Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or “Company”)
reported net income of $17.3 million, or $0.68 per diluted share,
for the first quarter of 2023 compared to net income of $14.5
million, or $0.56 per diluted share, for the first quarter of 2022.
Adjusted net income(1) was $20.4 million, or $0.80 per diluted
share, for the first quarter of 2023 as compared to $18.6 million,
or $0.72 per diluted share, for the first quarter of 2022.
Effective December 31, 2022, the Company adjusts for net realized
and unrealized gains and losses when calculating and presenting
adjusted net income, diluted adjusted earnings per share, and
adjusted return on equity. All prior period amounts have been
adjusted accordingly.
First Quarter 2023
Highlights
- Gross written premiums increased by
46.3% to $250.1 million compared to $170.9 million in the first
quarter of 2022
- Net income of $17.3 million,
compared to $14.5 million in the first quarter of 2022
- Adjusted net income(1) of $20.4
million, compared to $18.6 million in the first quarter of
2022
- Total loss ratio of 24.8% compared
to 19.7% in the first quarter of 2022
- Combined ratio of 77.9% compared to
76.5% in the first quarter of 2022
- Adjusted combined ratio(1) of
73.3%, compared to 72.1%, in the first quarter of 2022
- Annualized return on equity of
17.5%, compared to 15.0% in the first quarter of 2022
- Annualized adjusted return on
equity(1) of 20.7%, compared to 19.2% in the first quarter of
2022
(1) See discussion of “Non-GAAP and Key
Performance Indicators” below.
Mac Armstrong, Chairman and Chief Executive
Officer, commented, “Following a record year in 2022, I am pleased
with the strong start to 2023. Our first quarter results
demonstrate continued momentum in our business and further
execution of our Palomar 2X strategy. Highlights for the quarter
include gross written premium growth of 46%, an adjusted combined
ratio of 73.3%, and an adjusted return on equity of 20.7%.
Importantly, these results were achieved even with elevated
catastrophe activity during the quarter.”
Mr. Armstrong continued, “Additionally, in March
we secured approximately $188 million of incremental excess of loss
(“XOL”) limit providing support for further growth in our core
earthquake business. Pricing for the recent XOL placement was in
line with budgeted expectations and as a result, we remain
confident in our ability to deliver our full-year target of $86
million to $90 million of adjusted net income.”
Underwriting ResultsGross
written premiums increased 46.3% to $250.1 million compared to
$170.9 million in the first quarter of 2022, while net earned
premiums increased 9.5% compared to the prior year’s first
quarter.
Losses and loss adjustment expenses for the
first quarter were $20.7 million including $18.9 million of
non-catastrophe attritional losses, and $1.8 million of catastrophe
losses from the California flood activity during the first quarter
offset slightly by favorable prior period development of
catastrophe losses. The loss ratio for the quarter was 24.8%,
comprised of a catastrophe loss ratio(1) of 2.2% and an attritional
loss ratio of 22.6%, compared to a loss ratio of 19.7% during the
same period last year comprised of a catastrophe loss ratio(1) of
0.6% and attritional loss ratio of 19.1%.
Underwriting income(1) for the first quarter was $18.4 million
resulting in a combined ratio of 77.9% compared to underwriting
income of $17.9 million resulting in a combined ratio of 76.5%
during the same period last year. The Company’s adjusted
underwriting income(1) was $22.2 million resulting in an adjusted
combined ratio(1) of 73.3% in the first quarter compared to
adjusted underwriting income(1) of $21.2 million and an adjusted
combined ratio(1) of 72.1% during the same period last year.
Investment ResultsNet
investment income increased by 98.5% to $5.1 million compared to
$2.6 million in the prior year’s first 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
March 31, 2023 due to cash generated from operations. The weighted
average duration of the fixed-maturity investment portfolio,
including cash equivalents, was 3.93 years at March 31, 2023. Cash
and invested assets totaled $674.2 million at March 31, 2023.
During the first quarter, the Company recorded net realized and
unrealized gains of $0.1 million related to its investment
portfolio as compared to realized and unrealized losses of $1.3
million in last year’s first quarter.
