hrtg-10q_20200930.htm
false Q3 0001598665 --12-31 true true P2Y6M P2Y6M true true P5Y 2020-12-31 P5Y P5Y P1Y P5Y P1Y us-gaap:OtherAssets us-gaap:OtherAssets us-gaap:OtherLiabilities us-gaap:OtherLiabilities P2Y11M4D P7Y2M4D us-gaap:AccountingStandardsUpdate201613Member 0001598665 2020-01-01 2020-09-30 xbrli:shares 0001598665 2020-10-30 iso4217:USD 0001598665 2020-09-30 0001598665 2019-12-31 iso4217:USD xbrli:shares 0001598665 2020-07-01 2020-09-30 0001598665 2019-07-01 2019-09-30 0001598665 2019-01-01 2019-09-30 0001598665 hrtg:PolicyAcquisitionCostsMember 2020-07-01 2020-09-30 0001598665 hrtg:PolicyAcquisitionCostsMember 2020-01-01 2020-09-30 0001598665 us-gaap:GeneralAndAdministrativeExpenseMember 2020-07-01 2020-09-30 0001598665 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-09-30 0001598665 us-gaap:CommonStockMember 2019-12-31 0001598665 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001598665 us-gaap:RetainedEarningsMember 2019-12-31 0001598665 us-gaap:TreasuryStockMember 2019-12-31 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001598665 us-gaap:RetainedEarningsMember srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-12-31 0001598665 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-12-31 0001598665 us-gaap:CommonStockMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2019-12-31 0001598665 us-gaap:AdditionalPaidInCapitalMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2019-12-31 0001598665 us-gaap:RetainedEarningsMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2019-12-31 0001598665 us-gaap:TreasuryStockMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2019-12-31 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2019-12-31 0001598665 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2019-12-31 0001598665 2020-04-01 2020-06-30 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001598665 2020-01-01 2020-03-31 0001598665 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001598665 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001598665 us-gaap:TreasuryStockMember 2020-01-01 2020-03-31 0001598665 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001598665 us-gaap:CommonStockMember 2020-03-31 0001598665 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001598665 us-gaap:RetainedEarningsMember 2020-03-31 0001598665 us-gaap:TreasuryStockMember 2020-03-31 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001598665 2020-03-31 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001598665 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001598665 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001598665 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001598665 us-gaap:TreasuryStockMember 2020-04-01 2020-06-30 0001598665 us-gaap:CommonStockMember 2020-06-30 0001598665 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001598665 us-gaap:RetainedEarningsMember 2020-06-30 0001598665 us-gaap:TreasuryStockMember 2020-06-30 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001598665 2020-06-30 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-07-01 2020-09-30 0001598665 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001598665 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001598665 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001598665 us-gaap:CommonStockMember 2020-09-30 0001598665 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001598665 us-gaap:RetainedEarningsMember 2020-09-30 0001598665 us-gaap:TreasuryStockMember 2020-09-30 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-09-30 0001598665 2019-01-01 2019-03-31 0001598665 2019-04-01 2019-06-30 0001598665 us-gaap:CommonStockMember 2018-12-31 0001598665 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001598665 us-gaap:RetainedEarningsMember 2018-12-31 0001598665 us-gaap:TreasuryStockMember 2018-12-31 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001598665 2018-12-31 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001598665 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001598665 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001598665 us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0001598665 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001598665 us-gaap:CommonStockMember 2019-03-31 0001598665 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001598665 us-gaap:RetainedEarningsMember 2019-03-31 0001598665 us-gaap:TreasuryStockMember 2019-03-31 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001598665 2019-03-31 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001598665 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001598665 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001598665 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0001598665 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001598665 us-gaap:CommonStockMember 2019-06-30 0001598665 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001598665 