HCI Group, Inc.

Good morning and welcome to HCI Group's first quarter 2022 earnings call. My name is Holly and I will be your conference operator. At this time, all participants will be in a listen-only mode. Before we begin today's call, I would like to remind everyone that this conference call is being recorded and will be available for replay through June 4, 2022, starting later today. The call is also being broadcast live via webcast and available via webcast replay until May 23, 2023, on the Investor Information section of HCI Group's website at www.hcigroup.com. I would now like to turn the call over to Matt Glover, Gateway Investor Relations. Matt, please proceed.

Thank you, and good morning, everyone. Welcome to HCI Group's first quarter 2022 earnings call. On today's call is Karen Coleman, HCI Group's Chief Operating Officer, Mark Harmsworth, HCI's Chief Financial Officer, and Parish Patel, HCI's Chairman and Chief Executive Officer. Following Karen's opening remarks, Mark will review our financial performance for the first quarter of 2022, and then Parish will provide an operational outlook. To access today's webcast, please visit the investor information section of our corporate website at www.hcigroup.com. Before we begin, I would like to take the opportunity to remind our listeners today that today's presentation and responses to questions may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as anticipate, estimate, expect, intend, plan, and project, and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the company's filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company's business, financial conditions, and results of operations. HCI Group disclaims all the obligations to update any forward-looking statements. Now, with that, I'd like to turn the call over to Karen Coleman, Chief Operating Officer. Karen?

Thank you, Matt, and good morning, everyone. The first three months of 2022 marked another quarter of growth and profitability for HTI with reported earnings of $0.09 per share and adjusted earnings of $0.34 per share, excluding the impact of unrealized investment losses. Compared to fourth quarter 2021, adjusted earnings improved despite elevated weather-related costs, which Mark will touch on in a moment. Our insurance business continued to grow with gross written premiums up 40% from the first quarter of 2021, reflecting growth at both of our insurance subsidiaries. At Homeowners Choice, gross premiums written increased 12% over the first quarter of 2021 to $91 million. At TipTap, gross premiums written nearly doubled to just over $86 million. Our growing premium base produced a stable loss ratio around 40% similar to fourth quarter, highlighting steady operating performance across our insurance business. Our two renewal rights transactions with United Property and Casualty, one involving business in four northeast states and a second in three states in the southeast, continue to migrate into the HCI platform during the quarter. The northeast book fully transitioned to HCI as of April 1, while the southeast book will begin to transition on June 1. Now shifting gears, I'd like to take a moment to talk about how we're managing our balance sheet. You may recall, last quarter we highlighted actions we took in 2021 to significantly reduce our debt. Today, I'll touch on our investment portfolio, which is well positioned for the evolving interest rate environment. HCI Group and its subsidiaries ended the year with investable assets of more than $800 million, with over $600 million in cash and cash equivalent. Since that time, interest rates have increased dramatically, improving returns on fixed income investments and other assets. We've started to put some of our cash to work, allocating capital to higher yielding investments, mostly at the short end of the interest rate curve. During the quarter, we purchased over $120 million in short duration treasury securities. We're focused on finding additional opportunities to increase income from our portfolio in 2022. Lastly, we remain confident in our business strategy and intrinsic value of our shares. To that end, in March, the board approved a $20 million share repurchase program. Also during the quarter, we paid our 46th consecutive dividend to shareholders at 40 cents per share. One final note on legislative matters. Insurance markets in Florida remain fluid. While the Florida legislature adjourned in March without passing major reform, were encouraged by the governor's decision to call a special session in May and look forward to legislative proposals aimed at stabilizing the market for homeowners insurance in Florida. Now, I'll turn it over to Mark to provide more detail on our financial report. Mark?