Good afternoon. Welcome to HCI Group’s Second Quarter 2015 Earnings Call. My name is Tim and I will be your conference operator this afternoon. At this time, all participants will be in a listen-only mode. Before we begin today’s call, I’d like to remind everyone that this conference call is being recorded and will be available on replay through September 4th, starting later this evening. This call is also being broadcast live via webcast and will be available via webcast replay until October 4th, on the Investor Information section of the HCI Group website at www.hcigroup.com. I’d now like to turn the call over to Kevin Mitchell, the Vice President of Investor Relations for HCI Group. Sir Mitchell, please go proceed.

Thank you, Tim and good afternoon. Welcome to HCI Group’s second quarter 2015 earnings call. With me today are Paresh Patel, our Chairman and Chief Executive Officer; Richard Allen, our Chief Financial Officer. Following Paresh’s opening comments, Richard will review our financial performance for the second quarter of 2015, and then turn the call back to Paresh for an operational update and business outlook. Finally, we will answer questions. To access today’s webcast, please visit the Investor Relations section of our corporate website at hcigroup.com. Before we begin, I would 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 of these risks or uncertainties develop into actual events, these developments could have material adverse effects on the Company’s business, financial condition and results of operations. HCI Group, Inc. disclaims all the obligations to update any forward-looking statements. Now, I’d like to turn the call over to Paresh Patel, our Chairman and CEO. Paresh?

Thank you, Kevin and good afternoon everyone. Welcome to HCI Group’s second quarter 2015 earnings call. As most of you know, HCI Group is a holding company with subsidiaries engaged in various business activities. Our principal operating subsidiary, Homeowners Choice Property & Casualty Insurance Company which provides homeowners insurance in Florida. Based on written premiums, Homeowners Choice is the fifth largest homeowners insurance in the State of Florida. In addition, we have Bermuda-based reinsurance subsidiary, called Claddaugh Casualty Insurance Company, which participates in the Homeowners Choice reinsurance program. We use Claddaugh to retain selected levels of catastrophic risk and avoid the associated third-party reinsurance premiums. We also have an information technology operation, Exzeo, which develops innovative product and services for Homeowners Choice, the insurance industry and perhaps others as well. We have high expectations for our IT operations. Finally, we have our Greenleaf Capital division, which owns and manages a diversified and growing portfolio of real estate investments. We continue to investigate strategic opportunities to add to and further diversify our operations. Now turning to our results for the quarter. The second quarter of 2015 marked our 31st consecutive quarter of profitability. During the quarter, we generate $22 million of net income or $1.93 of diluted earnings per common share. We also paid $0.30 per share in dividends, our 19th consecutive quarter of paying dividends. This brings the total dividend paid to-date to $4.35 per share. We increased our book value also and in the quarter was at $22 exactly per share, up from $17.92 per share at the end of last year. This represents an increase of over 23%. Finally, we also successfully placed our reinsurance program for the 2015 hurricane season effective June 1st. The program provides even coverage up to approximately 1.45 billion, which according to catastrophic model is sufficient to cover the probable maximum loss, resulting from a 1 in 260 year event. All of our private reinsurers are either A.M. Best rated A minus or better or they have fully collateralized their exposure to us. As Richard Allen will expand on in the moment, Homeowners Choice continues to operate with a high degree of efficiency. We believe our operating ratios lead the industry and at these efficiencies are the results of our adherence to strict underwriting guidelines, our focus on minimizing operating costs, and our ongoing commitment to customer service. Now I invite our Chief Financial Officer, Richard Allen, to take us through the financial performance for the second quarter. Richard?

Thank you, Paresh and good afternoon. For the second quarter of 2015, income available to common stockholders totaled $22 million or $1.93 diluted earnings per common share, an increase of 34% [ph] and 38.8% respectively from the $16.4 million and $1.39 diluted earnings per common share in the second quarter of 2014. For the six months period ended June 30th, net income available to common shareholders increased to $47.4 million compared with $34.1 million in the same period over year ago, an increase of 39.2%. Net premiums earned for the second quarter of 2015 increased 21.9% to $76.4 million from $62.6 million in the second quarter of 2014. Net premiums earned for the six-month period reflect an increase of 22.5% to $158.1 million compared with $129 million for the year ago period. This increase is primarily due to the mix of business generated through the December 2014 and February 2015 Citizens assumptions and subsequent renewal. Direct and gross premiums written for the quarter were $156.2 million and $155.50 million [ph] respectively. For the six-month period corresponding amounts were $238.1 million and $236.8 million. For the second quarter of 2015, reinsurance costs are up $31.4 million or 29.1% of gross premiums earned as compared with 31.3% in the same quarter a year ago. Year-to-date ceded premiums of $59.2 million or 27.2% of gross premiums earned compared with 30.3% for the same period of 2014. We anticipate that ceded premiums for the remaining quarters of 2015 treaty year will be in the range of $40 million to $42 million per quarter. During the three and six months ended June 30, 2015, as a result of our placement of the multiyear reinsurance treaties have began in June of 2013, we have accrued benefits of approximately $6 million and $12.4 million respectively. As of…