Tax RateThe effective tax rate
for the three months ended March 31, 2023 was 23.5% compared to
23.8% for the three months ended March 31, 2022. For the current
quarter and prior year quarter, the Company’s income tax rate
differed from the statutory rate due primarily to the
non-deductible executive compensation expense, offset slightly by
the tax impact of the permanent component of employee stock option
exercises.
Stockholders’ Equity and
ReturnsStockholders' equity was $404.6 million at March
31, 2023, compared to $380.4 million at March 31, 2022. For the
three months ended March 31, 2023, the Company’s annualized return
on equity was 17.5% compared to 15.0% for the same period in the
prior year while adjusted return on equity(1) was 20.7% compared to
19.2% for the same period in the prior year. During the current
quarter, the Company repurchased 134,680 shares for $6.8 million of
the Company’s previously announced $100 million share repurchase
authorization. As of March 31, 2023, $58.8 million remains
available for future repurchases.
Full Year 2023 OutlookFor the
full year 2023, the Company expects to achieve adjusted net income
of $86 million to $90 million. This includes catastrophe losses
incurred in the first quarter of approximately $1.8 million. The
expected results do not include any additional catastrophe
losses.
Conference CallAs previously
announced, Palomar will host a conference call Thursday May 4,
2023, to discuss its first quarter 2023 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 First Quarter 2023 Earnings
Conference Call. A replay will be available starting at 4:00 p.m.
(Eastern Time) on May 4, 2023, and can be accessed by dialing
1-844-512-2921, or for international callers, 1-412-317-6671. The
passcode for the replay is 13737957. The replay will be available
until 11:59 p.m. (Eastern Time) on May 11, 2023.
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 serving residential and
commercial clients in specialty markets including the market for
earthquake 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.
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 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 StatementPalomar
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.
ContactMedia Inquiries Lindsay
Conner 1-551-206-6217 lconner@plmr.com
Investor Relations Jamie Lillis1-203-428-3223 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, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
($ in thousands, except per share
data) |
|
Gross written premiums |
|
$ |
250,112 |
|
$ |
170,934 |
|
$ |
79,178 |
|
46.3 |
% |
Ceded written premiums |
|
|
(170,344) |
|
|
(89,552) |
|
|
(80,792) |
|
90.2 |
% |
Net written premiums |
|
|
79,768 |
|
|
81,382 |
|
|
(1,614) |
|
(2.0) |
% |
Net earned premiums |
|
|
83,241 |
|
|
76,032 |
|
|
7,209 |
|
9.5 |
% |
Commission and other
income |
|
|
695 |
|
|
777 |
|
|
(82) |
|
