Heritage Reports Third Quarter 2022 Results
Heritage Insurance Holdings (NYSE: HRTG) reported a net loss of $48.2 million or $1.83 per diluted share for Q3 2022, a significant increase from a $16.4 million net loss in the prior year quarter. Gross premiums written rose 11.1% to $304.5 million, while net earned premiums fell 1.7% to $159.7 million. Major factors included weather-related losses of $63.8 million, up 24.2%, and a substantial increase in catastrophe losses due to Hurricane Ian. The net combined ratio worsened to 133.3% from 112.5%. The company has temporarily suspended dividends to shareholders amid these losses.
- Gross premiums written up 11.1% to $304.5 million.
- Gross premiums earned increased 4.6% year-over-year.
- Premiums-in-force rose by 5.8% despite a decline in policy count.
- Net loss of $48.2 million, up 194% from prior year.
- Net earned premiums decreased 1.7% to $159.7 million.
- Current accident year weather losses rose 24.2% to $63.8 million.
- Net loss ratio of 97.6%, up 17.8 points from last year.
- Net combined ratio increased to 133.3%, reflecting worsening underwriting performance.
- Suspension of dividends due to stock trading below tangible book value.
TAMPA, Fla., Nov. 8, 2022 /PRNewswire/ -- Heritage Insurance Holdings, Inc. (NYSE: HRTG) ("Heritage" or the "Company"), a super-regional property and casualty insurance holding company, today reported third quarter of 2022 financial results.
Third Quarter 2022 Result Highlights
- Third quarter net loss of
$48.2 million or$1.83 per diluted share, compared to a net loss of$16.4 million or$0.59 per diluted share in the prior year quarter. - Gross premiums written of
$304.5 million , up11.1% from$274.2 million in the prior year quarter. - Gross premiums earned of
$308.0 million , up4.6% from$294.4 million in the prior year quarter. - Net earned premiums of
$159.7 million , down1.7% from$162.4 million in the prior year quarter. - Net current accident year weather losses of
$63.8 million , up24.2% from$51.4 million in the prior year quarter. Current accident year catastrophe weather losses are$40.0 million up150.5% from$16.0 million in the prior year quarter. Current accident year other weather losses are$23.8 million , down32.8% from$35.4 million in the prior year quarter. - Ceded premium ratio of
48.1% , up 3.3 points from44.8% in the prior year quarter. - Net loss ratio of
97.6% , 17.8 points higher than the prior year quarter of79.8% . - Net expense ratio of
35.7% , up 3.0 points from the prior year quarter amount of32.7% . - Net combined ratio of
133.3% , up 20.8 points from112.5% in the prior year quarter. - Repurchased 632,744 shares for
$1.7 million .
"Hurricane Ian made landfall in Florida on September 28th. Our highest priority is our policyholders and all those who continue to be affected by Hurricane Ian remain in our thoughts. We are committed to fair and timely claim handling for our customers," said Heritage CEO Ernie Garateix. At the same time, we are focused on managing exposure and achieving rate adequacy throughout the book of business. We continue to de-risk products or geographies which are not producing appropriate margins, which includes being more selective on both new and renewal business. While I am disappointed with the loss in the quarter, the strategies outlined below are having a positive impact, as demonstrated by the Supplemental Information table included in this earnings release, and I expect that improvement to continue and be reflected in future quarters."
Strategic Profitability Initiatives
The following provides an update to the Company's strategic initiatives that we expect will enable Heritage to achieve consistent long-term quarterly earnings and drive shareholder value. The Supplemental Information table included in this earnings release demonstrates progress made since third quarter 2021.
- Generate underwriting profit though rate adequacy and more selective underwriting.
- Premiums-in-force of
$1.24 billion are up5.8% from the prior year quarter, while policy count is down6.9% , driven by higher rates. - Average premium per policy throughout the book increased
13.6% over the prior year quarter. - Continued focus on tightening underwriting criteria while also restricting new business, for policies written in over-concentrated markets or products.
- Optimize capital allocation toward products and geographies that maximize long-term returns.
