James River Announces First Quarter 2022 Results
James River Group Holdings reported first quarter 2022 net income of $9.3 million ($0.25 per diluted share), reversing a net loss of $103.5 million in Q1 2021. Adjusted net operating income reached $13.9 million ($0.37 per diluted share). The combined ratio was 97.4%, impacted by a loss portfolio transfer. Excess and Surplus Lines, the largest segment, achieved a 12.6% increase in gross written premium. Expense ratio improved to 26.0%. Net investment income rose by 7.8% due to renewable energy investments. A cash dividend of $0.05 per share was declared, payable June 30, 2022.
- Net income increased to $9.3 million from a loss of $103.5 million year-over-year.
- Adjusted net operating income rose to $13.9 million compared to a loss of $108.8 million in the prior year.
- Excess and Surplus Lines gross written premium grew by 12.6%.
- Expense ratio improved to 26.0% from 28.9% year-over-year.
- Net investment income increased by 7.8% due to strong renewable energy investments.
- Combined ratio of 97.4% elevated by 6.1 percentage points from the Retrocession Transaction.
- Gross written premium in Casualty Reinsurance segment decreased by 53.8%.
- First quarter 2022 net income available to common shareholders of
$9.3 million ($0.25 per diluted share). Adjusted net operating income1 of$13.9 million ($0.37 per diluted share). - The Group combined ratio of
97.4% was elevated by 6.1 percentage points associated with the previously announced Casualty Reinsurance loss portfolio transfer ("Retrocession Transaction"). The Company's largest segment, Excess and Surplus Lines ("E&S"), produced a combined ratio of83.7% . - Growth in E&S gross written premium of
12.6% and an increase in E&S renewal pricing of8.4% . - Group expense ratio improved to
26.0% from28.9% in the first quarter of 2021. - Net investment income increased
7.8% versus the prior year quarter due to strong results from renewable energy investments.
PEMBROKE, Bermuda, May 09, 2022 (GLOBE NEWSWIRE) -- James River Group Holdings, Ltd. ("James River" or the "Company") (NASDAQ: JRVR) today reported first quarter 2022 net income available to common shareholders of
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1 Adjusted net operating income (loss) is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.
Earnings (Loss) Per Diluted Share | Three Months Ended March 31, | |||||
2022 | 2021 | |||||
Net Income (Loss) | $ | 0.25 | $ | (3.37 | ) | |
Adjusted Net Operating Income (Loss)1 | $ | 0.37 | $ | (3.54 | ) | |
1 See "Reconciliation of Non-GAAP Measures" below. |
Frank D'Orazio, the Company’s Chief Executive Officer, commented, “The first quarter represented a strong start to the year, highlighted by continued attractive market conditions for our E&S segment allowing us to produce broad-based growth in an attractive underwriting environment. Our E&S renewal pricing reflected the twenty-first consecutive quarter of positive rate, compounding to
First Quarter 2022 Operating Results
- Gross written premium of
$359.9 million , consisting of the following:
Three Months Ended March 31, | |||||||||
($ in thousands) | 2022 | 2021 | % Change | ||||||
Excess and Surplus Lines | $ | 204,282 | $ | 181,358 | 13% | ||||
Specialty Admitted Insurance | 125,710 | 127,036 | (1)% | ||||||
Casualty Reinsurance | 29,944 | 64,861 | (54)% | ||||||
$ | 359,936 | $ | 373,255 | (4)% |
- Net written premium of
$175.9 million , consisting of the following:
Three Months Ended March 31, | |||||||||
($ in thousands) | 2022 | 2021 | % Change | ||||||
Excess and Surplus Lines | $ | 125,710 | $ | 108,433 | 16% | ||||
Specialty Admitted Insurance | 20,205 | 22,005 | (8)% | ||||||
Casualty Reinsurance | 29,944 | 44,161 | (32)% | ||||||
$ | 175,859 | $ | 174,599 | 1% |
- Net earned premium of
$189.8 million , consisting of the following:
Three Months Ended March 31, | ||||||||
($ in thousands) | 2022 | 2021 | % Change | |||||
