TAMPA, Fla., Sept. 25, 2025 (GLOBE NEWSWIRE) -- HCI Group, Inc. (NYSE:HCI) today announced that its majority owned subsidiary, Exzeo Group, Inc., has publicly filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the proposed initial public offering of Exzeo’s common stock. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The offering is subject to market conditions, and there c ...

Key Takeaways Fed cut rates by 25 bps to 4-4.25%, its first reduction since Dec 2024, with two more cuts expected in 2025. Global commercial insurance rates fell 4% in Q2 2025. Heavy investments in blockchain, telematics, and insurtech boost efficiency and long-term profitability. The Zacks Property and Casualty Insurance industry has performed well so far this year, riding on better pricing, prudent underwriting standards, increased exposure, streamlined operations, a wider global presence, and a solid cap ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Whil ...

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks ...

Group 1 - HCI Group, Inc. (NYSE: HCI) has shown operational strength with conservative expansion and disciplined underwriting policies over the past six months [1] - The company's strong topline performance indicates well-balanced growth [1] Group 2 - The analyst has been involved in the logistics sector for nearly two decades and has experience in stock investing and macroeconomic analysis for almost a decade [1] - The focus areas include ASEAN and NYSE/NASDAQ stocks, particularly in banks, telecommunications, logistics, and hotels [1] - The analyst has diversified investments across different industries and market cap sizes, including holdings for retirement and trading profits [1]

Group 1 - HCI Group's shares have increased by 9.3% over the past four weeks, closing at $154.34, with a mean price target of $202.5 indicating a potential upside of 31.2% [1] - The average price targets from analysts range from a low of $190.00 to a high of $225.00, with a standard deviation of $16.58, suggesting a potential increase of 23.1% to 45.8% from the current price [2] - Analysts have shown strong agreement in revising HCI's earnings estimates higher, which correlates with potential stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for HCI's current year earnings has increased by 3.4% over the last 30 days, with two estimates moving higher and no negative revisions [12] - HCI currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While the consensus price target may not be a reliable indicator of HCI's potential gains, it does provide a directional guide for price movement [14]

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies. Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to f ...

PART I – FINANCIAL INFORMATION [Item 1 Financial Statements](index=3&type=section&id=Item%201%20Financial%20Statements) This section presents the unaudited consolidated financial statements of HCI Group, Inc. and its subsidiaries, including balance sheets, statements of income, comprehensive income, equity, and cash flows, along with detailed notes explaining the company's financial position, performance, and significant accounting policies for the periods ended June 30, 2025 and 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time Consolidated Balance Sheets (in millions) | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Total Assets | $2,353.11 | $2,230.21 | | Total Liabilities | $1,566.02 | $1,761.17 | | Total Stockholders' Equity | $758.58 | $453.33 | | Cash and cash equivalents | $947.17 | $532.47 | | Fixed-maturity securities, available for sale | $592.21 | $718.54 | | Losses and loss adjustment expenses (liability) | $696.89 | $845.90 | | Long-term debt | $15.60 | $185.25 | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This section details the company's revenues, expenses, and net income over specific reporting periods Three Months Ended June 30 (YoY) (in millions) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) (in millions) | | :-------------------------------- | :------------------ | :------------------ | :----------- | | Total Revenue | $221.92 | $206.25 | +$15.68 | | Total Expenses | $127.53 | $130.22 | -$2.69 | | Net Income | $70.28 | $57.10 | +$13.18 | | Basic EPS | $5.57 | $5.18 | +$0.39 | | Diluted EPS | $5.18 | $4.24 | +$0.94 | Six Months Ended June 30 (YoY) (in millions) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) (in millions) | | :-------------------------------- | :------------------ | :------------------ | :----------- | | Total Revenue | $438.35 | $412.86 | +$25.49 | | Total Expenses | $243.62 | $259.40 | -$15.78 | | Net Income | $144.51 | $114.06 | +$30.45 | | Basic EPS | $12.00 | $9.95 | +$2.05 | | Diluted EPS | $10.57 | $8.04 | +$2.53 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's net income and other comprehensive income components, reflecting total non-owner changes in equity Three Months Ended June 30 (YoY) (in millions) | Metric | 2025 (in millions) | 2024 (in millions) | | :-------------------------------- | :------------------ | :------------------ | | Net income | $70.28 | $57.10 | | Other comprehensive (loss) income, net of income taxes | $(0.18) | $0.54 | | Comprehensive income | $70.10 | $57.64 | Six Months Ended June 30 (YoY) (in millions) | Metric | 2025 (in millions) | 2024 (in millions) | | :-------------------------------- | :------------------ | :------------------ | | Net income | $144.51 | $114.06 | | Other comprehensive income, net of income taxes | $1.91 | $0.60 | | Comprehensive income | $146.42 | $114.65 | [Consolidated Statements of Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Equity) This section outlines changes in the company's equity accounts, including net income, dividends, and stock transactions - Total Stockholders' Equity increased from **$453.33 million** as of December 31, 2024, to **$758.58 million** as of June 30, 2025[25](index=25&type=chunk) - Key changes for the six months ended June 30, 2025, include net income attributable to HCI of **$135.84 million** and **$172.83 million** from the conversion of senior notes to common stock, partially offset by **$8.92 million** in common stock dividends[25](index=25&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company's operating, investing, and financing activities Six Months Ended June 30 (YoY) (in millions) | Cash Flow Type | 2025 (in millions) | 2024 (in millions) | | :-------------------------------- | :------------------ | :------------------ | | Net cash provided by operating activities | $307.01 | $152.99 | | Net cash provided by (used in) investing activities | $120.02 | $(179.43) | | Net cash used in financing activities | $(12.27) | $(64.17) | | Net increase (decrease) in cash and cash equivalents and restricted cash | $414.71 | $(90.63) | | Cash and cash equivalents and restricted cash at end of period | $950.90 | $449.13 | - Non-cash investing and financing activities for the six months ended June 30, 2025, included the conversion of **$172.50 million** of 4.75% Convertible Senior Notes[35](index=35&type=chunk) [Notes to Consolidated Financial Statements (unaudited)](index=15&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed disclosures and explanations for the figures presented in the consolidated financial statements, covering the company's operations, significant accounting policies, investments, debt, equity, and other financial commitments [Note 1 -- Nature of Operations](index=15&type=section&id=Note%201%20--%20Nature%20of%20Operations) This note describes HCI Group, Inc.'s primary business activities, including insurance, technology, and real estate operations - HCI Group, Inc. primarily operates in property and casualty insurance through Homeowners Choice Property & Casualty Insurance Company, Inc. (HCPCI) and TypTap Insurance Company (TTIC) in Florida and other states[37](index=37&type=chunk) - Exzeo Group, Inc. provides turn-key insurance technology and operations solutions, while Greenleaf Capital, LLC manages real estate and marina facilities[37](index=37&type=chunk)[38](index=38&type=chunk) - The Company consolidates reciprocal insurance exchanges (CORE and Tailrow) as Variable Interest Entities (VIEs) for which it provides attorney-in-fact (AIF) services[38](index=38&type=chunk) - Approximately **13,900 policies** were assumed from Citizens Property Insurance Corporation