- Reduction of policy count for Florida personal lines product is a key focus and will continue if meaningful legislation to reduce abusive claims practices does not occur. Policy count for Florida personal lines business intentionally declined by
18.8% as compared to the prior year period. - Continued offering of Florida commercial lines product with
18.2% growth in annual premium while total insured value ("TIV") increased only4.2% . - Improve portfolio diversity.
- Diversification efforts led to a premium in-force growth of
14.1% in other States. - Overall premium-in-force increase of
5.8% , despite an8.5% reduction in Florida admitted personal lines business. - TIV in other states improved to
74.8% , compared to71.3% as of the third quarter of 2021.
Capital Management
Given that Heritage's stock is trading below tangible book value and the loss in the quarter, Heritage's Board of Directors has decided to temporarily suspend the quarterly dividend to shareholders. The Board of Directors will re-evaluate dividend distribution and stock repurchases on a quarterly basis.
Results of Operations
The following table summarizes results of operations for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands, except percentages and per share amounts):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||
Revenue | $ | 165,493 | $ | 167,408 | (1.1) | % | $ | 487,872 | $ | 464,849 | 5.0 | % | ||||||||||||||
Net loss | $ | (48,240) | $ | (16,410) | 194.0 | % | $ | (166,864) | $ | (25,509) | 554.1 | % | ||||||||||||||
Adjusted net loss [1] | $ | (48,240) | $ | (16,410) | 194.0 | % | $ | (76,090) | $ | (25,509) | 198.3 | % | ||||||||||||||
Loss per share | $ | (1.83) | $ | (0.59) | 210.1 | % | $ | (6.29) | $ | (0.91) | 587.8 | % | ||||||||||||||
Adjusted net loss [1] | $ | (1.83) | $ | (0.59) | 210.1 | % | $ | (2.87) | $ | (0.91) | 213.6 | % | ||||||||||||||
Book value per share | $ | 4.54 | $ | 14.57 | (68.8) | % | $ | 4.54 | $ | 14.57 | (68.8) | % | ||||||||||||||
Adjusted book value[1] | $ | 6.65 | $ | 14.55 | (54.3) | % | $ | 6.65 | $ | 14.55 | (54.3) | % | ||||||||||||||
Return on equity | (129.4) | % | (15.8) | % | (113.6) | pts | (96.6) | % | (8.0) | % | (88.6) | pts | ||||||||||||||
Adjusted return on equity*[1] | (129.4) | % | (15.8) | % | (113.6) | pts | (44.0) | % | (8.0) | % | (36.0) | pts | ||||||||||||||
Underwriting summary | ||||||||||||||||||||||||||
Gross premiums written | $ | 304,501 | $ | 274,178 | 11.1 | % | $ | 952,981 | $ | 886,059 | 7.6 | % | ||||||||||||||
Gross premiums earned | $ | 307,959 | $ | 294,409 | 4.6 | % | $ | 891,539 | $ | 850,466 | 4.8 | % | ||||||||||||||
Ceded premiums earned | $ | (148,266) | $ | (131,964) | 12.4 | % | $ | (420,645) | $ | (399,323) | 5.3 | % | ||||||||||||||
Net premiums earned | $ | 159,693 | $ | 162,445 | (1.7) | % | $ | 470,894 | $ | 451,143 | 4.4 | % | ||||||||||||||
Ceded premium ratio | 48.1 | % | 44.8 | % | 3.3 | pts | 47.2 | % | 47.0 | % | 0.2 | pts | ||||||||||||||
Ratios to Net Premiums Earned: | ||||||||||||||||||||||||||
Loss ratio | 97.6 | % | 79.8 | % | 17.8 | pts | 84.4 | % | 72.8 | % | 11.6 | pts | ||||||||||||||
Expense ratio | 35.7 | % | 32.7 | % | 3.0 | pts | 36.3 | % | 35.8 | % | 0.5 | pts | ||||||||||||||
Combined ratio | 133.3 | % | 112.5 | % | 20.8 | pts | 120.7 | % | 108.6 | % | 12.1 | pts | ||||||||||||||
[1] Represents a non-GAAP financial measure. Information regarding non-GAAP financial measures, including required reconciliations, are set forth below under the "Non-GAAP Financial Measures" section of this release. |
* Return on equity represents annualized net income for the period divided by average stockholders' equity during the period. |
Note: Percentages and sums in the table may not recalculate precisely due to rounding. |
Ratios
Ceded premium ratio represents ceded premiums as a percentage of gross premiums earned.