Excess and Surplus Lines | $ | 131,301 | $ | 113,708 | 15% | |||
Specialty Admitted Insurance | 19,318 | 16,357 | 18% | |||||
Casualty Reinsurance | 39,205 | 30,528 | 28% | |||||
$ | 189,824 | $ | 160,593 | 18% |
- E&S gross written premium increased
12.6% compared to the prior year quarter, with eleven out of thirteen underwriting divisions experiencing growth and ten of the underwriting divisions reporting double-digit growth. - Gross written premium for the Specialty Admitted Insurance segment declined
1.0% from the prior year due to shrinkage in both our individual risk workers' compensation business and our large workers' compensation fronted program. Taken together, gross written premium in these two areas declined12.6% , while remaining segment premium increased6.5% . - Gross written premium in the Casualty Reinsurance segment decreased
53.8% from the prior year quarter primarily driven by the non-renewal of several treaties. The decline in gross written premium is consistent with our previously announced strategy for this segment. Since the earning patterns of the business can extend over multiple years, changes in net earned premium for this segment will lag the expected decline in gross and net written premium. - Pre-tax favorable (unfavorable) reserve development by segment was as follows:
Three Months Ended March 31, | ||||||||
($ in thousands) | 2022 | 2021 | ||||||
Excess and Surplus Lines | $ | 59 | $ | (168,651 | ) | |||
Specialty Admitted Insurance | (63 | ) | 1,000 | |||||
Casualty Reinsurance | (6,800 | ) | (2,483 | ) | ||||
$ | (6,804 | ) | $ | (170,134 | ) |
- As previously disclosed, the prior year reserve development in the quarter included
$6.8 million (representing a 3.6 percentage point increase to the Company's loss ratio) associated with the Retrocession Transaction. Net reserve development on the remaining E&S and Specialty Admitted business was de minimis during the quarter. - Separately, as previously disclosed, the Retrocession Transaction resulted in
$4.7 million of additional current accident year losses in the Casualty Reinsurance segment (representing a 2.5 percentage point increase to the Company's loss ratio). As part of the Retrocession Transaction, the Company did not recognize any earnings on the portfolio during the first quarter, resulting in the additional current accident year losses. - Gross fee income was as follows:
Three Months Ended March 31, | |||||||||
($ in thousands) | 2022 | 2021 | % Change | ||||||
Specialty Admitted Insurance | $ | 5,558 | $ | 5,128 | 8% |
- The consolidated expense ratio was
26.0% for the first quarter of 2022, down from28.9% in the prior year first quarter. The expense ratio benefited from18.2% growth in net earned premium that was well in excess of growth in underwriting expenses as we continue to manage costs effectively.
Investment Results
Net investment income for the first quarter of 2022 was
The Company’s net investment income consisted of the following:
Three Months Ended March 31, | |||||||||
($ in thousands) | 2022 | 2021 | % Change | ||||||
Renewable Energy Investments | $ | 2,682 | $ | (681 | ) | NM | |||
Other Private Investments | 217 | 1,015 | (79)% | ||||||
All Other Net Investment Income | 13,368 | 14,755 | (9)% | ||||||
Total Net Investment Income | $ | 16,267 | $ | 15,089 | 8% |
The Company’s annualized gross investment yield on average fixed maturity, bank loan and equity securities for the three months ended March 31, 2022 was
Net realized and unrealized losses on investments of
Taxes
Generally the Company's effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. The tax rate for the three months ended March 31, 2022 was
Tangible Equity
Tangible equity2 of
Capital Management
The Company announced that its Board of Directors declared a cash dividend of
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2 Tangible equity is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.
