• Palomar Holdings, Inc. Reports First Quarter 2022 Results

    المصدر: Nasdaq GlobeNewswire / 04 مايو 2022 16:15:01   America/New_York

    LA JOLLA, Calif., May 04, 2022 (GLOBE NEWSWIRE) -- Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or “Company”) reported net income of $14.5 million, or $0.56 per diluted share, for the first quarter of 2022 compared to $16.6 million, or $0.63 per diluted share, for the first quarter of 2021. Adjusted net income(1) was $17.6 million, or $0.68 per diluted share, for the first quarter of 2022 compared to $19.3 million, or $0.73 per diluted share, for the first quarter of 2021.

    First Quarter 2022 Highlights

    • Gross written premiums increased by 65.0% to $170.9 million compared to $103.6 million in the first quarter of 2021
    • Net income of $14.5 million compared to $16.6 million in the first quarter of 2021
    • Adjusted net income(1) of $17.6 million compared to $19.3 million in the first quarter of 2021
    • Total loss ratio of 19.7% compared to negative 9.4% in the first quarter of 2021
    • Combined ratio of 76.5% compared to 60.4% in the first quarter of 2021
    • Adjusted combined ratio(1) of 72.1% compared to 53.3% in the first quarter of 2021
    • Annualized return on equity of 15.0% compared to 18.0% in the first quarter of 2021
    • Annualized adjusted return on equity(1) of 18.1% compared to 20.8% in the first quarter of 2021

    (1)        See discussion of “Non-GAAP and Key Performance Indicators” below.

    Mac Armstrong, Chairman and Chief Executive Officer, commented, “We are pleased to report another strong quarter for Palomar. When we began the year, we identified four strategic priorities for calendar 2022: produce strong premium growth, continue to deliver consistent and predictable earnings, monetize investments made over the course of 2021, and scale our organization. I am very happy to report that we made strong progress across all four initiatives during the first quarter. Selected highlights of Q1 2022 include: delivering a 65% gross written premium increase compared to the prior year period and record residential earthquake new business, the successful renewal of our aggregate reinsurance program that effectively places a floor on our adjusted return on equity of 14% for 2022, writing $30 million of managed written premium for PLMR-FRONT in its second quarter of operation, and achieving an expense ratio of 56.8%, which constituted a meaningful sequential and year-over-year improvement. The momentum of our first quarter results well positions Palomar to deliver sustained growth and profitability in the year ahead.”

    Underwriting Results
    Gross written premiums increased 65.0% to $170.9 million compared to $103.6 million in the first quarter of 2021, while net earned premiums increased 61.6% compared to the prior year’s first quarter.

    Losses and loss adjustment expenses for the first quarter were $15.0 million including $14.5 million of non-catastrophe attritional losses, and $0.5 million of unfavorable development on catastrophe losses from prior periods. The loss ratio for the quarter was 19.7%, comprised of a catastrophe loss ratio of 0.6%(1) and an non-catastrophe attritional loss ratio of 19.1%, compared to a loss ratio of negative 9.4% during the same period last year comprised of a catastrophe loss ratio of negative 20.5% and non-catastrophe attritional loss ratio of 11.1%.

    Underwriting income(1) was $17.9 million resulting in a combined ratio of 76.5% compared to underwriting income of $18.6 million and a combined ratio of 60.4% during the same period last year. Excluding expenses related to transactions, stock-based compensation, amortization of intangibles, and catastrophe bonds, the Company’s adjusted combined ratio(1) was 72.1% in the first quarter compared to 53.3% during the same period last year. Non-catastrophe losses and loss ratio increased mainly due to the growth of lines of business subject to attritional losses, such as Specialty Homeowners, Flood, and Inland Marine.

    When comparing our 2022 results to our first and second quarter results for 2021, it is important to remember the impact that Winter Storm Uri (“Uri”) had on our results during those periods. Uri resulted in negative losses and a negative loss ratio in the first quarter of 2021 offset by additional reinsurance expense, or ceded premium, in the first and second quarters of 2021.

