Heritage Insurance (US:HRTG)2022-05-09 20:32Financial Performance - Total assets decreased to $1,836,396 thousand as of March 31, 2022, from $1,980,762 thousand at December 31, 2021, representing a decline of approximately 7.2%[16] - Gross premiums written increased to $283,196 thousand for the three months ended March 31, 2022, compared to $274,181 thousand for the same period in 2021, reflecting a growth of 3.7%[17] - Net premiums earned rose to $152,929 thousand in Q1 2022, up from $142,199 thousand in Q1 2021, marking an increase of 7.3%[17] - The company reported a net loss of $30,759 thousand for the three months ended March 31, 2022, compared to a net loss of $5,148 thousand for the same period in 2021, indicating a significant increase in losses[17] - Total revenues for Q1 2022 were $158,608 thousand, up from $147,243 thousand in Q1 2021, which is an increase of 7.8%[17] - Losses and loss adjustment expenses surged to $140,038 thousand in Q1 2022, compared to $97,909 thousand in Q1 2021, representing a rise of 42.5%[17] Assets and Liabilities - The company’s total liabilities decreased to $1,554,630 thousand as of March 31, 2022, from $1,637,711 thousand at December 31, 2021, a reduction of approximately 5.1%[16] - Stockholders' equity fell to $281,766 thousand at March 31, 2022, down from $343,051 thousand at December 31, 2021, reflecting a decrease of about 17.9%[16] - Total cash, cash equivalents, and restricted cash decreased to $293,586 thousand at the end of March 31, 2022, down from $364,752 thousand at December 31, 2021[28] - The company’s cash and cash equivalents decreased from $359,337 thousand at December 31, 2021, to $286,170 thousand at March 31, 2022[28] - The company reported a decrease in unearned premiums of $4,183 thousand for the three months ended March 31, 2022[26] Investment and Income - Net investment income for the three months ended March 31, 2022, was $2,521,000, an increase of 38.8% from $1,817,000 in the same period of 2021[42] - Net investment income, less investment expenses, rose to $2,000,000 in Q1 2022, compared to $1,293,000 in Q1 2021, reflecting a 54.8% increase[42] - The company reported net realized investment losses of $16 thousand for the three months ended March 31, 2022, compared to net realized gains of $80 thousand in the same period of 2021[40] - The total fair value of debt securities available-for-sale was $673,511 thousand as of March 31, 2022, down from $669,354 thousand at December 31, 2021[39] Shareholder Actions - The company declared cash dividends of $0.06 per common stock, totaling $1,621 thousand for the three months ended March 31, 2022[22] - The Company repurchased 721,118 shares of its common stock for $5.0 million under its share repurchase program as of March 31, 2022, leaving a capacity to repurchase an additional $20.0 million[113][114] - The Company declared a quarterly dividend of $0.06 per share on March 4, 2022, payable on April 6, 2022, to stockholders of record as of March 17, 2022[115] Debt and Financing - The Company had $11.7 million of Convertible Senior Notes outstanding as of March 31, 2022, down from $23.4 million at the end of 2021[98] - The Company’s Term Loan Facility had an outstanding principal amount of $68.3 million as of March 31, 2022, with quarterly amortization payments decreasing to $875,000 starting December 31, 2021[90] - The Revolving Credit Facility had $15.0 million of borrowings and a $7.5 million letter of credit outstanding as of March 31, 2022[92] - Total long-term debt as of March 31, 2022, was $123.7 million, compared to $120.8 million at the end of 2021[98] Operational Metrics - The net combined ratio for Q1 2022 was 129.5%, up 21.8 points from 107.7% in the prior year quarter, primarily due to a higher net loss and LAE ratio[160] - Premiums in force were $1.2 billion, up 4.7% from Q1 2021, while policies in force decreased by 5.5% to 559,496[141] - Ceded premiums increased to $134.4 million, up 4.9% from $128.2 million in the prior year quarter, due to higher costs in the catastrophe excess of loss reinsurance program[143] Tax and Regulatory - The Company recorded an income tax benefit of $10.6 million for the three months ended March 31, 2022, compared to $2.6 million in 2021, with effective tax rates of 25.7% and 33.2%, respectively[72] - The Company is permitted to pay out dividends not exceeding $10.0 million in any fiscal year, provided there is no default or event of default[98] Miscellaneous - The Company did not establish an allowance for credit losses as of March 31, 2022, due to the decline in fair value being attributed to increased market interest rates rather than credit losses[43] - The Company has not experienced a material impact from the transition away from LIBOR as a benchmark interest rate[195] - There have been no material changes to the company's risk factors since the last annual report filed on March 14, 2022[202]