Exhibit 99.1

Heritage Reports Fourth Quarter 2020 Results

Clearwater, FL – March 3, 2021: Heritage Insurance Holdings, Inc. (NYSE: HRTG) (“Heritage” or the “Company”), a super-regional property and casualty insurance holding company, today reported fourth quarter 2020 financial results.

Fourth Quarter 2020 Highlights

 

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Net income of $2.8 million, or $0.10 per diluted share.

 

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Book value per share of $15.94, up 1.8% year-over-year.

 

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Gross premiums written of $282.3 million, up 19.9% year-over-year.

 

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Launched partnership with The Hartford to offer bundled home and auto policies.

 

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Favorable prior year reserve development of $4.7 million.

 

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Net current accident quarter weather losses of $38.9 million, up substantially from $15.3 million in the prior year quarter. Current accident quarter weather losses include $24.4 million of catastrophe losses and $14.5 million of other weather losses.

 

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Total capital returned to shareholders of $1.7 million, reflecting $0.06 per share regular quarterly dividend.

 

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Began writing homeowners insurance in Maryland, representing sixteenth active state.

Ernie Garateix, the Company’s CEO, said, “We were able to generate positive net income in the fourth quarter and full year and grow book value per share year-over-year despite experiencing unprecedented weather losses. I believe our solid organic growth platform and heightened focus on underwriting profitability position us well for 2021 and beyond.”

Quarterly Dividend

Heritage’s Board of Directors declared a quarterly cash dividend of $0.06 per share on the Company’s common stock. The dividend will be paid on April 6, 2021 to shareholders of record as of March 15, 2021.

COVID-19 Update

We continue to monitor the short- and long-term impacts of COVID-19 and through December 31, 2020, we saw virtually no impact to our business. As a residential property insurer, we view our business as relatively insulated from a short-term economic slowdown, as property owners and renters generally view our products as a necessity.

While we acknowledge uncertainties associated with future economic conditions, we do not expect a material impact to our business going forward. We will continue to monitor economic conditions and, in the case of a prolonged economic slowdown as a result of COVID-19, will take necessary actions to mitigate any negative impacts to our business, operations or financial results.

Results of Operations

The following table summarizes our results of operations for the three and twelve months ended December 31, 2020 and 2019 (amounts in thousands, except percentages and per share amounts):

 

		Three Months Ended December 31,												Year Ended December 31,
		2020				2019				Change				2020				2019				Change
Revenue		$	159,548			$	138,502				15.2	%		$	593,385			$	511,304				16.1	%
Net income		$	2,808			$	12,818				(78.1	)%		$	9,326			$	28,636				(67.4	)%
Per share		$	0.10			$	0.44				(77.3	)%		$	0.33			$	0.98				(66.3	)%
Book value per share		$	15.94			$	15.66				1.8	%		$	15.94			$	15.66				1.8	%
Return on equity			2.5	%			11.5	%			(9.0	)pts			2.1	%			6.6	%			(4.5	)pts
Underwriting summary
Gross premiums written		$	282,324			$	235,446				19.9	%		$	1,080,100			$	937,937				15.2	%
Gross premiums earned		$	265,353			$	234,082				13.4	%		$	996,842			$	924,247				7.9	%
Ceded premiums earned		$	(113,923	)		$	(103,005	)			10.6	%		$	(452,120	)		$	(445,534	)			1.5	%
Net premiums earned		$	151,430			$	131,077				15.5	%		$	544,722			$	478,713				13.8	%
Ceded premium ratio			42.9	%			44.0	%			(1.1	)pts			45.4	%			48.2	%			(2.8	)pts
Ratios to Net Premiums Earned:
Loss ratio			70.4	%			51.0	%			19.4	pts			68.5	%			57.1	%			11.4	pts
Expense ratio			38.3	%			38.3	%			0.0	pts			38.5	%			39.4	%			(0.9	)pts
Combined ratio			108.7	%			89.3	%			19.4	pts			107.0	%			96.5	%			10.5	pts

 

*	Return on equity represents annualized net income for the period divided by average stockholders’ equity during the period.

Note: Percentages and sums in the table may not recalculate precisely due to rounding.

Ratios

Ceded premium ratio represents ceded premiums as a percentage of gross premiums earned.

Net loss ratio represents net losses and loss adjustment expenses (“LAE”) as a percentage of net premiums earned.