    Investment Results
    Net investment income increased by 16.2% to $2.6 million compared to $2.2 million in the prior year’s first quarter. The year over year increase was primarily due to a higher average balance of investments held during the three months ended March 31, 2022 due to cash generated from operations. Funds are generally invested conservatively in high quality securities, including government agency, asset and mortgage-backed securities, municipal and corporate bonds with an average credit quality of "A1/A+" with a small portion of our portfolio invested in equity securities. The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 4.17 years at March 31, 2022. Cash and invested assets totaled $533.2 million at March 31, 2022. During the first quarter, the Company recorded realized and unrealized losses of $1.3 million related to its investment portfolio as compared to realized and unrealized losses of $739 thousand in last year’s first quarter.  

    Tax Rate
    The effective tax rate for the three months ended March 31, 2022 was 23.8% compared to 17.3% for the three months ended March 31, 2021. For the current quarter, the Company’s income tax rate was higher than the statutory rate due primarily to non-deductible executive compensation expense. For the three months ended March 31, 2021 our income tax rate was lower than the statutory rate due primarily to the tax impact of the permanent component of employee stock option exercises.

    Stockholders’ Equity and Returns
    Stockholders' equity was $380.4 million at March 31, 2022 compared to $394.2 million at December 31, 2021. For the three months ended March 31, 2022, the Company’s annualized return on equity was 15.0% compared to 18.0% for the same period in the prior year while adjusted return on equity(1) was 18.1% compared to 20.8% for the same period in the prior year. During the current quarter, the Company repurchased 219,061 shares, or $13.0 million, of the Company’s previously announced $100 million share repurchase authorization.

    Full Year 2022 Outlook
    For the full year 2022, the Company expects to achieve adjusted net income of $80 million to $85 million.

    Conference Call
    As previously announced, Palomar will host a conference call Thursday May 5, 2022, to discuss its first quarter 2022 results at 12:00 p.m. (Eastern Time). The conference call can be accessed by dialing 1-877-423-9813 (domestic) or 1-201-689-8573 (international) and asking for the Palomar First Quarter 2022 Earnings Call. A telephonic replay will be available starting at 3:00 p.m (Eastern Time) on May 5, 2022 and can be accessed by dialing 1-844-512-2921, or for international callers 1-412-317-6671 and providing the access code 13728464. The telephonic replay will be available until 11:59 pm (Eastern Time) on May 12, 2022.

    Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at http://ir.palomarspecialty.com/. The online replay will remain available for a limited time beginning immediately following the call.

    About Palomar Holdings, Inc.
    Palomar Holdings, Inc. is the holding company of subsidiaries Palomar Specialty Insurance Company (“PSIC”), Palomar Specialty Reinsurance Company Bermuda Ltd., Palomar Insurance Agency, Inc. and Palomar Excess and Surplus Insurance Company (“PESIC”). Palomar is an innovative insurer that focuses on the provision of specialty insurance for residential and commercial clients. Palomar’s underwriting and analytical expertise allow it to concentrate on certain markets that it believes are underserved by other insurance companies, such as the markets for earthquake, hurricane and flood insurance. Palomar’s insurance subsidiaries, Palomar Specialty Insurance Company, Palomar Specialty Reinsurance Company Bermuda Ltd., and Palomar Excess and Surplus Insurance Company, have a financial strength rating of “A-” (Excellent) from A.M. Best.

    To learn more, visit PLMR.com.

    Follow Palomar on Facebook, LinkedIn and Twitter: @PLMRInsurance

    Non-GAAP and Key Performance Indicators

    Palomar discusses certain key performance indicators, described below, which provide useful information about the Company’s business and the operational factors underlying the Company’s financial performance.

    Underwriting revenue is a non-GAAP financial measure defined as total revenue, excluding net investment income and net realized and unrealized gains and losses on investments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of total revenue calculated in accordance with GAAP to underwriting revenue.

    Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding net investment income and net realized and unrealized gains and losses on investments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to underwriting income.