during the six months ended June 30, 2025, representing **$35.80 million** in annualized gross written premiums[40](index=40&type=chunk) [Note 2 -- Summary of Significant Accounting Policies](index=15&type=section&id=Note%202%20--%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and estimation methods used in preparing the interim financial statements - Interim financial statements are prepared in accordance with U.S. GAAP and SEC rules, with certain disclosures omitted[41](index=41&type=chunk) - Material estimates, particularly susceptible to significant change, include losses and loss adjustment expenses (including incurred but not yet reported claims), reinsurance recoverable, income taxes, stock-based compensation, limited partnership investments, and acquired intangible assets[43](index=43&type=chunk)[44](index=44&type=chunk) [Note 3 -- Recent Accounting Pronouncements](index=16&type=section&id=Note%203%20--%20Recent%20Accounting%20Pronouncements) This note details recently adopted and pending accounting standards updates and their impact on the company's financial reporting - ASU 2023-09 (Income Taxes) was adopted prospectively for the fiscal year beginning January 1, 2025, enhancing income tax disclosures[47](index=47&type=chunk) - ASU 2024-04 (Convertible Debt) was early adopted effective January 1, 2025, clarifying accounting for induced conversions of convertible debt instruments, with no impact on financial position or results upon adoption[48](index=48&type=chunk) - ASU 2025-01 and 2024-03 (Expense Disaggregation) are pending adoption, effective for annual periods beginning after December 15, 2026, and are expected to result in additional disclosures of certain expenses[49](index=49&type=chunk) [Note 4 -- Cash and Cash Equivalents and Restricted Cash](index=17&type=section&id=Note%204%20--%20Cash%20and%20Cash%20Equivalents%20and%20Restricted%20Cash) This note provides a breakdown of the company's cash, cash equivalents, and restricted cash balances Cash and Cash Equivalents and Restricted Cash (in millions) | Item | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Cash and cash equivalents | $947.17 | $532.47 | | Restricted cash | $3.73 | $3.71 | | **Total** | **$950.90** | **$536.19** | - Restricted cash is primarily held by certain states to meet regulatory requirements and is not available for immediate business use[50](index=50&type=chunk) [Note 5 -- Investments](index=18&type=section&id=Note%205%20--%20Investments) This note details the company's investment portfolio, including fixed-maturity securities, equity securities, and real estate - The fair value of available-for-sale fixed-maturity securities decreased to **$592.21 million** as of June 30, 2025, from **$718.54 million** as of December 31, 2024. Gross unrealized losses decreased significantly from **$(3.10) million** to **$(0.43) million**[51](index=51&type=chunk) - The fair value of equity securities increased to **$58.62 million** as of June 30, 2025, from **$56.20 million** as of December 31, 2024. Net unrealized investment gains (losses) for equity securities shifted from a gain of **$3.17 million** in 2024 to a loss of **$(0.73) million** in 2025 for the six-month period[57](index=57&type=chunk) - Limited partnership investments' carrying value decreased to **$19.77 million** as of June 30, 2025, with an unfunded balance of **$2.99 million**. The Company recognized a net investment loss of **$0.66 million** for the six months ended June 30, 2025, compared to net investment income of **$0.09 million** in the prior year[60](index=60&type=chunk)[63](index=63&type=chunk) - Real estate investments at cost increased to **$93.90 million** as of June 30, 2025. Sales of real estate investments generated **$2.01 million** in proceeds and **$0.44 million** in gains for the six months ended June 30, 2025[67](index=67&type=chunk)[68](index=68&type=chunk) - Net investment income decreased slightly to **$30.20 million** for the six months ended June 30, 2025, from **$30.95 million** in the prior year, primarily due to a shift from income to loss in limited partnership investments and lower real estate investment income[69](index=69&type=chunk) [Note 6 -- Other Comprehensive Income (Loss)](index=25&type=section&id=Note%206%20--%20Other%20Comprehensive%20Income%20(Loss)) This note explains the components of other comprehensive income, primarily related to unrealized gains or losses on investments - Other comprehensive income (loss) for the six months ended June 30, 2025, was **$1.91 million** (net of tax), an increase from **$0.60 million** for the same period in 2024, primarily reflecting changes in unrealized gains or losses on available-for-sale fixed-maturity securities[70](index=70&type=chunk) [Note 7 -- Fair Value Measurements](index=25&type=section&id=Note%207%20--%20Fair%20Value%20Measurements) This note describes the fair value hierarchy used for financial assets and liabilities, categorizing inputs into three levels - The Company categorizes financial assets and liabilities into a three-level fair value hierarchy based on the observability of inputs[72](index=72&type=chunk) - Cash, restricted cash, and equity securities are primarily measured using Level 1 inputs (quoted prices in active markets)[78](index=78&type=chunk) - Available-for-sale fixed-maturity securities are valued using Level 1 and Level 2 inputs (quoted prices or observable inputs from pricing services/brokers)[78](index=78&type=chunk) - Long-term debt, specifically promissory notes, is valued using Level 3 inputs (discounted cash flow method)[77](index=77&type=chunk)[79](index=79&type=chunk) [Note 8 -- Intangible Assets, Net](index=28&type=section&id=Note%208%20--%20Intangible%20Assets,%20Net) This note provides details on the company's intangible assets, including their carrying value and remaining amortization periods - Intangible assets, net, decreased to **$3.93 million** as of June 30, 2025, from **$5.21 million** as of December 31, 2024[81](index=81&type=chunk) - The remaining weighted-average amortization periods are **17.7 years** for in-place leases and **0.9 years** for policy renewal rights - United[82](index=82&type=chunk) [Note 9 -- Other Assets](index=28&type=section&id=Note%209%20--%20Other%20Assets) This note explains the increase in other assets, primarily due to prepaid premium taxes and lease acquisition costs - Other assets increased to **$24.12 million** as of June 30, 2025, from **$9.82 million** as of December 31, 2024, driven by increases in prepaid premium taxes and lease acquisition costs[83](index=83&type=chunk) [Note 10 -- Revolving Credit Facility](index=29&type=section&id=Note%2010%20--%20Revolving%20Credit%20Facility) This note details the company's revolving credit facility, including outstanding amounts, interest expense, and available borrowing capacity - The Company had **$40.00 million** outstanding under its revolving credit facility as of June 30, 2025[84](index=84&type=chunk) - Interest expense for the six months ended June 30, 2025, was **$1.31 million**, down from **$1.63 million** in 2024[84](index=84&type=chunk) - The Company was in compliance with all covenants and had an additional available borrowing capacity of **$35.00 million** as of June 30, 2025[84](index=84&type=chunk) [Note 11 -- Long-Term Debt](index=29&type=section&id=Note%2011%20--%20Long-Term%20Debt) This note details the significant reduction in long-term debt, primarily due to the conversion of convertible senior notes into common shares - Total long-term debt significantly decreased to **$15.60 million** as of June 30, 2025, from **$185.25 million** as of December 31, 2024[85](index=85&type=chunk) - This reduction was primarily due to the conversion of **$172.50 million** of 4.75% Convertible Senior Notes into **2,187,063 common shares** during the six months ended June 30, 2025[85](index=85&type=chunk)[87](index=87&type=chunk) - Interest expense related to long-term debt for the six months ended June 30, 2025, was **$5.82 million**, compared to **$4.97 million** in 2024[86](index=86&type=chunk) [Note 12 -- Reinsurance](index=30&type=section&id=Note%2012%20--%20Reinsurance) This note details the company's reinsurance activities, including premiums written and earned, and amounts recoverable from reinsurers Premiums Written (Six Months Ended June 30, YoY) (in millions) | Metric | 2025 (in millions) | 