Heritage Insurance Holdings, Inc. Reports Financial Results for Fourth Quarter and Full Year 2017

CLEARWATER, Fla., March 7, 2018

Highlights 

• Book value per share increased 18.2% year-over-year to $14.67 as of December 31, 2017
• $8.2 million of dividends paid in 2017; book value per share increase of 20.2% adding back dividends
• Fourth quarter net loss of $5.0 million; full year net loss of $1.1 million
• Fourth quarter adjusted net income* of $30.3 million; full year adjusted net income* of $41.1 million
• Loss per share for the fourth quarter was ($0.18) and ($0.04) for the full year 2017
• Adjusted earnings per share* for the fourth quarter was $1.23 and $1.53 for the full year 2017
• Premiums in force increased by 48% to $940.8 million at December 31, 2017 compared to $635.3 million at December 31, 2016
• $379.8 million of stockholders' equity at December 31, 2017
• Repurchased 5,340,267 shares of our common stock in 2017 for an aggregate purchase price of $61.6 million
• A 62% increase in policy count from December 31, 2016 to December 31, 2017
• Board of Directors declared a fourth quarter dividend of $0.06 per share
• Closed on the acquisition of Narragansett Bay Insurance Company ("NBIC") on November 30, 2017
• Hurricane Irma
• Closed 87% of approximately 30,000 Irma Claims
• Vertically integrated repair division responded to approximately 9,000 Hurricane Irma claims

Bruce Lucas, Chairman & CEO, stated "I'm pleased to announce that we had record earnings in the fourth quarter and recorded $30.3 million of adjusted net income*.  By all accounts we had a tremendous 2017 and delivered a strong 20.2% total shareholder return to our investors in a year marked by a major Florida hurricane.   

Growth rates continue to accelerate and the Company recorded the best year in our history as measured by personal lines new business written, despite Hurricane Irma which temporarily impacted sales. Heritage ended 2017 with an increase in policy count of 62% year over year.  Our voluntary sales and diversification continue to outpace management's expectations, and we have new state and product initiatives in place that will further accelerate our sales in 2018.

We had a fourth straight year of record growth at our wholly-owned construction and mitigation division, Contractors Alliance Network ("CAN"), and we exceeded $100 million of revenue in 2017 for the first time in our history.  CAN currently provides loss mitigation services to our insurance company affiliates.  We are continuing to expand the division and plan to launch operations in additional states in 2018, which we believe will further improve our consolidated loss ratios.  2017 was a great example of our continued lower trend in consolidated loss ratios.  Our year-over-year consolidated gross loss ratio improved to an impressive 24.4% compared to 43.2% at the end of 2016.

Additionally, the integration of NBIC with Heritage Insurance has gone well.  NBIC provides substantial diversification to the Heritage portfolio and reduces our Florida concentration from 71.3% to just 32.1% of total insured value.  This diversification, and our substantial multi-year reinsurance, will benefit our 2018-2019 reinsurance program in both capacity and pricing, which we believe is a unique hedge compared to other insurance carriers in the Florida market.  We had another profitable year in 2017 and we are well positioned for increased growth and profitability in 2018."