(10.6) |
% |
Total underwriting revenue(1) |
|
|
83,936 |
|
|
76,809 |
|
|
7,127 |
|
9.3 |
% |
Losses and loss adjustment
expenses |
|
|
20,652 |
|
|
14,954 |
|
|
5,698 |
|
38.1 |
% |
Acquisition expenses, net of
ceding commissions and fronting fees |
|
|
25,679 |
|
|
28,054 |
|
|
(2,375) |
|
(8.5) |
% |
Other underwriting
expenses |
|
|
19,222 |
|
|
15,925 |
|
|
3,297 |
|
20.7 |
% |
Underwriting income(1) |
|
|
18,383 |
|
|
17,876 |
|
|
507 |
|
2.8 |
% |
Interest expense |
|
|
(1,020) |
|
|
(93) |
|
|
(927) |
|
NM |
|
Net investment income |
|
|
5,120 |
|
|
2,579 |
|
|
2,541 |
|
98.5 |
% |
Net realized and unrealized
gains (losses) on investments |
|
|
146 |
|
|
(1,278) |
|
|
1,424 |
|
(111.4) |
% |
Income before income taxes |
|
|
22,629 |
|
|
19,084 |
|
|
3,545 |
|
18.6 |
% |
Income tax expense |
|
|
5,316 |
|
|
4,547 |
|
|
769 |
|
16.9 |
% |
Net income |
|
$ |
17,313 |
|
$ |
14,537 |
|
$ |
2,776 |
|
19.1 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized
(gains) losses on investments(2) |
|
|
(146) |
|
|
1,278 |
|
|
(1,424) |
|
(111.4) |
% |
Expenses associated with
transactions |
|
|
— |
|
|
86 |
|
|
(86) |
|
(100.0) |
% |
Stock-based compensation
expense |
|
|
3,450 |
|
|
2,760 |
|
|
690 |
|
25.0 |
% |
Amortization of
intangibles |
|
|
313 |
|
|
315 |
|
|
(2) |
|
(0.6) |
% |
Expenses associated with
catastrophe bond |
|
|
50 |
|
|
200 |
|
|
(150) |
|
(75.0) |
% |
Tax impact |
|
|
(540) |
|
|
(592) |
|
|
52 |
|
(8.8) |
% |
Adjusted net income(1)(2) |
|
$ |
20,440 |
|
$ |
18,584 |
|
$ |
1,856 |
|
10.0 |
% |
Key Financial and Operating
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on
equity |
|
|
17.5 |
% |
|
15.0 |
% |
|
|
|
|
|
Annualized adjusted return on
equity(1) |
|
|
20.7 |
% |
|
19.2 |
% |
|
|
|
|
|
Loss ratio |
|
|
24.8 |
% |
|
19.7 |
% |
|
|
|
|
|
Expense ratio |
|
|
53.1 |
% |
|
56.8 |
% |
|
|
|
|
|
Combined ratio |
|
|
77.9 |
% |
|
76.5 |
% |
|
|
|
|
|
Adjusted combined
ratio(1) |
|
|
73.3 |
% |
|
72.1 |
% |
|
|
|
|
|
Diluted earnings per
share |
|
$ |
0.68 |
|
$ |
0.56 |
|
|
|
|
|
|
Diluted adjusted earnings per
share(1) |
|
$ |
0.80 |
|
$ |
0.72 |
|
|
|
|
|
|
Catastrophe losses |
|
$ |
1,806 |
|
$ |
481 |
|
|
|
|
|
|
Catastrophe loss ratio(1) |
|
|
2.2 |
% |
|
0.6 |
% |
|
|
|
|
|
Adjusted combined ratio
excluding catastrophe losses(1) |
|
|
71.2 |
% |
|
71.4 |
% |
|
|
|
|
|
Adjusted underwriting
income(1) |
|
$ |
22,196 |
|
$ |
21,237 |
|
$ |
959 |
|
4.5 |
% |
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.
(2)- We now include the impact of net realized and unrealized
losses and gains on investments as an adjustment to our net income.
As this line is primarily driven by equity market fluctuations
rather than our underlying business performance, we believe adding
this adjustment provides a more meaningful comparison of our
performance. We have also changed the prior year adjusted net
income to conform to this presentation.