Net expense ratio represents policy acquisition costs (“PAC”) and general and administrative (“G&A”) expenses as a percentage of net premiums earned. Ceding commission income is reported as a reduction of PAC and G&A expenses.

Net combined ratio represents the sum of net losses and LAE, PAC and G&A expenses as a percentage of net premiums earned.    The net combined ratio is a key measure of underwriting performance traditionally used in the property and casualty industry. A combined ratio under 100% generally reflects profitable underwriting results.

Quarterly Financial Results Fourth quarter 2020 net income was $2.8 million, down from net income of $12.8 million in the prior year quarter. The decrease primarily stems from elevated weather losses, partly offset by a tax benefit in the current year quarter.

Gross premiums written were $282.3 million, up 19.9% year-over-year, including growth in all states and product lines. Growth was partly attributable to rate increases, particularly in Florida

Premiums-in-force were $1.1 billion in fourth quarter 2020, representing a 17.6% annualized growth rate from third quarter 2020. The sequential increase stems from the same items impacting gross premiums written.

Gross premiums earned were $265.4 million in fourth quarter 2020, up 13.4% from $234.1 million in the prior year quarter. The increase reflects higher gross premiums written over the last twelve months.

The ceded premium ratio was 42.9% in fourth quarter 2020, down 1.1 points from 44.0% in the prior year quarter. The decrease primarily stems from gross premiums earned growth that modestly outpaced ceded premium growth and from year-end true-ups that benefited the current year quarter.

The net loss ratio was 70.4% in fourth quarter 2020, up 19.4 points from 51.0% in the prior year quarter. The increase primarily stems from higher current accident year weather losses.

The net expense ratio was 38.3% in fourth quarter 2020, unchanged from the prior year quarter.

The net combined ratio was 108.7% in fourth quarter 2020, up 19.4 points from 89.3% in the prior year quarter. The increase stems from a higher net loss ratio, as described above.

Book Value Analysis

Book value per share increased to $15.94 at December 31, 2020, up 1.8% year-over-year.

 

		As Of
Book Value Per Share		December 31, 2020				December 31, 2019				December 31, 2018
Numerator:
Common stockholders’ equity		$	442,344			$	448,799			$	425,333
Denominator:
Total Shares Outstanding			27,748,606				28,650,918				29,477,756
Book Value Per Common Share		$	15.94			$	15.66			$	14.43

Conference Call Details:

Wednesday, March 3, 2020 – 9:30 a.m. ET

Participant Dial-in Numbers Toll Free: 1-888-346-3095

Participant International Dial In: 1-412-902-4258

Canada Toll Free: 1-855-669-9657

Webcast:

To listen to the live webcast, please go to http://investors.heritagepci.com/. This webcast will be archived and accessible on the Company’s website.

HERITAGE INSURANCE HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share amounts)

(Unaudited)

 

		December 31,
		2020				2019
ASSETS
Fixed maturities, available-for-sale, at fair value		$	561,011			$	587,256
Equity securities, at fair value			1,599				1,618
Other investments			26,409				6,375
Total investments			589,019				595,249
Cash and cash equivalents			440,956				268,351
Restricted cash			5,427				14,657
Accrued investment income			2,737				4,377
Premiums receivable, net			77,471				63,685
Reinsurance recoverable on paid and unpaid claims, net			355,037				428,903
Prepaid reinsurance premiums			245,818				224,102
Income taxes receivable			32,224				3,171
Deferred policy acquisition costs, net			89,265				77,211
Property and equipment, net			18,685				20,753
Intangibles, net			62,277				68,642
Goodwill			152,459				152,459
Other assets			18,004				18,110
Total Assets		$	2,089,379			$	1,939,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
Unpaid losses and loss adjustment expenses		$	659,341			$	613,533
Unearned premiums			569,618				486,220
Reinsurance payable			161,918				156,351
Long-term debt, net			120,998				129,248
Deferred income tax, net			18,477				12,623
Advance premiums			18,268				16,504
Accrued compensation			9,325				5,347
Accounts payable and other liabilities			89,090				71,045
Total Liabilities		$	1,647,035			$	1,490,871
Commitments and contingencies
Stockholders’ Equity:
Common stock			3				3
Additional paid-in capital			331,867				329,568
Accumulated other comprehensive income, net of taxes			6,057				7,330
Treasury stock			(115,365	)			(105,368	)
Retained earnings			219,782				217,266
Total Stockholders’ Equity			442,344				448,799
Total Liabilities and Stockholders’ Equity		$	2,089,379			$	1,939,670