Thank you, Richard. As I stated earlier, we have secured our reinsurance program for the 2015 hurricane season. Looking ahead, we believe that our program would enable us to comfortably absorb two hurricane Andrew type storms in a single year. We have also mentioned on our previous calls that our strong financial position allows us to increase the level of risk we retain in Claddaugh. For the 2015 hurricane season, Claddaugh retains approximately $78 million of risk while displacing $26 million of third party premiums which adds directly to our profit from operations. We think this is a prudent risk and one that we are very capable of affording. Other items of note, we continue to see small areas of value in certain pockets of Citizens policies. We also see our real estate portfolio continues to grow. We plan to offer new products and services and put our technology to use. And finally our strong financial position should enable us to act quickly, should accretive opportunities become available. In summary, we are very pleased with our results and the actions we’ve taken for the future. We’re excited for the challenges and opportunities that lie ahead of us. With that, we’re ready to open the call for questions. Operator, please provide the appropriate instructions.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Matt Carletti of JMP Securities.

I had a couple of questions, kind of big picture type questions, and they’re kind of related. The first one is just love to get your view kind of you’re one of the companies that started the Citizens take out; you’ve been doing it for long time. Where you think that opportunity stands today? I know it’s just one of the opportunities you have but love to hear your updated thoughts.

I think Citizens consists of a number of different books of businesses; it’s not just one block. Clearly the main multi-peril pool for personal lines is fairly picked over and passed out of this place. But we do see opportunities in things like the wind-only book. If you recall, last year, we were the one of the first companies to do a big wind-only takeout because what we saw was an untapped pool. That pool still remains largely untapped but we’re extremely aware that there are a number of other companies looking at that pool now, a year or later having realized what we saw last year. So, we’re looking to possibly do something with that pool in the fourth quarter.

And then more broadly, maybe just a growth question on -- that’s kind of just one opportunity but where do you see the biggest growth potential over the next few years? Obviously you have flood, you have some IT initiatives, the commercial real estate book, just curious to hear where an update on where you think your best opportunities lie?

I think the best opportunities lie across the whole piece, right. So we’ll start with the real estate. The real estate opportunity is basically Greenleaf to some degree, also it’s almost like wind [ph] like structure owing lots and lots of real estate or adding more to it. The only difference being is that the cash it needs to acquire more properties, if you are a REIT, you have to keep issuing more shares. We can do it from the cash flow coming off the insurance operations. So that represents an opportunity for growth, but we don’t have it go into others states or anything else. The second item in terms of growth is I think everybody is rapidly looking to just to grow by growing top line. We’re looking at it differently. We’re saying we should grow in places where the opportunity lies in our favor, not increasing competition. So for example, we could expand to other states in multi-peril lines but the market is softening and competition is increasing in every state in those areas. The stock concentrating on like wind-only take at our Citizens and the flood opportunity which is more of a national opportunity, both markets, the primary rates are going up quarter after quarter, year after year for the policy-holders. So, we’re entering market where rates are still hardening, everybody else seems to want to compete for market share in areas that are softening. So in both areas, we sort of have untapped field ahead of us. And historically this is how we’ve always operated and done very well at. We chased hard markets and everybody else followed this later one and chased the markets when they become soft. So we continue to do that for the coming quarters and years.

Our next question comes from the line of Casey Alexander of Gilford Securities.

The reinsurance treaties that you put into place, I mean for a 1 in 260 year storm is the highest that the company has ever chosen to protect their book. Obviously that comes with a trade-off in terms of the reinsurance premiums that you’re ceding. Can you give us sort of what the company’s thinking was in terms of putting together such a strong treaty?