Net loss ratio represents net losses and loss adjustment expenses ("LAE") as a percentage of net premiums earned.
Net expense ratio represents policy acquisition costs ("PAC") and general and administrative ("G&A") expenses as a percentage of net premiums earned. Ceding commission income is reported as a reduction of PAC and G&A expenses.
Net combined ratio represents the sum of net losses and LAE, PAC and G&A expenses as a percentage of net premiums earned. The net combined ratio is a key measure of underwriting performance traditionally used in the property and casualty industry. A net combined ratio under
Third Quarter 2022 Results
- Third quarter net loss of
$48.2 million or$1.83 per diluted share, compared to a net loss of$16.4 million or$0.59 per diluted share in the prior year quarter driven primarily by current accident year weather losses, including a$40 million net retention for Hurricane Ian. In addition, the Company recorded a$10.7 million valuation allowance against our net deferred tax asset related to certain tax elections made by Osprey Re, our captive reinsurer domiciled in Bermuda. - Gross premiums written of
$304.5 million , up11.1% from$274.2 million in the prior year quarter, reflecting a4.8% rate related increase in Florida, despite a policy count reduction of approximately 40,000, and15.4% growth in other states primarily due to rate increases. Rate increases continued to meaningfully benefit written premiums throughout the book of business. - Gross premiums earned of
$308.0 million , up4.6% from$294.4 million in the prior year quarter, reflecting higher gross premiums written over the last twelve months driven by higher average premium per policy. - Net earned premiums are down
1.7% reflecting a12.4% increase in contract year reinsurance cost with higher ceded premium outpacing the increase in gross earned premiums for the quarter. - Net current accident year weather losses of
$63.8 million , up24.2% from$51.4 million in the prior year quarter. Current accident year catastrophe weather losses are$40.0 million up150.5% from$16.0 million in the prior year quarter. The catastrophe loss for the current quarter represents a$40.0 million retention for Hurricane Ian. Current accident year other weather losses are$23.8 million , down32.8% from$35.4 million in the prior year quarter. - Ceded premium ratio of
48.1% , up 3.3 points from44.8% in the prior year quarter driven by a higher cost of the 2022-2023 catastrophe excess of loss program, stemming from both higher costs and higher TIV. - Net loss ratio of
97.6% , 17.8 points higher than the prior year quarter of79.8% , driven by higher losses incurred and slightly lower net earned premium than the prior year quarter. - Net expense ratio of
35.7% , up 3.0 points from the prior year quarter amount of32.7% , mostly driven by the reduction of net earned premium from the prior year quarter, with a small portion of the increase related to higher underwriting costs associated with an increase in gross premiums written. - Net combined ratio of
133.3% , up 20.8 points from112.5% in the prior year quarter, driven by a higher net loss ratio and net expense ratio as described above. - Effective tax rate was
2.2% compared to6.4% in the prior year quarter, driven by the impact of permanent differences in relation to the pre-tax loss each quarter, as well as a$10.7 million valuation allowance as described above in the current period quarter.