2024 (in millions) | | :-------------------------------- | :------------------ | :------------------ | | Gross written | $645.79 | $561.89 | | Ceded | $(202.16) | $(144.82) | | Net premiums written | $443.63 | $417.07 | Premiums Earned (Six Months Ended June 30, YoY) (in millions) | Metric | 2025 (in millions) | 2024 (in millions) | | :-------------------------------- | :------------------ | :------------------ | | Gross earned | $603.01 | $520.21 | | Ceded | $(202.16) | $(144.82) | | Net premiums earned | $400.85 | $375.39 | - Total net amounts recoverable and receivable from reinsurers decreased to **$437.93 million** as of June 30, 2025, from **$558.44 million** as of December 31, 2024[92](index=92&type=chunk) - The Company decreased its reinsurance recoverable for unpaid losses and loss adjustment expenses by **$61.20 million** due to a favorable change in estimated losses from Hurricane Milton[92](index=92&type=chunk) - No benefits were accrued under the multi-year reinsurance contract with retrospective provisions for the six months ended June 30, 2025, compared to a **$13.99 million** reduction in premiums ceded for the same period in 2024[96](index=96&type=chunk) - The Company ceased providing quota share reinsurance to United Property & Casualty Insurance Company due to its financial insolvency, resulting in a net balance of **$2.40 million** due to United as of June 30, 2025[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) [Note 13 -- Losses and Loss Adjustment Expenses](index=34&type=section&id=Note%2013%20--%20Losses%20and%20Loss%20Adjustment%20Expenses) This note details the activity in the liability for losses and loss adjustment expenses, including incurred and paid amounts Activity in Liability for Losses and LAE (Six Months Ended June 30, YoY) (in millions) | Metric | 2025 (in millions) | 2024 (in millions) | | :-------------------------------- | :------------------ | :------------------ | | Net balance, beginning of period | $323.34 | $254.35 | | Total incurred, net of reinsurance | $123.75 | $158.25 | | Total paid, net of reinsurance | $(125.53) | $(120.81) | | Net balance, end of period | $321.56 | $291.79 | | Gross balance, end of period | $696.89 | $571.65 | - Lower losses and loss adjustment expenses for the six months ended June 30, 2025, primarily resulted from a decrease in claims and litigation related to Florida policies[105](index=105&type=chunk) [Note 14 -- Variable Interest Entities](index=34&type=section&id=Note%2014%20--%20Variable%20Interest%20Entities) This note explains the consolidation of reciprocal insurance exchanges as Variable Interest Entities (VIEs) and their financial impact - The Company consolidates two reciprocal insurance exchanges, CORE and Tailrow, as Variable Interest Entities (VIEs) because it is deemed the primary beneficiary[108](index=108&type=chunk) - VIE assets are legally restricted for their obligations, and creditors of the VIEs have no legal right to pursue additional sources of payment from the Company[109](index=109&type=chunk) VIE Assets and Liabilities (June 30, 2025 vs. Dec 31, 2024) (in millions) | Item | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Total assets | $123.97 | $101.34 | | Total liabilities | $64.18 | $50.60 | [Note 15 -- Segment Information](index=37&type=section&id=Note%2015%20--%20Segment%20Information) This note provides financial data by reportable segment, including Insurance Operations, Exzeo Group, and Real Estate - The Company has five reportable segments: Insurance Operations, Exzeo Group, Reciprocal Exchange Operations, Real Estate, and Corporate and Other[110](index=110&type=chunk) - For the six months ended June 30, 2025, Insurance Operations represented **77.5%** of total segment revenue and **81.0%** of combined segment assets[111](index=111&type=chunk) - For the six months ended June 30, 2025, Exzeo Group represented **16.5%** of total segment revenue and **6.0%** of combined segment assets[111](index=111&type=chunk) - Gross premiums earned from Florida were **$543.28 million** for the six months ended June 30, 2025, compared to **$461.51 million** in 2024[124](index=124&type=chunk) [Note 16 -- Leases](index=43&type=section&id=Note%2016%20--%20Leases) This note outlines the company's operating lease liabilities, weighted-average lease terms, and discount rates - Operating lease liabilities totaled **$1.07 million** as of June 30, 2025, with a weighted-average remaining lease term of **4.2 years** and a weighted-average discount rate of **6.0%**[127](index=127&type=chunk)[128](index=128&type=chunk) - In March 2025, the Company entered into an operating lease agreement for a commercial property in Tampa, Florida, with total net lease payments of **$56.87 million** over an initial term of **130 months**[129](index=129&type=chunk) [Note 17 -- Income Taxes](index=44&type=section&id=Note%2017%20--%20Income%20Taxes) This note details the company's effective tax rate and the establishment of a valuation allowance for deferred income tax assets - The effective tax rate for the six months ended June 30, 2025, was **25.8%** (income tax expense of **$50.22 million**), slightly up from **25.7%** in 2024, primarily due to certain non-deductible compensation expense[133](index=133&type=chunk) - A valuation allowance of **$0.54 million** was established for deferred income tax assets related to the deferred intercompany taxable loss from the sale of TTIC by Exzeo to HCI[131](index=131&type=chunk) [Note 18 -- Earnings Per Share](index=46&type=section&id=Note%2018%20--%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share, including income attributable to common stockholders and shares outstanding Basic EPS (Six Months Ended June 30, YoY) (in millions) | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Income attributable to common stockholders (in millions) | $130.15 | $98.44 | | Shares (in thousands) | 10,846 | 9,897 | | Basic EPS | $12.00 | $9.95 | Diluted EPS (Six Months Ended June 30, YoY) (in millions) | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Income attributable to common stockholders (in millions) | $135.65 | $101.84 | | Shares (in thousands) | 12,837 | 12,661 | | Diluted EPS | $10.57 | $8.04 | [Note 19 -- Redeemable Noncontrolling Interests](index=48&type=section&id=Note%2019%20--%20Redeemable%20Noncontrolling%20Interests) This note discusses the redemption of Exzeo's Series A Preferred Stock and changes in subscriber surplus contributions - Exzeo's Series A Preferred Stock, previously presented as redeemable noncontrolling interest, was fully redeemed during the first quarter of 2024[138](index=138&type=chunk) - Subscriber surplus contributions in redeemable noncontrolling interests, representing a refundable portion from VIE policyholders, increased to **$2.41 million** as of June 30, 2025, from **$0.79 million** as of June 30, 2024[139](index=139&type=chunk)[140](index=140&type=chunk) [Note 20 -- Equity](index=49&type=section&id=Note%2020%20--%20Equity) This note covers dividend declarations, outstanding warrants, and the remaining availability under the 'at-the-market' facility - A quarterly dividend of **$0.40 per common share** was declared on April 23, 2025, and paid on June 20, 2025[141](index=141&type=chunk) - As of June 30, 2025, there were **11,250 warrants** outstanding with an exercise price of **$54.40** and an expiration date of December 31, 2028[142](index=142&type=chunk) - The 'at-the-market' (ATM) facility had **$75.00 million** remaining availability as of June 30, 2025, for issuing new shares of common stock[143](index=143&type=chunk) - As of June 30, 2025, **7,701,189 shares** of Exzeo's common stock were not owned by HCI[146](index=146&type=chunk) [Note 21 -- Stock-Based Compensation](index=51&type=section&id=Note%2021%20--%20Stock-Based%20Compensation) This note details shares available for grant, outstanding stock options, and unrecognized compensation expense for restricted stock awards - As of June 30, 2025, **683,676 shares** were available for grant under the 2012 Omnibus Incentive Plan[148](index=148&type=chunk) - **590,000 stock options** were outstanding as of June 30, 2025, with a weighted-average exercise price of **$51.54** and a remaining contractual term of **4.4 years**[149](index=149&type=chunk) - Unrecognized compensation expense for nonvested restricted stock awards was **$17.45 million** as of June 