US Market News
1月前
Heritage Reports First Quarter 2026 ResultsMay 7, 2026 4:15 PM
PR Newswire (US) TAMPA, Fla., May 7, 2026 /PRNewswire/ -- Heritage Insurance Holdings, Inc. (NYSE: HRTG) ("Heritage" or the "Company"), a super-regional property and casualty insurance holding company, today reported first quarter of 2026 financial results. First Quarter 2026 Result Highlights Heritage reported record first quarter net income of $36.5 million, an increase of 19.7% from net income of $30.5 million in the prior year quarter; and earnings per share of $1.19 per diluted share, an increase of 20.2% from $0.99 per diluted share in the prior year quarter.Gross and Net premiums earned were consistent with the prior year quarter.Net loss ratio improved 3.8 percentage points to 45.9%, from 49.7% in the prior year quarter.Net combined ratio improved by 3.5 percentage points to 81.0%, from 84.5% in the prior year quarter.Return on average equity of 28.5% with average equity up 65.5% from the prior year quarter.Book value per share increased 4.6% from year end 2025 and was up 61.5% from the first quarter of 2025.First quarter cash flow from operations of $24.9 million.Through the date of this earnings release, repurchased 446,884 shares of common stock during 2026 at a cost of $12.0 million.On track to start writing business in Texas on a surplus lines basis.Four new products rolled out in Q1 with six additional products slated to launch in the second half of 2026.Ernie Garateix, Heritage's CEO, commented, "Our first quarter was the most profitable first quarter for the Company since becoming public in 2014. Our net loss ratio was also the lowest delivered in a first quarter since 2015 even with $37 million of weather related losses in the quarter. These results were derived from the consistent application of our strategic profitability initiatives established several years ago that focused on rate adequacy and underwriting discipline, allocating capital to products and geographies that maximize long-term returns, and targeting a balanced and diversified portfolio."Mr. Garateix, continued, "As our strategic initiatives have taken hold, we have re-opened over 90% of our geographies as they have become rate adequate and through our disciplined underwriting program, the quality of the book of business has greatly improved. This strategy is delivering results with new business written rising 62.7% from the first quarter of 2025 and over 30.0% from fourth quarter of 2025. We have expanded geographically, added products, enhanced our data analytics and demonstrated our ability to perform during adverse weather and challenging market conditions. We are also extremely well positioned to take advantage of any market disruptions or emerging opportunities. With our capabilities and financial strength, we will focus on evaluating and allocating capital to profitable products or geographies and we are positioned to expand organically or as accretive business opportunities arise."Strategic Profitability InitiativesThe Company has focused on three main strategic initiatives aimed at achieving consistent long-term quarterly earnings and driving shareholder value, which include:Generating underwriting profit through rate adequacy and more selective underwriting.Allocating capital to products and geographies that maximize long-term returns.Targeting a balanced and diversified portfolio.These three initiatives will remain in place while we also expand our strategy to include our 2026 initiatives. To continue executing on these three strategic initiatives throughout 2026, the Company expects to focus on the following profitability initiatives:Target geographies open for new business, while closely managing risk and exposure.Continue persistent underwriting discipline and focus on rate adequacy while driving prudent top line growth.Enhance data driven analytics using AI and other technology tools.Continue the refinement of customer service and claims capabilities.Leverage infrastructure and capabilities to foster future growth, which includes our plan to enter the State of Texas on an excess and surplus lines basis.Act as opportunities emerge which will continue our diversification and expansion over the next several years. Expand our relationship with reinsurance partners to expand capacity, manage volatility while pursuing growth.Capital ManagementHeritage's Board of Directors has decided to continue its suspension of the quarterly shareholder dividend to prioritize strategic growth. The Board of Directors will continue to evaluate dividend distributions on a quarterly basis. The Company repurchased 446,484 shares of common stock during 2026 through the current date, at a cost of $12.0 million under the Company's previously announced share repurchase authorization, which authorized the repurchase of up to an aggregate of $25.0 million of common stock through December 31, 2026. On May 7, 2026, the Board of Directors authorized a new $50.0 million share repurchase plan, replacing the prior plan. The new plan is effective immediately through December 31, 2026. Results of OperationsThe following table summarizes results of operations for the three months ended March 31, 2026, and 2025 (amounts in thousands, except percentages and per share amounts):
Three Months Ended March 31,
2026
2025
Change
Total revenues
$212,658
$211,520
0.5
%Net income
$36,483
$30,474