Supplemental Information:
At September 30, | ||||||||||||
2022 | 2021 | % Change | ||||||||||
Policies in force: | ||||||||||||
Florida | 188,383 | 228,572 | -17.6 | % | ||||||||
Other States | 352,989 | 352,714 | 0.1 | % | ||||||||
Total | 541,372 | 581,286 | -6.9 | % | ||||||||
Premiums in force: | ||||||||||||
Florida | $ | 569,589,537 | $ | 584,994,491 | -2.6 | % | ||||||
Other States | 672,812,875 | 589,527,230 | 14.1 | % | ||||||||
Total | $ | 1,242,402,412 | $ | 1,174,521,721 | 5.8 | % | ||||||
Total Insured Value: | ||||||||||||
Florida | $ | 102,784,056,201 | $ | 114,537,338,974 | -10.3 | % | ||||||
Other States | 304,657,398,158 | 284,498,624,168 | 7.1 | % | ||||||||
Total | $ | 407,441,454,359 | $ | 399,035,963,142 | 2.1 | % | ||||||
Book Value Analysis
Book value per share decreased to
Book Value Per Common Share | As Of | |||||||||||||||||||
Sept 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | ||||||||||||||||
Numerator: | ||||||||||||||||||||
Common stockholders' equity | $ | 117,697 | $ | 180,546 | $ | 281,766 | $ | 343,051 | $ | 405,025 | ||||||||||
Denominator: | ||||||||||||||||||||
Total Shares Outstanding | 25,898,930 | 26,544,096 | 26,444,720 | 26,753,511 | 27,802,626 | |||||||||||||||
Book Value Per Common Share | $ | 4.54 | $ | 6.80 | $ | 10.65 | $ | 12.82 | $ | 14.57 | ||||||||||
Adjusted Book Value Per Common Share | $ | 6.65 | 8.35 | 11.75 | 12.99 | 14.55 | ||||||||||||||
Conference Call Details:
Wednesday, November 9, 2022– 9:00 a.m. ET
Participant Dial-in Numbers Toll Free: 1-888-346-3095
Participant International Dial In: 1-412-902-4258
Canada Toll Free: 1-855-669-9657
Webcast:
To listen to the live webcast, please go to http://investors.heritagepci.com/. This webcast will be archived and accessible on the Company's website.
HERITAGE INSURANCE HOLDINGS, INC. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Amounts in thousands, except share amounts) | ||||||||
(Unaudited) | ||||||||
September 30, 2022 | December 31, 2021 | |||||||
ASSETS | (unaudited) | |||||||
Fixed maturities, available-for-sale, at fair value | $ | 633,192 | $ | 669,354 | ||||
Equity securities, at cost | 1,514 | 1,415 | ||||||
Other investments | 17,084 | 23,929 | ||||||
Total investments | 651,790 | 694,698 | ||||||
Cash and cash equivalents | 297,548 | 359,337 | ||||||
Restricted cash | 6,265 | 5,415 | ||||||
Accrued investment income | 3,517 | 3,167 | ||||||
Premiums receivable, net | 76,126 | 71,925 | ||||||
Reinsurance recoverable on paid and unpaid claims, net | 866,625 | 269,391 | ||||||
Prepaid reinsurance premiums | 381,368 | 265,873 | ||||||
Income tax receivable | 13,760 | 11,739 | ||||||
Deferred income tax asset, net | 14,637 | — | ||||||
Deferred policy acquisition costs, net | 100,649 | 93,881 | ||||||
Property and equipment, net | 22,784 | 17,426 | ||||||
Right-of-use lease asset, net | 25,218 | 27,753 | ||||||
Intangibles, net | 51,163 | 55,926 | ||||||
Goodwill | — | 91,959 | ||||||
Other assets | 11,133 | 12,272 | ||||||
Total Assets | $ | 2,522,583 | $ | 1,980,762 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Unpaid losses and loss adjustment expenses | $ | 1,209,352 | $ | 590,166 | ||||
Unearned premiums | 651,913 | 590,419 | ||||||
Reinsurance payable | 278,298 | 191,728 | ||||||
Long-term debt, net | 121,283 | 120,757 | ||||||
Deferred income tax liability, net | — | 9,426 | ||||||
Advance premiums | 37,855 | 24,504 | ||||||
Accrued compensation | 8,067 | 8,014 | ||||||
Lease liability | 28,901 | 31,172 | ||||||
Accounts payable and other liabilities | 69,217 | 71,525 | ||||||
Total Liabilities | $ | 2,404,886 | $ | 1,637,711 | ||||
Stockholders' Equity: | ||||||||
Common stock, | 3 | 3 | ||||||
Additional paid-in capital | 334,246 | 332,797 | ||||||
