x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Year Ended December 31, 2024 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________ FORM 10-K _________________________________________________________ o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36462 _________________________________________________________ Herit ...

Financial Data and Key Metrics Changes - For the full year 2024, the company achieved net income of $61.5 million or $2.01 per share, a significant increase from $45.3 million or $1.73 per share in 2023 [9] - The tangible book value per share grew by 30% to $9.50 at December 31, 2024, compared to year-end 2023, with an ROE of 24.1% [10] - In Q4 2024, net income was $20.3 million or $0.66 per diluted share, down from $30.9 million or $1.15 per diluted share in the prior year quarter, primarily due to higher catastrophe losses [19] Business Line Data and Key Metrics Changes - Gross premiums earned rose to $360.5 million, up 6.1% from $339.6 million in the prior year quarter, reflecting a strategic focus on rate adequacy and organic growth [22] - Net premiums earned increased to $199.3 million, up 12.2% from $177.7 million in the prior year quarter [22] - The commercial residential business saw a 13% increase in premiums in force compared to Q4 2023, now accounting for 20% of in-force premiums [23] Market Data and Key Metrics Changes - The company maintained a robust level of reinsurance coverage with $1.3 billion in the southeast, $1.1 billion in the northeast, and $750 million in Hawaii [26] - Legislative changes in Florida have positively impacted the economics of writing new profitable business, leading to a decline in frivolous lawsuits [15] Company Strategy and Development Direction - The company is focused on executing underwriting and rate adequacy initiatives while strategically reducing exposures in unprofitable areas [11] - New personal lines business is being selectively written with a focus on risk management and stringent underwriting [14] - The company aims to maintain a balanced and diversified portfolio, ensuring no single state represents over 30% of total insured value [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's earnings power moving forward, despite significant catastrophe losses [21] - The company anticipates continued rate increases to earn through its book of business, providing a tailwind for growth in 2025 [32] - The proactive approach to managing exposures and enhancing rate adequacy is expected to position the company well for continued success [33] Other Important Information - The company incurred approximately $105 million pretax from 2024 hurricanes, highlighting the impact of catastrophic events on financial performance [11][32] - The average duration of the fixed income portfolio is 3.1 years, with a focus on higher yields while maintaining a high-quality portfolio [30] Q&A Session Summary Question: Can you describe the profile of the LA Fire claims? - The company reported fifteen total loss claims, with the remaining twenty involving some form of smoke damage, primarily from the Mount Sage event [36] Question: Can you provide more detail on the prior period development for the quarter? - The prior period development primarily relates to Hurricane Irma, with claims winding down as the event reaches its tail end [38] Question: How is the company looking at growth in E and S markets? - The company continues to see momentum in E and S, adapting to market dynamics state by state and evaluating regulatory environments [44] Question: Which geographies are being considered for reopening profitable territories? - The company is considering reopening profitable territories across its entire footprint, including the northeast and southeast [47]

Catastrophe Losses - Heritage Insurance Holdings, Inc. announced estimated catastrophe losses for Q4 2024, primarily due to Southern California wildfires[4] - The company expects additional catastrophe losses to be incurred in Q1 2025 related to the same wildfires[4]

Core Viewpoint - Heritage Insurance (HRTG) is expected to report quarterly earnings of $0.52 per share, reflecting a year-over-year decline of 54.8%, while revenues are anticipated to be $199.87 million, an increase of 6.9% from the previous year [1]. Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the last 30 days, indicating that analysts have maintained their initial forecasts [1]. - Changes in earnings estimates are crucial for predicting investor reactions to the stock, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock price performance [2]. Revenue Forecasts - Analysts project 'Revenues- Net investment income' to be $9.91 million, indicating a year-over-year increase of 47.7% [4]. - The estimate for 'Revenues- Net premiums earned' is expected to reach $186.70 million, reflecting a year-over-year change of 5.1% [4]. - 'Revenues- Other revenue' is anticipated to be $3.27 million, suggesting a year-over-year decline of 5.9% [4]. Stock Performance - Heritage Insurance shares have increased by 1.3% over the past month, contrasting with the Zacks S&P 500 composite's decline of 4.1% [5]. - With a Zacks Rank of 4 (Sell), HRTG is expected to underperform the overall market in the near term [5].

