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HCI Group Reports Fourth Quarter 2024 Results

1. HCI Group reported decreasing net income in Q4 2024. 2. Earnings per share fell to $0.23 from $3.40 YoY. 3. Gross premiums earned increased by 38% in Q4 2024. 4. Company aims to keep rates flat despite hurricane impacts. 5. HCI's tech to aid other insurers amid rising catastrophes.

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Declining earnings and sharp drop in EPS can reduce investor confidence. Historical trends show such earnings declines often lead to lowered stock prices.

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The earnings report reveals financial health, impacting investor strategy and HCI's valuation in the market.

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February 27, 2025 16:15 ET  | Source: HCI Group, Inc. Fourth Quarter Pre-Tax Income of $5.9 million and Diluted EPS of $0.23 Full Year 2024 Pre-Tax Income of $173.4 million and Diluted EPS of $8.89 TAMPA, Fla., Feb. 27, 2025 (GLOBE NEWSWIRE) -- HCI Group, Inc. (NYSE:HCI) reported pre-tax income of $5.9 million and net income of $4.1 million in the fourth quarter of 2024. Net income after noncontrolling interests was $2.6 million compared with $38.1 million in the fourth quarter of 2023. Diluted earnings per share were $0.23 in the fourth quarter of 2024, compared with $3.40 diluted earnings per share, in the fourth quarter of 2023. Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the fourth quarter of 2024 was $5.0 million, or $0.31 diluted earnings per share compared with adjusted net income of $38.8 million, or $3.22 diluted earnings per share, in the fourth quarter of 2023. This press release includes an explanation of adjusted net income as well as a reconciliation to net income and earnings per share calculated in accordance with generally accepted accounting principles (known as “GAAP”). Management Commentary“Even with the hurricanes in 2024, HCI Group is unwavering in its commitment to Florida and supporting our existing and new policyholders. As part of our ongoing efforts, we plan to keep rates flat for the foreseeable future,” said HCI Group Chairman and Chief Executive Officer Paresh Patel. “Given an increased level of catastrophe activity across the country, we are taking initial steps to make our best-in-class technology available to other carriers and in additional geographies.” Fourth Quarter 2024 CommentaryConsolidated gross premiums earned in the fourth quarter increased by 38.0% to $297.5 million from $215.2 million in the fourth quarter of 2023 driven primarily by assumptions of policies from Citizens Property Insurance Corporation. Premiums ceded for reinsurance in the fourth quarter were $151.1 million compared with $66.6 million in the fourth quarter of 2023. The fourth quarter included the reversal of $50.6 million of previously accrued benefits related to retrospective reinsurance provisions as a result of losses caused by Hurricane Milton. Net investment income in the fourth quarter was $14.5 million compared with $10.3 million in the fourth quarter of 2023. The increase was primarily attributable to an increase in interest income from cash, cash equivalents and available-for-sale fixed maturity securities. Losses and loss adjustment expenses in the fourth quarter were $110.7 million compared with $65.4 million in the fourth quarter of 2023. Loss expenses in the fourth quarter of 2024 include a net loss of $78.0 million from Hurricane Milton, partially offset by $24.5 million of favorable development mostly related to the 2024 accident year. Policy acquisition and other underwriting expenses in the fourth quarter were $27.7 million compared with $22.7 million in the fourth quarter of 2023. General and administrative personnel expenses in the fourth quarter decreased to $10.2 million from $12.2 million in the fourth quarter of 2023. The decrease was attributable to lower stock-based compensation as well as higher reinsurance recoveries related to claims processing for Hurricane Milton. Full 2024 Results For the year ended December 31, 2024, the company reported pre-tax income of $173.4 million and net income of $127.6 million. Net income after noncontrolling interests was $110.0 million compared with $79.0 million for the year ended December 31, 2023. Diluted earnings per share were $8.89 for the year ended December 31, 2024, compared with $7.62 diluted earnings per share for the year ended December 31, 2023. Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the twelve month period was $125.6 million, or $8.75 diluted earnings per share compared with adjusted net income of $86.8 million, or $7.41 diluted earnings per share in the same period of 2023. An explanation of this non-GAAP financial measure and reconciliations to the applicable GAAP numbers accompany this press release. Consolidated gross premiums earned for the twelve months of 2024 increased by 41.5% to $1,083.2 million from $765.5 million in 2023 driven primarily by growth in Florida due to assumptions of policies from Citizens Property Insurance Corporation. Premiums ceded for reinsurance for the twelve months of 2024 were $405.7 million compared with $269.6 million for the twelve months of 2023. The twelve months of 2024 included the reversal of $62.9 million of previously accrued benefits related to retrospective reinsurance provisions as a result of losses caused by Hurricanes Helene and Milton. Net investment income for the twelve months of 2024 was $59.1 million compared with $46.2 million for the twelve months of 2023. The increase was primarily attributable to an increase in interest income from cash, cash equivalents, and available-for-sale fixed maturity securities, offset by a decrease in income from real estate investments. Losses and loss adjustment expenses for the twelve months of 2024 were $374.7 million compared with $254.6 million for the twelve months of 2023. Loss expense included $78.0 million from Hurricane Milton, $43.0 million from Hurricane Helene and $6.5 million from Hurricane Debby. Policy acquisition and other underwriting expenses for the twelve months of 2024 were $99.4 million compared with $90.8 million for the twelve months of 2023. General and administrative personnel expenses for the twelve months of 2024 increased to $63.2 million from $53.9 million for the twelve months of 2023. Conference CallHCI Group will hold a conference call later today, February 27, 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) 506-0062Listen-only international number: (973) 528-0011Entry Code: 835158 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 February 27, 2026. Toll-free replay number: (877) 481-4010International replay number: (919) 882-2331 Replay ID: 51955 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 StatementsThis news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "intend," "plan," "confident," "prospects" and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. For example, the estimation of reserves for losses and loss adjustment expenses is an inherently imprecise process involving many assumptions and considerable management judgment. Some of these risks and uncertainties are identified in the company's filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company's business, financial condition and results of operations. HCI Group, Inc. disclaims all obligations to update any forward-looking statements. Company Contact:Bill Broomall, CFAInvestor RelationsHCI Group, Inc.Tel (813) 776-1012wbroomall@typtap.com Investor Relations Contact:Matt GloverGateway Group, Inc.Tel (949) 574-3860HCI@gatewayir.com -    Tables to follow    -  HCI GROUP, INC. AND SUBSIDIARIESSelected Financial Metrics(Dollar amounts in thousands, except per share amounts)  Q4 2024  Q4 2023  FY 2024  FY 2023  (Unaudited)          Insurance Operations           Gross Written Premiums:           Homeowners Choice$145,085  $182,038  $593,943  $535,070 TypTap Insurance Company 174,980   138,482   491,413   363,552 Condo Owners Reciprocal Exchange 14,435   -   81,411   - Total Gross Written Premiums 334,500   320,520   1,166,767   898,622             Gross Premiums Earned:           Homeowners Choice 156,342   125,796   589,137   417,202 TypTap Insurance Company 123,807   89,394   442,876   348,310 Condo Owners Reciprocal Exchange 17,348   -   51,207   - Total Gross Premiums Earned 297,497   215,190   1,083,220   765,512             Gross Premiums Earned Loss Ratio 37.2%  30.4%  34.6%  33.3%            Per Share Metrics           GAAP Diluted EPS$0.23  $3.40  $8.89  $7.62 Non-GAAP Adjusted Diluted EPS$0.31  $3.22  $6.33  $7.41             Dividends per share$0.40  $0.40  $1.60  $1.60             Book value per share at the end of period$42.10  $33.36  $42.10  $33.36             Shares outstanding at the end of period 10,767,184   9,738,183   10,767,184   9,738,183                  HCI GROUP, INC. AND SUBSIDIARIESConsolidated Balance Sheets  (Dollar amounts in thousands)  December 31, 2024  December 31, 2023       