Accumulated other comprehensive loss, net | (54,573) | (4,573) | ||||||
Treasury stock | (130,286) | (123,557) | ||||||
Retained (deficit) earnings | (31,693) | 138,381 | ||||||
Total Stockholders' Equity | 117,697 | 343,051 | ||||||
Total Liabilities and Stockholders' Equity | $ | 2,522,583 | $ | 1,980,762 | ||||
HERITAGE INSURANCE HOLDINGS, INC. AND SUBSIDIARIES | ||||||||||||||||
Consolidated Statements of Income and Other Comprehensive Loss | ||||||||||||||||
(Amounts in thousands, except per share and share amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
REVENUES: | ||||||||||||||||
Gross premiums written | $ | 304,501 | $ | 274,178 | $ | 952,981 | $ | 886,059 | ||||||||
Change in gross unearned premiums | 3,458 | 20,231 | (61,442) | (35,593) | ||||||||||||
Gross premiums earned | 307,959 | 294,409 | 891,539 | 850,466 | ||||||||||||
Ceded premiums earned | (148,266) | (131,964) | (420,645) | (399,323) | ||||||||||||
Net premiums earned | 159,693 | 162,445 | 470,894 | 451,143 | ||||||||||||
Net investment income | 2,887 | 1,548 | 7,050 | 3,797 | ||||||||||||
Net realized losses | (3) | (6) | (121) | (926) | ||||||||||||
Other revenue | 2,916 | 3,421 | 10,049 | 10,835 | ||||||||||||
Total revenues | 165,493 | 167,408 | 487,872 | 464,849 | ||||||||||||
EXPENSES: | ||||||||||||||||
Losses and loss adjustment expenses | 155,849 | 129,632 | 397,409 | 328,376 | ||||||||||||
Policy acquisition costs, net | 39,194 | 35,984 | 115,826 | 109,183 | ||||||||||||
General and administrative expenses, net | 17,758 | 17,169 | 54,947 | 52,490 | ||||||||||||
Goodwill impairment | — | — | 91,959 | — | ||||||||||||
Total expenses | 212,801 | 182,785 | 660,141 | 490,049 | ||||||||||||
Operating loss | (47,308) | (15,377) | (172,269) | (25,200) | ||||||||||||
Interest expense, net | 2,027 | 2,150 | 5,750 | 5,953 | ||||||||||||
Loss before income taxes | (49,335) | (17,527) | (178,019) | (31,153) | ||||||||||||
Benefit for income taxes | (1,095) | (1,117) | (11,155) | (5,644) | ||||||||||||
Net loss | $ | (48,240) | $ | (16,410) | $ | (166,864) | $ | (25,509) | ||||||||
OTHER COMPREHENSIVE LOSS | ||||||||||||||||
Change in net unrealized losses on investments | (17,471) | (1,344) | (65,403) | (8,316) | ||||||||||||
Reclassification adjustment for net realized investment | 3 | 6 | 121 | (96) | ||||||||||||
Income tax expense related to items of other | 4,089 | 310 | 15,282 | 1,950 | ||||||||||||
Total comprehensive loss | $ | (61,619) | $ | (17,438) | $ | (216,864) | $ | (31,971) | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 26,369,265 | 27,938,028 | 26,536,700 | 27,902,814 | ||||||||||||
Diluted | 26,369,265 | 27,938,028 | 26,536,700 | 27,902,814 | ||||||||||||
Loss earnings per share | ||||||||||||||||
Basic | $ | (1.83) | $ | (0.59) | $ | (6.29) | $ | (0.91) | ||||||||
Diluted | $ | (1.83) | $ | (0.59) | $ | (6.29) | $ | (0.91) | ||||||||
About Heritage
Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company. Through its insurance subsidiaries and a large network of experienced agents, the Company writes approximately
Non-GAAP Financial Measures
We measure our performance with several financial and operating metrics. We use these metrics to assess the progress of our business, make decisions on where to allocate capital, time and investments and assess the long-term performance of our company. Certain of these financial metrics are reported in accordance with U.S. GAAP and certain of these metrics are considered non-GAAP financial measures. As our business evolves, we may make changes to our key financial and operating metrics used to measure our performance. For further information and a reconciliation to the most applicable financial measures under U.S. GAAP, refer to our reconciliations below.