Core Viewpoint - Heritage Insurance Holdings, Inc. will announce its fourth quarter and full year 2024 financial results on March 11, 2025, followed by a conference call on March 12, 2025 [1]. Group 1: Financial Results Announcement - The financial results for the fourth quarter and full year 2024 will be disclosed after market close on March 11, 2025 [1]. - A conference call and webcast will take place at 9:00 am ET on March 12, 2025 [1]. Group 2: Conference Call Details - Participants can join the call by dialing 1-888-346-3095 for domestic calls or 1-412-902-4258 for international calls [2]. - Participants should request to be joined into the Heritage Insurance Holdings Fourth Quarter 2024 Earnings Call [2]. Group 3: Webcast Information - A live audio webcast of the earnings call will be available in the investors section of the company's website [3]. - The call will be archived for replay, and financial information is routinely posted on the company's investor relations site [3]. Group 4: Company Overview - Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company [4]. - The company writes approximately $1.4 billion of gross personal and commercial residential premium across multiple states, including the northeast, southeast, Hawaii, and California [4]. - As a catastrophe-focused property insurer, the company addresses the needs of policyholders affected by wildfires, hurricanes, winter storms, and severe convective storms [4].

Core Viewpoint - Heritage Insurance Holdings, Inc. is expected to report strong financial results for the fourth quarter of 2024, driven by lower non-catastrophe losses and significant claims settlements from Hurricane Milton [2][3]. Financial Performance - The company anticipates its best earnings quarter of the year in Q4 2024, surpassing the $18.9 million after-tax net income from Q2 2024 [2]. - An estimated $57.0 million impact from Hurricane Milton is included in the Q4 results, comprising retained catastrophe losses of $40.0 million and a net reinstatement premium of $17.0 million [2]. - As of January 21, 2025, the company has settled over 9,000 hurricane claims from 2024, paying out more than $140 million, with approximately 90% of claims closed [2]. Catastrophe Losses - For Q1 2025, the company expects pre-tax net current accident quarter catastrophe losses of approximately $35.0 - $40.0 million due to the Southern California wildfires [3]. - The company is actively participating in insurance villages in California to assist affected policyholders [3]. Company Overview - Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company, writing approximately $1.4 billion in gross personal and commercial residential premiums across multiple states [4].

Core Viewpoint - Heritage Insurance Holdings, Inc. (HRTG) has shown significant stock performance, rallying 46% over the past six months, outperforming the industry and broader market indices [1][2]. Performance Metrics - HRTG's stock has outperformed the industry's growth of 7.5%, the Finance sector's return of 9.8%, and the Zacks S&P 500 composite's rise of 8.2% [1]. - The average target price for HRTG is set at $16.00 per share, indicating a potential upside of 43.8% from the recent closing price [5]. - The Zacks Consensus Estimate for 2025 suggests a 62.7% year-over-year increase in earnings, supported by a 7.4% rise in revenues [6]. Strategic Focus - HRTG is concentrating on enhancing profitability through selective underwriting, rate adequacy, and limiting new business in over-concentrated markets [7]. - The company has ceased writing new personal lines policies in Florida and the Northeast due to declining profitability and tightening reinsurance markets [7]. - HRTG is targeting growth in the excess and supply (E&S) business and is exploring opportunities in additional states [8]. Financial Health - HRTG has a robust reinsurance program that mitigates exposure to severe weather events, with expectations of a reduced ceded premium ratio due to improvements in the reinsurance structure [9]. - The return on equity for HRTG over the trailing 12 months was 29.2%, significantly higher than the industry average of 7.6% [11]. - The return on invested capital (ROIC) was 19.7%, also exceeding the industry average of 5.8%, indicating effective fund utilization [11]. Valuation - HRTG's stock is currently undervalued, trading at a price-to-book multiple of 1.22, lower than the industry average of 1.59 [12]. - The company has a Value Score of A, suggesting strong valuation metrics compared to peers [12]. Growth Prospects - HRTG's growth is supported by a growing commercial residential business, improved E&S business, better pricing, and expanding margins [13]. - The diversification strategy has led to better risk distribution and lower reinsurance costs, with no single state accounting for more than 26.7% of total insurable value [13].