19.7
%Earnings per share
$1.19
$0.99
20.2
%
Book value per share
$17.15
$10.62
61.5
%Return on equity *
28.5
%
39.3
%
(10.8)
pts
Underwriting summary
Gross premiums written
$346,745
$355,997
(2.6)
%Gross premiums earned
$353,562
$353,828
(0.1)
%Ceded premiums
$(153,870)
$(153,794)
0.0
%Net premiums earned
$199,692
$200,034
(0.2)
%
Ceded premium ratio
43.5
%
43.5
%
—
pts
Ratios to Net Premiums Earned:
Loss ratio
45.9
%
49.7
%
(3.8)
ptsExpense ratio
35.2
%
34.8
%
0.4
ptsCombined ratio
81.0
%
84.5
%
(3.5)
pts
* Return on equity represents annualized net income for the period divided by average stockholders' equity during the period.Note: Percentages and sums in the table may not recalculate precisely due to rounding.Ratios Ceded premium ratio represents ceded premiums as a percentage of gross premiums earned.Net loss ratio represents net losses and loss adjustment expenses ("LAE") as a percentage of net premiums earned.Net expense ratio represents policy acquisition costs ("PAC") and general and administrative ("G&A") expenses as a percentage of net premiums earned. Ceding commission income is reported as a reduction of PAC and G&A expenses.Net combined ratio represents the sum of net losses and LAE, PAC and G&A expenses as a percentage of net premiums earned. The net combined ratio is a key measure of underwriting performance traditionally used in the property and casualty industry. A combined ratio under 100% generally reflects profitable underwriting results.First Quarter 2026 Results: First quarter 2026 net income was $36.5 million or $1.19 per diluted share, compared to net income of $30.5 million or $0.99 per diluted share in the prior year quarter, primarily driven by higher investment income and a reduction in losses, partly offset by higher general and administrative expenses. The reduction in losses is attributable to a slightly lower net attritional loss ratio resulting from the positive impact of rate actions, underwriting actions, and targeted exposure management taken over the last several years, which continue to favorably impact results, as well as lower weather losses. Policy acquisition costs were lower from the prior year quarter by 1.0%, driven mostly by lower costs associated with premium processing. General and administrative costs increased 4.4% from the prior year quarter driven primarily by human capital costs, with the net general and administrative expense ratio at 12.5% compared to 11.9% for the prior year quarter.Premiums-in-force were $1.427 billion, a decrease of 0.4% compared to $1.432 billion as of the first quarter 2025.Gross premiums written of $346.7 million were down 2.6% from $356.0 million in the prior year quarter, primarily driven by a reduction in commercial residential business which was partly offset by higher gross premiums written for personal lines business. The Florida commercial residential market has become increasingly competitive and management is committed to maintaining adequate margins; as such Heritage will only write business that meets our underwriting and pricing standards. Management is also leveraging the expertise of our commercial residential team to expand this product to other states, the most recent of which is Hawaii. Management believes we have achieved rate adequacy in over 90% of our territories and each of those territories were open for new business as of March 31, 2026. Our catastrophe excess of loss program this year will be completed with higher coverage than previously purchased but also at risk adjusted cost decreases. To the extent our cost of doing business decreases, our policyholders would benefit with reduced pricing, while we maintain adequate margins.Gross premiums earned were $353.6 million, consistent with $353.8 million earned in the prior year quarter, as commercial residential business declined due to the market conditions described above but were largely offset by higher gross premiums earned for the personal residential business.Net premiums earned were $199.7 million, consistent with $200.0 million earned in the prior year quarter, given a small reduction in gross premiums earned described above, with relatively flat ceded premiums for the quarter.Net loss ratio decreased to 45.9%, a 3.8 point improvement from 49.7% in the same quarter last year, driven by lower net losses and LAE and relatively flat net premiums earned. Net weather and catastrophe losses for the current accident quarter were $36.7 million, a decrease from $43.5 million in the prior year quarter. Catastrophe losses were $24.4 million compared to $31.8 million in the prior year quarter. Other weather losses totaled $12.3 million, an increase of $600,000 from the prior year quarter amount of $11.7 million. Net favorable prior year loss development was $8.2 million for the first quarter of 2025 compared to net favorable loss development of $7.8 million for the prior year quarter.The net expense ratio was 35.2%, a 40 basis point increase from the prior year quarter amount of 34.8%, primarily driven by an increase in human capital-related costs, partly offset by lower policy acquisition costs, with relatively flat net premiums earned.Net combined ratio of 81.0%, a 3.5 point improvement from 84.5% in the prior year quarter, driven by a lower net loss ratio partly offset by a higher net expense ratio as described above.Net investment income increased to $9.9 million, a 