us-gaap:RetainedEarningsMember 2019-06-30 0001598665 us-gaap:TreasuryStockMember 2019-06-30 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001598665 2019-06-30 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2019-09-30 0001598665 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001598665 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001598665 us-gaap:TreasuryStockMember 2019-07-01 2019-09-30 0001598665 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001598665 us-gaap:CommonStockMember 2019-09-30 0001598665 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001598665 us-gaap:RetainedEarningsMember 2019-09-30 0001598665 us-gaap:TreasuryStockMember 2019-09-30 0001598665 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0001598665 2019-09-30 0001598665 us-gaap:AccountingStandardsUpdate201613Member 2020-09-30 0001598665 hrtg:USGovernmentAgencySecuritiesMember 2020-09-30 0001598665 us-gaap:USStatesAndPoliticalSubdivisionsMember 2020-09-30 0001598665 hrtg:SpecialRevenueFundMember 2020-09-30 0001598665 hrtg:HybridSecuritiesMember 2020-09-30 0001598665 hrtg:IndustrialAndMiscellaneousMember 2020-09-30 0001598665 hrtg:USGovernmentAgencySecuritiesMember hrtg:DebtSecuritiesPledgedMember 2020-09-30 0001598665 hrtg:USGovernmentAgencySecuritiesMember 2019-12-31 0001598665 us-gaap:USStatesAndPoliticalSubdivisionsMember 2019-12-31 0001598665 hrtg:SpecialRevenueFundMember 2019-12-31 0001598665 hrtg:HybridSecuritiesMember 2019-12-31 0001598665 hrtg:IndustrialAndMiscellaneousMember 2019-12-31 0001598665 hrtg:USGovernmentAgencySecuritiesMember hrtg:DebtSecuritiesPledgedMember 2019-12-31 0001598665 us-gaap:EquitySecuritiesMember 2019-01-01 2019-09-30 0001598665 us-gaap:EquitySecuritiesMember 2020-01-01 2020-09-30 xbrli:pure 0001598665 us-gaap:DebtSecuritiesMember 2020-07-01 2020-09-30 0001598665 us-gaap:DebtSecuritiesMember 2019-07-01 2019-09-30 0001598665 us-gaap:DebtSecuritiesMember 2020-01-01 2020-09-30 0001598665 us-gaap:DebtSecuritiesMember 2019-01-01 2019-09-30 0001598665 us-gaap:EquitySecuritiesMember 2019-07-01 2019-09-30 0001598665 us-gaap:CashAndCashEquivalentsMember 2020-07-01 2020-09-30 0001598665 us-gaap:CashAndCashEquivalentsMember 2019-07-01 2019-09-30 0001598665 us-gaap:CashAndCashEquivalentsMember 2020-01-01 2020-09-30 0001598665 us-gaap:CashAndCashEquivalentsMember 2019-01-01 2019-09-30 0001598665 us-gaap:OtherThanSecuritiesInvestmentMember 2020-07-01 2020-09-30 0001598665 us-gaap:OtherThanSecuritiesInvestmentMember 2019-07-01 2019-09-30 0001598665 us-gaap:OtherThanSecuritiesInvestmentMember 2020-01-01 2020-09-30 0001598665 us-gaap:OtherThanSecuritiesInvestmentMember 2019-01-01 2019-09-30 hrtg:Security 0001598665 hrtg:PartnershipRealEstateInvestmentTrustsAndLimitedLiabilityCompaniesMember hrtg:RedeemableClassAPreferredUnitsMember 2020-09-30 0001598665 hrtg:PartnershipRealEstateInvestmentTrustsAndLimitedLiabilityCompaniesMember 2020-09-30 0001598665 hrtg:LimitedPartnershipsRealEstateInvestmentTrustsAndLimitedLiabilityCompanyInvestmentsMember 2020-09-30 0001598665 hrtg:LimitedPartnershipsRealEstateInvestmentTrustsAndLimitedLiabilityCompanyInvestmentsMember 2019-12-31 0001598665 hrtg:RedeemableClassAPreferredUnitsMember us-gaap:LimitedLiabilityCompanyMember 2020-07-01 2020-09-30 0001598665 hrtg:ConversionOfSecuredPromissoryNotesIntoRedeemableClassAPreferredUnitsMember us-gaap:LimitedLiabilityCompanyMember 2020-09-30 0001598665 hrtg:ConversionOfSecuredPromissoryNotesIntoRedeemableClassAPreferredUnitsMember us-gaap:LimitedLiabilityCompanyMember 2020-09-01 2020-09-30 0001598665 hrtg:RedeemableClassAPreferredUnitsMember us-gaap:LimitedLiabilityCompanyMember 2020-09-30 0001598665 hrtg:USGovernmentAgencySecuritiesMember us-gaap:FairValueInputsLevel1Member 2020-09-30 0001598665 hrtg:USGovernmentAgencySecuritiesMember us-gaap:FairValueInputsLevel2Member 2020-09-30 0001598665 us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel2Member 2020-09-30 0001598665 hrtg:SpecialRevenueFundMember us-gaap:FairValueInputsLevel2Member 2020-09-30 0001598665 hrtg:HybridSecuritiesMember us-gaap:FairValueInputsLevel2Member 2020-09-30 0001598665 hrtg:IndustrialAndMiscellaneousMember us-gaap:FairValueInputsLevel2Member 2020-09-30 0001598665 us-gaap:FairValueInputsLevel1Member 2020-09-30 0001598665 us-gaap:FairValueInputsLevel2Member 2020-09-30 0001598665 us-gaap:FairValueInputsLevel1Member hrtg:USGovernmentAgencySecuritiesMember 2019-12-31 0001598665 us-gaap:FairValueInputsLevel2Member hrtg:USGovernmentAgencySecuritiesMember 2019-12-31 0001598665 us-gaap:FairValueInputsLevel2Member us-gaap:USStatesAndPoliticalSubdivisionsMember 2019-12-31 0001598665 us-gaap:FairValueInputsLevel2Member hrtg:SpecialRevenueFundMember 2019-12-31 0001598665 us-gaap:FairValueInputsLevel2Member hrtg:HybridSecuritiesMember 2019-12-31 0001598665 us-gaap:FairValueInputsLevel2Member hrtg:IndustrialAndMiscellaneousMember 2019-12-31 