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, |
|
|
2023 |
|
2022 |
|
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
Fixed maturity securities available for sale, at fair value
(amortized cost: $594,736 in 2023; $561,580 in 2022) |
|
$ |
554,489 |
|
$ |
515,064 |
Equity securities, at fair value (cost: $42,352 in 2023; $42,352 in
2022) |
|
|
39,356 |
|
|
38,576 |
Total investments |
|
|
593,845 |
|
|
553,640 |
Cash and cash equivalents |
|
|
80,295 |
|
|
68,108 |
Restricted cash |
|
|
65 |
|
|
56 |
Accrued investment income |
|
|
4,077 |
|
|
3,777 |
Premiums receivable |
|
|
187,910 |
|
|
162,858 |
Deferred policy acquisition costs, net of ceding commissions and
fronting fees |
|
|
54,187 |
|
|
56,740 |
Reinsurance recoverable on paid losses and loss adjustment
expenses |
|
|
45,801 |
|
|
39,718 |
Reinsurance recoverable on unpaid losses and loss adjustment
expenses |
|
|
183,601 |
|
|
153,895 |
Ceded unearned premiums |
|
|
232,425 |
|
|
204,084 |
Prepaid expenses and other assets |
|
|
41,291 |
|
|
44,088 |
Deferred tax assets, net |
|
|
9,005 |
|
|
10,622 |
Property and equipment, net |
|
|
540 |
|
|
603 |
Intangible assets, net |
|
|
7,948 |
|
|
8,261 |
Total assets |
|
$ |
1,440,990 |
|
$ |
1,306,450 |
Liabilities and
stockholders' equity |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Accounts payable and other accrued liabilities |
|
$ |
19,401 |
|
$ |
25,760 |
Reserve for losses and loss adjustment expenses |
|
|
264,967 |
|
|
231,415 |
Unearned premiums |
|
|
496,182 |
|
|
471,314 |
Ceded premium payable |
|
|
173,035 |
|
|
146,127 |
Funds held under reinsurance treaty |
|
|
11,356 |
|
|
10,680 |
Borrowings from credit agreements |
|
|
71,400 |
|
|
36,400 |
Total liabilities |
|
|
1,036,341 |
|
|
921,696 |
Stockholders' equity: |
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0
shares issued and outstanding as of March 31, 2023 and
December 31, 2022 |
|
|
— |
|
|
— |
Common stock, $0.0001 par value, 500,000,000 shares authorized,
24,942,196 and 25,027,467 shares issued and outstanding as of
March 31, 2023 and December 31, 2022,
respectively |
|
|
3 |
|
|
3 |
Additional paid-in capital |
|
|
337,492 |
|
|
333,558 |
Accumulated other comprehensive loss |
|
|
(31,041) |
|
|
(36,515) |
Retained earnings |
|
|
98,195 |
|
|
87,708 |
Total stockholders' equity |
|
|
404,649 |
|
|
384,754 |
Total liabilities and
stockholders' equity |
|
$ |
1,440,990 |
|
$ |
1,306,450 |
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 |
|
|
March 31, |
|
|
2023 |
|
2022 |
Revenues: |
|
|
|
|
|
|
Gross written premiums |
|
$ |
250,112 |
|
$ |
170,934 |
Ceded written premiums |
|
|
(170,344) |
|
|
(89,552) |
Net written premiums |
|
|
79,768 |
|
|
81,382 |
Change in unearned premiums |
|
|
3,473 |
|
|
(5,350) |
Net earned premiums |
|
|
83,241 |
|
|
76,032 |
Net investment income |
|
|
5,120 |
|
|
2,579 |
Net realized and unrealized gains
(losses) on investments |
|
|
146 |
|
|
(1,278) |
Commission and other income |
|
|
695 |
|
|
777 |
Total revenues |
|
|
89,202 |
|
|
78,110 |
Expenses: |
|
|
|
|
|
|
Losses and loss adjustment
expenses |
|
|
20,652 |
|
|
14,954 |
Acquisition expenses, net of
ceding commissions and fronting fees |
|
|
25,679 |
|
|
28,054 |
Other underwriting expenses |
|
|
19,222 |
|
|
15,925 |
