• Palomar Holdings, Inc. Reports Second Quarter 2024 Results

    المصدر: Nasdaq GlobeNewswire / 05 أغسطس 2024 16:10:21   America/New_York

    LA JOLLA, Calif., Aug. 05, 2024 (GLOBE NEWSWIRE) -- Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or “Company”) reported net income of $25.7 million, or $1.00 per diluted share, for the second quarter of 2024 compared to net income of $17.6 million, or $0.69 per diluted share, for the second quarter of 2023. Adjusted net income(1) was $32.0 million, or $1.25 per diluted share, for the second quarter of 2024 as compared to $21.8 million, or $0.86 per diluted share, for the second quarter of 2023.

    Second Quarter 2024 Highlights

    • Gross written premiums increased by 40.4% to $385.2 million compared to $274.3 million in the second quarter of 2023
    • Net income of $25.7 million, compared to $17.6 million in the second quarter of 2023
    • Adjusted net income(1) of $32.0 million, compared to $21.8 million in the second quarter of 2023
    • Total loss ratio of 24.9% compared to 21.5% in the second quarter of 2023
    • Combined ratio of 79.1% compared to 79.0% in the second quarter of 2023
    • Adjusted combined ratio(1) of 73.1%, compared to 72.2%, in the second quarter of 2023
    • Annualized return on equity of 19.9%, compared to 17.2% in the second quarter of 2023
    • Annualized adjusted return on equity(1) of 24.7%, compared to 21.3% in the second quarter of 2023

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

    Mac Armstrong, Chairman and Chief Executive Officer, commented, "I am very pleased with our second quarter results as we achieved record gross written premium and adjusted net income during the quarter. Additionally, our profitable growth remained robust with gross written premium and adjusted net income increasing 40% and 47%, respectively, year-over-year. Beyond the strong financial results achieved during the quarter, we had several other accomplishments including but not limited to: successfully placing our core excess of loss reinsurance program at June 1st on terms that were better than anticipated, bringing on several new leaders who will help scale the Company and execute our Palomar 2X strategy, and AM Best upgrading our Financial Strength Rating to an A."

    Mr. Armstrong continued, “We introduced our Palomar 2X strategy at our investor day in 2022 with designs of doubling our underwriting income over a three-to-five-year time frame while generating an adjusted ROE in excess of 20%. Our second quarter results and our further raising of adjusted net income guidance for the year clearly demonstrates that we are tracking ahead of these ambitious goals.”

    Underwriting Results

    Gross written premiums increased 40.4% to $385.2 million compared to $274.3 million in the second quarter of 2023, while net earned premiums increased 47.1% compared to the prior year’s second quarter. 

    Losses and loss adjustment expenses for the second quarter were $30.4 million, comprised of $27.0 million of attritional losses and $3.4 million of catastrophe losses from severe convective storms. The loss ratio for the quarter was 24.9%, comprised of an attritional loss ratio of 22.1% and a catastrophe loss ratio(1) of 2.8%, compared to a loss ratio of 21.5% during the same period last year comprised of an attritional loss ratio of 18.9% and a catastrophe loss ratio(1) of 2.6%. 

    Underwriting income(1) for the second quarter was $25.6 million resulting in a combined ratio of 79.1% compared to underwriting income of $17.4 million resulting in a combined ratio of 79.0% during the same period last year. The Company’s adjusted underwriting income(1) was $32.9 million resulting in an adjusted combined ratio(1) of 73.1% in the second quarter compared to adjusted underwriting income(1) of $23.1 million and an adjusted combined ratio(1) of 72.2% during the same period last year.

    Investment Results
    Net investment income increased by 43.7% to $8.0 million compared to $5.5 million in the prior year’s second quarter. The increase was primarily due to higher yields on invested assets and a higher average balance of investments held during the three months ended June 30, 2024 due to cash generated from operations. The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 3.73 years at June 30, 2024. Cash and invested assets totaled $777.9 million at June 30, 2024. During the second quarter, the Company recorded immaterial net realized and unrealized gains related to its investment portfolio as compared to net realized and unrealized gains of $1.1 million during the same period last year.