0001598665 us-gaap:FairValueInputsLevel1Member 2019-12-31 0001598665 us-gaap:FairValueInputsLevel2Member 2019-12-31 0001598665 us-gaap:FairValueMeasurementsNonrecurringMember 2020-01-01 2020-03-31 0001598665 us-gaap:FairValueMeasurementsNonrecurringMember 2020-04-01 2020-06-30 0001598665 us-gaap:FairValueMeasurementsNonrecurringMember 2019-01-01 2019-03-31 0001598665 us-gaap:FairValueMeasurementsNonrecurringMember 2019-04-01 2019-06-30 0001598665 srt:MinimumMember 2020-09-30 0001598665 srt:MaximumMember 2020-09-30 0001598665 us-gaap:LandMember 2020-09-30 0001598665 us-gaap:LandMember 2019-12-31 0001598665 us-gaap:BuildingMember 2020-09-30 0001598665 us-gaap:BuildingMember 2019-12-31 0001598665 hrtg:ComputerHardwareAndSoftwareMember 2020-09-30 0001598665 hrtg:ComputerHardwareAndSoftwareMember 2019-12-31 0001598665 hrtg:OfficeFurnitureAndEquipmentMember 2020-09-30 0001598665 hrtg:OfficeFurnitureAndEquipmentMember 2019-12-31 0001598665 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2020-09-30 0001598665 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2019-12-31 0001598665 hrtg:VehiclesFleetMember 2020-09-30 0001598665 hrtg:VehiclesFleetMember 2019-12-31 utr:acre hrtg:Building utr:sqft 0001598665 srt:MinimumMember 2020-01-01 2020-09-30 0001598665 srt:MaximumMember 2020-01-01 2020-09-30 0001598665 2019-01-01 2019-03-30 0001598665 hrtg:PolicyAcquisitionCostsMember 2019-07-01 2019-09-30 0001598665 hrtg:PolicyAcquisitionCostsMember 2019-01-01 2019-09-30 0001598665 us-gaap:GeneralAndAdministrativeExpenseMember 2019-07-01 2019-09-30 0001598665 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-09-30 0001598665 us-gaap:CatastropheMember 2020-01-01 2020-09-30 0001598665 hrtg:QuotaShareMember 2020-01-01 2020-09-30 0001598665 hrtg:FloridaHurricaneCatastropheFundMember 2020-01-01 2020-09-30 0001598665 hrtg:TwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember hrtg:HeritageMember hrtg:FirstCatastropheMember srt:MaximumMember 2020-01-01 2020-09-30 0001598665 hrtg:TwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember hrtg:NarragansettBayInsuranceCompanyMember hrtg:FirstCatastropheMember srt:MaximumMember 2020-01-01 2020-09-30 0001598665 hrtg:TwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember hrtg:ZephyrMember hrtg:FirstCatastropheMember srt:MaximumMember 2020-01-01 2020-09-30 0001598665 hrtg:TwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember hrtg:HeritageMember hrtg:FirstCatastropheMember srt:MaximumMember 2020-09-30 0001598665 hrtg:TwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember hrtg:ZephyrMember hrtg:FirstCatastropheMember srt:MaximumMember 2020-09-30 0001598665 hrtg:TwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember hrtg:NarragansettBayInsuranceCompanyMember hrtg:FirstCatastropheMember srt:MaximumMember 2020-09-30 0001598665 hrtg:OspreyMember hrtg:FirstCatastropheMember srt:MinimumMember 2020-01-01 2020-09-30 0001598665 hrtg:OspreyMember hrtg:FirstCatastropheMember srt:MaximumMember 2020-01-01 2020-09-30 0001598665 hrtg:TwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember 2020-09-30 0001598665 hrtg:TwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember 2020-01-01 2020-09-30 0001598665 hrtg:GrossQuotaShareMember hrtg:NarragansettBayInsuranceCompanyMember 2018-06-01 2019-05-31 0001598665 hrtg:GrossQuotaShareMember hrtg:NarragansettBayInsuranceCompanyMember 2019-05-31 0001598665 hrtg:TwoThousandTwentyToTwoThousandTwentyOneNetQuotaShareReinsuranceMember hrtg:NarragansettBayInsuranceCompanyMember 2020-01-01 2020-09-30 0001598665 hrtg:TwoThousandTwentyToTwoThousandTwentyOneNetQuotaShareReinsuranceMember hrtg:NarragansettBayInsuranceCompanyMember 2019-12-31 0001598665 hrtg:TwoThousandTwentyToTwoThousandTwentyOneNetQuotaShareReinsuranceMember hrtg:NarragansettBayInsuranceCompanyMember 2018-12-31 0001598665 hrtg:AggregateCoverageMember us-gaap:CatastropheMember 2020-01-01 2020-09-30 0001598665 hrtg:AggregateCoverageMember us-gaap:CatastropheMember 2020-09-30 0001598665 hrtg:NarragansettBayInsuranceCompanyMember hrtg:FortyTwoPointFivePercentAggregateCoverageMember 2019-12-01 2019-12-01 0001598665 hrtg:NarragansettBayInsuranceCompanyMember hrtg:FortyTwoPointFivePercentAggregateCoverageMember 2019-12-01 0001598665 hrtg:NarragansettBayInsuranceCompanyMember hrtg:HundredPercentAggregateCoverageMember 2019-12-30 2019-12-31 hrtg:Reinsurer 0001598665 hrtg:NarragansettBayInsuranceCompanyMember hrtg:HundredPercentAggregateCoverageMember 2019-12-31 0001598665 us-gaap:InsuranceClaimsMember 2020-09-30 0001598665 us-gaap:PropertyLiabilityAndCasualtyInsuranceSegmentMember 2020-01-01 2020-09-30 0001598665 us-gaap:PropertyLiabilityAndCasualtyInsuranceSegmentMember 2020-09-30 0001598665 us-gaap:InsuranceClaimsMember hrtg:CommercialResidentialLossesMember hrtg:NarragansettBayInsuranceCompanyMember 2020-09-30 0001598665 us-gaap:PropertyLiabilityAndCasualtyInsuranceSegmentMember