Conference Call
James River will hold a conference call to discuss its third quarter results tomorrow, May 10, 2022 at 8:30 a.m. Eastern Time. Investors may access the conference call by dialing (877) 930-8055, Conference ID# 7872437, or via the internet by visiting www.jrgh.net and clicking on the “Investor Relations” link. Please access the website at least 15 minutes early to register and download any necessary audio software. A replay of the call will be available until 11:00 a.m. (Eastern Time) on June 9, 2022 and can be accessed by dialing (855) 859-2056 or by visiting the company website.
Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as believe, expect, seek, may, will, should, intend, project, anticipate, plan, estimate, guidance or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and uncertainties, they include, among others, the following: the inherent uncertainty of estimating reserves and the possibility that incurred losses may be greater than our loss and loss adjustment expense reserves; inaccurate estimates and judgments in our risk management may expose us to greater risks than intended; the downgrade in the financial strength rating of our regulated insurance subsidiaries announced on May 7, 2021, or further downgrades, impacting our ability to attract and retain insurance and reinsurance business that our subsidiaries write, our competitive position, and our financial condition; the potential loss of key members of our management team or key employees and our ability to attract and retain personnel; adverse economic factors resulting in the sale of fewer policies than expected or an increase in the frequency or severity of claims, or both; the impact of a persistent high inflationary environment on our reserves, the values of our investment returns, and on our compensation expenses; reliance on a select group of brokers and agents for a significant portion of our business and the impact of our potential failure to maintain such relationships; reliance on a select group of customers for a significant portion of our business and the impact of our potential failure to maintain, or decision to terminate, such relationships; our ability to obtain reinsurance coverage at prices and on terms that allow us to transfer risk and adequately protect our company against financial loss; losses resulting from reinsurance counterparties failing to pay us on reinsurance claims, insurance companies with whom we have a fronting arrangement failing to pay us for claims, or a former customer with whom we have an indemnification arrangement failing to perform their reimbursement obligations; inadequacy of premiums we charge to compensate us for our losses incurred; changes in laws or government regulation, including tax or insurance law and regulations; the ongoing effect of Public Law No. 115-97, informally titled the Tax Cuts and Jobs Act, which may have a significant effect on us including, among other things, by potentially increasing our tax rate, as well as on our shareholders; in the event we do not qualify for the insurance company exception to the passive foreign investment company (“PFIC”) rules and are therefore considered a PFIC, there could be material adverse tax consequences to an investor that is subject to U.S. federal income taxation; the Company or any of its foreign subsidiaries becoming subject to U.S. federal income taxation; a failure of any of the loss limitations or exclusions we utilize to shield us from unanticipated financial losses or legal exposures, or other liabilities; losses from catastrophic events, such as natural disasters and terrorist acts, which substantially exceed our expectations and/or exceed the amount of reinsurance we have purchased to protect us from such events; the effects of the COVID-19 pandemic and associated government actions on our operations and financial performance; potential effects on our business of emerging claim and coverage issues; exposure to credit risk, interest rate risk and other market risk in our investment portfolio; the potential impact of internal or external fraud, operational errors, systems malfunctions or cyber security incidents; our ability to manage our growth effectively; failure to maintain effective internal controls in accordance with Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”); and changes in our financial condition, regulations or other factors that may restrict our subsidiaries’ ability to pay us dividends. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those in the forward-looking statements, is contained in our filings with the U.S. Securities and Exchange Commission ("SEC"), including our most recently filed Annual Report on Form 10-K. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
Non-GAAP Financial Measures
In presenting James River Group Holdings, Ltd.’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). Such measures, including underwriting profit (loss), adjusted net operating income (loss), tangible equity, tangible common equity, adjusted net operating return on average tangible equity (which is calculated as annualized adjusted net operating income (loss) divided by average tangible equity), and adjusted net operating return on average tangible common equity (which is calculated as annualized adjusted net operating income (loss) divided by average tangible common equity), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those measures determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included at the end of this press release.
About James River Group Holdings, Ltd.