15.1% increase from $8.6 million in the first quarter of 2025, driven mostly by a higher balance of invested assets. We continue to maintain a conservative portfolio with high quality investments and duration liability matched.The effective tax rate was 25.6% compared to 23.8% in the prior year first quarter. We calculate the provision for income taxes during interim reporting periods by applying an estimate of the effective tax rate for the full year. The effective tax rate is 1.8 points higher than the prior year quarter, with the variance driven by estimates of pre-tax income and permanent items. The effective tax rate can fluctuate throughout the year as income changes and estimates used in each quarterly tax provision are updated with additional information.Supplemental Information:Policies-in-force:Q1 2026
Q1 2025
% Change
Personal Residential
341,843
364,781
(6.29)
%Commercial Residential
3,069
2,908
5.54
%Other
8,997
10,132
(11.20)
%Total
353,909
377,821
(6.33)
%
Premiums-in-force:
Personal Residential
1,161,078,115
1,144,698,410
1.43
%Commercial Residential
256,415,766
278,158,021
(7.82)
%Other
9,632,637
9,796,388
(1.67)
%Total
1,427,126,518
1,432,652,819
(0.39)
%
Total Insured Value:
Personal Residential
317,090,936,074
320,649,423,206
(1.11)
%Commercial Residential
48,009,340,202
42,995,169,737
11.66
%OtherN/A
N/A
—
%Total
365,100,276,276
363,644,592,943
0.40
%Book Value Analysis:
As of
Book Value Per Share
March 31, 2026
December 31, 2025
March 31, 2025
Numerator:
Common stockholders' equity
$520,372
$505,251
$329,003
Denominator:
Total Shares Outstanding
30,334,925
30,833,776
30,993,270
Book Value Per Common Share
$17.15
$16.39
$10.62
Book value per share was $17.15 at March 31, 2026, an increase of 4.6% from December 31, 2025 and an increase of 61.5% from the first quarter of 2025. The increase in Shareholders' Equity from December 31, 2025 was primarily driven by net income, partially offset by a $3.4 million net-of-tax increase in unrealized losses on the Company's fixed income securities portfolio, $10.0 million related to the repurchase of 370,484 shares of common stock, during the first quarter of 2026, and $8.9 million from vested performance-based shares surrendered to satisfy tax withholding obligations. The decline in the number of shares outstanding was driven by the repurchase of common stock and shares surrendered for income tax withholdings, partly offset by issuance of restricted stock during the quarter. The increase in average stockholders' equity of 65.5% over the prior year quarter caused the ROAE for the prior year quarter to be higher than the current year quarter, despite higher net income for the current year quarter.The unrealized losses are unrelated to credit risk but are instead attributable to rising interest rates, with the increase in unrealized losses driven by higher interest rates during the quarter. Heritage does not anticipate a need to sell investments in advance of their maturity. As such, the Company expects unrealized losses to continue to roll off the portfolio as investments mature. The average duration of the fixed income portfolio is 3.4 years as the Company has extended duration to take advantage of higher yields further out on the yield curve, while still maintaining a short duration, high credit quality portfolio.Conference Call Details:
Friday, May 8, 2026– 9:00 a.m. ET
North American Dial-in Numbers Toll Free: 1-888-346-3095
International Dial In: 1-412-902-4258Webcast: To listen to the live webcast, please go to http://investors.heritagepci.com. This webcast will be archived and accessible on the Company's website.HERITAGE INSURANCE HOLDINGS, INC. Condensed Consolidated Balance Sheets (Amounts in thousands, except share amounts)
March 31, 2026
December 31, 2025
ASSETS(unaudited)
Fixed maturities, available-for-sale, at fair value$751,384
$713,237
Equity securities, at fair value
1,072
1,064
Other investments, net
1,259
1,285
Total investments
753,715
715,586
Cash and cash equivalents
517,070
559,274
Restricted cash
16,221
13,307
Accrued investment income
6,272
6,556
Premiums receivable, net
93,989
95,331
Reinsurance recoverable on paid and unpaid claims, net
261,179
318,588
Prepaid reinsurance premiums
194,607
307,039
Deferred income tax asset, net
5,589
5,855
Deferred policy acquisition costs, net
64,367
64,544
Property and equipment, net
28,447
28,254
Right-of-use lease asset, finance
11,978
12,598
Right-of-use lease asset, operating
6,328
4,878
Intangibles, net
28,643
30,189
Other assets
32,579
33,823
Total Assets$2,020,984
$2,195,822
LIABILITIES AND STOCKHOLDERS' EQUITY
Unpaid losses and loss adjustment expenses$544,043
$579,477
Unearned premiums
701,090
707,923
Reinsurance payable
73,498
232,801
Long-term debt, net
77,613
78,428
Advance premiums
30,797
19,164
Income tax payable/receivable
15,499
4,282
Accrued compensation
4,896
8,844
Lease liability, finance
14,914
15,587
Lease liability, operating
6,521
5,800
Accounts payable and other liabilities
31,741
38,265
Total Liabilities$1,500,612
$1,690,571
Stockholders' Equity:
Common stock, $0.0001 par value
3
3
Additional paid-in capital
357,813
365,736
Accumulated other comprehensive loss, net of taxes
(13,988)
(10,555)
Treasury stock, at cost
(143,189)
(133,183)
Retained earnings
319,733
283,250
Total Stockholders' Equity
520,372
505,251
Total Liabilities and Stockholders' Equity$2,020,984
$2,195,822