hrtg:CommercialResidentialLossesMember hrtg:NarragansettBayInsuranceCompanyMember 2020-01-01 2020-09-30 0001598665 us-gaap:PropertyLiabilityAndCasualtyInsuranceSegmentMember hrtg:CommercialResidentialLossesMember hrtg:NarragansettBayInsuranceCompanyMember 2020-09-30 0001598665 hrtg:CommercialResidentialLossesMember hrtg:NarragansettBayInsuranceCompanyMember 2020-01-01 2020-09-30 0001598665 hrtg:FacultativeReinsuranceMember srt:MaximumMember 2020-09-30 0001598665 hrtg:FacultativeReinsuranceMember srt:MinimumMember 2020-01-01 2020-09-30 hrtg:Layer 0001598665 hrtg:GeneralExcessOfLossTwoThousandTwentyAndTwentyOneReinsuranceProgramMember hrtg:NarragansettBayInsuranceCompanyMember srt:ScenarioForecastMember 2020-07-01 2021-06-30 0001598665 hrtg:GeneralExcessOfLossTwoThousandTwentyAndTwentyOneReinsuranceProgramMember hrtg:NarragansettBayInsuranceCompanyMember 2019-07-01 2020-06-30 0001598665 hrtg:GeneralExcessOfLossTwoThousandTwentyAndTwentyOneReinsuranceProgramMember hrtg:FirstLayerCoverageMember hrtg:NarragansettBayInsuranceCompanyMember srt:ScenarioForecastMember 2020-07-01 2021-06-30 0001598665 hrtg:GeneralExcessOfLossTwoThousandTwentyAndTwentyOneReinsuranceProgramMember hrtg:FirstLayerCoverageMember hrtg:NarragansettBayInsuranceCompanyMember 2019-07-01 2020-06-30 0001598665 hrtg:GeneralExcessOfLossTwoThousandTwentyAndTwentyOneReinsuranceProgramMember hrtg:SecondLayerCoverageMember hrtg:NarragansettBayInsuranceCompanyMember srt:ScenarioForecastMember 2020-07-01 2021-06-30 0001598665 hrtg:GeneralExcessOfLossTwoThousandTwentyAndTwentyOneReinsuranceProgramMember hrtg:SecondLayerCoverageMember hrtg:NarragansettBayInsuranceCompanyMember 2019-07-01 2020-06-30 0001598665 hrtg:GeneralExcessOfLossTwoThousandTwentyAndTwentyOneReinsuranceProgramMember hrtg:CasualtySecondLayerMember hrtg:NarragansettBayInsuranceCompanyMember srt:ScenarioForecastMember 2020-07-01 2021-06-30 0001598665 hrtg:GeneralExcessOfLossTwoThousandTwentyAndTwentyOneReinsuranceProgramMember hrtg:CasualtySecondLayerMember hrtg:NarragansettBayInsuranceCompanyMember 2019-07-01 2020-06-30 0001598665 hrtg:FacultativeTwoThousandTwentyAndTwoThousandTwentyOneExcessOfLossReinsuranceProgramsMember srt:MinimumMember hrtg:NarragansettBayInsuranceCompanyMember 2020-09-30 0001598665 2020-01-01 0001598665 hrtg:ConvertibleSeniorNotesMember 2017-09-30 0001598665 hrtg:ConvertibleSeniorNotesMember 2017-08-31 0001598665 hrtg:ConvertibleSeniorNotesMember 2020-01-01 2020-09-30 0001598665 hrtg:ConvertibleSeniorNotesMember 2020-09-30 0001598665 hrtg:ConvertibleSeniorNotesMember 2019-01-01 2019-09-30 0001598665 us-gaap:ConvertibleDebtMember srt:ParentCompanyMember 2019-02-19 0001598665 us-gaap:ConvertibleDebtMember srt:ParentCompanyMember 2019-02-16 2019-02-19 0001598665 hrtg:SeniorSecuredCreditFacilityMember 2018-12-01 2018-12-31 0001598665 hrtg:SeniorSecuredCreditFacilityMember 2018-12-31 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:TermLoanMember 2018-12-31 0001598665 hrtg:SeniorSecuredCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:TermLoanMember 2019-03-31 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:TermLoanMember 2019-12-31 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:TermLoanMember 2020-01-02 2020-01-02 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:TermLoanMember 2020-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:TermLoanMember 2020-01-01 2020-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:TermLoanMember 2019-01-01 2019-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2020-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember us-gaap:StandbyLettersOfCreditMember 2020-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:SwinglineLoanMember 2020-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001598665 hrtg:SeniorSecuredCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2020-01-01 2020-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-09-30 0001598665 us-gaap:StandbyLettersOfCreditMember srt:AffiliatedEntityMember 2020-07-01 0001598665 us-gaap:StandbyLettersOfCreditMember srt:AffiliatedEntityMember 2020-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember hrtg:CreditAgreementSecondAmendmentMember 2020-01-01 2020-09-30 0001598665 hrtg:SeniorSecuredCreditFacilityMember us-gaap:RevolvingCreditFacilityMember hrtg:CreditAgreementSecondAmendmentMember 2020-04-27 0001598665 hrtg:SeniorSecuredCreditFacilityMember us-gaap:StandbyLettersOfCreditMember hrtg:CreditAgreementThirdAmendmentMember 2020-06-01 0001598665 hrtg:CollateralFinancialArrangementMember hrtg:SkyeLanePropertiesLLCMember us-gaap:FirstMortgageMember 2017-10-31 0001598665 hrtg:CollateralFinancialArrangementMember hrtg:SkyeLanePropertiesLLCMember us-gaap:FirstMortgageMember hrtg:FiveYearTreasurySecurityMember 2017-10-01 2017-10-31 0001598665 hrtg:CollateralFinancialArrangementMember hrtg:SkyeLanePropertiesLLCMember us-gaap:FirstMortgageMember 2020-01-01 