    Tax Rate
    The effective tax rate for the three months ended June 30, 2024 was 22.9% compared to 23.7% for the three months ended June 30, 2023. For the current quarter, the Company’s income tax rate differed from the statutory rate due primarily to the non-deductible executive compensation expense.

    Stockholders’ Equity and Returns
    Stockholders' equity was $532.6 million at June 30, 2024, compared to $413.7 million at June 30, 2023. For the three months ended June 30, 2024, the Company’s annualized return on equity was 19.9% compared to 17.2% for the same period in the prior year while adjusted return on equity(1) was 24.7% compared to 21.3% for the same period in the prior year. There were no share repurchases during the three months ended June 30, 2024.

    Full Year 2024 Outlook
    For the full year 2024, the Company is increasing its guidance range and now expects to achieve adjusted net income of $124 million to $130 million. This range includes $6.8 million of catastrophe losses incurred during the six months ended June 30, 2024 and additional catastrophe losses incurred during the third quarter of 2024 of approximately $5 million to $7 million related to Hurricanes Beryl and Debby.

    Conference Call
    As previously announced, Palomar will host a conference call Tuesday, August 6, 2024, to discuss its second quarter 2024 results at 12:00 p.m. (Eastern Time). The conference call can be accessed live by dialing 1-877-423-9813 or for international callers, 1-201-689-8573, and requesting to be joined to the Palomar Second Quarter 2024 Earnings Conference Call. A replay will be available starting at 4:00 p.m. (Eastern Time) on August 6, 2024, and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the replay is 13747528. The replay will be available until 11:59 p.m. (Eastern Time) on August 13, 2024.

    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., Palomar Excess and Surplus Insurance Company (“PESIC”), and Palomar Underwriters Exchange Organization, Inc. Palomar's consolidated results also include Laulima Reciprocal Exchange, a variable interest entity for which the Company is the primary beneficiary. Palomar is an innovative specialty insurer serving residential and commercial clients in five product categories: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. 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.

    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, net realized and unrealized gains and losses on investments, and interest expense. 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.

    Annualized 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.

    Adjusted underwriting income is a non-GAAP financial measure defined as underwriting income 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 income before income taxes calculated in accordance with GAAP to adjusted underwriting income.

    Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity less goodwill and 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 
    Lindsay Conner 
    1-551-206-6217 
    lconner@plmr.com 

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


    Summary of Operating Results:

    The following tables summarize the Company’s results for the three and six months ended June 30, 2024 and 2023:

     Three Months Ended         
     June 30,         
     2024  2023  Change  % Change 
     ($ in thousands, except per share data) 
    Gross written premiums$385,184  $274,296  $110,888   40.4%
    Ceded written premiums (209,181)  (169,109)  (40,072)  23.7%
    Net written premiums 176,003   105,187   70,816   67.3%
    Net earned premiums 122,285   83,107   39,178   47.1%
    Commission and other income 792   621   171   27.5%
    Total underwriting revenue(1) 123,077   83,728   39,349   47.0%
    Losses and loss adjustment expenses 30,431   17,905   12,526   70.0%
    Acquisition expenses, net of ceding commissions and fronting fees 35,806   26,057   9,749   37.4%
    Other underwriting expenses 31,233   22,350   8,883   39.7%
    Underwriting income(1) 25,607   17,416   8,191   47.0%
    Interest expense (225)  (1,064)  839   (78.9)%
    Net investment income 7,960   5,541   2,419   43.7%
    Net realized and unrealized gains on investments 32   1,127   (1,095)  (97.2)%
    Income before income taxes 33,374   23,020   10,354   45.0%
    Income tax expense 7,645   5,458   2,187   40.1%
    Net income$25,729  $17,562  $8,167   46.5%
    Adjustments:               
    Net realized and unrealized gains on investments (32)  (1,127)  1,095   (97.2)%
    Expenses associated with transactions 472   —   472   —%
    Stock-based compensation expense 3,968   3,697   271   7.3%
    Amortization of intangibles 389   389   —   —%
    Expenses associated with catastrophe bond 2,483   1,590   893   56.2%
    Tax impact (1,029)  (317)  (712)  224.6%
    Adjusted net income(1)$31,980  $21,794  $10,186   46.7%
    Key Financial and Operating Metrics               
    Annualized return on equity 19.9%  17.2%        
    Annualized adjusted return on equity(1) 24.7%  21.3%        
    Loss ratio 24.9%  21.5%        
    Expense ratio 54.2%  57.5%        
    Combined ratio 79.1%  79.0%        
    Adjusted combined ratio(1) 73.1%  72.2%        
    Diluted earnings per share$1.00  $0.69         
    Diluted adjusted earnings per share(1)$1.25  $0.86         
    Catastrophe losses$3,441  $2,159         
    Catastrophe loss ratio(1) 2.8%  2.6%        
    Adjusted combined ratio excluding catastrophe losses(1) 70.3%  69.6%        
    Adjusted underwriting income(1)$32,919  $23,092  $9,827   42.6%
    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.



     Six Months Ended         
     June 30,         
     2024  2023  Change  % Change 
     ($ in thousands, except per share data) 
    Gross written premiums$753,262  $524,407  $228,855   43.6%
    Ceded written premiums (437,352)  (339,453)  (97,899)  28.8%
    Net written premiums 315,910   184,954   130,956   70.8%
    Net earned premiums 230,151   166,347   63,804   38.4%
    Commission and other income 1,320   1,316   4   0.3%
    Total underwriting revenue(1) 231,471   167,663   63,808   38.1%
    Losses and loss adjustment expenses 57,268   38,557   18,711   48.5%
    Acquisition expenses, net of ceding commissions and fronting fees 67,604   51,736   15,868   30.7%
    Other underwriting expenses 56,036   41,572   14,464   34.8%
    Underwriting income(1) 50,563   35,798   14,765   41.2%
    Interest expense (965)  (2,084)  1,119   (53.7)%
    Net investment income 15,098   10,661   4,437   41.6%
    Net realized and unrealized gains on investments 3,034   1,273   1,761   138.3%
    Income before income taxes 67,730   45,648   22,082   48.4%
    Income tax expense 15,619   10,774   4,845   45.0%
    Net income$52,111  $34,874  $17,237   49.4%
    Adjustments:               
    Net realized and unrealized gains on investments (3,034)  (1,273)  (1,761)  138.3%
    Expenses associated with transactions 472   —   472   —%
    Stock-based compensation expense 7,789   7,147   642   9.0%
    Amortization of intangibles 779   703   76   10.8%
    Expenses associated with catastrophe bond 2,483   1,640   843   51.4%
    Tax impact (825)  (857)  32   (3.7)%
    Adjusted net income(1)$59,775  $42,234  $17,541   41.5%
    Key Financial and Operating Metrics               
    Annualized return on equity 20.8%  17.5%        
    Annualized adjusted return on equity(1) 23.8%  21.2%        
    Loss ratio 24.9%  23.2%        
    Expense ratio 53.1%  55.3%        
    Combined ratio 78.0%  78.5%        
    Adjusted combined ratio(1) 73.0%  72.8%        
    Diluted earnings per share$2.04  $1.37         
    Diluted adjusted earnings per share(1)$2.34  $1.66         
    Catastrophe losses$6,800  $3,965         
    Catastrophe loss ratio(1) 3.0%  2.4%        
    Adjusted combined ratio excluding catastrophe losses(1) 70.1%  70.4%        
    Adjusted underwriting income(1)$62,086  $45,288  $16,798   37.1%

    (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)
     