Assets     Fixed-maturity securities, available for sale, at fair value (amortized cost: $719,536 and $387,687, respectively and allowance for credit losses: $0 and $0, respectively)$718,537  $383,238 Equity securities, at fair value (cost: $52,030 and $44,011, respectively) 56,200   45,537 Limited partnership investments 20,802   23,583 Real estate investments 79,120   67,893 Total investments 874,659   520,251       Cash and cash equivalents 532,471   536,478 Restricted cash 3,714   3,287 Receivable from maturities of fixed-maturity securities —   91,085 Accrued interest and dividends receivable 6,008   3,507 Income taxes receivable 463   — Deferred income taxes, net 72   512 Premiums receivable, net (allowance: $5,891 and $3,152, respectively) 50,582   38,037 Assumed premium receivable —   19,954 Prepaid reinsurance premiums 92,060   86,232 Reinsurance recoverable, net of allowance for credit losses:     Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively) 36,062   19,690 Unpaid losses and loss adjustment expenses (allowance: $186 and $118, respectively) 522,379   330,604 Deferred policy acquisition costs 54,303   42,910 Property and equipment, net 29,544   29,251 Right-of-use-assets - operating leases 1,182   1,407 Intangible assets, net 5,206   7,659 Funds withheld for assumed business 11,690   30,087 Other assets 9,818   50,365       Total assets$2,230,213  $1,811,316       Liabilities and Equity     Losses and loss adjustment expenses$845,900  $585,073 Unearned premiums 584,703   501,157 Advance premiums 18,867   15,895 Reinsurance payable on paid losses and loss adjustment expenses 2,496   3,145 Ceded reinsurance premiums payable 18,313   8,921 Assumed premiums payable 2,176   850 Accrued expenses 17,677   19,722 Income tax payable 5,451   7,702 Deferred income taxes, net 2,830   — Revolving credit facility 44,000   — Long-term debt 185,254   208,495 Lease liabilities - operating leases 1,185   1,408 Other liabilities 32,320   35,623       Total liabilities 1,761,172   1,387,991       Commitments and contingencies     Redeemable noncontrolling interest 1,691   96,160       Equity:     Common stock, (no par value, 40,000,000 shares authorized, 10,767,184 and 9,738,183 shares issued and outstanding in 2024 and 2023, respectively) —   — Additional paid-in capital 122,289   89,568 Retained income 331,793   238,438 Accumulated other comprehensive loss, net of taxes (749)  (3,163)Total stockholders' equity 453,333   324,843 Noncontrolling interests 14,017   2,322 Total equity 467,350   327,165       Total liabilities, redeemable noncontrolling interest, and equity$2,230,213  $1,811,316          HCI GROUP, INC. AND SUBSIDIARIESConsolidated Statements of Income(Unaudited)(Dollar amounts in thousands, except per share amounts)  Three Months Ended  Years Ended  December 31,  December 31,  2024  2023  2024  2023             Revenue                       Gross premiums earned$297,497  $215,190  $1,083,220  $765,512 Premiums ceded (151,146)  (66,576)  (405,659)  (269,627)            Net premiums earned 146,351   148,614   677,561   495,885             Net investment income 14,486   10,341   59,148   46,234 Net realized investment gains (losses) 326   (410)  3,384   (1,996)Net unrealized investment (losses) gains (1,181)  2,830   2,644   3,215 Policy fee income 1,302   1,053   4,639   4,704 Other 591   242   2,675   2,628             Total revenue 161,875   162,670   750,051   550,670             Expenses                       Losses and loss adjustment expenses 110,727   65,398   374,708   254,579 Policy acquisition and other underwriting expenses 27,707   22,716   99,402   90,822 General and administrative personnel expenses 10,231   12,230   63,152   53,868 Interest expense 3,322   2,822   13,344   11,117 Other operating expenses 3,997   5,344   26,018   22,634             Total expenses 155,984   108,510   576,624   433,020             Income before income taxes 5,891   54,160   173,427   117,650             Income tax expense 1,757   13,248   45,846   28,393             Net income$4,134  $40,912  $127,581  $89,257 Net income attributable to redeemable noncontrolling interests —   (2,360)  (10,149)  (9,370)Net income attributable to noncontrolling interests (1,550)  (457)  (7,479)  (853)            Net income after noncontrolling interests$2,584  $38,095  $109,953  $79,034             Basic earnings per share$0.24  $4.31  $10.59  $9.13             Diluted earnings per share$0.23  $3.40  $8.89  $7.62             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 earnings per common share calculated in accordance with GAAP is presented below.  