    Adjusted net income is a non-GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. Palomar calculates the tax impact only on adjustments which would be included in calculating the Company’s income tax expense using the estimated tax rate at which the company received a deduction for these adjustments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income calculated in accordance with GAAP to adjusted net income.

    Return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.

    Annualized adjusted return on equity is a non-GAAP financial measure defined as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of return on equity calculated using unadjusted GAAP numbers to adjusted return on equity.

    Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses, to net earned premiums.

    Expense ratio, expressed as a percentage, is the ratio of acquisition and other underwriting expenses, net of commission and other income to net earned premiums.

    Combined ratio is defined as the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.

    Adjusted combined ratio is a non-GAAP financial measure defined as the sum of the loss ratio and the expense ratio calculated excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio.

    Diluted adjusted earnings per share is a non-GAAP financial measure defined as adjusted net income divided by the weighted-average common shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of diluted earnings per share calculated in accordance with GAAP to diluted adjusted earnings per share.

    Catastrophe loss ratio is a non-GAAP financial measure defined as the ratio of catastrophe losses to net earned premiums. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of loss ratio calculated using unadjusted GAAP numbers to catastrophe loss ratio.

    Adjusted combined ratio excluding catastrophe losses is a non-GAAP financial measure defined as adjusted combined ratio excluding the impact of catastrophe losses.  See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio excluding catastrophe losses.

    Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity less intangible assets. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of stockholders’ equity calculated in accordance with GAAP to tangible stockholders’ equity.

    Safe Harbor Statement
    Palomar cautions you that statements contained in this press release may regard matters that are not historical facts but are forward-looking statements. These statements are based on the company’s current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by Palomar that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business. The forward-looking statements are typically, but not always, identified through use of the words "believe," "expect," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected results or delays in development and regulatory review, regulatory approval requirements, the frequency and severity of adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

    Contact
    Media Inquiries
    Bill Bold
    1-619-890-5972
    bbold@plmr.com

    Investor Relations
    Jamie Lillis
    1-203-428-3223
    investors@plmr.com   
    Source: Palomar Holdings, Inc.

    Summary of Operating Results

    The following table summarizes the Company’s results for the three months ended March 31, 2022 and 2021:

                     
      Three months ended         
      March 31,        
         2022     2021     Change     % Change 
      ($ in thousands, except per share data)
    Gross written premiums $170,934  $103,577  $67,357  65.0 %
    Ceded written premiums  (89,552)  (43,364)  (46,188) 106.5 %
    Net written premiums  81,382   60,213   21,169  35.2 %
    Net earned premiums  76,032   47,053   28,979  61.6 %
    Commission and other income  777   711   66  9.3 %
    Total underwriting revenue (1)  76,809   47,764   29,045  60.8 %
    Losses and loss adjustment expenses  14,954   (4,423)  19,377  NM  
    Acquisition expenses  28,054   19,313   8,741  45.3 %
    Other underwriting expenses  15,925   14,248   1,677  11.8 %
    Underwriting income (1)  17,876   18,626   (750) (4.0)%
    Interest expense  (93)  —   (93) NM  
    Net investment income  2,579   2,219   360  16.2 %
    Net realized and unrealized losses on investments  (1,278)  (739)  (539) 72.9 %
    Income before income taxes  19,084   20,106   (1,022) (5.1)%
    Income tax expense  4,547   3,476   1,071  30.8 %
    Net income  $14,537  $16,630  $(2,093) (12.6)%
    Adjustments:                   
    Expenses associated with transactions and stock offerings  86   410   (324) (79.0)%
    Stock-based compensation expense  2,760   938   1,822  194.2 %
    Amortization of intangibles  315   337   (22) (6.5)%
    Expenses associated with catastrophe bond, net of rebate  200   1,683   (1,483) NM  
    Tax impact  (325)  (712)  387  NM  
    Adjusted net income (1) $17,573  $19,286  $(1,713) (8.9)%
    Key Financial and Operating Metrics                    
    Annualized return on equity  15.0 %   18.0 %           
    Annualized adjusted return on equity (1)  18.1 %   20.8 %           
    Loss ratio  19.7 %   (9.4)%           
    Expense ratio  56.8 %   69.8 %           
    Combined ratio  76.5 %   60.4 %           
    Adjusted combined ratio (1)  72.1 %   53.3 %         
    Diluted earnings per share $0.56  $0.63         
    Diluted adjusted earnings per share (1) $0.68  $0.73         
    Catastrophe losses $481  $(9,631)        
    Catastrophe loss ratio (1)  0.6 %   (20.5)%         
    Adjusted combined ratio excluding catastrophe losses (1)  71.4 %   73.7 %         
    NM- not meaningful                