     June 30,  December 31, 
     2024  2023 
     (Unaudited)     
    Assets       
    Investments:       
    Fixed maturity securities available for sale, at fair value (amortized cost: $723,940 in 2024; $675,130 in 2023)$687,138  $643,799 
    Equity securities, at fair value (cost: $32,987 in 2024; $43,003 in 2023) 37,761   43,160 
    Equity method investment 2,351   2,617 
    Other investments 2,641   — 
    Total investments 729,891   689,576 
    Cash and cash equivalents 47,840   51,546 
    Restricted cash 179   306 
    Accrued investment income 5,930   5,282 
    Premiums receivable 357,267   261,972 
    Deferred policy acquisition costs, net of ceding commissions and fronting fees 82,486   60,990 
    Reinsurance recoverable on paid losses and loss adjustment expenses 33,309   32,172 
    Reinsurance recoverable on unpaid losses and loss adjustment expenses 347,840   244,622 
    Ceded unearned premiums 303,477   265,808 
    Prepaid expenses and other assets 86,590   72,941 
    Deferred tax assets, net 9,450   10,119 
    Property and equipment, net 253   373 
    Goodwill and intangible assets, net 11,537   12,315 
    Total assets$2,016,049  $1,708,022 
    Liabilities and stockholders' equity       
    Liabilities:       
    Accounts payable and other accrued liabilities$52,052  $42,376 
    Reserve for losses and loss adjustment expenses 466,601   342,275 
    Unearned premiums 720,528   597,103 
    Ceded premium payable 231,182   181,742 
    Funds held under reinsurance treaty 13,080   13,419 
    Income taxes payable —   7,255 
    Borrowings from credit agreements —   52,600 
    Total liabilities 1,483,443   1,236,770 
    Stockholders' equity:       
    Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023 —   — 
    Common stock, $0.0001 par value, 500,000,000 shares authorized, 24,984,638 and 24,772,987 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively 3   3 
    Additional paid-in capital 363,904   350,597 
    Accumulated other comprehensive loss (28,055)  (23,991)
    Retained earnings 196,754   144,643 
    Total stockholders' equity 532,606   471,252 
    Total liabilities and stockholders' equity$2,016,049  $1,708,022 


    Condensed Consolidated Income Statement


    Palomar Holdings, Inc. and Subsidiaries
    Condensed Consolidated Statements of Income and Comprehensive Income (loss) (Unaudited)
    (in thousands, except shares and per share data)
     
     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
    Revenues:               
    Gross written premiums$385,184  $274,296  $753,262  $524,407 
    Ceded written premiums (209,181)  (169,109)  (437,352)  (339,453)
    Net written premiums 176,003   105,187   315,910   184,954 
    Change in unearned premiums (53,718)  (22,080)  (85,759)  (18,607)
    Net earned premiums 122,285   83,107   230,151   166,347 
    Net investment income 7,960   5,541   15,098   10,661 
    Net realized and unrealized gains on investments 32   1,127   3,034   1,273 
    Commission and other income 792   621   1,320   1,316 
    Total revenues 131,069   90,396   249,603   179,597 
    Expenses:               
    Losses and loss adjustment expenses 30,431   17,905   57,268   38,557 
    Acquisition expenses, net of ceding commissions and fronting fees 35,806   26,057   67,604   51,736 
    Other underwriting expenses 31,233   22,350   56,036   41,572 
    Interest expense 225   1,064   965   2,084 
    Total expenses 97,695   67,376   181,873   133,949 
    Income before income taxes 33,374   23,020   67,730   45,648 
    Income tax expense 7,645   5,458   15,619   10,774 
    Net income$25,729  $17,562  $52,111  $34,874 
    Other comprehensive income, net:               
    Net unrealized (losses) gains on securities available for sale (1,550)  (3,685)  (4,064)  1,789 
    Net comprehensive income$24,179  $13,877  $48,047  $36,663 
    Per Share Data:               
    Basic earnings per share$1.03  $0.71  $2.09  $1.40 
    Diluted earnings per share$1.00  $0.69  $2.04  $1.37 
                    
