Heritage Insurance第二季純利6170萬美元增28.5% 承保表現持續改善

10-Q
 
 
 
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 

 
 
 
 
 

 
 

 

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

 
 
 
 

 
  

 

 Form 10-Q

 
 
 
 

 
  

 

 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number
001-36462

 
 
 
 

 
  

 

 Heritage Insurance Holdings, Inc.
(Exact name of Registrant as specified in its charter)

 
 
 
 

 
  

 

  

 
 
 
 
 
 

 
 Delaware

  

 45-5338504

 

 
 (State of Incorporation)

 

 (IRS Employer
Identification No.)

 

 1401 N. Westshore Blvd
Tampa, FL 33607
(Address, including zip code, of principal executive offices)
(727) 362-7200
(Registrant’s telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:

 
 
 
 
 
 

 
 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 

 
 Common Stock, par value $0.0001 per share

 HRTG

 New York Stock Exchange

 

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 
 
 
 
 
 
 
 
 

 
 Large accelerated filer

 ☐

 Accelerated filer

 ☒

 Emerging growth company 

 ☐

 

 
 Non-accelerated filer

 ☐

 Smaller reporting company

 ☐

  

  

 

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate number of shares of the Registrant’s Common Stock outstanding on August 2, 2026 was 29,732,416

 
 
 
 

 
  

 

  

  

 
  

 HERITAGE INSURANCE HOLDINGS, INC.
Table of Contents
 

 
 
 
 
 
 

 
  

  

 Page

 

 
 PART I – FINANCIAL INFORMATION

  

  

 

 
 Item 1 Unaudited Financial Statements

  

  

 

 
 Condensed Consolidated Balance Sheets: June 30, 2026 (unaudited) and December 31, 2025

  

 2

 

 
 Condensed Consolidated Statements of Operations and Other Comprehensive Income: Three and Six Months Ended June 30, 2026 and 2025 (unaudited)

  

 3

 

 
 Condensed Consolidated Statements of Stockholders’ Equity: Three and Six Months Ended June 30, 2026 and 2025 (unaudited)

  

 4

 

 
 Condensed Consolidated Statements of Cash Flows: Six Months Ended June 30, 2026 and 2025 (unaudited)

  

 5

 

 
 Notes to Unaudited Condensed Consolidated Financial Statements

  

 7

 

 
 Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

 29

 

 
 Item 3 Quantitative and Qualitative Disclosures about Market Risk

  

 43

 

 
 Item 4 Controls and Procedures

  

 43

 

 
 PART II – OTHER INFORMATION

  

  

 

 
 Item 1 Legal Proceedings

  

 44

 

 
 Item 1A Risk Factors

  

 44

 

 
 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

  

 44

 

 
 Item 5 Other Information

  

 44

 

 
 Item 6 Exhibits

  

 45

 

 
 Signatures

  

 46

 

  
 
 
 

  

 
  

 FORWARD-LOOKING STATEMENTS
Statements in this Quarterly Report on Form 10-Q (“Form 10-Q”) or in documents incorporated by reference that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements, expectations or beliefs regarding: (i) our core strategy and ability to fully execute our business plan; (ii) our growth, including by geographic expansion, new lines of business, additional policies and new products and services, competitive strengths, proprietary capabilities, processes and new technology, results of operations and liquidity; (iii) strategic initiatives and their impact on shareholder value; (iv) projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; (v) management’s goals and objectives, including intentions to pursue certain business and the handling of certain claims; (vi) projections of revenue, earnings, capital structure, reserves, liquidity and other financial items; (vii) potential for rising costs of materials and labor; (viii) the supply of catastrophe reinsurance and its costs; (ix) assumptions underlying our critical accounting policies and estimates; (x) assumptions underlying statements regarding us and our business; (xi) the impact of legislation; (xii) claims and related expenses, and our reinsurers’ obligations; (xiii) pending legal proceedings and their effect on our financial position; (xiv) effects of updated claims, policy, and billing systems; and (xv) other similar expressions concerning matters that are not historical facts. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included throughout this filing and particularly in Item 1A: "Risk Factors" set forth in our 2025 Annual Report on Form 10-K and Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in this quarterly report on Form 10-Q. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to revise or publicly release any revision to any such forward-looking statement, except as may otherwise be required by law.
These statements are based on current expectations, estimates and projections about the industry and market in which we operate, and management’s beliefs and assumptions. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” or “continue” or the negative variations thereof or comparable terminology are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. The risks and uncertainties include, without limitation:
•the possibility that actual losses may exceed reserves, which are based on estimates;