    (1)- Indicates Non-GAAP financial measure- see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.

    Condensed Consolidated Balance sheets

    Palomar Holdings, Inc. and Subsidiaries

    Condensed Consolidated Balance Sheets (unaudited)

    (in thousands, except shares and par value data)

           
         March 31,     December 31, 
      2022 2021
      (Unaudited)   
    Assets        
    Investments:        
    Fixed maturity securities available for sale, at fair value (amortized cost: $461,206 in 2022; $426,122 in 2021) $444,320 $432,682
    Equity securities, at fair value (cost: $41,836 in 2022; $31,834 in 2021)  41,983  33,261
    Total investments  486,303  465,943
    Cash and cash equivalents  46,876  50,284
    Restricted cash  63  87
    Accrued investment income  2,648  2,725
    Premium receivable  94,615  88,012
    Deferred policy acquisition costs  54,977  55,953
    Reinsurance recoverable on unpaid losses and loss adjustment expenses  113,726  127,947
    Reinsurance recoverable on paid losses and loss adjustment expenses  32,082  29,368
    Ceded unearned premiums  84,975  58,315
    Prepaid expenses and other assets  31,479  37,072
    Property and equipment, net  483  527
    Intangible assets, net  9,201  9,501
    Total assets $957,428 $925,734
    Liabilities and stockholders' equity        
    Liabilities:        
    Accounts payable and other accrued liabilities $26,561 $21,284
    Reserve for losses and loss adjustment expenses  165,112  173,366
    Unearned premiums  316,675  284,665
    Ceded premium payable  47,318  37,460
    Funds held under reinsurance treaty  6,362  10,882
    Deferred tax liabilities, net  —  3,908
    Borrowings from credit agreements  15,000  —
    Total liabilities  577,028  531,565
    Stockholders' equity:        
    Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021  —  —
    Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,231,571 and 25,428,929 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively  3  3
    Additional paid-in capital  322,048  318,902
    Accumulated other comprehensive income (loss)  (13,151)  5,312
    Retained earnings  71,500  69,952
    Total stockholders' equity  380,400  394,169
    Total liabilities and stockholders' equity $957,428 $925,734

    Condensed Consolidated Income Statement

    Palomar Holdings, Inc. and Subsidiaries

    Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)

    (in thousands, except shares and per share data)

           
      Three Months Ended
      March 31, 
         2022    2021
    Revenues:        
    Gross written premiums $170,934 $103,577
    Ceded written premiums  (89,552)  (43,364)
    Net written premiums  81,382  60,213
    Change in unearned premiums  (5,350)  (13,160)
    Net earned premiums  76,032  47,053
    Net investment income  2,579  2,219
    Net realized and unrealized losses on investments  (1,278)  (739)
    Commission and other income  777  711
    Total revenues  78,110  49,244
    Expenses:        
    Losses and loss adjustment expenses  14,954  (4,423)
    Acquisition expenses  28,054  19,313
    Other underwriting expenses  15,925  14,248
    Interest expense  93  —
    Total expenses  59,026  29,138
    Income before income taxes  19,084  20,106
    Income tax expense  4,547  3,476
    Net income  14,537  16,630
    Other comprehensive income, net:        
    Net unrealized losses on securities available for sale for the three months ended March 31, 2022 and 2021, respectively  (18,463)  (6,199)
    Net comprehensive income (loss) $(3,926) $10,431
    Per Share Data:        
    Basic earnings per share $0.57 $0.65
    Diluted earnings per share $0.56 $0.63
           
