Condensed Financial Information of HCI Group, Inc.

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of HCI Group, Inc.

Note 27 -- Condensed Financial Information of HCI Group, Inc.

Condensed financial information of HCI Group, Inc. is as follows:

Balance Sheets

	December 31,
	2022		2021
Assets
Cash and cash equivalents	$	102,755	$	10,366
Fixed-maturity securities, available for sale, at fair value		34		1,637
Equity securities, at fair value		8,662		11,513
Limited partnership investments		19,446		21,722
Note receivable – related party		58,102		40,022
Investment in subsidiaries		274,785		332,596
Property and equipment, net		805		712
Intangible assets, net		—		5,374
Right-of-use assets - operating leases		7,631		4,243
Income taxes receivable		—		3,281
Other assets		1,515		1,595
Total assets	$	473,735	$	433,061
Liabilities and Stockholders’ Equity
Accrued expenses and other liabilities	$	1,618	$	2,560
Lease liabilities - operating leases		7,607		4,290
Income tax payable		8,427		—
Deferred income taxes, net		2		900
Revolving credit facility		—		15,000
Long-term debt		191,042		23,886
Due to related parties		102,443		63,060
Total liabilities		311,139		109,696
Total stockholders’ equity		162,596		323,365
Total liabilities and stockholders’ equity	$	473,735	$	433,061

Statements of Income

	Years Ended December 31,
	2022			2021			2020
Net investment income (loss)	$	5,498		$	3,115		$	(676	)
Net realized investment (losses) gains		(1,154	)		3,344			330
Net unrealized investment (losses) gains		(1,609	)		92			229
Credit losses on investments		—			—			(20	)
Other income		1,138			222			—
Loss on repurchases of convertible senior notes		—			—			(150	)
Interest expense		(6,876	)		(5,467	)		(10,710	)
Debt conversion expense		—			(1,754	)		—
Operating expenses		(9,877	)		(9,056	)		(6,887	)
Loss before income tax benefit and equity in (loss) income of subsidiaries		(12,880	)		(9,504	)		(17,884	)
Income tax benefit		1,700			2,086			4,024
Net loss before equity in (loss) income of subsidiaries		(11,180	)		(7,418	)		(13,860	)
Equity in (loss) income of subsidiaries		(47,331	)		9,274			41,440
Net (loss) income	$	(58,511	)	$	1,856		$	27,580

Statements of Cash Flows

	Years Ended December 31,
	2022			2021			2020
Cash flows from operating activities:
Net (loss) income	$	(58,511	)	$	1,856		$	27,580
Adjustments to reconcile net (loss) income to net cash provided by    operating activities:
Stock-based compensation expense		6,430			5,874			4,488
Net realized investment losses (gains)		1,154			(3,344	)		(330	)
Net unrealized investment losses (gains)		1,609			(92	)		(229	)
Net (accretion of discount) amortization of premiums on investments    in fixed-maturity securities		(110	)		3			(42	)
Depreciation and amortization		1,403			1,490			4,686
Net (income) loss from limited partnership investments		(3,345	)		(2,608	)		1,781
Distributions from limited partnership interests		2,123			1,477			844
Credit losses on investments		—			—			20
Debt conversion expense		—			1,754			—
Loss on repurchases of convertible senior notes		—			—			150
Equity in loss (income) of subsidiaries		47,331			(9,274	)		(41,440	)
Deferred income taxes		(895	)		232			(935	)
Changes in operating assets and liabilities:
Income taxes		11,708			5,067			(9,791	)
Other assets		(2,805	)		2,679			(629	)
Accrued expenses and other liabilities		4,078			(5,620	)		1,096
Due to related parties		38,696			5,360			17,438
Net cash provided by operating activities		48,866			4,854			4,687
Cash flows from investing activities:
Investments in limited partnership interests		(1,261	)		(2,616	)		(3,376	)
Investment in note receivable – related party		(15,000	)		(40,000	)		(22,000	)
Purchase of fixed-maturity securities		(52,576	)		(1,685	)		(7	)
Purchase of equity securities		(11,406	)		(76,786	)		(35,855	)
Purchase of short-term and other investments		(42	)		(1,307	)		(200	)
Purchase of intangible assets		(3,800	)		—			—
Purchase of property and equipment		(581	)		(365	)		(742	)
Proceeds from sales of fixed-maturity securities		86			134			447
Proceeds from calls, repayments and maturities of fixed-maturity    securities		54,178			145			27
Proceeds from sales of equity securities		10,975			78,555			30,688
Proceeds from sales, redemptions and maturities of short-term and other    investments		570			3,618			537
Collection of note receivable – related party		—			23,280			—
Distributions received from limited partnership interests		4,759			2,567			1,614
Dividends received from subsidiary		51,500			41,900			52,500
Return of capital from subsidiary		—			—			9
Investment in subsidiaries		(41,868	)		(10,000	)		(22,629	)
Net cash (used in) provided by investing activities		(4,466	)		17,440			1,013

(continued)

Statements of Cash Flows – (Continued)

	Years Ended December 31,
	2022			2021			2020
Cash flows from financing activities:
Repurchases of common stock		(71,242	)		(1,314	)		(1,547	)
Repurchases of common stock under share repurchase plan		(17,070	)		—			(5,161	)
Repurchases of convertible senior notes		—			—			(4,459	)
Debt issuance costs		(6,041	)		(152	)		—
Cash dividends paid		(15,233	)		(14,065	)		(12,694	)
Cash dividends received under share repurchase forward contract		76			306			306
Net (repayment) borrowing under revolving credit facility		(15,000	)		(8,750	)		14,000
Proceeds from exercise of common stock options		—			—			63
Debt conversion expense paid		—			(1,895	)		—
Proceeds from issuance of long-term debt		172,500			—			—
Repayment of long-term debt		(1	)		(2	)		(2	)
Net cash provided by (used in) financing activities		47,989			(25,872	)		(9,494	)
Net increase (decrease) in cash and cash equivalents		92,389			(3,578	)		(3,794	)
Cash and cash equivalents at beginning of year		10,366			13,944			17,738
Cash and cash equivalents at end of year	$	102,755		$	10,366		$	13,944