Non-GAAP adjusted net income is a non-GAAP financial measure and the most directly comparable GAAP financial measure is net income. Non-GAAP adjusted net income is calculated by adding back the non-recurring, non-cash charges of
Non-GAAP adjusted earnings per share (EPS) is a non-GAAP measure and is calculated by dividing the non-GAAP adjusted net income by the number of fully diluted shares at the end of the period.
Non-GAAP adjusted return on equity is a non-GAAP measure and is calculated by using non-GAAP adjusted net income as the base for the calculation.
Non-GAAP adjusted book value per share is a non-GAAP measure and is calculated by dividing total stockholders' equity excluding accumulated other comprehensive loss, net of tax, by the total common shares outstanding.
We use these non-GAAP financial measures internally as performance measures and believe that these measures reflect the financial performance of the Company's ongoing business and core operations. As a supplement to the primary GAAP presentations, non-GAAP financial measures provide meaningful supplemental information about our operating performance. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). These metrics should only be considered as supplemental to net income, earnings per share and return on equity as measures of our performance. These measures should also not be used as a supplement to, or substitute for, cash flow from operating activities (computed in accordance with U.S. GAAP).
The following tables are reconciliations of adjusted net income, adjusted earnings per share and adjusted return on equity to the most directly comparable U.S. GAAP financial measures for the three and nine months ended September 30, 2022 and 2021, respectively:
Statement of Operations Non-GAAP | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||
Income Statement Data | (in thousands except per share data) | ||||||||||||||||||||||||||
Net loss | $ | (48,240) | $ | (16,410) | 194.0 | % | $ | (166,864) | $ | (25,509) | $ | 554.1 | % | ||||||||||||||
Less: Goodwill impairment, net of tax | — | — | — | (90,774) | — | NM | |||||||||||||||||||||
Non-GAAP adjusted net loss | $ | (48,240) | $ | (16,410) | 194.0 | % | $ | (76,090) | $ | (25,509) | $ | 198.3 | % | ||||||||||||||
Diluted Earnings Per Share Data | |||||||||||||||||||||||||||
Net loss | $ | (1.83) | $ | (0.59) | (1.2) | % | $ | (6.29) | $ | (0.91) | (5.4) | % | |||||||||||||||
Less: Goodwill impairment, net of tax | — | — | — | (3.42) | — | NM | |||||||||||||||||||||
Non-GAAP adjusted net loss | $ | (1.83) | $ | (0.59) | (1.2) | % | $ | (2.87) | $ | (0.91) | (2.0) | % | |||||||||||||||
Return on Equity Data | |||||||||||||||||||||||||||
Return on Equity | (129.4) | % | (15.8) | % | (113.6) | pts | (96.6) | % | (8.0) | % | (88.6) | pts | |||||||||||||||
Less: Goodwill impairment, net of tax | — | % | — | % | — | pts | (52.5) | % | — | % | (52.5) | pts | |||||||||||||||
Non-GAAP adjusted return on equity | (129.4) | % | (15.8) | % | (113.6) | pts | (44.0) | % | (8.0) | % | (36.0) | pts | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
Return on Equity Non-GAAP Reconciliation | 2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands except per share data) | |||||||||||||||||
Income Statement Data | (annualized) | ||||||||||||||||
Net loss | $ | (192,961) | $ | (65,640) | $ | (222,486) | $ | (34,012) | |||||||||
Adjusted net loss | $ | (192,961) | $ | (65,640) | $ | (101,454) | $ | (34,012) | |||||||||
Divided by Average Equity: | |||||||||||||||||
Shareholders' equity at the beginning of period | $ | 180,546 | $ | 424,873 | $ | 343,051 | $ | 442,344 | |||||||||
Shareholders' equity at the end of period | 117,697 | 405,025 | 117,697 | 405,025 | |||||||||||||
Average Shareholders' Equity | $ | 149,121 | $ | 414,949 | $ | 230,374 | $ | 423,685 | |||||||||
Return on equity | (129.4) | % | (15.8) | % | (96.6) | % | (8.0) | % | |||||||||
Adjusted return on equity | (129.4) | % | (15.8) | % | (44.0) | % | (8.0) | % | |||||||||
As Of | ||||||||||||||||||||
Stockholders' Equity Reconciliation | 30-Sep-22 | 30-Jun-22 | 31-Mar-22 | 31-Dec-21 | 30-Sep-21 | |||||||||||||||
