Heritage Insurance Holdings Inc
For the period ended Dec 31, 2023. Filed Mar 13, 2024.
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FY2023 · Filed Mar 13, 2024
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Schedule II Condensed Financial Information of Registrant
Condensed Balance Sheet
The following summarizes the major categorizes of Heritage Insurance Holdings, Inc.’s financial statements (in thousands):
| As of December 31, | ||
|---|---|---|
| 2023 | 2022 | |
| (in thousands) | ||
| ASSETS | ||
| Cash and cash equivalents | $26,807 | $1,109 |
| Investment in and advances to subsidiaries | 334,788 | 269,325 |
| Other assets | 1,678 | 7,207 |
| Total Assets | $363,273 | $277,641 |
| LIABILITIES | ||
| Other liabilities | $142,993 | $146,602 |
| Total Liabilities | $142,993 | $146,602 |
| STOCKHOLDERS' EQUITY | ||
| Common stock | $3 | $3 |
| Paid-in-capital | 360,310 | 334,711 |
| Treasury | (130,900) | (130,900) |
| Accumulated other comprehensive income | (35,250) | (53,585) |
| Retained earnings (deficit) | 26,117 | (19,190) |
| Total Stockholders' Equity | $220,280 | $131,039 |
| Total Liabilities and Stockholders' Equity | $363,273 | $277,641 |
Condensed Statement of Operations
| For the Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In thousands, except share and per share amounts) | |||
| Revenue: | |||
| Other revenue | $17,208 | $589 | $1,511 |
| Total revenue | 17,208 | 589 | 1,511 |
| Expenses: | |||
| General and administrative expense | 1,841 | 6,671 | 10,498 |
| Amortization of debt issuance cost | 469 | 1,449 | 2,500 |
| Interest expense, net | 10,238 | 7,471 | 5,895 |
| Total expenses | $12,548 | $15,591 | $18,893 |
| Income (loss) before income taxes and equity in net income of subsidiaries | 4,660 | (15,002) | (17,382) |
| Provision (benefit) from income taxes | 1,905 | (3,147) | (3,526) |
| Income (loss) before equity in net income of subsidiaries | 2,755 | (11,855) | (13,856) |
| Equity in net income (loss) of subsidiaries | 42,552 | (142,508) | (60,871) |
| Consolidated net income (loss) | $45,307 | $(154,363) | $(74,727) |
See notes to condensed financial statements.
SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Condensed Statement of Cash Flows
| For the Years Ended December 31, | |||
|---|---|---|---|
| Cash flows from operating activities: | 2023 | 2022 | 2021 |
| (in thousands) | |||
| Net income (loss) | $2,754 | $(11,854) | $(13,856) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
| Stock-based compensation | 1,362 | 2,008 | 1,161 |
| Net realized gains | — | — | — |
| Amortization of debt issuance cost | 469 | 1,448 | 1,657 |
| Impairment on other investments | — | — | 1,157 |
| Deferred income taxes | 39 | 474 | (69) |
| Changes in operating assets and liabilities | |||
| Prepaid | 137 | 8 | 1,160 |
| Income taxes payable | 9,415 | (14,674) | 10,764 |
| Accrued interest on debt | (425) | — | 306 |
| Other assets | 2,572 | 332 | (2,100) |
| Dividends payable | (19) | (1,562) | (36) |
| Other liabilities | (588) | 170 | (416) |
| Net cash provided by (used in) operating activities | $15,716 | $(23,651) | $(271) |
| Investing Activities: | |||
| Dividends received from subsidiaries | — | 32,200 | 41,138 |
| Investments and advances to subsidiaries | (38,475) | (8,948) | (22,189) |
| Net cash (used in) provided by investing activities | (38,475) | 23,252 | 18,949 |
| Financing Activities: | |||
| Mortgage loan payments | (180) | (322) | (613) |
| Draw from credit facility | — | 35,000 | — |
| Repurchase convertible notes | — | (22,529) | |
| Issuance of common stock, net | 24,666 | — | — |
| Repayment of long-term debt | (9,500) | (6,400) | (2,430) |
| Shares tendered for income tax withholdings | (429) | (94) | (231) |
| Purchase of treasury stock | — | (7,343) | (8,192) |
| Dividends paid | 33,900 | (3,208) | (6,673) |
| Net cash provided by (used in) financing activities | 48,457 | (4,896) | (18,139) |
| Increase (decrease) in cash and cash equivalents | 25,698 | (5,295) | 539 |
| Cash and cash equivalents, beginning of period | 1,109 | 6,404 | 5,865 |
| Cash and cash equivalents, end of year | $26,807 | $1,109 | $6,404 |
See notes to condensed financial statements.
SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Notes to Condensed Financial Statements
(1)
Organization and Basis of Presentation
Heritage Insurance Holdings, Inc., (“we”, “our”, “us” and “Heritage”), established in 2012 and incorporated in the state of Delaware in 2014, is a property and casualty insurance holding company that provides personal and commercial residential property insurance. We are headquartered in Tampa, Florida and, through our insurance company subsidiaries, Heritage Property & Casualty Insurance Company (“Heritage P&C”), Narragansett Bay Insurance Company (“NBIC”) and Zephyr Insurance Company (“Zephyr”), we write personal residential property insurance in the states of Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia. We also provide commercial residential insurance for properties in Florida, New Jersey, and New York and are also licensed in the state of Pennsylvania, but have not written business in that state. In order to limit our potential exposure to catastrophic events, we purchase significant reinsurance from third party reinsurers and may sponsor catastrophe bonds issued by Citrus Re Ltd.
The accompanying condensed financial statements included the activity of Heritage and the equity basis of its consolidated subsidiaries. Accordingly, these condensed financial statements have been presented for the parent company only. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes of Heritage Insurance and subsidiaries set forth in Part II, Item 8 Financial Statements and Supplemental Data of this Annual Report.
In applying the equity method to our consolidated subsidiaries, we record the investment at cost and subsequently adjust for additional capital contributions, distributions and proportionate share of earnings or losses.
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