||||||||||||||||||||
| Basic Earnings Per Share: | ||||||||||||||||||||||||
| Income allocated to common stockholders | 94 | 9,326 | $ | 0.01 | 1,832 | 8,092 | $ | 0.23 | ||||||||||||||||
| Effect of Dilutive Securities:* | ||||||||||||||||||||||||
| Stock options | — | 260 | — | 207 | ||||||||||||||||||||
| Warrants | — | 400 | — | 281 | ||||||||||||||||||||
| Diluted Earnings Per Share: | ||||||||||||||||||||||||
| Income available to common stockholders and assumed conversions | $ | 94 | 9,986 | $ | 0.01 | $ | 1,832 | 8,580 | $ | 0.21 | ||||||||||||||
| (a) Shares in thousands. | ||||||||||||||||||||||||
| * Convertible senior notes were excluded due to anti-dilutive effect. | ||||||||||||||||||||||||
Non-GAAP Financial Measures
Adjusted net (loss) 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 (loss) income and GAAP diluted earnings per share to non-GAAP Adjusted diluted (loss) earnings per share is provided below.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net (Loss) Income
| Three Months Ended | Year Ended | |||||||||||||||||||
| December 31, 2021 | December 31, 2021 | |||||||||||||||||||
| GAAP Net income | $ | 1,435 | $ | 7,242 | ||||||||||||||||
| Net unrealized investment gains | $ | (2,012 | ) | $ | (1,363 | ) | ||||||||||||||
| Less: Tax effect at | $ | 479 | $ | 324 | ||||||||||||||||
| Net adjustment to Net income | $ | (1,533 | ) | $ | (1,039 | ) | ||||||||||||||
| Non-GAAP Adjusted Net (loss) income | $ | (98 | ) | $ | 6,203 | |||||||||||||||
HCI GROUP, INC. AND SUBSIDIARIES
(Amounts in thousands, except per share amounts)
A summary of the numerator and denominator of the basic and diluted (loss) income per common share calculated with the Non-GAAP financial measure Adjusted net (loss) income is presented below.
| Three Months Ended | Year Ended | |||||||||||||||||||||||
| Non-GAAP | December 31, 2021 | December 31, 2021 | ||||||||||||||||||||||
| Loss | Shares (a) | Per Share | Income | Shares (a) | Per Share | |||||||||||||||||||
| (Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | |||||||||||||||||||
| Adjusted net (loss) income (non-GAAP) | $ | (98 | ) | $ | 6,203 | |||||||||||||||||||
| Less: Net income attributable to redeemable noncontrolling interest | (2,224 | ) | $ | (7,399 | ) | |||||||||||||||||||
| Less: TypTap Group's net loss attributable to non-HCI common stockholders and TypTap Group's participating securities | 892 | 2,024 | ||||||||||||||||||||||
| Net (loss) income attributable to HCI | (1,430 | ) | 828 | |||||||||||||||||||||
| Less: Income attributable to participating securities | 105 | 55 | ||||||||||||||||||||||
| Basic Earnings Per Share before unrealized gains/losses on equity securities: | ||||||||||||||||||||||||
| (Loss) income allocated to common stockholders | (1,325 | ) | 9,326 | $ | (0.14 | ) | 883 | 8,092 | $ | 0.11 | ||||||||||||||
| Effect of Dilutive Securities:* | ||||||||||||||||||||||||
| Stock options** | — | — | — | 207 | ||||||||||||||||||||
| Warrants** | — | — | — | 281 | ||||||||||||||||||||
| Diluted Earnings Per Share before unrealized gains/losses on equity securities: | ||||||||||||||||||||||||
| (Loss) income available to common stockholders and assumed conversions | $ | (1,325 | ) | $ | 9,326 | $ | (0.14 | ) | $ | 883 | $ | 8,580 | $ | 0.10 | ||||||||||
| (a) Shares in thousands. | ||||||||||||||||||||||||
| * Convertible senior notes were excluded due to anti-dilutive effect. **For the three months ended December 31, 2021, stock options and warrants were excluded due to anti-dilutive effect. | ||||||||||||||||||||||||
Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS
| Three Months Ended | Year Ended | |||||||||||||||||||
| December 31, 2021 | December 31, 2021 | |||||||||||||||||||
| GAAP diluted Earnings Per Share | $ | 0.01 | $ | 0.21 | ||||||||||||||||
| Net unrealized investment gains | $ | (0.21 | ) | $ | (0.16 | ) | ||||||||||||||
| Less: Tax effect at | $ | 0.06 | $ | 0.05 | ||||||||||||||||
| Net adjustment to GAAP diluted EPS | $ | (0.15 | ) | $ | (0.11 | ) | ||||||||||||||
| Non-GAAP Adjusted diluted EPS | $ | (0.14 | ) | $ | 0.10 | |||||||||||||||
FAQ
What were HCI's Q4 2021 financial results?
How did gross written premiums perform in Q4 2021 for HCI?
What is the adjusted net income for HCI in Q4 2021?
What were the annual financial results for HCI in 2021?
How much did HCI's gross premiums increase in 2021?