30, 2025, expected to be recognized over a weighted-average period of **2.7 years**[151](index=151&type=chunk) - Compensation expense related to Exzeo's stock-based awards was **$1.40 million** for the six months ended June 30, 2025[155](index=155&type=chunk) [Note 22 -- Commitments and Contingencies](index=53&type=section&id=Note%2022%20--%20Commitments%20and%20Contingencies) This note addresses the company's involvement in legal matters, unfunded capital commitments, and FIGA assessments payable - The Company is involved in litigation and other legal matters in the ordinary course of business but does not believe any will have a material adverse effect on its financial position, results of operations, or cash flows[158](index=158&type=chunk) - Unfunded capital commitments for limited partnership investments totaled **$2.99 million** as of June 30, 2025[159](index=159&type=chunk) - FIGA assessments payable were **$3.59 million** as of June 30, 2025[160](index=160&type=chunk) [Note 23 -- Related Party Transactions](index=54&type=section&id=Note%2023%20--%20Related%20Party%20Transactions) This note discloses transactions with related parties, specifically a reinstatement premium protection contract with Oxbridge Reinsurance Limited - Oxbridge Reinsurance Limited, where a non-employee director serves as chairman and CEO, participates in a reinstatement premium protection (RPP) contract with HCPCI and Tailrow[161](index=161&type=chunk) - Oxbridge's annual premium for this RPP contract is **$1.03 million**, paid in installments and fully collateralized in a trust account[161](index=161&type=chunk) [Note 24 -- Subsequent Events](index=54&type=section&id=Note%2024%20--%20Subsequent%20Events) This note reports significant events occurring after the reporting period, including dividend declarations and real estate transactions - A quarterly dividend of **$0.40 per common share** was declared on July 1, 2025, payable on September 19, 2025[162](index=162&type=chunk) - The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, and the Company is currently assessing its impact on consolidated financial statements[163](index=163&type=chunk) - On July 24, 2025, the Company entered into a **$17.00 million** loan agreement secured by commercial real estate[164](index=164&type=chunk) - On August 1, 2025, the Company entered into a purchase and sale agreement for a **$17.50 million** commercial property in St. Petersburg, Florida, to be funded using available cash on hand[165](index=165&type=chunk) [Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and cash flows for the three and six months ended June 30, 2025, compared to the same periods in 2024, highlighting key drivers and trends across its operating segments [OVERVIEW](index=55&type=section&id=OVERVIEW) This section provides a high-level summary of HCI Group, Inc.'s diverse operations across its five reportable segments - HCI Group, Inc. operates in property and casualty insurance, information technology services, insurance management, real estate, and reinsurance, managing operations across five segments: Insurance Operations, Exzeo Group, Reciprocal Exchange Operations, Real Estate, and Corporate and Other[168](index=168&type=chunk) - For the six months ended June 30, 2025, Insurance Operations represented **77.5%** of total segment revenue and **81.0%** of combined segment assets, while Exzeo Group represented **16.5%** of total segment revenue and **6.0%** of combined segment assets[169](index=169&type=chunk) - Exzeo's proprietary platform includes configurable applications designed to support the full insurance value chain, such as AtlasViewer®, SAMSTM, HarmonyTM, and ClaimColonyTM[175](index=175&type=chunk) [RESULTS OF OPERATIONS](index=59&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including revenue, expenses, and profitability, for the current and prior periods - Net income for the three months ended June 30, 2025, increased by **$13.18 million** to **$70.28 million**, with diluted EPS rising by **$0.94** to **$5.18**[183](index=183&type=chunk) - Net income for the six months ended June 30, 2025, increased by **$30.45 million** to **$144.51 million**, with diluted EPS rising by **$2.53** to **$10.57**[197](index=197&type=chunk) Key Financial Ratios (Six Months Ended June 30, YoY) | Ratio | 2025 | 2024 | Change | | :-------------------------------- | :----- | :----- | :----- | | Net Loss Ratio | 30.9% | 42.2% | -11.3% | | Net Expense Ratio (excl. interest) | 28.1% | 25.2% | +2.9% | | Net Combined Ratio (excl. interest) | 59.0% | 67.4% | -8.4% | [Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024](index=60&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20to%20the%20Three%20Months%20Ended%20June%2030,%202024) This section compares the company's financial performance for the three months ended June 30, 2025, against the same period in 2024 - Net income increased to **$70.28 million** from **$57.10 million**, driven by a **$13.26 million** increase in net premiums earned and a **$13.87 million** decrease in losses and loss adjustment expenses[183](index=183&type=chunk) - Gross Premiums Earned increased by **$39.07 million** to **$302.63 million**, primarily due to a higher volume of policies in force from Citizens' take-out program[184](index=184&type=chunk) - Premiums Ceded increased by **$25.81 million** to **$102.52 million**, representing **33.9%** of gross premiums earned (up from **29.1%**), due to higher reinsurance costs[185](index=185&type=chunk) - Losses and Loss Adjustment Expenses decreased by **$13.87 million** to **$64.46 million**, attributed to lower claims and litigation frequency[190](index=190&type=chunk) - The Net Loss Ratio decreased to **32.2%** from **41.9%**, while the Net Expense Ratio increased to **29.7%** from **25.9%** due to higher policy acquisition and general & administrative personnel expenses. The Net Combined Ratio decreased to **61.9%** from **67.8%**[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) [Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024](index=62&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20to%20the%20Six%20Months%20Ended%20June%2030,%202024) This section compares the company's financial performance for the six months ended June 30, 2025, against the same period in 2024 - Net income increased to **$144.51 million** from **$114.06 million**, primarily due to a **$34.50 million** decrease in losses and loss adjustment expenses and a **$25.47 million** increase in net premiums earned[197](index=197&type=chunk) - Gross Premiums Earned increased by **$82.81 million** to **$603.01 million**, mainly due to a higher volume of policies in force from Citizens' take-out program[198](index=198&type=chunk) - Premiums Ceded increased by **$57.34 million** to **$202.16 million**, representing **33.5%** of gross premiums earned (up from **27.8%**), due to higher reinsurance costs[199](index=199&type=chunk) - Losses and Loss Adjustment Expenses decreased by **$34.50 million** to **$123.75 million**, primarily due to a decline in claims and litigation frequency[203](index=203&type=chunk) - Net Unrealized Investment Losses were **$0.73 million**, compared with net unrealized investment gains of **$3.17 million** in the prior year, primarily due to an overall decline in the equity markets[202](index=202&type=chunk) - The Net Loss Ratio decreased to **30.9%** from **42.2%**, while the Net Expense Ratio increased to **28.1%** from **25.2%**. The Net Combined Ratio decreased to **59.0%** from **67.4%**[207](index=207&type=chunk)[208](index=208&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=65&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's sources and uses of cash, capital structure, and strategies for managing liquidity - The Company's liquidity requirements are met through operations, common and preferred stock issuances, and debt offerings, with future needs expected to be covered by premiums and investment income[210](index=210&type=chunk) - A comprehensive reinsurance program is maintained to diversify risk and safeguard the financial position[212](index=212&type=chunk) - As of June 30, 2025, the revolving credit facility had an additional available borrowing capacity of **$35.00 million**, and an 'at-the-market' (ATM) facility had **$75.00 million** remaining availability for common stock