Absolutely, Casey. It’s a couple of things. One is, yes, on an absolute number, that number is a highest it’s ever been. But part of that is, we also have requirement that we suppose to buy to both from OIR and from Demotech, our rating agency. So, what we bought, definitely confirms to all of those things. And part of what you’re seeing in the 1 in 260 is a result of two things that have materially changed year-over-year, one is adding a wind-only book means that you really end up buying reinsurance that work slightly differently. And secondly, the cat fund is shifting around in our reinsurance power as well. And thirdly, the cat fund is in itself and it’s -- how much coverage it provides is shifting, so all of those things combine together to move us to the number that we’re at. It is a very large number and it definitely means that Homeowners Choice is very well protected from a major storm because go through the top of this tower, would require a lot of outcome. I mean I think, you can do some very simple math whereby if you add -- if you divide the top of the tower which 1.45 billion by the number of policies we have, you end up at a number of something like $8,000 per policy-holder or something that we have just for one event, which is a huge number.

Secondly, can you sort of -- because this has become a lot more complicated than it has been in the past with the captive reinsurance company. Can you sort of define the company’s retention, both traditional path and then you’ve sectioned off a flood side of the portfolio. So, can you give us a feel for the two sides of this portfolio and what the company’s retention is?

Sure. And Casey, look, the only to look at this is as we have multiple divisions, we do look at them slightly differently, so job one is to make sure that the Homeowners Choice which is insurance, regular insurance subsidiary is very well protected. And as I said, even after two hurricane Andrew style events, that company come, we would be very well capitalized to continue doing business going forward. So, we make sure that happens, one. And because you have that, you can then do other things. So, one of the other -- one of the ways we did this was when we got into the flood business 18 months ago, there was some uncertainty about what that risk meant et cetera. So, we constructed reinsurance in a fashion whereby Homeowners Choice, really has all losses from -- flood losses covered by third parties. So, third parties being Claddaugh at the lower end of the tower and third party reinsurance above that. So having done that, it gets everybody safety that the flood tower no way affects and the flood exposure nowhere affects anybody in Homeowners Choice. And having segmented that everything else is in what we call the main tower which is the main reinsurance that we talk about. And what we did there was -- Homeowners Choice subsidiary again, that subsidiary only has 16 million of retention first event and 16 million of retention in second event. When you look at that against a business that has $180 million of surplus and probably a lot of tax credits that it can recoup in the event of losses, that’s really not a great deal. So, that protects Homeowners Choice. And once we know that is so well protected, we can look at the capital in the rest of…

Our next question comes from the line of Arash Soleimani at KBW.

I just have a few questions. One, I know you these are pretty small but I’m just curios what are the OTTI losses from Q1 and Q2 coming from?

We have developed -- some of our investment portfolio includes equities and those of equities jus they go up and they go down. And given the numbers we’re posting, when you have anything that goes down, OTTI is a great way of adjusting your cost basis.

One of our criteria, Arash, is it’s got to be in a impaired situation for a minimum of 12 months before we consider it. We look at probable downgrades in the stock by various analysts and then what’s our potential to hold it to maturity on some items.

Yes. And a lot of these things because the equity we do hold on to them and that’s why they become OTTI. If we had told them because we didn’t believe that they would have any issues, then you would just run for the income statement. We think that showing up as OTTI because they’re down in the market but we haven’t -- we don’t think they’re over and done with. So we sort of continue to hold on to them. And sometimes we think they have a way of coming back. So Richard from his side of the table marks them down as it meets the criteria; from the investment committee side of the table, they continue to hold them because they feel it’s a good investment. Especially as some of these things are being marked down, actually also have a very nice yield attach to them. Things like BDCs, oil sector investments, those kinds of things, yes.

Then, few numbers questions; one, could you provide a gross premiums written and policy count?

I think gross premiums written I mentioned, but just a second I’ll take it back out for you.

Yes. And I think the policy count at the end of quarter was around 170,000 or so.

And do you have -- do you track, I guess organic policy generations for the quarter?

No, we don’t because it’s almost so meaningless in our measurements over the years that we just don’t track it.

Gross premiums written for the quarter, 155.3 million.

Thanks for looking that up. And was there any development favorable or adverse in the quarter?

As far as losses, no.

Okay. My next question is, do you guys have any filed rate increases for flood?

I don’t think we have -- actually that’s an interesting question, Arash. I don’t think the department’s in the mindset to approve any increases of revenue rates at the momentum. So, I’m sure we might have some flood rates out there, but I don’t think that they will -- we wish, we think, you imagine but you actually are not getting an increase through the department.