    Weighted-average common shares outstanding:      
    Basic  25,362,179  25,552,629
    Diluted  25,899,290  26,256,281

    Underwriting Segment Data

    The Company has a single reportable segment and offers primarily earthquake, wind, inland marine, and flood insurance products. Gross written premiums (GWP) by product, location and company are presented below:

                
      Three Months Ended March 31, 
      2022 2021 
      ($ in thousands) 
         % of    % of 
      Amount GWP Amount GWP 
    Product                           
    Residential Earthquake $46,336 27.1%  $35,898 34.7%
    Fronting Premiums  29,845 17.5%   — 0.0%
    Commercial Earthquake  25,144 14.7%   21,277 20.5%
    Inland Marine  18,237 10.7%   7,834 7.6%
    Specialty Homeowners  16,284 9.5%   14,002 13.5%
    Commercial All Risk  11,210 6.6%   8,190 7.9%
    Hawaii Hurricane  6,914 4.0%   6,137 5.9%
    Residential Flood  2,993 1.8%   2,283 2.2%
    Other  13,971 8.1%   7,956 7.7%
    Total Gross Written Premiums $170,934 100.0%  $103,577 100.0%


                
      Three Months Ended March 31, 
      2022 2021 
      ($ in thousands) 
         % of    % of 
      Amount GWP Amount GWP 
    State                           
    California $68,718 40.2%  $50,502 48.8%
    Texas  18,979 11.1%   11,054 10.7%
    Hawaii  8,540 5.0%   6,920 6.7%
    Washington  6,881 4.0%   4,088 3.9%
    Florida  4,962 2.9%   6,058 5.8%
    Oregon  4,373 2.6%   2,904 2.8%
    Illinois  4,273 2.5%   2,522 2.4%
    North Carolina  4,078 2.4%   3,888 3.8%
    Other  50,130 29.3%   15,641 15.1%
    Total Gross Written Premiums $170,934 100.0%  $103,577 100.0%


                
      Three Months Ended March 31, 
      2022 2021 
      ($ in thousands) 
         % of    % of 
      Amount GWP Amount GWP 
    Subsidiary           
    PSIC $104,004 60.8%  $79,845 77.1%
    PESIC  66,930 39.2%   23,732 22.9%
    Total Gross Written Premiums $170,934 100.0%  $103,577 100.0%

    Gross and net earned premiums

    The table below shows the amount of premiums the Company earned on a gross and net basis and the Company’s net earned premiums as a percentage of gross earned premiums for each period presented:

                 
      Three Months Ended       
      March 31,       
         2022    2021    Change    % Change
      ($ in thousands) 
    Gross earned premiums $138,924 $91,293 $47,631 52.2%
    Ceded earned premiums  (62,892)  (44,240)  (18,652) 42.2%
    Net earned premiums $76,032 $47,053 $28,979 61.6%
                 
    Net earned premium ratio  54.7%  51.5%      

    Loss detail

                 
      Three Months Ended       
      March 31,       
         2022    2021    Change    % Change
      ($ in thousands)
    Catastrophe losses $481 $(9,631) $10,112 (105.0) 
    Non-catastrophe losses  14,473  5,208  9,265 177.9%
    Total losses and loss adjustment expenses $14,954 $(4,423) $19,377 (438.1)%
                 

    The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses:

           
      Three Months Ended March 31, 
      2022    2021
       (in thousands)
    Reserve for losses and LAE net of reinsurance recoverables at beginning of period $45,419 $34,470
    Add: Incurred losses and LAE, net of reinsurance, related to:      
    Current year  13,449  (1,696)
    Prior years  1,505  (2,727)
    Total incurred  14,954  (4,423)
    Deduct: Loss and LAE payments, net of reinsurance, related to:        
    Current year  1,490  1,680
    Prior years  7,497  9,351
    Total payments  8,987  11,031
    Reserve for losses and LAE net of reinsurance recoverables at end of period  51,386  19,016
    Add: Reinsurance recoverables on unpaid losses and LAE at end of period  113,726  188,448
    Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period $165,112 $207,464