HERITAGE INSURANCE HOLDINGS, INC. Condensed Consolidated Statements of Operations(Amounts in thousands, except per share and share amounts)(Unaudited)
Three Months Ended March 31,
2026
2025
REVENUE:
Gross premiums written$346,745
$355,997
Change in gross unearned premiums
6,817
(2,169)
Gross premiums earned
353,562
353,828
Ceded premiums
(153,870)
(153,794)
Net premiums earned
199,692
200,034
Net investment income
9,867
8,575
Net realized gains (losses) on debt securities and other investments
16
(4)
Other revenue
3,083
2,915
Total revenue
212,658
211,520
EXPENSES:
Losses and loss adjustment expenses
91,597
99,407
Policy acquisition costs
45,335
45,815
General and administrative expenses
24,908
23,862
Total expenses
161,840
169,084
Operating income
50,818
42,436
Interest expense, net
1,779
2,426
Income before taxes$49,039
$40,010
Income tax expense
12,556
9,536
Net income$36,483
$30,474
Weighted average shares outstanding
Basic
30,680,933
30,697,826
Diluted
30,740,251
30,757,089
Earnings per share
Basic$1.19
$0.99
Diluted$1.19
$0.99
About Heritage Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company. Through its insurance subsidiaries and a large network of experienced agents, the Company writes approximately $1.4 billion of gross personal and commercial residential premium across its multi-state footprint covering the northeast, southeast, Hawaii and California excess and surplus lines.Forward-Looking Statements Statements in this press release and on our earnings conference call that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "or "continue" or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. This release and our earnings conference call include forward-looking statements, including statements relating to our strategic initiatives for 2026 and our ability to profitably grow our business and deliver value to our shareholders either organically or through accretive business opportunities; our ability to take advantage of market disruptions and emerging opportunities; our positioning to deliver managed growth with rate adequacy in our markets and our intent not to write policies that we believe are underpriced or do not meet our underwriting standards; our expectations and plans regarding our margins and maintaining adequate margins; our beliefs regarding commercial residential market competitiveness, generally, and pricing pressure in Florida, specifically; our expectations regarding our catastrophe excess of loss program; our capital allocation strategy, including our Board's evaluation of dividend distributions and share repurchases and our evaluation of the intrinsic value of our common stock; our new geography and product diversification and expansion strategy, including our plan to enter the Texas market on an E&S lines basis, and our plans relating to employee and agency and distribution relationships in any new market; our focus on underwriting discipline, exposure management and rate adequacy in existing and new geographies, leveraging our scale, continued enhancement of data and AI-driven analytics and our other strategic priorities for 2026; our expectations regarding reinsurance capacity and pricing, including the impact of certain tort reform legislation and lack of catastrophe losses, and the resulting effect on costs to insurance consumers; and our expectations regarding our financial results in 2026 and beyond and the drivers of such results. The risks and uncertainties that could cause our actual results to differ from those expressed or implied herein include, without limitation: the success of the Company's underwriting and profitability initiatives; inflation and other changes in economic conditions (including changes in interest rates and financial and real estate markets), including changes that may impact demand for our products and our operations; lack of effectiveness of exclusions and loss limitation methods in the insurance policies we assume or write; inherent uncertainty of our models and our reliance on artificial intelligence as a tool in creating and using such models; the impact of macroeconomic and geopolitical conditions, including the impact of interest rates, supply chain constraints, inflationary pressures, tariffs, labor availability and geopolitical conflicts; the impact of new federal and state regulations that affect the property and casualty insurance market and our failure to meet increased regulatory requirements, including minimum capital and surplus requirements; continued and increased impact of abusive and unwarranted claims; the cost of reinsurance, the collectability of reinsurance and our ability to obtain reinsurance coverage on terms and at a cost acceptable to us; assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to obtain regulatory approval for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against us, including the terms of any settlements; risks related to the nature of our business; dependence on investment income and the composition of our investment portfolio; the adequacy of our liability for losses and loss adjustment expense; our ability to build and maintain relationships with insurance agents; claims experience; ratings by industry services; catastrophe losses; reliance on key personnel; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes, wildfires and hail); changes in loss trends; acts of war and terrorist activities; court decisions and trends in litigation; and other matters described from time to time by us in our filings with the Securities and Exchange Commission, including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission on March 12, 2026, and subsequent filings. The Company undertakes no obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.Investor Contact:
