HCI Group, Inc.

Good afternoon and welcome to HCI Group's first quarter 2026 earnings call. My name is Tom 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 6th, 2026, starting later today. The call is also being broadcast live via webcast and available via webcast replay until May 6, 2027 on the Investor Information section of HCI Group's website at www.hcigroup.com. I would now like to turn the call over to Nat Otis, HCI Investor Relations. Nat, please proceed.

Thank you and good afternoon. Welcome to HCI Group's first quarter 2026 earnings call. To access today's webcast, please visit the investor information section of our corporate website at www.hcigroup.com. Before we begin, I'd like to take the opportunity to remind our listeners 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 materially adverse effects on the company's business, financial condition, and results of operations. HEI Group disclaims all the obligations to update any forward-looking statements. Now, with that, I'll turn the call over to Mark Harmsworth, Chief Financial Officer.

Thanks, Nat. Good afternoon, everyone, and thank you for taking the time to join us on our call today. This was another fantastic quarter. Pre-tax income grew by 15% from the same quarter last year to $115 million, and diluted earnings per share were $5.45. This was the best first quarter ever for us. as we continue to grow the top line, the bottom line, and return on equity. Gross premiums earned grew by just over 8%, reflecting the full impact of the assumptions we completed in 2025. Total revenue grew by just over 12%, as investment income and other income grew significantly. The increase in other income reflects revenue that Exio and Griston are generating on non-HCI business. The loss ratio this quarter was 20%, about the same as the first quarter last year, reflecting continued low claims and litigation frequency. We've been talking about the combined ratio for a while now. With where the business is, we're targeting a combined ratio plus or minus 5%. For the full year 2025, the combined ratio was about 57%, and it was 57% again this quarter, illustrating the quality of our underwriting and our operating efficiencies. Let's turn to the balance sheet for a minute. With growing earnings and prudent capital management, the balance sheet continues to strengthen. Stockholder equity has doubled over just the last year to over a billion dollars. We have just under $2 billion of cash in fixed-term securities. Book value per share is now almost $85, and the debt-to-cap ratio is only 6%. In addition to the strong consolidated balance sheet, the underwriters are stronger than ever. As I mentioned earlier, gross premiums are up by 8% or so, but total surplus has grown by 22% over the last year to well over a half a billion dollars. The growth leverage ratio is now less than 2.5, leaving plenty of room for additional growth without the need for surplus, for new capital, sorry, and gives us additional security if there's a storm. We also have significant surplus in CLADA, which gives us considerable flexibility in our upcoming reinsurance program. As you know, we announced a buyback plan in March under which we were authorized to purchase up to $80 million of stock, and we have been actively buying back shares under that plan. As of the end of March, we had used $17.5 million of the authorization, buying back approximately 110,000 shares. Since the end of the first quarter, we have continued buying back shares, and at the end of April, we were up to a cumulative total of 239,000 shares purchased and have used about $37.5 million of the $80 million. In terms of holding company liquidity, we have just under $200 million of liquidity at the HCI level. This does not include the 75 million shares we own of Exio, which now trade publicly. Speaking of Exio, while our book value per share of almost $85 is impressive, I should mention that this does not include any unrealized gains on our ownership of Exio. If the fair value of Exio and our real estate portfolio were added, pro forma book value per share would be almost $145. This means that we're trading only about 10% above book value while generating record earnings and 35% after-tax return on equity. Wrapping up on the quarter, this has been another fantastic one for the company. 2025 was a record year for HCI, and the first quarter of this year was even better. Revenue was growing, margins are expanding, we're generating record cash flows, have minimal debt, and are generating superior returns on capital. And with that, I'll hand it over to Karen.