Core Viewpoint - Heritage Insurance Holdings, Inc. (HRTG) is experiencing a bullish trend in its stock performance, supported by strong year-to-date growth and favorable technical indicators [1][4]. Company Performance - HRTG shares have increased by 76.1% year to date, significantly outperforming the industry growth of 24.6%, the Finance sector's return of 16%, and the Zacks S&P 500 composite's rise of 24% [4]. - The average target price for HRTG is set at $16.00 per share, indicating a potential upside of 39.4% from the recent closing price [7]. Analyst Sentiment - The consensus estimates for 2024 and 2025 earnings have decreased by 3.8% and 4.4%, respectively, over the past 60 days [8]. - The Zacks Consensus Estimate for 2024 suggests a year-over-year decrease of 23.4%, while the estimate for 2025 indicates a significant increase of 62.7% [8]. Underwriting and Profitability - HRTG is focusing on rate adequacy and selective profit-oriented underwriting, which are expected to enhance profitability [9]. - The company has ceased writing new personal lines policies in Florida and the Northeast due to declining profitability and tightening reinsurance markets [9]. Business Strategy - HRTG is experiencing a decline in policy count, but average premiums per policy have increased, with expectations that the decline in policies will moderate in the coming quarters [10]. - The excess and surplus (E&S) business is identified as a growth opportunity, with plans to explore expansion into more states [10]. Reinsurance and Financial Health - HRTG's reinsurance program is designed to mitigate exposure to severe weather events, with expectations of a substantial reduction in the ceded premium ratio due to improvements in the reinsurance program [11]. - The company has approved a share repurchase program worth $10 million, although its debt has increased by 2.4% as of September 30, 2024, which is unfavorable compared to industry averages [12]. Return on Capital - HRTG's return on equity over the trailing 12 months was 29.2%, significantly higher than the industry average of 7.6% [13]. - The return on invested capital (ROIC) for HRTG was 19.7%, also exceeding the industry average of 5.8% [13]. Valuation - HRTG's stock is currently undervalued, trading at a price-to-book multiple of 1.26, lower than the industry average of 1.51 [14]. - The company has a Value Score of A, indicating strong valuation metrics compared to peers [14]. Growth Prospects - The company is expected to benefit from a growing commercial residential business, improved E&S business, better pricing, and expanding margins, which bode well for future growth [15].

Core Insights - The focus is on growth and momentum stocks that are reasonably priced and expected to outperform the market in the long term [1] - The S&P 500 and Nasdaq saw significant increases of 367% and 685% respectively from 2009 to 2019, following a recommendation to buy at the financial crisis bottom in March 2009 [1] - The aim is to assist investors in making money through investments in high-quality growth stocks [1]

Core Viewpoint - Heritage Insurance Holdings, Inc. (HRTG) has significantly outperformed its industry and broader market indices year to date, with an 81.4% increase in share price [1][2]. Group 1: Financial Performance - HRTG has beaten earnings estimates in three of the last four quarters, indicating strong operational performance [2]. - The consensus estimate for 2024 earnings has decreased by 14.9%, while the estimate for 2025 suggests a substantial increase of 118% [3]. - The return on equity for HRTG in the trailing 12 months was 29.2%, significantly higher than the industry average of 7.5% [8]. - The return on invested capital (ROIC) for HRTG was 19.7%, also above the industry average of 5.8% [8]. Group 2: Growth Strategy - HRTG's growth strategy emphasizes rate adequacy and selective underwriting, with a focus on profitability [4]. - The company has ceased writing new personal lines policies in Florida and the Northeast due to declining profitability [4]. - HRTG is exploring growth opportunities in the excess and surplus (E&S) business across more states [5]. Group 3: Market Position and Valuation - HRTG shares are currently trading at a price-to-book multiple of 1.42, which is lower than the industry average of 1.50, indicating that the stock is undervalued [10]. - The average price target for HRTG is $16.00 per share, suggesting a potential upside of 35.3% from recent closing prices [9]. Group 4: Risk Management - HRTG is exposed to severe weather events, but its reinsurance program is designed to protect the balance sheet from significant losses [6]. - The company anticipates a reduction in the ceded premium ratio due to improvements in its reinsurance program and increasing gross premiums earned [6]. Group 5: Analyst Sentiment - Despite the strong performance, there is mixed analyst sentiment regarding HRTG, with a Zacks Rank of 3 (Hold) indicating caution [12].