James River Group Holdings, Ltd. is a Bermuda-based insurance holding company that owns and operates a group of specialty insurance and reinsurance companies. The Company operates in three specialty property-casualty insurance and reinsurance segments: Excess and Surplus Lines, Specialty Admitted Insurance and Casualty Reinsurance. Each of the Company’s regulated insurance subsidiaries are rated “A-” (Excellent) by A.M. Best Company.
Visit James River Group Holdings, Ltd. on the web at www.jrgh.net
For more information contact:
Brett Shirreffs
SVP, Finance, Investments and Investor Relations
InvestorRelations@jrgh.net
James River Group Holdings, Ltd. and Subsidiaries Condensed Consolidated Balance Sheet Data (Unaudited) | |||||
($ in thousands, except for share data) | March 31, 2022 | December 31, 2021 | |||
ASSETS | |||||
Invested assets: | |||||
Fixed maturity securities, available-for-sale, at fair value | $ | 1,662,278 | $ | 1,677,561 | |
Equity securities, at fair value | 102,973 | 108,410 | |||
Bank loan participations, at fair value | 159,084 | 156,043 | |||
Short-term investments | 147,334 | 136,563 | |||
Other invested assets | 53,298 | 51,908 | |||
Total invested assets | 2,124,967 | 2,130,485 | |||
Cash and cash equivalents | 270,195 | 190,123 | |||
Restricted cash equivalents (a) | 102,009 | 102,005 | |||
Accrued investment income | 11,730 | 11,037 | |||
Premiums receivable and agents’ balances, net | 367,991 | 393,967 | |||
Reinsurance recoverable on unpaid losses, net | 1,617,884 | 1,348,628 | |||
Reinsurance recoverable on paid losses | 87,595 | 82,235 | |||
Deferred policy acquisition costs | 66,028 | 68,526 | |||
Goodwill and intangible assets | 217,779 | 217,870 | |||
Other assets | 401,040 | 403,674 | |||
Total assets | $ | 5,267,218 | $ | 4,948,550 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Reserve for losses and loss adjustment expenses | $ | 2,750,188 | $ | 2,748,473 | |
Unearned premiums | 706,770 | 727,552 | |||
Funds held (a) | 371,853 | 97,360 | |||
Senior debt | 222,300 | 262,300 | |||
Junior subordinated debt | 104,055 | 104,055 | |||
Accrued expenses | 48,229 | 57,920 | |||
Other liabilities | 271,248 | 225,528 | |||
Total liabilities | 4,474,643 | 4,223,188 | |||
Series A redeemable preferred shares | 144,898 | 0 | |||
Total shareholders’ equity | 647,677 | 725,362 | |||
Total liabilities, Series A redeemable preferred shares, and shareholders’ equity | $ | 5,267,218 | $ | 4,948,550 | |
Tangible equity (b) | $ | 574,796 | $ | 507,492 | |
Tangible equity per share outstanding (b) | $ | 13.34 | $ | 13.58 | |
Shareholders' equity per share outstanding | $ | 17.30 | $ | 19.41 | |
Common shares outstanding | 37,448,314 | 37,373,066 | |||
(a) Restricted cash equivalents and the funds held liability includes funds posted by the Company to a trust account for the benefit of a third party administrator handling the claims on the Rasier commercial auto policies in run-off. Such funds held in trust secure the Company's obligations to reimburse the administrator for claims payments, and are primarily sourced from the collateral posted to the Company by Rasier and its affiliates to support their obligations under the indemnity agreements and the loss portfolio transfer reinsurance agreement with the Company. The funds held liability also includes a notional funds withheld account balance related to the Retrocession Transaction that will be reduced on a quarterly basis by paid losses on the subject business. | |||||