And do you have rates filed in other states?

Not on admitted basis, we have got ENS [ph] licenses in a couple of places but that’s a different situation.

And I want to confirm something from Casey’s question. Did you respond to Casey’s question that there is no exposure for flood inside your the statutory subsidiary, it’s only within Claddaugh and within third parties?

Minimal exposure is retained within the insurance company.

Okay.

[Indiscernible]

I am sorry, what was that?

I think it’s minimum in rounding areas kind of thing, if there anything that shows up. And we are just saying that out of an abundance of caution; I think it really maybe zero but we never like to say zero.

So basically all of HCI, all of the exposure for flood is basically in Claddaugh not for HCI?

Mostly, yes.

And then, so the stock-based compensation, does that flow through other operating expenses?

Yes.

And my other question on the cat fund, you mentioned in your comments that it’s shifting for HCI. Can you I guess just talk about how it’s shifting and how that impacts you?

Yes, absolutely. I think two things, one is that you do a wind-only book mixture. Those policies carry a higher cat fund premium and have higher coverage associated with them. So that moves the thing around. The other thing is a number of companies opted out of the 90% crunch of their election this year which meant the rest of us, the ones that did keep the 90% election actually got a lot more limit for the same dollar. So, it added to the amount of reinsurance cover provided by the cat fund. I think it increased by about 10% more than it would have if people hadn’t taken down the retention or the participation.

Did you have to pay more for that or were you able to get that at your existing rate?

No, it sort of comes out of the cat fund. What the cat fund does is because everybody take, select their participation, based on that they charge everybody whatever the premiums they’re going to charge. But other side of that is they then divvy up [ph] $17 billion based on everybody’s participation. So, we just got a greatest share of the $17 billion because a lot of people went down from 90% to 45% the last moment.

And when you said in your comments, and you mentioned flood is a national opportunity, can you talk or I guess extend on that a bit more?

Absolutely, let me just give you three sets of numbers and then tell how you big an opportunity it is, if you know what you’re doing. Don’t get me wrong, there are ways of losing money in any market and people routinely prove that to us. But there is then NFIP numbers. I think the NFIP writes about $3.5 billion worth of premium throughout the United States; of that $3.5 billion, $2.5 billion is in East Coast states that’s going from Texas around the Gulf through Florida and up to Maine. And of that $2.5 billion, almost $1 billion of it is Florida. We think over the course of time, this could help us expand into all these other East Coast states. And we could probably easily pick up 15% to 20% market share. I don’t mean next week or next month or next year, but over the course of the next number of years. And just doing simple math, 20% of $2.5 billion is around $500 million.

And you mentioned, you said the rates were hardening in two places, one was flood; what was the other one?

The wind-only bookings...

And what are the rate increases you’re seeing on the wind-only side?

Well, I think Citizens far great versus a year go where they went up about 10% or so. I don’t know the exact number of that; you have to ask Citizens, but I think there were some great increase as of February 1 this year.

And in terms of your IT initiative, I guess my question there is, do you have plans -- I mean not necessarily in the next six months but just generally maybe in the next two or three years. Are there plans to monetize some of the IT products that you have or is the idea there more so to use them internally and to save money by not having to outsource those functions?

I would answer both, as far as internally, using internally I think -- and monetizing by using it internally. We already do that. I think our numbers speak to that in fact in terms of efficiency et cetera. As far as monetizing it with third parties, I think eventually third parties will realize the value of these tools and at some point we will -- we are quite open to licensing them third parties. And when we do, there will be some valuation that will be created for that subsidiary. It is all the tools are designed such that Exzeo develops them, Homeowners Choice is merely the first licensee of those tools but they’re available to be licensed by third parties.

And just very, very last question. On the expense ratio, I know you said stock-based compensation drove it down, again, year-over-year it went down like 400 basis points. Was that all stock-based compensation or was anything else flowing through there as well than higher year-over-year decrease?

Stock-based compensation was a primary piece of it.

At this time, this concludes our question-and-answer session secession. I would now like to turn the call back over to Kevin Mitchell who has few closing remarks.

Thank you. On behalf of the entire management team, I would like to express our appreciation for the continued support we received from our shareholders, employees, agents and most importantly, our policyholders. We look forward to continued success in 2015.

Thank you for joining us on today’s presentation. This concludes today’s call. You may now disconnect.