issuance[215](index=215&type=chunk)[217](index=217&type=chunk) - Unexpired capital commitments for limited partnership investments totaled **$2.99 million** as of June 30, 2025[218](index=218&type=chunk) - The Company plans to expand its real estate investment portfolio, with a recent purchase agreement for a **$17.50 million** commercial property in St. Petersburg, Florida[219](index=219&type=chunk)[220](index=220&type=chunk) - Net cash provided by operating activities for the six months ended June 30, 2025, was **$307.01 million**, a significant increase from **$152.99 million** in 2024[222](index=222&type=chunk)[223](index=223&type=chunk) - Net cash provided by investing activities for the six months ended June 30, 2025, was **$120.02 million**, a reversal from net cash used of **$179.43 million** in 2024[222](index=222&type=chunk)[223](index=223&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=70&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) This section highlights key accounting policies and estimates that require significant judgment and are susceptible to material change - Material estimates susceptible to significant change include losses and loss adjustment expenses (LAE), reinsurance recoverable, income taxes, stock-based compensation, limited partnership investments, and acquired intangible assets[229](index=229&type=chunk) - Reserves for losses and LAE decreased from **$845.90 million** as of December 31, 2024, to **$696.89 million** as of June 30, 2025, primarily due to reductions in catastrophe reserves (Hurricane Ian, Helene, Milton) and non-catastrophe reserves[234](index=234&type=chunk) - As of June 30, 2025, **$616.23 million** of the total **$696.89 million** Reserves is attributable to Incurred But Not Reported (IBNR) losses[232](index=232&type=chunk) - Management considers its Reserves adequate as of June 30, 2025, but acknowledges they are subject to significant variability and continuous review due to future events and changing conditions[235](index=235&type=chunk) [Item 3 Quantitative and Qualitative Disclosures About Market Risk](index=72&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including interest rate risk, credit risk, and equity price risk, and the strategies employed to mitigate these risks within its investment portfolio - The Company's investment portfolio is exposed to interest rate risk, credit risk, and equity price risk[238](index=238&type=chunk) - A hypothetical **100 basis point increase** in interest rates would decrease the fair value of available-for-sale fixed-maturity securities by **$11.75 million** (**-2%**), while a **100 basis point decrease** would increase it by **$11.76 million** (**+2%**)[240](index=240&type=chunk) - Credit risk is mitigated by investing in generally investment-grade securities, diversifying the portfolio, and continuously monitoring credit quality. As of June 30, 2025, **76%** of available-for-sale fixed-maturity securities had an AA+, AA, or AA- rating[241](index=241&type=chunk)[242](index=242&type=chunk) - Equity price risk is managed through industry and issuer diversification and asset mix. As of June 30, 2025, the equity securities portfolio was composed of **34%** stocks by sector and **66%** mutual funds/exchange-traded funds[243](index=243&type=chunk) [Item 4 Controls and Procedures](index=74&type=section&id=Item%204%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[246](index=246&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the three months ended June 30, 2025[247](index=247&type=chunk) PART II – OTHER INFORMATION [Item 1 Legal Proceedings](index=75&type=section&id=Item%201%20Legal%20Proceedings) The company is involved in various legal matters arising in the ordinary course of business but does not anticipate any material adverse effects on its financial position, results of operations, or cash flows - For details on legal proceedings and related matters, refer to Note 22 'Commitments and Contingencies' in the consolidated financial statements[249](index=249&type=chunk) [Item 1A Risk Factors](index=75&type=section&id=Item%201A%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report - No material changes to the risk factors previously disclosed in Part I, Item 1A of the 2024 Annual Report[250](index=250&type=chunk) [Item 2 Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's equity security transactions, including common share repurchases to satisfy payroll tax liabilities, and confirms no unregistered sales or use of proceeds from registered equity securities. It also outlines dividend restrictions on insurance subsidiaries - There were no unregistered sales of equity securities or use of proceeds from registered equity securities[251](index=251&type=chunk)[252](index=252&type=chunk) - **266 common shares** were purchased at an average price of **$150.57 per share** in June 2025 to satisfy payroll tax liabilities associated with the vesting of restricted stock awards[253](index=253&type=chunk) - The Company's insurance subsidiaries are subject to Florida law restrictions on dividend payments, which could impact HCI's ability to pay dividends in the future[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) - During the six months ended June 30, 2025, the insurance subsidiaries paid **$14.00 million** in dividends to HCI[257](index=257&type=chunk) [Item 3 Defaults Upon Senior Securities](index=76&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[258](index=258&type=chunk) [Item 4 Mine Safety Disclosures](index=76&type=section&id=Item%204%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - There were no mine safety disclosures[259](index=259&type=chunk) [Item 5 Other Information](index=76&type=section&id=Item%205%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - During the three months ended June 30, 2025, none of the Company's directors or officers adopted or terminated a 'Rule 10b5-1 trading arrangement' or a 'non-Rule 10b5-1 trading arrangement'[260](index=260&type=chunk) [Item 6 Exhibits](index=77&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed or incorporated by reference as part of the Form 10-Q, including articles of incorporation, bylaws, various agreements, and certifications [Exhibits Index](index=77&type=section&id=Exhibits%20Index) This index provides a comprehensive list of all documents and agreements filed as exhibits to the Form 10-Q - The exhibits include Articles of Incorporation, Bylaws, Common Stock Purchase Warrant, Indentures, Preferred Stock Purchase Agreement, Shareholders Agreement, Parent Guaranty Agreement, Incentive Plans, Employment Agreements, Reimbursement Contracts, various Reinsurance Contracts, Equity Distribution Agreement, Assumption Agreements, and Certifications[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk) [SIGNATURES](index=85&type=section&id=SIGNATURES) This section contains the official signatures of the company's Chief Executive Officer and Chief Financial Officer, certifying the report - The report was signed on August 8, 2025, by Paresh Patel, Chief Executive Officer, and James Mark Harmsworth, Chief Financial Officer, on behalf of HCI Group, Inc[275](index=275&type=chunk)