2020-09-30 0001598665 hrtg:CollateralFinancialArrangementMember hrtg:SkyeLanePropertiesLLCMember us-gaap:FirstMortgageMember 2019-01-01 2019-09-30 0001598665 hrtg:CollateralFinancialArrangementMember hrtg:SkyeLanePropertiesLLCMember us-gaap:FirstMortgageMember 2017-10-01 2017-10-31 0001598665 srt:FederalHomeLoanBankOfAtlantaMember 2018-12-31 0001598665 srt:FederalHomeLoanBankOfAtlantaMember 2020-09-30 0001598665 srt:FederalHomeLoanBankOfAtlantaMember 2019-01-01 2019-09-30 0001598665 srt:FederalHomeLoanBankOfAtlantaMember 2020-01-01 2020-09-30 0001598665 hrtg:FederalHomeLoanBankDesMoinesMember 2020-09-30 0001598665 hrtg:FederalHomeLoanBankDesMoinesMember 2019-12-31 0001598665 hrtg:FederalHomeLoanBankBostonMember 2020-09-30 0001598665 hrtg:FederalHomeLoanBankBostonMember 2019-12-31 0001598665 us-gaap:ConvertibleDebtMember 2020-09-30 0001598665 us-gaap:ConvertibleDebtMember 2019-12-31 0001598665 us-gaap:FirstMortgageMember 2020-09-30 0001598665 us-gaap:FirstMortgageMember 2019-12-31 0001598665 hrtg:TermLoanMember 2020-09-30 0001598665 hrtg:TermLoanMember 2019-12-31 0001598665 us-gaap:RevolvingCreditFacilityMember 2020-09-30 0001598665 us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001598665 hrtg:FederalHomeLoanBankLoanAgreementMember 2020-09-30 0001598665 hrtg:FederalHomeLoanBankLoanAgreementMember 2019-12-31 0001598665 hrtg:HeritagePropertyAndCasualtyInsuranceCompanyMember 2020-01-01 2020-09-30 0001598665 hrtg:HeritagePropertyAndCasualtyInsuranceCompanyMember 2020-09-30 0001598665 hrtg:ZephyrMember 2020-09-30 0001598665 hrtg:NarragansettBayInsuranceCompanyMember 2020-09-30 0001598665 hrtg:HeritagePropertyAndCasualtyInsuranceCompanyAndZephyrInsuranceCompanyAndNarragansettBayInsuranceCompanyAndPawtucketInsuranceCompanyMember 2020-09-30 0001598665 hrtg:HeritagePropertyAndCasualtyInsuranceCompanyAndZephyrInsuranceCompanyAndNarragansettBayInsuranceCompanyAndPawtucketInsuranceCompanyMember 2019-12-31 0001598665 2020-07-01 2020-07-31 0001598665 hrtg:LeaseObligationsMember 2020-09-30 0001598665 hrtg:ShannonLucasMember 2017-01-01 2017-01-31 0001598665 hrtg:HeritagePropertyAndCasualtyInsuranceCompanyAndNarragansettBayInsuranceCompanyMember srt:DirectorMember 2017-01-01 2017-01-31 0001598665 us-gaap:ImmediateFamilyMemberOfManagementOrPrincipalOwnerMember 2020-07-01 2020-09-30 0001598665 us-gaap:ImmediateFamilyMemberOfManagementOrPrincipalOwnerMember 2020-01-01 2020-09-30 0001598665 us-gaap:ImmediateFamilyMemberOfManagementOrPrincipalOwnerMember 2019-07-01 2019-09-30 0001598665 us-gaap:ImmediateFamilyMemberOfManagementOrPrincipalOwnerMember 2019-01-01 2019-09-30 0001598665 hrtg:ComegysInsuranceAgencyIncorporationMember 2020-07-01 2020-09-30 0001598665 hrtg:ComegysInsuranceAgencyIncorporationMember 2020-01-01 2020-09-30 0001598665 hrtg:ComegysInsuranceAgencyIncorporationMember 2019-07-01 2019-09-30 0001598665 hrtg:ComegysInsuranceAgencyIncorporationMember 2019-01-01 2019-09-30 0001598665 hrtg:ScenarioOneMember 2020-01-01 2020-09-30 0001598665 hrtg:ScenarioTwoMember 2020-01-01 2020-09-30 0001598665 us-gaap:RestrictedStockMember 2020-09-30 0001598665 us-gaap:RestrictedStockMember 2019-12-31 0001598665 2018-08-01 0001598665 2018-07-31 2018-08-01 0001598665 2020-02-27 0001598665 2020-05-04 0001598665 2020-08-03 0001598665 2020-02-27 2020-02-27 0001598665 2020-05-04 2020-05-04 0001598665 2020-08-03 2020-08-03 0001598665 hrtg:OmnibusIncentivePlanMember 2014-05-22 0001598665 hrtg:OmnibusIncentivePlanMember 2020-09-30 0001598665 us-gaap:ShareBasedPaymentArrangementEmployeeMember us-gaap:RestrictedStockMember 2020-04-01 2020-04-30 0001598665 us-gaap:ShareBasedPaymentArrangementEmployeeMember us-gaap:RestrictedStockMember 2020-09-01 2020-09-30 hrtg:Installment 0001598665 us-gaap:ShareBasedPaymentArrangementEmployeeMember us-gaap:RestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-04-01 2020-04-30 0001598665 us-gaap:ShareBasedPaymentArrangementEmployeeMember us-gaap:RestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2020-04-01 2020-04-30 0001598665 us-gaap:ShareBasedPaymentArrangementEmployeeMember us-gaap:RestrictedStockMember 2020-04-30 0001598665 us-gaap:ShareBasedPaymentArrangementEmployeeMember us-gaap:RestrictedStockMember 2020-09-30 0001598665 us-gaap:RestrictedStockMember hrtg:EmployeeMember 2020-01-01 2020-09-30 0001598665 us-gaap:RestrictedStockMember 2020-01-01 2020-09-30 0001598665 us-gaap:RestrictedStockMember srt:MinimumMember 2020-01-01 2020-09-30 0001598665 us-gaap:RestrictedStockMember srt:MaximumMember 2020-01-01 2020-09-30 0001598665 us-gaap:RestrictedStockMember 2020-07-01 2020-09-30 0001598665 us-gaap:RestrictedStockMember 2019-07-01 2019-09-30 0001598665 us-gaap:RestrictedStockMember 2019-01-01 2019-09-30 0001598665 us-gaap:RestrictedStockMember srt:ScenarioForecastMember 2020-10-01 2020-12-31 0001598665 us-gaap:SubsequentEventMember 2020-11-02 2020-11-02 0001598665 us-gaap:SubsequentEventMember 2020-11-02