Three Months Ended  Year Ended GAAPDecember 31, 2024  December 31, 2024  Income  Shares (a)  Per Share  Income  Shares (a)  Per Share  (Numerator)  (Denominator)  Amount  (Numerator)  (Denominator)  Amount Net income$4,134        $127,581       Less: Net income attributable to redeemable noncontrolling interest —         (10,149)      Less: Net income attributable to noncontrolling interests (1,550)        (7,479)      Net income attributable to HCI 2,584         109,953       Less: Income attributable to participating securities (118)        (4,110)      Basic Earnings Per Share:                 Income allocated to common stockholders 2,466   10,143  $0.24   105,843   9,997  $10.59                   Effect of Dilutive Securities: *                 Stock options —   323      —   294    Convertible senior notes —   —      6,908   2,177    Warrants —   143      —   218                      Diluted Earnings Per Share:                 Income available to common stockholders and assumed conversions$2,466   10,609  $0.23  $112,751   12,686  $8.89                   (a) Shares in thousands. *For the three months ended December 31, 2024, convertible senior notes were excluded due to anti-dilutive effect.    Non-GAAP Financial Measures Adjusted net income is a Non-GAAP financial measure that removes from net income of HCI's portion of the effect of unrealized gains or losses on equity securities required to be included in results of operations in accordance with Accounting Standards Codification 321. HCI Group believes net income without the effect of volatility in equity prices more accurately depicts operating results. This financial measurement is not recognized in accordance with accounting principles generally accepted in the United States of America ("GAAP") and should not be viewed as an alternative to GAAP measures of performance. A reconciliation of GAAP Net income to Non-GAAP Adjusted net income and GAAP diluted earnings per share to Non-GAAP Adjusted diluted earnings per share is provided below. Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income  Three Months Ended Year Ended December 31, 2024 December 31, 2024GAAP Net income    $4,134        $127,581   Net unrealized investment losses (gains)$1,181        $(2,644)      Less: Tax effect at 25.041%$(296)       $662       Net adjustment to Net income    $885        $(1,982)  Non-GAAP Adjusted Net income    $5,019        $125,599                        HCI GROUP, INC. AND SUBSIDIARIES(Amounts in thousands, except per share amounts) A summary of the numerator and denominator of the basic and diluted earnings per common share calculated with the Non-GAAP financial measure Adjusted net income is presented below.   Three Months Ended  Year Ended Non-GAAPDecember 31, 2024  December 31, 2024  Income  Shares (a)  Per Share  Income  Shares (a)  Per Share  (Numerator)  (Denominator)  Amount  (Numerator)  (Denominator)  Amount Adjusted net income (non-GAAP)$5,019        $125,599       Less: Net income attributable to redeemable noncontrolling interest -        $(10,149)      Less: Net loss (income) attributable to noncontrolling interests (1,550)        (7,281)      Net income attributable to HCI 3,469         108,169       Less: Income attributable to participating securities (158)        (4,043)                        Basic Earnings Per Share before unrealized gains/losses on equity securities:                 Income allocated to common stockholders 3,311   10,143  $0.33   104,126   9,997  $10.42                   Effect of Dilutive Securities: *                 Stock options —   323      —   294    Convertible senior notes —   —      6,908   2,177    Warrants —   143      —   218                      Diluted Earnings Per Share before unrealized gains/losses on equity securities:                 Income available to common stockholders and assumed conversions$3,311   10,609  $0.31  $111,034   12,686  $8.75                   (a) Shares in thousands. *For the three months ended December 31, 2024, convertible senior notes 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, 2024 December 31, 2024GAAP diluted Earnings Per Share   $0.23       $8.89   Net unrealized investment gains$0.10       $(0.20)     Less: Tax effect at 25.041%$(0.02)      $0.06      Net adjustment to GAAP diluted EPS    $0.08        $(0.14)  Non-GAAP Adjusted diluted EPS    $0.31        $8.75   

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