Financial Data and Key Metrics Changes - HCI reported earnings of $5.18 per share, an increase from $4.24 in the same quarter last year [9] - The net combined ratio improved to 62% [5] - Total shareholders' equity grew to $759 million, up 65% year to date [5] - Pretax income for the quarter was over $94 million, with year-to-date pretax income at $195 million [9][10] - The gross loss ratio improved to 21.3%, down more than six points from the second quarter last year [10] Business Line Data and Key Metrics Changes - HCI's in-force premium increased by over $460 million to approximately $1.2 billion since 2022 [7] - The retention ratio supported by technology was about 90% [7] - The gross loss ratio improved to below 25% during the same period [7] Market Data and Key Metrics Changes - The underwriting environment in Florida showed improvements, allowing HCI to capitalize on favorable market shifts [6][27] - The company detected a competitive market landscape but maintained a strong position with multiple underwriters [26][28] Company Strategy and Development Direction - HCI plans to pursue an initial public offering (IPO) for Exeo, aiming to separate it as a publicly traded entity [14][16] - The company emphasizes a conservative reinsurance strategy to ensure protection for the upcoming year [6] - HCI aims to leverage technology to identify and underwrite attractive policies that align with risk and profitability standards [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate compelling returns on shareholder capital despite market conditions [8] - The competitive landscape in Florida is expected to attract more capital, but HCI believes it is well-positioned to navigate this environment [26][28] - Management highlighted the importance of technology in improving operational efficiency and underwriting discipline [7][8] Other Important Information - The company reduced its debt-to-cap ratio to less than 10% and redeemed $172 million in convertible notes [12] - Book value per share increased by over $16 to $58.55 [12] - Holding company liquidity was over $250 million at the end of the second quarter [13] Q&A Session Summary Question: Update on market conditions in Florida - Management noted that the environment is healthy, attracting capital and competition, but HCI is well-positioned with strong capital and technology [26][27] Question: Outlook for Depop and appetite for policies - Three carriers were approved for 25,000 policies each in October, and HCI will leverage technology to select desirable policies [31] Question: Benefits of Exeo being independent from Homeowners Choice - Management indicated that independence allows teams to focus on their core competencies, presenting opportunities for both entities [35] Question: Pricing environment in the condo business - The market remains soft, but it is a small part of HCI's business and not a significant issue [36] Question: Weather impact on loss ratio - Despite more weather claims this quarter, the overall frequency of claims has decreased, contributing to a lower loss ratio [41][42] Question: Investment income and interest expense - Investment income is expected to remain stable, and interest expense will significantly decrease due to the redemption of convertible notes [44][46] Question: Characterization of remaining policies for takeout - The ratio of viable policies has shifted, but HCI is confident in its ability to identify suitable opportunities [48] Question: Growth in gross premiums written - The increase in premiums is primarily due to the renewal of existing policies rather than new voluntary business [50] Question: Normalization of net combined ratio - The projected net combined ratio of 70% accounts for full reinsurance load and policy acquisition expenses [51]

[Executive Summary & Management Commentary](index=1&type=section&id=Executive%20Summary%20%26%20Management%20Commentary) HCI Group's Q2 2025 results show strong financial performance and management's strategic focus on unlocking shareholder value [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) HCI Group reported strong Q2 2025 results with significant increases in pre-tax income, net income, and diluted EPS, alongside a notable improvement in the gross loss ratio and book value per share Second Quarter 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | Source | | :-------------------------------- | :------ | :------ | :----- | :----- | | Pre-Tax Income | $94.4 million | - | - | [1] | | Net Income | $70.3 million | - | - | [1] | | Net Income after Noncontrolling Interests | $66.2 million | $54.1 million | +22.4% | [1] | | Diluted EPS | $5.18 | $4.24 | +22.2% | [1, 19] | | Book Value Per Share (end of period) | $58.55 | $42.72 | +37.0% | [1, 19] | | Gross Loss Ratio | 21.3% | 29.7% | -8.4 pts | [1, 19] | [Management Outlook](index=1&type=section&id=Management%20Outlook) Management highlighted solid profitability, industry-leading net combined ratios, and growth in book value per share, while also progressing initiatives to unlock shareholder value, specifically establishing Exzeo as an independent public entity - HCI Group delivered another strong quarter, marked by **solid profitability**, **industry-leading net combined ratios**, and **meaningful growth in book value per share**[2](index=2&type=chunk) - The company continues to make progress on initiatives to **unlock shareholder value** and establish Exzeo as an independent, publicly traded entity[2](index=2&type=chunk) [Second Quarter 2025 Financial Review](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Review) This section details HCI Group's second quarter 2025 financial performance, including revenue, underwriting results, and operating expenses [Revenue and Premiums](index=1&type=section&id=Revenue%20and%20Premiums) Consolidated gross premiums earned increased significantly in Q2 2025 due to a higher volume of policies in force, while premiums ceded for reinsurance also saw a slight increase compared to the previous quarter Q2 2025 Premiums Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | Source | | :-------------------------- | :---------- | :---------- | :----------- | :----- | | Consolidated Gross Premiums Earned | $302.6 million | $263.6 million | +14.8% | [2, 19] | | Premiums Ceded for Reinsurance | $102.5 million | $76.7 million | +33.6% | [3, 23] | - The increase in consolidated gross premiums earned was a result of a **higher volume of policies in force** over the comparative period[2](index=2&type=chunk) [Underwriting Performance and Expenses](index=1&type=section&id=Underwriting%20Performance%20and%20Expenses) Losses and loss adjustment expenses decreased substantially in Q2 2025, leading to a significantly improved gross loss ratio, primarily due to a decline in claims and litigation frequency. Policy acquisition and other underwriting expenses increased due to higher gross premiums Q2 2025 Underwriting Expenses | Expense Category | Q2 2025 | Q2 2024 | Change (YoY) | Source | | :-------------------------------- | :---------- | :---------- | :----------- | :----- | | Losses and Loss Adjustment Expenses | $64.5 million | $78.3 million | -17.6% | [3, 23] | | Gross Loss Ratio | 21.3% | 29.7% | -8.4 pts | [3, 19] | | Policy Acquisition and Other Underwriting Expenses | $30.6 million | $23.5 million | +30.2% | [4, 23] | - The decrease in losses and loss adjustment expenses was primarily driven by a **decline in claims and litigation frequency**[3](index=3&type=chunk) - The increase in policy acquisition and other underwriting expenses was driven by **higher gross premiums**[4](index=4&type=chunk) [Profitability Expenses](index=1&type=section&id=Profitability%20Expenses) General and administrative personnel expenses increased due to higher stock-based compensation, employee health benefits, and merit increases. Other operating expenses also rose, partly due to a debt conversion charge Q2 2025 Operating Expenses | Expense Category | Q2 2025 | Q2 2024 | Change (YoY) | Source | | :-------------------------------- | :---------- | :---------- | :----------- | :----- | | General and Administrative Personnel Expenses | $20.0 million | $17.5 million | +14.3% | [4, 23] | | Other Operating Expenses | $8.8 million | $7.5 million | +17.3% | [5, 23] | - The increase in general and administrative personnel expenses was primarily attributable to **higher stock-based compensation**, **employee health benefits**, and **merit increases**[4](index=4&type=chunk) - Other operating expenses included a **$1.1 million debt conversion charge** in connection with the conversion of 4.75% Convertible Senior Notes[5](index=5&type=chunk) [Year-to-Date 2025 Financial Review](index=1&type=section&id=Year-to-Date%202025%20Financial%20Review) This section provides a year-to-date financial review for 2025, detailing revenue, underwriting performance, and profitability metrics [Revenue and Premiums (YTD)](index=1&type=section&id=Revenue%20and%20Premiums%20(YTD)) For the first six months of 2025, consolidated gross premiums earned increased significantly, driven by a higher volume of policies in force, while premiums ceded for reinsurance also rose considerably compared to the prior year period YTD 2025 Premiums Performance | Metric | YTD 2025 | YTD 2024 | Change (YoY) | Source | | :-------------------------- | :--------- | :--------- | :----------- | :----- | | Consolidated Gross Premiums Earned | $603.0 million | $520.2 million | +15.9% | [7, 23] | | Premiums Ceded for Reinsurance | $202.2 million | $144.8 million | +39.6% | [7, 23] | - The increase in consolidated gross premiums earned was a result of