 

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 September 30, 2020

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.)

2600 McCormick Drive, Suite 300

Clearwater, Florida 33759

(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 October 30, 2020 was 28,058,873

 

 

 


HERITAGE INSURANCE HOLDINGS, INC.

Table of Contents

 

 

 

Page

PART I – FINANCIAL INFORMATION

 

 

Item 1 Unaudited Financial Statements

 

 

Condensed Consolidated Balance Sheets: September 30, 2020 (unaudited) and December 31, 2019

 

2

Condensed Consolidated Statements of Operations and Other Comprehensive Income: Three and Nine months ended September 30, 2020 and 2019 (unaudited)

 

3

Condensed Consolidated Statements of Stockholders’ Equity: Three and Nine months ended September 30, 2020 and 2019 (unaudited)

 

4

Condensed Consolidated Statements of Cash Flows: Nine months ended September 30, 2020 and 2019 (unaudited)

 

6

Notes to Unaudited Condensed Consolidated Financial Statements

 

8

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

 

28

Item 3 Quantitative and Qualitative Disclosures about Market Risk

 

38

Item 4 Controls and Procedures

 

39

PART II – OTHER INFORMATION

 

 

Item 1 Legal Proceedings

 

40

Item 1A Risk Factors

 

40

Item 6 Exhibits

 

41

Signatures

 

42

 

 

 

 


 

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 about (i) the impact of the COVID-19 pandemic on the economy in general and on our business, results of operations and financial condition; (ii) our ability to meet our investment objectives and to manage and mitigate market risk with respect to our investments; (iii) the adequacy of our reinsurance program and our ability to diversify risk and safeguard our financial position; (iv) our estimates and beliefs with respect to tax and accounting matters including the impact on our financial statements, as well as the impact of the CARES Act on our financial results, effective tax rate and liquidity; (v) future dividends, if any; (vi) our expectations related to our financing activities; (vii) the sufficiency of our liquidity to pay our insurance company affiliates’ claims and expenses, as well as to satisfy commitments in the event of unforeseen events; (viii) the sufficiency of our capital resources, together with cash provided from our operations, to meet currently anticipated working capital requirements, including to fund our insurance company affiliates’ claims and expenses and satisfy commitments in the event of unforeseen events such as inadequate premium rates or reserve deficiencies, notwithstanding the potential impact of the COVID-19 pandemic(ix) our intent to re-invest cash proceeds from gains from certain investments; (x) the potential effects of the seasonality of our business, including effects on our reinsurance business and financial results; (xi) our intentions with respect to our credit risk investments; and (xii) the potential effects of our current legal proceedings.

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;

 

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 events;

 

the fluctuation in our results of operations;

 

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;

 

our failure to identify suitable acquisition candidates, effectively manage our growth and integrate acquired companies;

 

increased competition, competitive pressures, and market conditions;

 

our failure to accurately price the risks we underwrite;

 

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

 

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

 

low renewal rates and failure of such renewals to meet our expectations;

 

our failure to execute our diversification strategy;

 

failure of our information technology systems and unsuccessful development and implementation of new technologies;

 

a lack of redundancy in our operations;

 

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

 

our inability to generate investment income;

 

our inability to maintain our financial stability rating;

 

our ability to access sufficient liquidity or obtain additional financing to fund our operations;

 

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;

 

our reliance on independent agents to write voluntary insurance policies;

 


 

 

changes in regulations and our failure to meet increased regulatory requirements;

 

our ability to maintain effective internal controls over financial reporting;

 

the regulation of our insurance operations;

 

certain characteristics of our common stock; and

 

the continued and potentially prolonged impact of COVID-19 on the economy, demand for our products and our operations, including measures taken by the governmental authorities to address COVID-19, which may precipitate or exacerbate other risks and/or uncertainties.

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.