Interest expense |
|
|
1,020 |
|
|
93 |
Total expenses |
|
|
66,573 |
|
|
59,026 |
Income before income taxes |
|
|
22,629 |
|
|
19,084 |
Income tax expense |
|
|
5,316 |
|
|
4,547 |
Net income |
|
|
17,313 |
|
|
14,537 |
Other comprehensive
income (loss), net: |
|
|
|
|
|
|
Net unrealized gains (losses) on
securities available for sale |
|
|
5,474 |
|
|
(18,463) |
Net comprehensive income (loss) |
|
$ |
22,787 |
|
$ |
(3,926) |
Per Share
Data: |
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.69 |
|
$ |
0.57 |
Diluted earnings per share |
|
$ |
0.68 |
|
$ |
0.56 |
|
|
|
|
|
|
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
Basic |
|
|
24,969,703 |
|
|
25,362,179 |
Diluted |
|
|
25,442,902 |
|
|
25,899,290 |
Underwriting Segment Data
The Company has a single reportable segment and offers primarily
property and casualty insurance products. Gross written premiums
(GWP) by product, location and company are presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
($ in thousands) |
|
|
|
|
|
|
% of |
|
|
|
|
% of |
|
|
|
Amount |
|
GWP |
|
Amount |
|
GWP |
|
Product |
|
|
|
|
|
|
|
|
|
|
|
Fronting Premiums |
|
$ |
91,755 |
|
36.7 |
% |
$ |
29,845 |
|
17.5 |
% |
Residential Earthquake |
|
|
55,725 |
|
22.3 |
% |
|
46,336 |
|
27.1 |
% |
Commercial Earthquake |
|
|
37,770 |
|
15.1 |
% |
|
25,144 |
|
14.7 |
% |
Inland Marine |
|
|
31,049 |
|
12.4 |
% |
|
18,237 |
|
10.7 |
% |
Casualty |
|
|
11,733 |
|
4.7 |
% |
|
5,007 |
|
2.9 |
% |
Commercial All Risk |
|
|
8,376 |
|
3.3 |
% |
|
11,210 |
|
6.6 |
% |
Hawaii Hurricane |
|
|
8,073 |
|
3.2 |
% |
|
6,914 |
|
4.0 |
% |
Residential Flood |
|
|
4,235 |
|
1.7 |
% |
|
2,993 |
|
1.8 |
% |
Specialty Homeowners |
|
|
(59) |
|
— |
% |
|
16,284 |
|
9.5 |
% |
Other |
|
|
1,455 |
|
0.6 |
% |
|
8,964 |
|
5.2 |
% |
Total Gross Written Premiums |
|
$ |
250,112 |
|
100.0 |
% |
$ |
170,934 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
($ in thousands) |
|
|
|
|
|
|
% of |
|
|
|
|
% of |
|
|
|
Amount |
|
GWP |
|
Amount |
|
GWP |
|
State |
|
|
|
|
|
|
|
|
|
|
|
California |
|
$ |
131,889 |
|
52.7 |
% |
$ |
68,718 |
|
40.2 |
% |
Texas |
|
|
23,210 |
|
9.3 |
% |
|
18,979 |
|
11.1 |
% |
Florida |
|
|
12,096 |
|
4.8 |
% |
|
4,962 |
|
2.9 |
% |
Washington |
|
|
11,972 |
|
4.8 |
% |
|
6,881 |
|
4.0 |
% |
Hawaii |
|
|
10,105 |
|
4.0 |
% |
|
8,540 |
|
5.0 |
% |
Oregon |
|
|
6,780 |
|
2.7 |
% |
|
4,373 |
|
2.6 |
% |
Illinois |
|
|
4,702 |
|
1.9 |
% |
|
4,273 |
|
2.5 |
% |
New York |
|
|
3,871 |
|
1.5 |
% |
|
2,380 |
|
1.4 |
% |
Other |
|
|
45,487 |
|
18.3 |
% |
|
51,828 |
|
30.3 |
% |
Total Gross Written Premiums |
|
$ |
250,112 |
|
100.0 |
% |
$ |
170,934 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
($ in thousands) |
|
|
|
|
|
|
% of |
|
|
|
|
% of |
|
|
|
Amount |
|
GWP |
|
Amount |
|
GWP |
|
Subsidiary |
|
|
|
|
|
|
|
|
|
|
|
PSIC |
|
$ |
150,704 |
|
60.3 |
% |
$ |
104,004 |
|
60.8 |
% |
PESIC |
|
|
99,408 |
|
39.7 |
% |
|
66,930 |
|
39.2 |
% |
Total Gross Written Premiums |
|
$ |
250,112 |
|
100.0 |
% |
$ |
170,934 |
|
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, |
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
($ in thousands) |
Gross earned premiums |
|
$ |
225,243 |
|
$ |
138,924 |
|
$ |
86,319 |
|
62.1 |
% |
Ceded earned premiums |
|
|
(142,002) |
|
|
(62,892) |
|
|
(79,110) |