a **higher volume of policies in force** over the comparative period[7](index=7&type=chunk) [Underwriting Performance and Expenses (YTD)](index=3&type=section&id=Underwriting%20Performance%20and%20Expenses%20(YTD)) Year-to-date losses and loss adjustment expenses decreased, resulting in a lower gross loss ratio, primarily due to reduced claims and litigation frequency. Policy acquisition and other underwriting expenses increased, consistent with higher gross premiums YTD 2025 Underwriting Expenses | Expense Category | YTD 2025 | YTD 2024 | Change (YoY) | Source | | :-------------------------------- | :--------- | :--------- | :----------- | :----- | | Losses and Loss Adjustment Expenses | $123.7 million | $158.2 million | -21.8% | [8, 23] | | Gross Loss Ratio | 20.5% | 30.4% | -9.9 pts | [8] | | Policy Acquisition and Other Underwriting Expenses | $57.8 million | $45.6 million | +26.8% | [9, 23] | - The decrease in losses and loss adjustment expenses was primarily driven by a **decline in claims and litigation frequency**[8](index=8&type=chunk) - The increase in policy acquisition and other underwriting expenses was driven by **higher gross premiums**[9](index=9&type=chunk) [Profitability Metrics (YTD)](index=1&type=section&id=Profitability%20Metrics%20(YTD)) Year-to-date pre-tax income, net income, and diluted EPS all showed substantial increases. General and administrative personnel expenses rose due to increased stock-based compensation, employee health benefits, and merit increases, while other operating expenses saw a slight decrease, partially offset by a debt conversion charge YTD 2025 Profitability and Operating Expenses | Metric/Expense Category | YTD 2025 | YTD 2024 | Change (YoY) | Source | | :-------------------------------- | :--------- | :--------- | :----------- | :----- | | Pre-Tax Income | $194.7 million | $153.5 million | +27.0% | [6, 23] | | Net Income | $144.5 million | $114.1 million | +26.6% | [6, 23] | | Net Income after Noncontrolling Interests | $135.8 million | $101.7 million | +33.5% | [6, 23] | | Diluted EPS | $10.57 | $8.04 | +31.5% | [6, 23] | | General and Administrative Personnel Expenses | $40.5 million | $33.7 million | +20.2% | [9, 23] | | Other Operating Expenses | $14.4 million | $15.2 million | -5.3% | [10, 23] | - The increase in general and administrative personnel expenses was primarily attributable to **higher stock-based compensation**, **employee health benefits**, and **merit increases**[9](index=9&type=chunk) - The decrease in other operating expenses was partially offset by a **$1.1 million debt conversion charge** in connection with the conversion of 4.75% Convertible Senior Notes[10](index=10&type=chunk) [Financial Position and Key Metrics](index=6&type=section&id=Financial%20Position%20and%20Key%20Metrics) This section outlines HCI Group's financial position, including balance sheet highlights and key per share metrics as of June 30, 2025 [Balance Sheet Highlights](index=7&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2025, total assets increased, primarily driven by a significant rise in cash and cash equivalents. Total liabilities decreased, notably due to a substantial reduction in long-term debt and losses and loss adjustment expenses, leading to a significant increase in total equity Balance Sheet Summary (June 30, 2025 vs Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | Dec 31, 2024 | Change | Source | | :-------------------------------- | :------------ | :----------- | :----- | :----- | | Total Assets | $2,353,106 | $2,230,213 | +$122,893 | [21] | | Cash and Cash Equivalents | $947,166 | $532,471 | +$414,695 | [21] | | Total Liabilities | $1,566,017 | $1,761,172 | -$195,155 | [21] | | Long-Term Debt | $15,602 | $185,254 | -$169,652 | [21] | | Losses and Loss Adjustment Expenses (Liability) | $696,892 | $845,900 | -$149,008 | [21] | | Total Equity | $784,684 | $467,350 | +$317,334 | [21] | [Per Share Metrics](index=6&type=section&id=Per%20Share%20Metrics) HCI Group reported increased diluted EPS and book value per share for Q2 2025 and year-to-date 2025, while dividends per share remained constant Per Share Metrics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | Source | | :-------------------------- | :------ | :------ | :------- | :------- | :----- | | Diluted EPS | $5.18 | $4.24 | $10.57 | $8.04 | [19, 23] | | Dividends per share | $0.40 | $0.40 | $0.80 | $0.80 | [19, 23] | | Book value per share (end of period) | $58.55 | $42.72 | - | - | [19] | | Shares outstanding (end of period) | 12,956,884 | 10,472,741 | - | - | [19] | [Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of HCI Group, details for the upcoming conference call, important forward-looking statements, and investor relations contacts [About HCI Group, Inc.](index=3&type=section&id=About%20HCI%20Group%2C%20Inc.) HCI Group, Inc. is a holding company with two main operating units: an insurance unit comprising four insurance companies, a captive reinsurance company, and claims/real estate operations; and Exzeo Group, an insurance technology innovator focused on advanced underwriting algorithms and data analytics - HCI Group, Inc. is a holding company with **two distinct operating units**[13](index=13&type=chunk) - The first unit includes **four top-performing insurance companies**, a captive reinsurance company, and operations in claims management and real estate[13](index=13&type=chunk) - The second unit, Exzeo Group, is a leading innovator of insurance technology that utilizes **advanced underwriting algorithms and data analytics** to empower property and casualty insurers[13](index=13&type=chunk) - 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**[14](index=14&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) HCI Group will host a conference call on August 7, 2025, at 4:45 p.m. Eastern time to discuss the financial results, with replay options available - HCI Group will hold a conference call on **August 7, 2025, at 4:45 p.m. Eastern time** to discuss these financial results[11](index=11&type=chunk) - The call will be hosted by Chairman and Chief Executive Officer Paresh Patel, Chief Operating Officer Karin Coleman, and Chief Financial Officer Mark Harmsworth[11](index=11&type=chunk) - A replay of the call will be available by telephone and via the Investor Information section of the HCI Group website through **August 7, 2026**[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The news release contains forward-looking statements subject to various risks and uncertainties, particularly regarding the estimation of reserves for losses and loss adjustment expenses. The company disclaims any obligation to update these statements - This news release may contain forward-looking statements made pursuant to the **Private Securities Litigation Reform Act of 1995**[15](index=15&type=chunk) - Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties, such as the inherently imprecise process of **estimating reserves for losses and loss adjustment expenses**[15](index=15&type=chunk) - HCI Group, Inc. disclaims all obligations to update any forward-looking statements[15](index=15&type=chunk) [Investor Relations Contacts](index=3&type=section&id=Investor%20Relations%20Contacts) Contact information for HCI Group's Investor Relations and Gateway Investor Relations is provided for inquiries - Company Contact: **Bill Broomall, CFA, HCI Group, Inc.** (Tel: 813-776-1012, wbroomall@exzeo.com)[16](index=16&type=chunk)[17](index=17&type=chunk) - Investor Relations Contact: **Matt Glover, Gateway Group, Inc.