These forward-looking statements are subject to numerous risks, uncertainties and assumptions about us described in our filings with the Securities and Exchange Commission (the “SEC”). The forward-looking statements we make in our Form 10-Q are valid only as of the date of our Form 10-Q and may not occur in light of the risks, uncertainties and assumptions that we describe from time to time in our filings with the SEC. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from our forward-looking statements is included in the section entitled “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2019. Except as required by applicable law, we undertake no obligation and disclaim any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 


 

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)

 

 

 

September 30, 2020

 

 

December 31, 2019

 

ASSETS

 

(unaudited)

 

 

 

 

 

Fixed maturities, available-for-sale, at fair value (amortized cost of $437,036 and $577,789)

 

$

445,481

 

 

$

587,256

 

Equity securities, at fair value, (cost $1,599 and $1,618)

 

 

1,599

 

 

 

1,618

 

Other investments

 

 

26,774

 

 

 

6,375

 

Total investments

 

 

473,854

 

 

 

595,249

 

Cash and cash equivalents

 

 

509,596

 

 

 

268,351

 

Restricted cash

 

 

5,437

 

 

 

14,657

 

Accrued investment income

 

 

2,637

 

 

 

4,377

 

Premiums receivable, net

 

 

70,038

 

 

 

63,685

 

Reinsurance recoverable on paid and unpaid claims, net of allowance for estimated uncollectible reinsurance of $54

 

 

424,157

 

 

 

428,903

 

Prepaid reinsurance premiums

 

 

307,997

 

 

 

224,102

 

Income taxes receivable

 

 

16,250

 

 

 

3,171

 

Deferred policy acquisition costs, net

 

 

86,140

 

 

 

77,211

 

Property and equipment, net

 

 

19,134

 

 

 

20,753

 

Intangibles, net

 

 

63,864

 

 

 

68,642

 

Goodwill

 

 

152,459

 

 

 

152,459

 

Other assets

 

 

16,827

 

 

 

18,110

 

Total Assets

 

$

2,148,390

 

 

$

1,939,670

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

662,997

 

 

$

613,533

 

Unearned premiums

 

 

552,627

 

 

 

486,220

 

Reinsurance payable

 

 

240,857

 

 

 

156,351

 

Long-term debt, net

 

 

122,589

 

 

 

129,248

 

Deferred income tax, net

 

 

12,448

 

 

 

12,623

 

Advance premiums

 

 

31,618

 

 

 

16,504

 

Accrued compensation

 

 

11,617

 

 

 

5,347

 

Accounts payable and other liabilities

 

 

70,497

 

 

 

71,045

 

Total Liabilities

 

$

1,705,250

 

 

$

1,490,871

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 18)

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value, 50,000,000 shares authorized, 28,058,873 shares issued and 27,748,606 shares outstanding at September 30, 2020; 28,996,452 shares issued and 28,650,918 shares outstanding at December 31, 2019

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

333,332

 

 

 

329,568

 

Accumulated other comprehensive income

 

 

6,525

 

 

 

7,330

 

Treasury stock, at cost, 9,279,839 and 8,349,483 shares, respectively

 

 

(115,365

)

 

 

(105,368

)

Retained earnings

 

 

218,645

 

 

 

217,266

 

Total Stockholders' Equity

 

 

443,140

 

 

 

448,799

 

Total Liabilities and Stockholders' Equity

 

$

2,148,390

 

 

$

1,939,670

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

2


 

HERITAGE INSURANCE HOLDINGS, INC.

Condensed Consolidated Statements of Operations and Other Comprehensive Income

(Unaudited)

(Amounts in thousands, except per share and share amounts)

 

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

$

278,242

 

 

$

237,303

 

 

$

797,776

 

 

$

702,491

 

Change in gross unearned premiums

 

 

(23,260

)

 

 

(5,686

)

 

 

(66,287

)

 

 

(12,326

)

Gross premiums earned

 

 

254,982

 

 

 

231,617

 

 

 

731,489

 

 

 

690,165

 

Ceded premiums

 

 

(116,752

)

 

 

(107,755

)

 

 

(338,197

)

 

 

(342,529

)

Net premiums earned

 

 

138,230

 

 

 

123,862

 

 

 

393,292

 

 

 

347,636

 

Net investment income

 

 

2,817

 

 

 

3,655

 

 

 

9,783

 

 

 

11,157

 

Net realized and unrealized gains

 

 

20,355

 

 

 

805

 

 

 

20,377

 

 

 

3,132

 

Other revenue

 

 

3,717

 

 

 

3,377

 

 

 

10,385

 

 

 

10,878

 

Total revenues

 

 

165,119

 

 

 

131,699

 

 

 

433,837

 

 

 

372,803

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

 

119,718

 

 

 

70,052

 

 

 

266,769

 

 

 

206,490

 

Policy acquisition costs, net of ceding commission income of $10.6 and $32.3 (1)

 

 

31,960

 

 

 

26,686

 

 

 

92,243

 

 

 

79,793

 

General and administrative expenses, net of ceding commission income of $3.5 and $10.6 (1)

 

 

17,923

 

 

 

21,477

 

 

 

59,583

 

 

 

58,465

 

Total expenses

 

 

169,601

 

 

 

118,215

 

 

 

418,595

 

 

 

344,748

 

Operating (loss) income

 

 

(4,482

)

 

 

13,484

 

 

 

15,242

 

 

 

28,055

 

Interest expense, net

 

 

2,251

 

 

 

2,401

 

 

 

5,939

 

 

 

6,502

 

Other non-operating loss, net

 

 

 

 

 

 

 

 

 

 

 

48

 

(Loss) Income before income taxes

 

 

(6,733

)

 

 

11,083

 

 

 

9,303

 

 

 

21,505

 

(Benefit) provision for income taxes

 

 

(1,500

)