Kirk Lusk
Chief Financial Officer
investors@heritagecompanies.com View original content to download multimedia:https://www.prnewswire.com/news-releases/heritage-reports-first-quarter-2026-results-302766027.htmlSOURCE Heritage Insurance Holdings, Inc. Original: Heritage Reports First Quarter 2026 Results
US Market News
3月前
Heritage Reports Fourth Quarter and Full Year 2025 ResultsMarch 9, 2026 6:25 AM
PR Newswire (US)
TAMPA, Fla., March 9, 2026 /PRNewswire/ -- Heritage Insurance Holdings, Inc. (NYSE: HRTG) ("Heritage" or the "Company"), a super-regional property and casualty insurance holding company, today reported fourth quarter of 2025 financial results.Fourth Quarter 2025 Result Highlights Heritage reported net income of $66.7 million, an increase of 228.5% from net income of $20.2 million in the prior year quarter; and earnings per share of $2.15 per diluted share, an increase of 225.8% from $0.66 per diluted share from the prior year quarter.Gross premiums earned were $361.7 million, an increase of 0.4% from $360.4 million in the prior year quarter.Net premiums earned totaled $202.7 million, an increase of 1.7% from $199.3 million in the prior year quarter.Net loss ratio was 31.3%, an improvement of 23.4 percentage points from 54.7% in the prior year quarter.Net expense ratio was 30.7%, an improvement of 4.3 percentage points from 35.0% in the prior year quarter.Net combined ratio was 62.0%, an improvement of 27.7 percentage points from 89.7% in the prior year quarter.Return on average equity was 56.6%, up from 28.5% in the prior year quarter.Book value per share increased 72.5% from year end 2024 and was up 124.8% from year-end 2023."Our fourth quarter results benefited from the cumulative effect of the strategic initiatives launched several years ago and which have been continuously refined over the last two years. Our focus on rate adequacy, disciplined underwriting and high service levels to our agents and policyholders, coupled with favorable weather, resulted in record earnings this quarter and for the full year. Looking forward, we are well-positioned to deliver managed growth with rate adequacy in over 90% of our markets where we are open for new business. As a result, we have seen our new business premium production increase 60.4% in the quarter as compared to the fourth quarter of 2024. We believe we have the right agent relationships, reinsurer partnerships, management team, and infrastructure to prudently grow our top line in 2026. We appreciate our valued agents, agencies and reinsurance partners and recognize their influence on our success," remarked Heritage CEO Ernie Garateix.Strategic Profitability InitiativesThe Company has focused on three main strategic initiatives aimed at achieving consistent long-term quarterly earnings and driving shareholder value, which include:Generating underwriting profit through rate adequacy and more selective underwriting.Allocating capital to products and geographies that maximize long-term returns.Targeting a balanced and diversified portfolio.2025 Progress on Strategic InitiativesRe-opened profitable geographies and allocated capital to sustain profits and margin on a measured basis.Persistent underwriting discipline and focus on rate adequacy.Continued data driven analytics.Enhanced customer service and claims capabilities.Leveraged infrastructure and capabilities to foster future growth.Strategic Initiatives for 2026Target geographies open for new business, while closely managing risk and exposure.Continue persistent underwriting discipline and focus on rate adequacy while driving prudent growth of the top line.Enhance data driven analytics using AI and other technology tools.Continue the refinement of customer service and claims capabilities.Leverage infrastructure and capabilities to foster future growth, which includes our plan to enter the State of Texas to offer products on an excess and surplus lines basis.Capital ManagementHeritage's Board of Directors has decided to continue its suspension of the quarterly shareholder dividend to prioritize strategic growth. The Board of Directors will continue to evaluate dividend distributions on a quarterly basis. The Company repurchased 106,135 shares of common stock during 2025 at a cost of $2.3 million under the Company's previously announced share repurchase authorization, which authorizes the repurchase of up to an aggregate of $10.0 million of common stock through December 31, 2025. On November 5, 2025, the Board of Directors established a new share repurchase plan to commence upon the expiration of the 2025 share repurchase plan on December 31, 2025, for the purpose of repurchasing up to an aggregate of $25.0 million of common stock through December 31, 2026. The Company repurchased 112,858 shares of common stock during the first quarter of 2026 at a cost of $3.0 million under the new share repurchase plan.Results of OperationsThe following table summarizes results of operations for the three-months and years ended December 31, 2025 and 2024 (amounts in thousands, except percentages and per share amounts):