Common stockholders' equity | $ | 117,697 | $ | 180,546 | $ | 281,766 | $ | 343,051 | $ | 405,025 | ||||||||||
Add: Accumulated other comprehensive loss, net | 54,573 | 41,194 | 28,894 | 4,573 | 405 | |||||||||||||||
Non-GAAP adjusted common stockholders' equity | $ | 172,270 | $ | 221,740 | $ | 310,660 | $ | 338,478 | $ | 404,620 | ||||||||||
Weighted shares outstanding | 25,899 | 25,644 | 26,444 | 26,754 | 27,803 | |||||||||||||||
Book value per common share | $ | 4.54 | $ | 7.04 | $ | 10.66 | $ | 12.82 | $ | 14.57 | ||||||||||
Non-GAAP adjusted book value per common | $ | 6.65 | $ | 8.65 | $ | 11.75 | $ | 12.65 | $ | 14.55 | ||||||||||
Note: Percentages and sums in the tables may not recalculate precisely due to rounding |
Forward-Looking Statements
Statements in this press release that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "or "continue" or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. This release includes forward-looking statements relating to the expected positive impact of our strategic initiatives on our future financial results, including focus on profitability, exposure management, rate adequacy and our ability to create value for our shareholders; ability to achieve consistent long-term quarterly earnings and drive shareholder value; continued increase in average premium per policy; expected continued changes in our portfolio to reduce exposure and generate long term returns; the expected benefits of excess and surplus insurance products; expected losses from Hurricane Ian; future dividend payments; the impact of legislation on the homeowner's insurance marketplace and litigious practices in Florida; our ability to successfully manage inflationary pressures; expectations regarding our fixed income investment portfolio; and our ability to successfully regain value in the Company and achieve our target return on equity. The risks and uncertainties that could cause our actual results to differ from those expressed or implied herein include, without limitation: the success of the Company's underwriting and profitability initiatives; the continued and potentially prolonged impact of the COVID-19 pandemic on the economy, demand for our products and our operations; inflation and other changes in economic conditions (including changes in interest rates and financial and real estate markets), including as a result of the COVID-19 pandemic; the impact of macroeconomic and geopolitical conditions, including the impact of supply chain constraints, inflationary pressures, labor availability and the conflict between Russia and Ukraine; the impact of new federal and state regulations that affect the property and casualty insurance market; the costs of reinsurance, the collectability of reinsurance and our ability to obtain reinsurance coverage on terms and at a cost acceptable to us; assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to obtain regulatory approval for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against us, including the terms of any settlements; risks related to the nature of our business; dependence on investment income and the composition of our investment portfolio; the adequacy of our liability for losses and loss adjustment expense; our ability to build and maintain relationships with insurance agents; claims experience; ratings by industry services; catastrophe losses; reliance on key personnel; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes and hail); changes in loss trends; acts of war and terrorist activities; court decisions and trends in litigation; and other matters described from time to time by us in our filings with the Securities and Exchange Commission, including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 14, 2022 and subsequent filings. The Company undertakes no obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.
Investor Contact:
Kirk Lusk
Chief Financial Officer
klusk@heritagepci.com
investors@heritagepci.com
Mike Houston and Julia Ward
Lambert
HRTG@lambert.com
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SOURCE Heritage Insurance Holdings, Inc.
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