    Reconciliation of Non-GAAP Financial Measures

    For the three ended March 31, 2022 and 2021, the Non-GAAP financial measures discussed above reconcile to their most comparable GAAP measures as follows:

    Underwriting revenue

           
      Three Months Ended
      March 31, 
         2022    2021
      (in thousands)
    Total revenue $78,110 $49,244
    Net investment income  (2,579)  (2,219)
    Net realized and unrealized (gains) losses on investments  1,278  739
    Underwriting revenue $76,809 $47,764

    Underwriting income

           
      Three Months Ended
      March 31, 
         2022    2021
      (in thousands)
    Income before income taxes $19,084    $20,106
    Net investment income  (2,579)  (2,219)
    Net realized and unrealized (gains) losses on investments  1,278  739
    Underwriting income $17,876 $18,626

    Adjusted net income

           
      Three Months Ended
      March 31, 
         2022    2021
      (in thousands)
    Net income $14,537    $16,630
    Adjustments:        
    Expenses associated with transactions and stock offerings  86  410
    Stock-based compensation expense  2,760  938
    Amortization of intangibles  315  337
    Expenses associated with catastrophe bond, net of rebate  200  1,683
    Tax impact  (325)  (712)
    Adjusted net income $17,573 $19,286

    Annualized adjusted return on equity

            
      Three Months Ended
      March 31, 
         2022    2021 
      ($ in thousands) 
              
    Annualized adjusted net income    $70,292    $77,144    
    Average stockholders' equity $387,284 $370,048 
    Annualized adjusted return on equity  18.1%   20.8%

    Adjusted combined ratio

            
      Three Months Ended
      March 31, 
      2022    2021 
      ($ in thousands) 
    Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income $58,156 $28,427 
    Denominator: Net earned premiums $76,032 $47,053 
    Combined ratio  76.5%   60.4%  
    Adjustments to numerator:       
    Expenses associated with transactions and stock offerings $(86) $(410) 
    Stock-based compensation expense  (2,760)  (938) 
    Amortization of intangibles  (315)  (337) 
    Expenses associated with catastrophe bond, net of rebate  (200)  (1,683) 
    Adjusted combined ratio  72.1%   53.3%  

    Diluted adjusted earnings per share

           
      Three Months Ended
      March 31, 
         2022    2021
      (in thousands, except per share data)
             
    Adjusted net income    $17,573    $19,286
    Weighted-average common shares outstanding, diluted  25,899,290  26,256,281
    Diluted adjusted earnings per share $0.68 $0.73

    Catastrophe loss ratio

            
      Three Months Ended  
      March 31,  
      2022    2021 
      ($ in thousands) 
    Numerator: Losses and loss adjustment expenses $14,954 $(4,423) 
    Denominator: Net earned premiums $76,032 $47,053 
    Loss ratio  19.7%   (9.4)%  
            
    Numerator: Catastrophe losses $481 $(9,631) 
    Denominator: Net earned premiums $76,032 $47,053 
    Catastrophe loss ratio  0.6%   (20.5)%  

    Adjusted combined ratio excluding catastrophe losses

            
      Three Months Ended  
      March 31,  
      2022    2021 
      ($ in thousands) 
    Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income $58,156 $28,427 
    Denominator: Net earned premiums $76,032 $47,053 
    Combined ratio  76.5%   60.4%  
    Adjustments to numerator:       
    Expenses associated with transactions and stock offerings $(86) $(410) 
    Stock-based compensation expense  (2,760)  (938) 
    Amortization of intangibles  (315)  (337) 
    Expenses associated with catastrophe bond, net of rebate  (200)  (1,683) 
    Catastrophe losses  (481)  9,631 
    Adjusted combined ratio excluding catastrophe losses  71.4%   73.7%  

    Tangible Stockholders’ equity

           
      March 31,  December 31,
         2022    2021
      (in thousands)
    Stockholders' equity $380,400    $394,169
    Intangible assets  (9,201)  (9,501)
    Tangible stockholders' equity $371,199 $384,668

     


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