    Weighted-average common shares outstanding:               
    Basic 24,946,987   24,833,852   24,904,677   24,901,403 
    Diluted 25,617,916   25,309,526   25,554,445   25,384,409 


    Underwriting Segment Data

    The Company has a single reportable segment and offers specialty insurance products. Gross written premiums (GWP) by product, location and company are presented below:

     Three Months Ended June 30,         
     2024  2023         
     ($ in thousands)     
         % of      % of      % 
     Amount  GWP  Amount  GWP  Change  Change 
    Product(1)                       
    Earthquake$135,029   35.1% $107,929   39.3% $27,100   25.1%
    Fronting 95,896   24.9%  79,724   29.1%  16,172   20.3%
    Inland Marine and Other Property 93,453   24.3%  69,779   25.4%  23,674   33.9%
    Casualty 58,605   15.2%  16,376   6.0%  42,229   257.9%
    Crop 2,201   0.6%  488   0.2%  1,713   NM 
    Total Gross Written Premiums$385,184   100.0% $274,296   100.0% $110,888   40.4%
    NM - not meaningful                       


     Six Months Ended June 30,         
     2024  2023         
     ($ in thousands)     
         % of      % of         
     Amount  GWP  Amount  GWP  Change  Change 
    Product(1)                       
    Earthquake$240,759   32.0% $201,424   38.4% $39,335   19.5%
    Fronting 190,727   25.3%  171,479   32.7%  19,248   11.2%
    Inland Marine and Other Property 170,329   22.6%  122,484   23.4%  47,845   39.1%
    Casualty 110,539   14.7%  28,532   5.4%  82,007   287.4%
    Crop 40,908   5.4%  488   0.1%  40,420   NM 
    Total Gross Written Premiums$753,262   100.0% $524,407   100.0% $228,855   43.6%
    NM - not meaningful                       

    (1) - Beginning in 2024, the Company has updated the categorization of its products to align with management's current strategy and view of the business. Prior year amounts have been reclassified for comparability purposes. The recategorization is for presentation purposes only and does not impact overall gross written premiums.


     Three Months Ended June 30,  Six Months Ended June 30, 
     2024  2023  2024  2023 
     ($ in thousands)  ($ in thousands) 
         % of      % of      % of      % of 
     Amount  GWP  Amount  GWP  Amount  GWP  Amount  GWP 
    State                               
    California$183,396   47.6% $157,057   57.3% $340,614   45.2% $288,946   55.1%
    Florida 29,796   7.7%  12,664   4.6%  43,720   5.8%  24,760   4.7%
    Texas 28,600   7.4%  25,231   9.2%  69,396   9.2%  48,441   9.2%
    Hawaii 18,235   4.7%  12,228   4.5%  30,751   4.1%  22,333   4.3%
    Washington 13,063   3.4%  13,645   5.0%  25,066   3.3%  25,617   4.9%
    New York 7,980   2.1%  3,785   1.4%  16,010   2.1%  7,656   1.5%
    Oregon 5,776   1.5%  5,907   2.2%  12,851   1.7%  12,687   2.4%
    Michigan 5,008   1.3%  848   0.3%  6,711   0.9%  1,711   0.3%
    Other 93,330   24.2%  42,931   15.7%  208,143   27.6%  92,256   17.6%
    Total Gross Written Premiums$385,184   100.0% $274,296   100.0% $753,262   100.0% $524,407   100.0%