** (Tel: 949-574-3860, HCI@gateway-grp.com)[17](index=17&type=chunk) [Detailed Financial Statements](index=6&type=section&id=Detailed%20Financial%20Statements) This section provides comprehensive financial statements, including selected metrics, consolidated balance sheets, income statements, and earnings per share reconciliation [Selected Financial Metrics (Table)](index=6&type=section&id=Selected%20Financial%20Metrics%20(Table)) This section presents key selected financial metrics for Q2 2025 and Q2 2024, including gross written premiums by segment, gross premiums earned, gross loss ratio, and per share metrics like diluted EPS, dividends, and book value Selected Financial Metrics (Unaudited) (In thousands, except share and per share amounts) | | Q2 2025 | | | Q2 2024 | | --- | --- | --- | --- | --- | | Gross Written Premiums: | | | | | | Homeowners Choice | $ | 227,090 | $ | 191,775 | | TypTap Insurance Company | | 110,412 | | 79,093 | | Condo Owners Reciprocal Exchange | | 13,830 | | 36,034 | | Tailrow Reciprocal Exchange | | 5,213 | | - | | Total Gross Written Premiums | | 356,545 | | 306,902 | | Gross Premiums Earned: | | | | | | Homeowners Choice | | 156,552 | | 143,703 | | TypTap Insurance Company | | 124,437 | | 107,055 | | Condo Owners Reciprocal Exchange | | 12,811 | | 12,803 | | Tailrow Reciprocal Exchange | | 8,828 | | - | | Total Gross Premiums Earned | | 302,628 | | 263,561 | | Gross Premiums Earned Loss Ratio | | 21.3% | | 29.7% | | Per Share Metrics | | | | | | Diluted EPS | $ | 5.18 | $ | 4.24 | | Dividends per share | $ | 0.40 | $ | 0.40 | | Book value per share at the end of period | $ | 58.55 | $ | 42.72 | | Shares outstanding at the end of period | | 12,956,884 | | 10,472,741 | [Consolidated Balance Sheets (Table)](index=7&type=section&id=Consolidated%20Balance%20Sheets%20(Table)) This table provides a detailed breakdown of HCI Group's consolidated assets, liabilities, redeemable noncontrolling interests, and equity as of June 30, 2025, compared to December 31, 2024 Consolidated Balance Sheets (In thousands, except share amounts) | | | June 30, 2025 | | December 31, 2024 | | --- | --- | --- | --- | --- | | | | (Unaudited) | | | | Assets | | | | | | Fixed-maturity securities, available for sale, at fair value (amortized cost: $590,666 and $719,536, | | | | | | respectively and allowance for credit losses: $0 and $0, respectively) | $ | 592,210 | $ | 718,537 | | Equity securities, at fair value (cost: $55,174 and $52,030, respectively) | | 58,618 | | 56,200 | | Limited partnership investments | | 19,770 | | 20,802 | | Real estate investments | | 85,578 | | 79,120 | | Total investments | | 756,176 | | 874,659 | | Cash and cash equivalents | | 947,166 | | 532,471 | | Restricted cash | | 3,730 | | 3,714 | | Accrued interest and dividends receivable | | 6,308 | | 6,008 | | Income taxes receivable | | 3,130 | | 463 | | Deferred income tax assets, net | | 361 | | 72 | | Premiums receivable, net (allowance: $8,180 and $5,891, respectively) | | 65,826 | | 50,582 | | Prepaid reinsurance premiums | | — | | 92,060 | | Reinsurance recoverable, net of allowance for credit losses: | | | | | | Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively) | | 62,727 | | 36,062 | | Unpaid losses and loss adjustment expenses (allowance: $137 and $186, respectively) | | 375,198 | | 522,379 | | Deferred policy acquisition costs | | 65,138 | | 54,303 | | Property and equipment, net | | 29,695 | | 29,544 | | Right-of-use-assets - operating leases | | 1,065 | | 1,182 | | Intangible assets, net | | 3,927 | | 5,206 | | Funds withheld for assumed business | | 8,538 | | 11,690 | | Other assets | | 24,121 | | 9,818 | | Total assets | $ | 2,353,106 | $ | 2,230,213 | | Liabilities, Redeemable Noncontrolling Interests and Equity | | | | | | Losses and loss adjustment expenses | $ | 696,892 | $ | 845,900 | | Unearned premiums | | 627,484 | | 584,703 | | Advance premiums | | 43,677 | | 18,867 | | Reinsurance payable on paid losses and loss adjustment expenses | | 127 | | 2,496 | | Ceded reinsurance premiums payable | | 38,121 | | 18,313 | | Assumed premiums payable | | 375 | | 2,176 | | Accrued expenses | | 42,033 | | 17,677 | | Income taxes payable | | 24,294 | | 5,451 | | Deferred income tax liabilities, net | | 2,402 | | 2,830 | | Revolving credit facility | | 40,000 | | 44,000 | | Long-term debt | | 15,602 | | 185,254 | | Lease liabilities - operating leases | | 1,072 | | 1,185 | | Other liabilities | | 33,938 | | 32,320 | | Total liabilities | | 1,566,017 | | 1,761,172 | | Commitments and contingencies | | | | | | Redeemable noncontrolling interests | | 2,405 | | 1,691 | | Equity: | | | | | | Common stock, (no par value, 40,000,000 shares authorized, 12,956,884 and 10,767,184 | | | | | | shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) | | — | | — | | Additional paid-in capital | | 298,706 | | 122,289 | | Retained earnings | | 458,713 | | 331,793 | | Accumulated other comprehensive income (loss) | | 1,158 | | (749) | | Total stockholders' equity | | 758,577 | | 453,333 | | Noncontrolling interests | | 26,107 | | 14,017 | | Total equity | | 784,684 | | 467,350 | | Total liabilities, redeemable noncontrolling interest and equity | $ | 2,353,106 | $ | 2,230,213 | [Consolidated Statements of Income (Table)](index=8&type=section&id=Consolidated%20Statements%20of%20Income%20(Table)) This table presents the consolidated statements of income for the three months and six months ended June 30, 2025, and 2024, detailing revenue, expenses, and net income Consolidated Statements of Income (Unaudited) (In thousands, except per share data) | | | | Three Months Ended | | | | Six Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 2025 | | June 30, | 2024 | | 2025 | June 30, | 2024 | | Revenue | | | | | | | | | | Gross premiums earned | $ | 302,628 | $ | 263,561 | $ | 603,011 | $ | 520,205 | | Premiums ceded | | (102,522) | | (76,713) | | (202,157) | | (144,819) | | Net premiums earned | | 200,106 | | 186,848 | | 400,854 | | 375,386 | | Net investment income | | 16,445 | | 16,881 | | 30,196 | | 30,948 | | Net realized investment gains | | 155 | | 212 | | 1,322 | | 212 | | Net unrealized investment gains (losses) | | 1,180 | | 533 | | (726) | | 3,168 | | Policy fee income | | 1,467 | | 1,089 | | 3,696 | | 2,108 | | Other | | 2,567 | | 682 | | 3,011 | | 1,037 | | Total revenue | | 221,920 | | 206,245 | | 438,353 | | 412,859 | | Expenses | | | | | | | | | | Losses and loss adjustment expenses | | 64,457 | | 78,324 | | 123,748 | | 158,246 | | Policy acquisition and other underwriting expenses | | 30,551 | | 23,452 | | 57,838 | | 45,591 | | General and administrative personnel expenses | | 19,985 | | 17,471 | | 40,468 | | 33,745 | | Interest expense | | 3,744 | | 3,452 | | 7,128 | | 6,601 | | Other operating expenses | | 8,791 | | 7,520 | | 14,440 | | 15,220 | | Total expenses | | 127,528 | | 130,219 | | 243,622 | | 259,403 | | Income before income taxes | | 94,392 | | 76,026 | | 194,731 | | 153,456 | | Income tax expense | | 24,113 | | 18,927 | | 50,222 | | 39,401 | | Net income | $ | 70,279 | $ | 57,099 | $ | 144,509 | $ | 114,055 | | Net income attributable to redeemable noncontrolling | | | | | | | | | | interests | | — | | — | | — | | (10,149) | | Net income attributable to noncontrolling interests | | (4,119) | | (3,023) | | (8,665) | | (2,219) | | Net income after noncontrolling interests | $ | 66,160 | $ | 54,076 | $ | 135,844 | $ | 101,687 | | Basic earnings per share | $ | 5.57 | $ | 5.18 | $ | 12.00 | $ | 9.95 | | Diluted earnings per share | $ | 5.18 | $ | 4.24 | $ | 10.57 | $ | 8.04 | | Dividends per share | $ | 0.40 | $ | 0.40 | $ | 0.80 | $ | 0.80 | [Earnings Per Share Reconciliation (Table)](index=9&type=section&id=Earnings%20Per%20Share%20Reconciliation%20(Table)) This table provides a summary of the numerator and denominator used to calculate basic and diluted earnings per common share for the three and six months ended June 30, 2025 Basic and Diluted Earnings Per Common Share Reconciliation (Unaudited) (In thousands, except per share amount) | | Three Months Ended | | | Six Months Ended | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | June 30, 2025 | | | June 30, 2025 | | | | | | | | Per | | | | Per | | | Income | Shares | Share | | Income | Shares | Share | | | (Numerato | (Denominato | Amoun | | (Numerat | (Denominato | | | | r) | r) | t | | or) | r) | Amount | | Net income | $ 70,279 | | | $ | 144,509 | | | | Less: Net income attributable to | | | | | | | | | noncontrolling interests | (4,119) | | | | (8,665) | | | | Net income attributable to HCI | 66,160 | | | | 135,844 | | | | Less: Income attributable to participating | | | | | | | | | securities | (2,616) | | | | (5,691) | | | | Basic Earnings Per Share: | | | | | | | | | Income attributable to common stockholders | 63,544 | 11,400 | $ 5.57 | | 130,153 | 10,846 | $ 12.00 | | Effect of Dilutive Securities: | | | | | | | | | Stock options | — | 392 | | | — | 373 | | | Convertible senior notes | 3,170 | 1,084 | | | 5,500 | 1,611 | | | Warrants | — | 7 | | | — | 7 | | | Diluted Earnings Per Share: | | | | | | | | | Income attributable to common stockholders | $ 66,714 | 12,883 | $ 5.18 | $ | 135,653 | 12,837 | $ 10.57 |