Three Months Ended December 31,
Year Ended December 31,
2025
2024
Change
2025
2024
Change
Total revenue$
215,317
$
210,264
2.4
%$
847,330
$
816,985
3.71
%Net income$
66,675
$
20,294
228.5
%$
195,594
$
61,539
217.8
%
Earnings Per Diluted Share$
2.15
$
0.66
225.8
%$
6.32
$
2.01
214.4
%
Book value per share$
16.39
$
9.50
72.5
%$
16.39
$
9.50
72.5
%
Return on equity*
56.6
%
28.5
%
28.1
pts
49.1
%
24.1
%
25.0
pts
Underwriting summary
Gross premiums written$
336,221
$
338,742
(0.7)
%$
1,436,346
$
1,432,942
0.2
%Gross premiums earned$
361,720
$
360,448
0.4
%$
1,431,103
$
1,406,106
1.8
%Ceded premiums$
(159,045)
$
(161,170)
(1.3)
%$
(636,946)
$
(638,246)
(0.2)
%Net premiums earned$
202,676
$
199,278
1.7
%$
794,157
$
767,860
3.4
%
Ceded premium ratio
44.0
%
44.7
%
(0.7)
pts
44.5
%
45.4
%
(0.9)
pts
Ratios to Net Premiums Earned:
Loss ratio
31.3
%
54.7
%
(23.4)
pts
39.4
%
58.2
%
(18.8)
ptsExpense ratio
30.7
%
35.0
%
(4.3)
pts
33.6
%
36.0
%
(2.4)
ptsCombined ratio
62.0
%
89.7
%
(27.7)
pts
73.1
%
94.2
%
(21.1)
pts
* Return on equity represents annualized net income for the period divided by average stockholders' equity during the period. Note: Percentages and sums in the table may not recalculate precisely due to rounding.Ratios Ceded premium ratio represents ceded premiums as a percentage of gross premiums earned.Net loss ratio represents net losses and loss adjustment expenses ("LAE") as a percentage of net premiums earned.Net expense ratio represents policy acquisition costs ("PAC") and general and administrative ("G&A") expenses as a percentage of net premiums earned. Ceding commission income is reported as a reduction of PAC and G&A expenses.Net combined ratio represents the sum of net losses and LAE, PAC, and G&A expenses as a percentage of net premiums earned. The net combined ratio is a key measure of underwriting performance traditionally used in the property and casualty industry. A combined ratio under 100% generally reflects profitable underwriting results.Fourth Quarter 2025 Results: Fourth quarter 2025 net income was $66.7 million or $2.15 per diluted share, compared to net income of $20.3 million or $0.66 per diluted share in the prior year quarter. The increase was primarily driven by higher net premiums earned and investment income, accompanied by a significant reduction in losses and loss adjustment expenses and a reduction in policy acquisition costs. Additionally, a lower effective tax rate caused the provision for income taxes in the current year quarter to be proportionately lower compared to the prior year quarter. A strong increase from the full year 2024's net income of $61.5 million, or $2.01 per share. Of note, our full year results included $31.8 million of net pretax losses and loss adjustment expenses related to the California wildfires in the first quarter of 2025.Premiums-in-force were $1.43 billion as of the fourth quarter 2025, relatively flat compared to the fourth quarter 2024.Gross premiums written of $336.2 million were down 0.7% from $338.7 million in the prior year quarter, driven by a moderate reduction in our commercial residential business from by competitive market conditions, which was partly offset by rate driven growth in our personal lines business.Gross premiums earned were $361.7 million, up 0.4% from $360.4 million in the prior year quarter, reflecting higher gross premiums written over the last twelve months.Net premiums earned were $202.7 million, up 1.7% from $199.3 million in the prior year quarter, driven primarily by a reduction in ceded premiums from the prior year quarter.Net loss ratio was 31.3%, a 23.4 point improvement from 54.7% in the same quarter last year reflecting significantly lower net losses and LAE coupled with higher net premiums earned. Net weather losses for the current accident quarter were $7.7 million, a decrease of $37.9 million from $45.6 million in the prior year quarter. There were no catastrophe losses in the current year quarter compared to $40.0 million in the prior year quarter. Other weather losses totaled $7.7 million, slightly up from the prior year quarter amount of $5.6 million. Attritional losses declined from the prior year quarter. Adverse loss development was $1.6 million compared to adverse development in the prior year quarter of $3.8 million.The net expense ratio was 30.7%, a 4.3 point improvement from the prior year quarter amount of 35.0%, driven primarily by a reduction in policy acquisition costs from higher ceding commission income as well as relatively flat general and administrative expenses, coupled with an increase in net premiums earned.Net combined ratio of 62.0% improved 27.7 points from 89.7% in the prior year quarter, driven by a lower net loss ratio and lower net expense ratio as described above.Net investment income was $9.8 million up $1.3 million, or 15.9%, from $8.5 million in the prior year quarter reflecting larger investment balances coupled with actions to align the investments with the yield curve, while maintaining a high-quality portfolio of short duration.The effective tax rate was 24.2% compared to 29.9% in the prior year quarter. The effective tax rate for the current year quarter was slightly lower than the statutory rate, driven primarily by higher pre-tax income which diluted the impacts of permanent tax differences. The effective tax rate for the prior year quarter was higher than the statutory rate, driven largely by the impact of the true up during the fourth quarter of 2024 from the previous three quarterly estimates. The impact of permanent tax differences on projected results of operations for the calendar year affects the effective tax rate, which can also fluctuate throughout the year as estimates used in the quarterly tax provision are updated with additional information.Supplemental Information:
At December 31,Policies in force:
2025
2024
% Change
Florida
123,437
133,775
(7.7)
%Other States
233,838
255,700
(8.5)
%Total
357,275
389,475
(8.3)
%
Premiums in force:
(In thousands)
Florida$
679,079
$
707,197
(4.0)
%Other States
752,738
726,048
3.7
%Total$
1,431,817
$
1,433,245
(0.1)
%
Total Insured Value:
(In thousands)
Florida$
105,997,817
$
102,661,095
3.3
%Other States
257,533,142
264,950,914
(2.8)
%Total$
363,530,959
$
367,612,009
(1.1)
%Book Value Analysis:
As Of
Book Value Per ShareDecember 31, 2025
December 31, 2024
December 31, 2023
Numerator:
Common stockholders' equity$505,251
$290,799
$220,280
Denominator:
Total Shares Outstanding
30,833,776
30,607,039
30,218,938
Book Value Per Common Share$16.39
$9.50
$7.29
Book value per share of $16.39 at December 31, 2025, was up 72.5% from the fourth quarter 2024 and up 124.8% from the fourth quarter 2023. The increase from December 31, 2024 is primarily attributable to net income as well as a $23.7 million reduction in unrealized losses on the Company's fixed income securities portfolio. The unrealized losses are unrelated to credit risk but are instead attributable to rising interest rates, with the reduction in unrealized losses driven by lower interest rates during 2025. Heritage does not anticipate a need to sell investments in advance of their maturity. As such, the Company expects unrealized losses to continue to roll off the portfolio as investments mature. The average duration of the fixed income portfolio is 3.2 years as the Company has extended duration to take advantage of higher yields further out on the yield curve, while still maintaining a short duration, high credit quality portfolio.Conference Call Details:
Monday, March 9, 2026– 9:00 a.m. ET
North American Dial-in Numbers Toll Free: 1-888-346-3095
International Dial In: 1-412-902-4258Webcast: To listen to the live webcast, please go to http://investors.heritagepci.com. This webcast will be archived and accessible on the Company's website.HERITAGE INSURANCE HOLDINGS, INC.
Consolidated Balance Sheets
(Amounts In thousands, except share amounts)
December 31, 2025
December 31, 2024
ASSETS
Fixed maturities, available-for-sale, at fair value$713,237
$655,555
Equity securities, at fair value
1,064
1,936
Other investments, net
1,285
5,952
Total investments
715,586
663,443
Cash and cash equivalents
559,274
452,666
Restricted cash
13,307
10,979
Accrued investment income
6,556
5,592
Premiums receivable, net
95,331
102,134
Reinsurance recoverable on paid and unpaid claims, net
318,588
740,204
Prepaid reinsurance premiums
307,039
309,802
Deferred income tax asset, net
5,855
13,876
Deferred policy acquisition costs, net
64,544
63,204
Property and equipment, net
28,254
38,080
Right-of-use lease asset, finance
12,598
15,082
Right-of-use lease asset, operating
4,878
5,850
Intangibles, net
30,189
36,372
Other assets
33,823
11,640
Total Assets$2,195,822
$2,468,924
LIABILITIES AND STOCKHOLDERS' EQUITY
Unpaid losses and loss adjustment expenses$579,477
$1,042,687
Unearned premiums
707,923
702,707
Reinsurance payable
232,801
227,060
Long-term debt, net
78,428
116,319
Advance premiums
19,164
15,186
Income tax payable, net
4,282
846
Accrued compensation
8,844
8,926
Lease liability, finance
15,587
18,071
Lease liability, operating
5,800
6,945
Accounts payable and other liabilities
38,265
39,378
Total Liabilities$1,690,571
$2,178,125
Stockholders' Equity:
Common stock, $0.0001 par value
3
3
Additional paid-in capital
365,736
362,644
Accumulated other comprehensive loss, net of taxes
(10,555)
(28,604)
Treasury stock, at cost
(133,183)
(130,900)
Retained earnings
283,250
87,656
Total Stockholders' Equity
505,251
290,799
Total Liabilities and Stockholders' Equity$2,195,822
$2,468,924
HERITAGE INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Income and Other Comprehensive Income
(Amounts in thousands, except per share and share amounts)
Three Months Ended December 31,
Year Ended December 31,
2025
2024
2025
2024
REVENUE:
Gross premiums written$336,221
$338,742
$1,436,346
$1,432,942
Change in gross unearned premiums
25,499
21,706
(5,243)
(26,836)
Gross premiums earned
361,720
360,448
1,431,103
1,406,106
Ceded premiums
(159,045)
(161,170)
(636,946)
(638,246)
Net premiums earned
202,676
199,278
794,157
767,860
Net investment income
9,861
8,510
37,156
36,631
Net realized gains on debt securities and other investments
(33)
(722)
2,713
(705)
Other revenue
2,814
3,198
13,304
13,199
Total revenue
215,317
210,264
847,330
816,985
EXPENSES:
Losses and loss adjustment expenses
63,453
109,065
313,246
447,048
Policy acquisition costs
39,818
48,528
173,961
191,189
General and administrative expenses
22,367
21,153
92,972
85,138
Total expenses
125,639
178,746
580,179
723,375
Operating income$89,678
$31,518
$267,151
$93,610
Interest expense, net
1,730
2,569
7,887
10,934
Income before taxes$87,948
$28,949
$259,264
$82,676
Income tax expense
21,273
8,655
63,670
21,136
Net income$66,675