|
125.8 |
% |
Net earned premiums |
|
$ |
83,241 |
|
$ |
76,032 |
|
$ |
7,209 |
|
9.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premium ratio |
|
|
37.0% |
|
|
54.7% |
|
|
|
|
|
|
Loss detail
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
($ in thousands) |
Catastrophe losses |
|
$ |
1,806 |
|
$ |
481 |
|
$ |
1,325 |
|
275.5 |
% |
Non-catastrophe losses |
|
|
18,846 |
|
|
14,473 |
|
|
4,373 |
|
30.2 |
% |
Total losses and loss adjustment
expenses |
|
$ |
20,652 |
|
$ |
14,954 |
|
$ |
5,698 |
|
38.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table represents a reconciliation of changes in
the ending reserve balances for losses and loss adjustment
expenses:
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
(in thousands) |
Reserve for losses and LAE net of
reinsurance recoverables at beginning of period |
|
$ |
77,520 |
|
$ |
45,419 |
Add: Incurred losses and LAE, net of reinsurance, related to: |
|
|
|
|
|
|
Current year |
|
|
17,300 |
|
|
13,449 |
Prior years |
|
|
3,352 |
|
|
1,505 |
Total incurred |
|
|
20,652 |
|
|
14,954 |
Deduct: Loss and LAE payments, net of reinsurance, related
to: |
|
|
|
|
|
|
Current year |
|
|
1,393 |
|
|
1,490 |
Prior years |
|
|
15,413 |
|
|
7,497 |
Total payments |
|
|
16,806 |
|
|
8,987 |
Reserve for losses and LAE net of
reinsurance recoverables at end of period |
|
|
81,366 |
|
|
51,386 |
Add: Reinsurance recoverables on
unpaid losses and LAE at end of period |
|
|
183,601 |
|
|
113,726 |
Reserve for losses and LAE gross
of reinsurance recoverables on unpaid losses and LAE at end of
period |
|
$ |
264,967 |
|
$ |
165,112 |
Reconciliation of Non-GAAP Financial Measures
For the three months and year ended March 31, 2023 and 2022, the
Non-GAAP financial measures discussed above reconcile to
their most comparable GAAP measures as follows:
Underwriting revenue
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
(in thousands) |
Total revenue |
|
$ |
89,202 |
|
$ |
78,110 |
Net investment income |
|
|
(5,120) |
|
|
(2,579) |
Net realized and unrealized
(gains) losses on investments |
|
|
(146) |
|
|
1,278 |
Underwriting revenue |
|
$ |
83,936 |
|
$ |
76,809 |
Underwriting income and adjusted underwriting income
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
(in thousands) |
Income before income taxes |
|
$ |
22,629 |
|
$ |
19,084 |
Net investment income |
|
|
(5,120) |
|
|
(2,579) |
Net realized and unrealized
(gains) losses on investments |
|
|
(146) |
|
|
1,278 |
Interest expense |
|
|
1,020 |
|
|
93 |
Underwriting income |
|
$ |
18,383 |
|
$ |
17,876 |
Expenses associated with
transactions |
|
|
— |
|
|
86 |
Stock-based compensation
expense |
|
|
3,450 |
|
|
2,760 |
Amortization of
intangibles |
|
|
313 |
|
|
315 |
Expenses associated with
catastrophe bond |
|
|
50 |
|
|
200 |
Adjusted underwriting
income |
|
$ |
22,196 |
|
$ |
21,237 |
Adjusted net income
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
(in thousands) |
Net income |
|
$ |
17,313 |
|
$ |
14,537 |
Adjustments: |
|
|
|
|
|
|
Net realized and unrealized
(gains) losses on investments |
|
|
(146) |
|
|
1,278 |
Expenses associated with
transactions |
|
|
— |
|
|
86 |
Stock-based compensation
expense |
|
|
3,450 |
|
|
2,760 |
Amortization of
intangibles |
|
|
313 |
|
|
315 |
Expenses associated with