•the concentration of our business in coastal states, which could be impacted by hurricane losses or other significant weather-related events such as northeastern winter storms;

•our exposure to catastrophic weather-related events, including hurricanes and wildfires; 

•our failure to adequately assess and price the risks we underwrite;

•the fluctuation in our results of operations, including as a result of factors outside of our control;

•increased costs of reinsurance, non-availability of reinsurance, non-collectability of reinsurance and our ability to obtain reinsurance on terms and at a cost acceptable to us;

•inherent uncertainty of our models and our reliance on such models as a tool to evaluate risk;

•increased competition, competitive pressures, industry developments and market conditions;

•continued and increased impact of abusive and unwarranted claims;

•our inability to effectively manage our growth and integrate acquired companies;

•our failure to execute our diversification strategy;

•our reliance on independent agents to write insurance policies for us on a voluntary basis and our ability to attract and retain agents;

•the failure of our claims department to effectively manage or remediate claims;

•the failure of policy renewals to meet our expectations;

•our inability to maintain our financial stability rating;

•our ability to access sufficient liquidity or obtain additional financing to fund our operations and expand our business;

•our inability to generate investment income;

•effects of emerging claim and coverage issues relating to legal, judicial, environmental and social conditions;

•the failure of our risk mitigation strategies or loss limitation methods; 

•lack of effectiveness of exclusions and loss limitation methods in the insurance policies we assume or write;

•the regulation of our insurance operations;

•changes in regulations and our failure to meet increased regulatory requirements, including minimum capital and surplus requirements;

  

 
  

 •climate change, health crisis, severe weather conditions and other catastrophe events;

•litigation or regulatory actions;

•regulation limiting rate increases or that require us to participate in loss sharing or assessments;

•the terms of our indebtedness, including restrictions that limit our flexibility in operating our business, and our inability to comply with the financial and other covenants of our debt facilities;

•changes in interest rates and their impact on investment income or losses on our investment portfolio and on our variable rate indebtedness;

•our ability to maintain effective internal controls over financial reporting; 

•certain characteristics of our common stock; 

•failure of our information technology systems or those of our key service providers and unsuccessful development and implementation of new technologies; and

•our failure to attract and retain qualified employees and independent agents or our loss of key personnel.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrences of anticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in the forward-looking statements. Consequently, you should not place undue reliance on forward-looking statements. 

  

 
  

 PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements
HERITAGE INSURANCE HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except per share and share amounts)

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 June 30, 2026

  

  

 December 31, 2025

  

 

 
 ASSETS

  

 (unaudited)

  

  

  

  

 

 
 Fixed maturities, available-for-sale, at fair value (amortized cost of $821,858 and $726,774)

  

 $

 801,910

  

  

 $

 713,237

  

 

 
 Equity securities, at fair value, (cost $816 and $1,064)

  

  

 816

  

  

  

 1,064

  

 

 
 Other investments, net

  

  

 1,259

  

  

  

 1,285

  

 

 
 Total investments

  

  

 803,985

  

  

  

 715,586

  

 

 
 Cash and cash equivalents

  

  

 587,597

  

  

  

 559,274

  

 

 
 Restricted cash

  

  

 13,782

  

  

  

 13,307

  

 

 
 Accrued investment income

  

  

 7,507

  

  

  

 6,556

  

 

 
 Premiums receivable, net

  

  

 94,034

  

  

  

 95,331

  

 

 
 Reinsurance recoverable on paid and unpaid claims, net of allowance for credit losses of $175

  

  

 305,175

  

  

  

 318,588

  

 

 
 Prepaid reinsurance premiums

  

  

 460,694

  

  

  

 307,039

  

 

 
 Deferred income tax asset, net

  

  

 6,003

  

  

  

 5,855

  

 

 
 Deferred policy acquisition costs, net

  

  

 68,921

  

  

  

 64,544

  

 

 
 Property and equipment, net

  

  

 27,715

  

  

  

 28,254

  

 

 
 Right-of-use lease asset, finance

  

  

 11,374

  

  

  

 12,598

  

 

 
 Right-of-use lease asset, operating

  

  

 6,086

  

  

  

 4,878

  

 

 
 Intangibles, net

  

  

 27,147

  

  

  

 30,189

  

 

 
 Other assets

  

  

 32,416

  

  

  

 33,823

  

 

 
 Total Assets

  

 $

 2,452,436

  

  

 $

 2,195,822

  

 