 

 

2,950

 

 

 

2,784

 

 

 

5,687

 

Net (loss) income

 

$

(5,233

)

 

$

8,133

 

 

$

6,519

 

 

$

15,818

 

OTHER COMPREHENSIVE (LOSS) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net unrealized gains on investments

 

 

2,480

 

 

 

4,429

 

 

 

19,330

 

 

 

19,533

 

Reclassification adjustment for net realized investment (gains) losses

 

 

(20,355

)

 

 

(103

)

 

 

(20,377

)

 

 

291

 

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

 

 

4,137

 

 

 

(1,035

)

 

 

242

 

 

 

(4,747

)

Total comprehensive (loss) income

 

$

(18,971

)

 

$

11,424

 

 

$

5,714

 

 

$

30,895

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

27,739,839

 

 

 

29,109,962

 

 

 

28,053,959

 

 

 

29,329,742

 

Diluted

 

 

27,739,839

 

 

 

29,168,392

 

 

 

28,073,570

 

 

 

29,352,756

 

(Loss) Earnings  per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.19

)

 

$

0.28

 

 

$

0.23

 

 

$

0.54

 

Diluted

 

$

(0.19

)

 

$

0.28

 

 

$

0.23

 

 

$

0.54

 

 

 

(1)

Parenthetical values are presented in millions for the three and nine months ended September 30, 2020

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

3


 

HERITAGE INSURANCE HOLDINGS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

At September 30, 2020

(Unaudited)

(Amounts in thousands, except share amounts)

 

 

 

 

 

Common Shares Outstanding

 

 

Par Value

 

 

Additional Paid-In Capital

 

 

Retained

Earnings

 

 

Treasury Stock

 

 

Accumulated Other Comprehensive Income

 

 

Total

Stockholders'

Equity

 

Balance at January 1, 2020

 

 

28,650,918

 

 

$

3

 

 

$

329,568

 

 

$

217,266

 

 

$

(105,368

)

 

$

7,330

 

 

$

448,799

 

Cumulative effect of adoption accounting guidance for expected credit losses, net of tax at January 1, 2020

 

 

 

 

 

 

 

 

 

 

 

(34

)

 

 

 

 

 

 

 

 

(34

)

Balance at January 1, 2020 (as adjusted for change in accounting principle)

 

 

28,650,918

 

 

 

3

 

 

 

329,568

 

 

 

217,232

 

 

 

(105,368

)

 

 

7,330

 

 

 

448,765

 

Net unrealized change in investments, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,512

 

 

 

1,512

 

Shares tendered for income taxes withholding

 

 

(17,500

)

 

 

 

 

 

(233

)

 

 

 

 

 

 

 

 

 

 

 

(233

)

Restricted stock vested and released

 

 

25,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation on restricted stock

 

 

 

 

 

 

 

 

1,345

 

 

 

 

 

 

 

 

 

 

 

 

1,345

 

Stock buy-back

 

 

(766,900

)

 

 

 

 

 

 

 

 

 

 

 

(7,986

)

 

 

 

 

 

(7,986

)

Cash dividends declared ($0.06 per common stock)

 

 

 

 

 

 

 

 

 

 

 

(1,726

)

 

 

 

 

 

 

 

 

(1,726

)

Net income

 

 

 

 

 

 

 

 

 

 

 

7,620

 

 

 

 

 

 

 

 

 

7,620

 

Balance at March 31, 2020

 

 

27,891,518

 

 

$

3

 

 

$

330,680

 

 

$

223,126

 

 

$

(113,354

)

 

$

8,842

 

 

$

449,297

 

Net unrealized change in investments, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,421

 

 

 

11,421

 

Deferred tax adjustment for credit expected losses

 

 

 

 

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

 

 

 

(4

)

Restricted stock vested and released

 

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation on restricted stock

 

 

 

 

 

 

 

 

1,357

 

 

 

 

 

 

 

 

 

 

 

 

1,357

 

Stock buy-back

 

 

(163,456

)

 

 

 

 

 

 

 

 

 

 

 

(2,011

)

 

 

 

 

 

(2,011

)

Cash dividends declared ($0.06 per common stock)

 

 

 

 

 

 

 

 

 

 

 

(1,693

)

 

 

 

 

 

 

 

 

(1,693

)

Net income

 

 

 

 

 

 

 

 

 

 

 

4,132

 

 

 

 

 

 

 

 

 

4,132

 

Balance at June 30, 2020

 

 

27,738,062

 

 

$

3

 

 

$

332,037

 

 

$

225,561

 

 

$

(115,365

)

 

$

20,263

 

 

$

462,499

 

Net unrealized change in investments, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,738

)

 

 

(13,738

)

Surrendered shares for tax withholding

 

 

(4,723

)

 

 

 

 

 

(64

)

 

 

 

 

 

 

 

 

 

 

 

(64

)

Restricted stock vested and released

 

 

10,267

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued restricted stock

 

 

5,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation on restricted stock

 

 

 

 

 

 

 

 

1,359

 

 

 

 

 

 

 

 

 

 

 

 

1,359

 

Dividends declared on common stock

 

 

 

 

 

 

 

 

 

 

 

(1,683

)

 

 

 

 

 

 

 

 

(1,683

)

Net income

 

 

 

 

 

 

 

 

 

 

 

(5,233

)

 

 

 

 

 

 

 

 

(5,233

)

Balance at September 30, 2020

 

 

27,748,606

 

 

 

3

 

 

 

333,332

 

 

 

218,645