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HCI Group Reports Second Quarter 2018 Results
Tampa, Fla. August 2, 2018 HCI Group, Inc. (NYSE:HCI), a holding company primarily engaged in homeowners insurance, with additional operations in reinsurance, real estate and information technology, reported results for the three and six months ended June 30, 2018.
Second Quarter 2018 - Financial Results
Net income for the second quarter of 2018 totaled $6.4 million or $0.92 diluted earnings per share compared with $9.5 million or $0.93 diluted earnings per share in the second quarter of 2017. Adjusted net income (a non-GAAP financial measure which excludes unrealized gains or losses on equity securities) for the quarter was $7.6 million or $1.01 per fully diluted share. The company has included in this press release an explanation of adjusted net income as well as a reconciliation to net income and earnings per share calculated in accordance with generally accepted accounting principles (known as GAAP).
Gross premiums earned totaled $85.9 million compared with $90.1 million in the same period in 2017. The decrease was primarily attributable to attrition in the number of insurance policies outstanding.
Gross premiums written were $132.4 million compared with $134.4 million in the same quarter of 2017.
Premiums ceded increased to $33.0 million or 38.4% of gross premiums earned from $28.2 million or 31.3% of gross premiums earned in the second quarter of 2017.
Net premiums earned (defined as gross premiums earned less premiums ceded to reinsurers) were $53 million compared with $61.8 million in the same period in 2017.
Net premiums written (defined as gross premiums written less premiums ceded to reinsurers) were $99.4 million compared with $106.2 million in the same period in 2017.
Net realized investment gains were $2.7 million compared with $1.8 million in the same period in 2017. The gains in 2018 resulted primarily from sales intended to rebalance the companys investment portfolio.
Losses and loss adjustment expenses were $21.8 million compared with $27.7 million in the same period in 2017. The decrease is due to fewer non-catastrophe claims in the second quarter of 2018 compared to the second quarter of 2017. Loss reserves established during the second quarter of 2018 primarily pertained to claims in the 2018 loss year, whereas the 2017 losses and loss adjustment expenses were impacted by the strengthening of loss reserves in response to trends involving assignment of insurance benefits and related litigation.
General and administrative personnel expenses were $7.8 million compared with $7.4 million in the same period in 2017.
The increase was due to the reclassification of cumulative dividends paid on unvested restricted stock awards which have market-based vesting conditions that will not be met.
Income tax expense was $5.1 million compared with $4.8 million in the same quarter in 2017. The increase was attributable to the derecognition of deferred tax assets and the disallowance of deductibility of dividends reclassified to expense, both of which relate to certain restricted stock awards granted in 2013 having market-based vesting thresholds that will not be met. The increase was offset by tax savings from a lower federal corporate income tax rate attributable to the Tax Cut and Jobs Act of 2017 that became effective January 1, 2018.
The following information was filed by Hci Group, Inc. (HCI) on Thursday, August 2, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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