 
 LIABILITIES AND STOCKHOLDERS' EQUITY

  

  

  

  

  

  

 

 
 Unpaid losses and loss adjustment expenses

  

 $

 481,997

  

  

 $

 579,477

  

 

 
 Unearned premiums

  

  

 738,384

  

  

  

 707,923

  

 

 
 Reinsurance payable

  

  

 501,033

  

  

  

 232,801

  

 

 
 Long-term debt, net

  

  

 71,287

  

  

  

 78,428

  

 

 
 Advance premiums

  

  

 26,635

  

  

  

 19,164

  

 

 
 Income taxes payable, net

  

  

 5,660

  

  

  

 4,282

  

 

 
 Accrued compensation

  

  

 6,618

  

  

  

 8,844

  

 

 
 Lease liability, finance

  

  

 14,254

  

  

  

 15,587

  

 

 
 Lease liability, operating

  

  

 6,293

  

  

  

 5,800

  

 

 
 Accounts payable and other liabilities

  

  

 32,547

  

  

  

 38,265

  

 

 
 Total Liabilities

  

 $

 1,884,708

  

  

 $

 1,690,571

  

 

 
  

  

  

  

  

  

  

 

 
 Commitments and contingencies (Note 17)

  

  

  

  

  

  

 

 
 Stockholders’ Equity:

  

  

  

  

  

  

 

 
 Common stock, $0.0001 par value, 50,000,000 shares authorized, 43,071,733 shares issued and 29,732,416 outstanding at June 30, 2026 and 43,171,585 shares issued and 30,833,776 outstanding at December 31, 2025

  

  

 3

  

  

  

 3

  

 

 
 Additional paid-in capital

  

  

 359,501

  

  

  

 365,736

  

 

 
 Accumulated other comprehensive loss, net of taxes

  

  

 (15,446

 )

  

  

 (10,555

 )

 

 
 Treasury stock, at cost, 13,339,317 and 12,337,809 shares at June 30, 2026 and December 31, 2025, respectively

  

  

 (157,773

 )

  

  

 (133,183

 )

 

 
 Retained earnings

  

  

 381,443

  

  

  

 283,250

  

 

 
 Total Stockholders' Equity

  

  

 567,728

  

  

  

 505,251

  

 

 
 Total Liabilities and Stockholders' Equity

  

 $

 2,452,436

  

  

 $

 2,195,822

  

 

 See accompanying notes to unaudited condensed consolidated financial statements.

 2

 
  

 HERITAGE INSURANCE HOLDINGS, INC.
Condensed Consolidated Statements of Operations and Other Comprehensive Income
(Amounts in thousands, except per share and share amounts)
(Unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 For The Three Months Ended June 30,

  

  

 For The Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

  

 2026

  

  

 2025

  

 

 
 REVENUES:

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Gross premiums written

  

 $

 388,441

  

  

 $

 410,968

  

  

 $

 735,187

  

  

 $

 766,965

  

 

 
 Change in gross unearned premiums

  

  

 (37,288

 )

  

  

 (57,374

 )

  

  

 (30,471

 )

  

  

 (59,543

 )

 

 
 Gross premiums earned

  

  

 351,153

  

  

  

 353,594

  

  

  

 704,716

  

  

  

 707,422

  

 

 
 Ceded premiums

  

  

 (150,029

 )

  

  

 (157,278

 )

  

  

 (303,899

 )

  

  

 (311,072

 )

 

 
 Net premiums earned

  

  

 201,124

  

  

  

 196,316

  

  

  

 400,817

  

  

  

 396,350

  

 

 
 Net investment income

  

  

 10,595

  

  

  

 9,034

  

  

  

 20,462

  

  

  

 17,609

  

 

 
 Net realized (losses) gains on debt securities and other investments

  

  

 (37

 )

  

  

 4

  

  

  

 (21

 )

  

  

 —

  

 

 
 Other revenue

  

  

 2,513

  

  

  

 2,681

  

  

  

 5,596

  

  

  

 5,595

  

 

 
 Total revenues

  

  

 214,195

  

  

  

 208,035

  

  

  

 426,854

  

  

  

 419,554

  

 

 
 EXPENSES:

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Losses and loss adjustment expenses

  

  

 61,057

  

  

  

 75,620

  

  

  

 152,654

  

  

  

 175,027

  

 

 
 Policy acquisition costs, net of ceding commission income (1)

  

  

 45,510

  

  

  

 43,146

  

  

  

 90,845

  

  

  

 88,961

  

 

 
 General and administrative expenses, net of ceding commission income(2)

