HCI Group, Inc.: 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 08, 2025 (GLOBE NEWSWIRE) -- 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: [phone]
Listen-only international number: [phone]
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 [phone].

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: [phone]
International replay number: [phone]
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 [phone]
[e-mail]

Investor Relations Contact:
Matt Glover
Gateway Group, Inc.
Tel [phone]
[e-mail]

- Tables to follow -
HCI GROUP, INC. AND SUBSIDIARIES Selected Financial Metrics (Dollar amounts in thousands, except per share amounts)
	Q1 2025			Q1 2024			FY 2024
	(Unaudited)			(Unaudited)
Insurance Operations
Gross Written Premiums:
Homeowners Choice	$	117,133		$	91,875		$	593,943
TypTap Insurance Company		142,396			143,624			491,413
Condo Owners Reciprocal Exchange		7,731			19,487			81,411
Tailrow Reciprocal Exchange		21,985			-			-
Total Gross Written Premiums		289,245			254,986			1,166,767
Gross Premiums Earned:
Homeowners Choice		156,489			149,271			589,137
TypTap Insurance Company		124,447			103,748			442,876
Condo Owners Reciprocal Exchange		15,325			3,625			51,207
Tailrow Reciprocal Exchange		4,122			-			-
Total Gross Premiums Earned		300,383			256,644			1,083,220
Gross Premiums Earned Loss Ratio		19.7	%		31.1	%		34.6	%
Per Share Metrics
Diluted EPS	$	5.35		$	3.81		$	8.89
Dividends per share	$	0.40		$	0.40		$	1.60
Book value per share at the end of period	$	48.55		$	38.50		$	42.10
Shares outstanding at the end of period		10,765,336			10,276,463			10,767,184

HCI GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Dollar amounts in thousands)
	March 31, 2025				December 31, 2024
	(Unaudited)
Assets
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)	$	652,861			$	718,537
Equity securities, at fair value (cost: $52,962 and $52,030, respectively)		55,226				56,200
Limited partnership investments		20,176				20,802
Real estate investments		80,151				79,120
Total investments		808,414				874,659
Cash and cash equivalents		754,481				532,471
Restricted cash		3,722				3,714
Accrued interest and dividends receivable		7,650				6,008
Income taxes receivable		-				463
Deferred income taxes, net		1,502				72
Premiums receivable, net (allowance: $4,684 and $5,891, respectively)		54,704				50,582
Prepaid reinsurance premiums		38,009				92,060
Reinsurance recoverable, net of allowance for credit losses:
Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively)		46,335				36,062
Unpaid losses and loss adjustment expenses (allowance: $151 and $186, respectively)		481,434				522,379
Deferred policy acquisition costs		56,398				54,303
Property and equipment, net		30,237				29,544
Right-of-use-assets - operating leases		1,124				1,182
Intangible assets, net		4,565				5,206
Funds withheld for assumed business		8,451				11,690
Other assets		9,642				9,818
Total assets	$	2,306,668			$	2,230,213
Liabilities and Equity
Losses and loss adjustment expenses	$	798,146			$	845,900
Unearned premiums		573,565				584,703
Advance premiums		37,807				18,867
Reinsurance payable on paid losses and loss adjustment expenses		-				2,496
Ceded reinsurance premiums payable		19,779				18,313
Assumed premiums payable		3,582				2,176
Accrued expenses		29,110				17,677
Income tax payable		33,378				5,451
Deferred income taxes, net		3,661				2,830
Revolving credit facility		42,000				44,000
Long-term debt		185,332				185,254
Lease liabilities - operating leases		1,131				1,185
Other liabilities		34,708				32,320
Total liabilities		1,762,199				1,761,172
Commitments and contingencies
Redeemable noncontrolling interest		1,637				1,691
Equity:
Common stock, (no par value, 40,000,000 shares authorized, 10,765,336 and 10,767,184 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively)		-				-
Additional paid-in capital		124,170				122,289
Retained income		397,171				331,793
Accumulated other comprehensive loss, net of taxes		1,342				(749	)
Total stockholders' equity		522,683				453,333
Noncontrolling interests		20,149				14,017
Total equity		542,832				467,350
Total liabilities, redeemable noncontrolling interest, and equity	$	2,306,668			$	2,230,213

HCI GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) (Dollar amounts in thousands, except per share amounts)
	Three Months Ended
	March 31,
	2025				2024
Revenue
Gross premiums earned	$	300,383			$	256,644
Premiums ceded		(99,635	)			(68,106	)
Net premiums earned		200,748				188,538
Net investment income		13,751				14,067
Net realized investment gains		1,167				-
Net unrealized investment (losses) gains		(1,906	)			2,635
Policy fee income		2,229				1,019
Other		444				355
Total revenue		216,433				206,614
Expenses
Losses and loss adjustment expenses		59,291				79,922
Policy acquisition and other underwriting expenses		27,287				22,139
General and administrative personnel expenses		20,483				16,274
Interest expense		3,384				3,149
Other operating expenses		5,649				7,700
Total expenses		116,094				129,184
Income before income taxes		100,339				77,430
Income tax expense		26,109				20,474
Net income	$	74,230			$	56,956
Net income attributable to redeemable noncontrolling interests		-				(10,149	)
Net (income) loss attributable to noncontrolling interests		(4,546	)			804
Net income after noncontrolling interests	$	69,684			$	47,611
Basic earnings per share	$	6.47			$	4.76
Diluted earnings per share	$	5.35			$	3.81
Dividends per share	$	0.40			$	0.40

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												Three Months Ended
	March 31, 2025												March 31, 2024
	Income				Shares (a)				Per Share				Income				Shares (a)				Per Share
	(Numerator)				(Denominator)				Amount				(Numerator)				(Denominator)				Amount
Net income	$	74,230											$	56,956
Less: Net income attributable to redeemable noncontrolling interests		-												(10,149	)
Less: Net (income) loss attributable to noncontrolling interests		(4,546	)											804
Net income attributable to HCI		69,684												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.