     Three Months Ended June 30,  Six Months Ended June 30, 
     2024  2023  2024  2023 
     ($ in thousands)  ($ in thousands) 
         % of      % of      % of      % of 
     Amount  GWP  Amount  GWP  Amount  GWP  Amount  GWP 
    Subsidiary                               
    PSIC$193,709   50.3% $159,846   58.3% $416,366   55.3% $310,550   59.2%
    PESIC 177,109   46.0%  114,450   41.7%  313,603   41.6%  213,857   40.8%
    Laulima 14,366   3.7%  —   —%  23,293   3.1%  —   —%
    Total Gross Written Premiums$385,184   100.0% $274,296   100.0% $753,262   100.0% $524,407   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          Six Months Ended         
     June 30,          June 30,         
     2024  2023  Change  % Change  2024  2023  Change  % Change 
     ($ in thousands)  ($ in thousands) 
    Gross earned premiums$326,964  $242,189  $84,775   35.0% $629,835  $467,432  $162,403   34.7%
    Ceded earned premiums (204,679)  (159,082)  (45,597)  28.7%  (399,684)  (301,085)  (98,599)  32.7%
    Net earned premiums$122,285  $83,107  $39,178   47.1% $230,151  $166,347  $63,804   38.4%
                                    
    Net earned premium ratio 37.4%  34.3%          36.5%  35.6%        


    Loss detail

     Three Months Ended          Six Months Ended         
     June 30,          June 30,         
     2024  2023  Change  % Change  2024  2023  Change  % Change 
     ($ in thousands)  ($ in thousands) 
    Catastrophe losses$3,441  $2,159  $1,282   59.4% $6,800  $3,965  $2,835   71.5%
    Non-catastrophe losses 26,990   15,746   11,244   71.4%  50,468   34,592   15,876   45.9%
    Total losses and loss adjustment expenses$30,431  $17,905  $12,526   70.0% $57,268  $38,557  $18,711   48.5%


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

     Three Months Ended June 30,  Six Months Ended June 30, 
     2024  2023  2024  2023 
     (in thousands)  (in thousands) 
    Reserve for losses and LAE net of reinsurance recoverables at beginning of period$110,163  $81,366  $97,653  $77,520 
    Add: Incurred losses and LAE, net of reinsurance, related to:               
    Current year 33,355   18,539   59,688   35,839 
    Prior years (2,924)  (634)  (2,420)  2,718 
    Total incurred 30,431   17,905   57,268   38,557 
    Deduct: Loss and LAE payments, net of reinsurance, related to:               
    Current year 6,861   6,176   11,756   7,569 
    Prior years 14,972   11,795   24,404   27,208 
    Total payments 21,833   17,971   36,160   34,777 
    Reserve for losses and LAE net of reinsurance recoverables at end of period 118,761   81,300   118,761   81,300 
    Add: Reinsurance recoverables on unpaid losses and LAE at end of period 347,840   216,783   347,840   216,783 
    Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period$466,601  $298,083  $466,601  $298,083 

    Reconciliation of Non-GAAP Financial Measures

    For the three and six months ended June 30, 2024 and 2023, the Non-GAAP financial measures discussed above reconcile to their most comparable GAAP measures as follows:

    Underwriting revenue

     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
     (in thousands)  (in thousands) 
    Total revenue$131,069  $90,396  $249,603  $179,597 
    Net investment income (7,960)  (5,541)  (15,098)  (10,661)
    Net realized and unrealized gains on investments (32)  (1,127)  (3,034)  (1,273)
    Underwriting revenue$123,077  $83,728  $231,471  $167,663 


    Underwriting income and adjusted underwriting income

     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
     (in thousands)  (in thousands) 
    Income before income taxes$33,374  $23,020  $67,730  $45,648 
    Net investment income (7,960)  (5,541)  (15,098)  (10,661)
    Net realized and unrealized gains on investments (32)  (1,127)  (3,034)  (1,273)
    Interest expense 225   1,064   965   2,084 
    Underwriting income$25,607  $17,416  $50,563  $35,798 
    Expenses associated with transactions 472   —   472   — 
    Stock-based compensation expense 3,968   3,697   7,789   7,147 
    Amortization of intangibles 389   389   779   703 
    Expenses associated with catastrophe bond 2,483   1,590   2,483   1,640 
    Adjusted underwriting income$32,919  $23,092  $62,086  $45,288 