HERITAGE INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Income and Other Comprehensive Income

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

(Unaudited)

 

		Three Months Ended December 31,								Year Ended December 31,
		2020				2019				2020				2019
REVENUE:
Gross premiums written		$	282,324			$	235,446			$	1,080,100			$	937,937
Change in gross unearned premiums			(16,971	)			(1,364	)			(83,258	)			(13,690	)
Gross premiums earned			265,353				234,082				996,842				924,247
Ceded premiums			(113,923	)			(103,005	)			(452,120	)			(445,534	)
Net premiums earned			151,430				131,077				544,722				478,713
Net investment income			2,519				3,275				12,302				14,432
Net realized and unrealized gains			2,018				1,031				22,395				4,163
Other revenue			3,581				3,119				13,966				13,997
Total revenue			159,548				138,502				593,385				511,305
EXPENSES:
Losses and loss adjustment expenses			106,618				66,798				373,387				273,288
Policy acquisition costs			36,032				28,113				128,276				107,906
General and administrative expenses			21,954				22,079				81,537				80,544
Total expenses			164,604				116,990				583,200				461,738
Operating (loss) income		$	(5,056	)		$	21,512			$	10,185			$	49,567
Interest expense, net			2,033				2,021				7,972				8,523
Other non-operating loss, net			0				0				0				48
(Loss) Income before taxes		$	(7,089	)		$	19,491			$	2,213			$	40,996
(Benefit) Provision for income taxes			(9,897	)			6,673				(7,113	)			12,360
Net income		$	2,808			$	12,818			$	9,326			$	28,636
OTHER COMPREHENSIVE INCOME:
Change in net unrealized gains on investments			1,408				232				20,738				19,765
Reclassification adjustment for net realized investment gains			(2,018	)			(2,025	)			(22,395	)			(1,734	)
Income tax benefit (expense) related to items of other
comprehensive income			142				573				384				(4,174	)
Total comprehensive income		$	2,340			$	11,598			$	8,053			$	42,493
Weighted average shares outstanding
Basic			27,748,606				28,871,197				27,978,519				29,213,910
Diluted			27,753,317				28,878,440				27,988,966				29,232,981
Earnings per share
Basic		$	0.10			$	0.44			$	0.33			$	0.98
Diluted		$	0.10			$	0.44			$	0.33			$	0.98

About Heritage

Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company headquartered in Clearwater, Florida. Through its insurance subsidiaries and a large network of experienced agents, the Company writes over $1 billion of gross personal and commercial residential premium across its multi-state footprint.

Forward-Looking Statements

Statements in this press release that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “or “continue” or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. This release includes forward-looking statements relating to (i) the impact of the COVID-19 pandemic on our business, results of operations and financial condition and our ability to navigate the uncertainty and mitigate the impact and (ii) our profitability position for 2021 and beyond given our solid organic growth platform and heightened focus on underwriting. The risks and uncertainties that could cause our actual results to differ from those expressed or implied herein include, without limitation: the success of the Company’s underwriting and profitability initiatives; the continued and potentially prolonged impact of the COVID-19 pandemic on the economy, demand for our products and our operations; inflation and other changes in economic conditions (including changes in interest rates and financial and real estate markets), including as a result of the COVID-19 pandemic; the impact of new federal and state regulations that affect the property and casualty insurance market; the costs of reinsurance, the collectability of reinsurance and our ability to obtain reinsurance coverage on terms and at a cost acceptable to us; assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to obtain regulatory approval for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against us, including the terms of any settlements; risks related to the nature of our business; dependence on investment income and the composition of our investment portfolio; the adequacy of our liability for losses and loss adjustment expense; our ability to build and maintain relationships with insurance agents; claims experience; ratings by industry services; catastrophe losses; reliance on key personnel; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes and hail); changes in loss trends; acts of war and terrorist activities; court decisions and trends in litigation; and other matters described from time to time by us in our filings with the Securities and Exchange Commission, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 10, 2020 and subsequent filings. The Company undertakes no obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.

Investor Contact:

Arash Soleimani, CFA, CPA

Executive Vice President

727.871.0206

Email: asoleimani@heritagepci.com