  

  

 23,778

  

  

  

 24,399

  

  

  

 48,687

  

  

  

 48,260

  

 

 
 Total expenses

  

  

 130,345

  

  

  

 143,165

  

  

  

 292,186

  

  

  

 312,248

  

 

 
 Operating income

  

  

 83,850

  

  

  

 64,870

  

  

  

 134,668

  

  

  

 107,306

  

 

 
 Interest expense, net

  

  

 1,690

  

  

  

 1,880

  

  

  

 3,468

  

  

  

 4,306

  

 

 
 Income before income taxes

  

  

 82,160

  

  

  

 62,990

  

  

  

 131,200

  

  

  

 103,000

  

 

 
 Income tax expense

  

  

 20,450

  

  

  

 14,966

  

  

  

 33,006

  

  

  

 24,502

  

 

 
 Net income

  

 $

 61,710

  

  

 $

 48,024

  

  

 $

 98,194

  

  

 $

 78,498

  

 

 
 OTHER COMPREHENSIVE INCOME

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Change in net unrealized (losses) gains on investments

  

  

 (1,947

 )

  

  

 6,072

  

  

  

 (6,438

 )

  

  

 14,549

  

 

 
 Reclassification adjustment for net realized investment losses

  

  

 37

  

  

  

 (4

 )

  

  

 21

  

  

  

 —

  

 

 
 Income tax benefits (expense) related to items of other comprehensive income

  

  

 452

  

  

  

 (1,443

 )

  

  

 1,526

  

  

  

 (3,459

 )

 

 
 Total comprehensive income

  

 $

 60,252

  

  

 $

 52,649

  

  

 $

 93,303

  

  

 $

 89,588

  

 

 
 Weighted average shares outstanding

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Basic

  

  

 30,017,180

  

  

  

 31,004,218

  

  

  

 30,349,056

  

  

  

 30,851,022

  

 

 
 Diluted

  

  

 30,076,443

  

  

  

 31,063,481

  

  

  

 30,408,347

  

  

  

 30,910,285

  

 

 
 Earnings per share

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Basic

  

 $

 2.06

  

  

 $

 1.55

  

  

 $

 3.24

  

  

 $

 2.54

  

 

 
 Diluted

  

 $

 2.05

  

  

 $

 1.55

  

  

 $

 3.23

  

  

 $

 2.54

  

 

  
 
(1)Policy acquisition costs includes $11.4 million and $22.3 million of ceding commission income for the three and six months ended June 30, 2026 and $13.1 million and $24.8 million of ceding commission income for the three and six months ended June 30, 2025.

(2)General and administration includes $3.7 million and $7.3 million of ceding commission income for the three and six months ended June 30, 2026 and $4.3 million and $8.2 million of ceding commission income for the three and six months ended June 30, 2025.

 
See accompanying notes to unaudited condensed consolidated financial statements.

 3

 
  

 HERITAGE INSURANCE HOLDINGS, INC.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(Amounts in thousands, except share amounts)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Common Shares

  

  

 Par Value

  

  

 Additional Paid-In Capital

  

  

 Retained
Earnings

  

  

 Treasury Shares

  

 

 Accumulated Other Comprehensive Loss

  

  

 Total
Stockholders'
Equity

  

 

 
 Balance at December 31, 2025

  

  

 30,833,776

  

  

 $

 3

  

  

 $

 365,736

  

  

 $

 283,250

  

  

 $

 (133,183

 )

  

 $

 (10,555

 )

  

 $

 505,251

  

 

 
 Net unrealized change in investments, net of tax

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (3,433

 )

  

  

 (3,433

 )

 

 
 Issuance of restricted stock

  

  

 188,225

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Surrendered shares for tax withholdings

  

  

 (316,592

 )

  

  

 —

  

  

  

 (8,909

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (8,909

 )

 

 
 Stock-based compensation on restricted stock

  

  

 —

  

  

  

 —

  

  

  

 986

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 986

  

 

 
 Purchase of treasury stock

  

  

 (370,484

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (10,006

 )

  

  

 —

  

  

  

 (10,006

 )

 

 
 Net Income

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 36,483

  

  

  

 —

  

  

  

 —

  

  

  

 36,483

  

 

 
 Balance at March 31, 2026

  

  

 30,334,925

  

  

 $

 3

  

  

 $

 357,813

  

  

 $

 319,733

  

  

 $

 (143,189

 )

  

 $

 (13,988

 )

  

 $

 520,372

  

 

 
 Net unrealized change in investments, ne