    Adjusted net income

     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
     (in thousands)  (in thousands) 
    Net income$25,729  $17,562  $52,111  $34,874 
    Adjustments:               
    Net realized and unrealized gains on investments (32)  (1,127)  (3,034)  (1,273)
    Expenses associated with transactions 472   —   472   — 
    Stock-based compensation expense 3,968   3,697   7,789   7,147 
    Amortization of intangibles 389   389   779   703 
    Expenses associated with catastrophe bond 2,483   1,590   2,483   1,640 
    Tax impact (1,029)  (317)  (825)  (857)
    Adjusted net income$31,980  $21,794  $59,775  $42,234 


    Annualized adjusted return on equity

     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
     (in thousands)  (in thousands) 
                    
    Annualized adjusted net income$127,920  $87,176  $119,550  $84,468 
    Average stockholders' equity$517,131  $409,178  $501,928  $399,230 
    Annualized adjusted return on equity 24.7%  21.3%  23.8%  21.2%


    Adjusted combined ratio

     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
     (in thousands)  (in thousands) 
    Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income$96,678  $65,691  $179,588  $130,549 
    Denominator: Net earned premiums$122,285  $83,107  $230,151  $166,347 
    Combined ratio 79.1%  79.0%  78.0%  78.5%
    Adjustments to numerator:               
    Expenses associated with transactions$(472) $—  $(472) $— 
    Stock-based compensation expense (3,968)  (3,697)  (7,789)  (7,147)
    Amortization of intangibles (389)  (389)  (779)  (703)
    Expenses associated with catastrophe bond (2,483)  (1,590)  (2,483)  (1,640)
    Adjusted combined ratio 73.1%  72.2%  73.0%  72.8%


    Diluted adjusted earnings per share

     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
     (in thousands, except per share data)  (in thousands, except per share data) 
                    
    Adjusted net income$31,980  $21,794  $59,775  $42,234 
    Weighted-average common shares outstanding, diluted 25,617,916   25,309,526   25,554,445   25,384,409 
    Diluted adjusted earnings per share$1.25  $0.86  $2.34  $1.66 


    Catastrophe loss ratio

     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
     (in thousands)  (in thousands) 
    Numerator: Losses and loss adjustment expenses$30,431  $17,905  $57,268  $38,557 
    Denominator: Net earned premiums$122,285  $83,107  $230,151  $166,347 
    Loss ratio 24.9%  21.5%  24.9%  23.2%
                    
    Numerator: Catastrophe losses$3,441  $2,159  $6,800  $3,965 
    Denominator: Net earned premiums$122,285  $83,107  $230,151  $166,347 
    Catastrophe loss ratio 2.8%  2.6%  3.0%  2.4%


    Adjusted combined ratio excluding catastrophe losses

     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
     (in thousands)  (in thousands) 
    Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income$96,678  $65,691  $179,588  $130,549 
    Denominator: Net earned premiums$122,285  $83,107  $230,151  $166,347 
    Combined ratio 79.1%  79.0%  78.0%  78.5%
    Adjustments to numerator:               
    Expenses associated with transactions$(472) $—  $(472) $— 
    Stock-based compensation expense (3,968)  (3,697)  (7,789)  (7,147)
    Amortization of intangibles (389)  (389)  (779)  (703)
    Expenses associated with catastrophe bond (2,483)  (1,590)  (2,483)  (1,640)
    Catastrophe losses (3,441)  (2,159)  (6,800)  (3,965)
    Adjusted combined ratio excluding catastrophe losses 70.3%  69.6%  70.1%  70.4%


    Tangible Stockholders’ equity

     June 30,  December 31, 
     2024  2023 
     (in thousands) 
    Stockholders' equity$532,606  $471,252 
    Goodwill and intangible assets (11,537)  (12,315)
    Tangible stockholders' equity$521,069  $458,937 

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