$20,294
$195,594
$61,539
OTHER COMPREHENSIVE INCOME:
Change in net unrealized gains (losses) on investments
3,031
(11,582)
23,588
8,771
Reclassification adjustment for net realized investment losses (gains)
112
(34)
107
(51)
Income tax expense related to items of other comprehensive income
(760)
2,742
(5,646)
(2,074)
Total comprehensive income$69,058
$11,420
$213,643
$68,185
Weighted average shares outstanding
Basic
30,897,929
30,670,779
30,890,609
30,595,348
Diluted
30,957,245
30,730,042
30,949,899
30,654,611
Earnings per share
Basic$2.16
$0.66
$6.33
$2.01
Diluted$2.15
$0.66
$6.32
$2.01
About Heritage Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company. Through its insurance subsidiaries and a large network of experienced agents, the Company writes approximately $1.4 billion of gross personal and commercial residential premium across its multi-state footprint covering the northeast, southeast, Hawaii and California excess and surplus lines.Forward-Looking StatementsStatements in this press release and on our earnings conference call that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "or "continue" or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. This release and our earnings conference call include forward-looking statements, including statements relating to our strategic initiatives for 2026 and our ability to profitably grow our business and deliver value to our shareholders; our positioning to deliver managed growth with rate adequacy in our markets and our intent not to write policies that we believe are underpriced or do not meet our underwriting standards; our belief regarding having the right team and infrastructure in place to prudently grow our top line in 2026; our capital allocation strategy, including our Board's evaluation of dividend distributions and share repurchases and our evaluation of the intrinsic value of our common stock; our new geography and product diversification and expansion strategy, including our plan to enter the Texas market on an E&S lines basis, and our plans relating to employee and agency and distribution relationships in any new market; our focus on underwriting discipline, exposure management and rate adequacy in existing and new geographies, leveraging our scale, continued enhancement of data and AI-driven analytics and our other strategic priorities for 2026; our plans for growth and expansion in certain geographies; our expectations regarding reinsurance capacity and pricing, including the impact of certain tort reform legislation and lack of catastrophe losses, and the resulting effect on costs to insurance consumers; and our expectations regarding profit and growth in 2026 and beyond and the drivers of such profit and growth. The risks and uncertainties that could cause our actual results to differ from those expressed or implied herein include, without limitation: the success of the Company's underwriting and profitability initiatives; inflation and other changes in economic conditions (including changes in interest rates and financial and real estate markets), including changes that may impact demand for our products and our operations; lack of effectiveness of exclusions and loss limitation methods in the insurance policies we assume or write; inherent uncertainty of our models and our reliance on such models as a tool to evaluate risk; the impact of macroeconomic and geopolitical conditions, including the impact of interest rates, supply chain constraints, inflationary pressures, tariffs, labor availability and geopolitical conflicts; the impact of new federal and state regulations that affect the property and casualty insurance market and our failure to meet increased regulatory requirements, including minimum capital and surplus requirements; continued and increased impact of abusive and unwarranted claims; the cost of reinsurance, the collectability of reinsurance and our ability to obtain reinsurance coverage on terms and at a cost acceptable to us; assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to obtain regulatory approval for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against us, including the terms of any settlements; risks related to the nature of our business; dependence on investment income and the composition of our investment portfolio; the adequacy of our liability for losses and loss adjustment expense; our ability to build and maintain relationships with insurance agents; claims experience; ratings by industry services; catastrophe losses; reliance on key personnel; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes, wildfires and hail); changes in loss trends; acts of war and terrorist activities; court decisions and trends in litigation; and other matters described from time to time by us in our filings with the Securities and Exchange Commission, including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission on March 13, 2025, and subsequent filings. The Company undertakes no obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.Investor Contact:
Kirk Lusk
Chief Financial Officer
investors@heritagecompanies.com
View original content:https://www.prnewswire.com/news-releases/heritage-reports-fourth-quarter-and-full-year-2025-results-302707657.htmlSOURCE Heritage Insurance Holdings, Inc.
Original: Heritage Reports Fourth Quarter and Full Year 2025 Results
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