catastrophe bond |
|
|
50 |
|
|
200 |
Tax impact |
|
|
(540) |
|
|
(592) |
Adjusted net income |
|
$ |
20,440 |
|
$ |
18,584 |
Annualized adjusted return on equity
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
($ in thousands) |
|
|
|
|
|
|
|
|
|
Annualized adjusted net
income |
|
$ |
81,761 |
|
$ |
74,336 |
|
Average stockholders'
equity |
|
$ |
394,701 |
|
$ |
387,284 |
|
Annualized adjusted return on
equity |
|
|
20.7 |
% |
|
19.2 |
% |
Adjusted combined ratio
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
($ in thousands) |
|
Numerator: Sum of losses and
loss adjustment expenses, acquisition expenses, and other
underwriting expenses, net of commission and other income |
|
$ |
64,858 |
|
$ |
58,156 |
|
Denominator: Net earned
premiums |
|
$ |
83,241 |
|
$ |
76,032 |
|
Combined ratio |
|
|
77.9 |
% |
|
76.5 |
% |
Adjustments to numerator: |
|
|
|
|
|
|
|
Expenses associated with
transactions |
|
$ |
— |
|
$ |
(86) |
|
Stock-based compensation
expense |
|
|
(3,450) |
|
|
(2,760) |
|
Amortization of
intangibles |
|
|
(313) |
|
|
(315) |
|
Expenses associated with
catastrophe bond |
|
|
(50) |
|
|
(200) |
|
Adjusted combined ratio |
|
|
73.3 |
% |
|
72.1 |
% |
Diluted adjusted earnings per share
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
(in thousands, except per share data) |
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
20,440 |
|
$ |
18,584 |
Weighted-average common shares
outstanding, diluted |
|
|
25,442,902 |
|
|
25,899,290 |
Diluted adjusted earnings per
share |
|
$ |
0.80 |
|
$ |
0.72 |
Catastrophe loss ratio
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
($ in thousands) |
|
Numerator: Losses and loss
adjustment expenses |
|
$ |
20,652 |
|
$ |
14,954 |
|
Denominator: Net earned
premiums |
|
$ |
83,241 |
|
$ |
76,032 |
|
Loss ratio |
|
|
24.8 |
% |
|
19.7 |
% |
|
|
|
|
|
|
|
|
Numerator: Catastrophe
losses |
|
$ |
1,806 |
|
$ |
481 |
|
Denominator: Net earned
premiums |
|
$ |
83,241 |
|
$ |
76,032 |
|
Catastrophe loss ratio |
|
|
2.2 |
% |
|
0.6 |
% |
Adjusted combined ratio excluding catastrophe losses
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
($ in thousands) |
|
Numerator: Sum of losses and
loss adjustment expenses, acquisition expenses, and other
underwriting expenses, net of commission and other income |
|
$ |
64,858 |
|
$ |
58,156 |
|
Denominator: Net earned
premiums |
|
$ |
83,241 |
|
$ |
76,032 |
|
Combined ratio |
|
|
77.9 |
% |
|
76.5 |
% |
Adjustments to numerator: |
|
|
|
|
|
|
|
Expenses associated with
transactions |
|
$ |
— |
|
$ |
(86) |
|
Stock-based compensation
expense |
|
|
(3,450) |
|
|
(2,760) |
|
Amortization of
intangibles |
|
|
(313) |
|
|
(315) |
|
Expenses associated with
catastrophe bond |
|
|
(50) |
|
|
(200) |
|
Catastrophe losses |
|
|
(1,806) |
|
|
(481) |
|
Adjusted combined ratio
excluding catastrophe losses |
|
|
71.2 |
% |
|
71.4 |
% |
Tangible Stockholders’ equity
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
(in thousands) |
Stockholders' equity |
|
$ |
404,649 |
|
$ |
384,754 |
Intangible assets |
|
|
(7,948) |
|
|
(8,261) |
Tangible stockholders'
equity |
|
$ |
396,701 |
|
$ |
376,493 |
Palomar (NASDAQ:PLMR)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Palomar (NASDAQ:PLMR)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024