(b) See “Reconciliation of Non-GAAP Measures” |
James River Group Holdings, Ltd. and Subsidiaries Condensed Consolidated (Loss) Income Statement Data (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
($ in thousands, except for share data) | 2022 | 2021 | |||||
REVENUES | |||||||
Gross written premiums | $ | 359,936 | $ | 373,255 | |||
Net written premiums | 175,859 | 174,599 | |||||
Net earned premiums | 189,824 | 160,593 | |||||
Net investment income | 16,267 | 15,089 | |||||
Net realized and unrealized (losses) gains on investments | (5,010 | ) | 6,272 | ||||
Other income | 867 | 1,026 | |||||
Total revenues | 201,948 | 182,980 | |||||
EXPENSES | |||||||
Losses and loss adjustment expenses | 135,608 | 273,500 | |||||
Other operating expenses | 50,061 | 47,381 | |||||
Other expenses | 368 | 621 | |||||
Interest expense | 2,292 | 2,216 | |||||
Amortization of intangible assets | 91 | 91 | |||||
Total expenses | 188,420 | 323,809 | |||||
Income (loss) before taxes | 13,528 | (140,829 | ) | ||||
Income tax expense (benefit) | 3,323 | (37,369 | ) | ||||
NET INCOME (LOSS) | $ | 10,205 | $ | (103,460 | ) | ||
Dividends on Series A preferred shares | (875 | ) | 0 | ||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | 9,330 | $ | (103,460 | ) | ||
ADJUSTED NET OPERATING INCOME (LOSS) (a) | $ | 13,867 | $ | (108,795 | ) | ||
INCOME (LOSS) PER COMMON SHARE | |||||||
Basic | $ | 0.25 | $ | (3.37 | ) | ||
Diluted | $ | 0.25 | $ | (3.37 | ) | ||
ADJUSTED NET OPERATING INCOME (LOSS) PER COMMON SHARE | |||||||
Basic | $ | 0.37 | $ | (3.54 | ) | ||
Diluted | $ | 0.37 | $ | (3.54 | ) | ||
Weighted-average common shares outstanding: | |||||||
Basic | 37,406,913 | 30,713,986 | |||||
Diluted | 37,554,662 | 30,713,986 | |||||
Cash dividends declared per common share | $ | 0.05 | $ | 0.30 | |||
Ratios: | |||||||
Loss ratio | 71.4 | % | 170.3 | % | |||
Expense ratio (b) | 26.0 | % | 28.9 | % | |||
Combined ratio | 97.4 | % | 199.2 | % | |||
Accident year loss ratio | 67.9 | % | 64.4 | % | |||
(a) See "Reconciliation of Non-GAAP Measures". | |||||||
(b) Calculated with a numerator comprising other operating expenses less gross fee income (in specific instances when the Company is not retaining insurance risk) included in “Other income” in our Condensed Consolidated Income Statements of |
James River Group Holdings, Ltd. and Subsidiaries Segment Results | ||||||||||
EXCESS AND SURPLUS LINES | ||||||||||
Three Months Ended March 31, | ||||||||||
($ in thousands) | 2022 | 2021 | % Change | |||||||
Gross written premiums | $ | 204,282 | $ | 181,358 | 12.6 | % | ||||
Net written premiums | $ | 125,710 | $ | 108,433 | 15.9 | % | ||||
Net earned premiums | $ | 131,301 | $ | 113,708 | 15.5 | % | ||||
Losses and loss adjustment expenses | (84,925 | ) | (241,742 | ) | (64.9) % | |||||
Underwriting expenses | (24,919 | ) | (22,912 | ) | 8.8 | % | ||||
Underwriting profit (loss) (a) | $ | 21,457 | $ | (150,946 | ) | — | ||||
Ratios: | ||||||||||
Loss ratio | 64.7 | % | 212.6 | % | ||||||
Expense ratio | 19.0 | % | 20.1 | % | ||||||
Combined ratio | 83.7 | % | 232.7 | % | ||||||
Accident year loss ratio | 64.7 | % | 64.3 | % | ||||||
(a) See "Reconciliation of Non-GAAP Measures". |
SPECIALTY ADMITTED INSURANCE | ||||||||||
Three Months Ended March 31, | ||||||||||
($ in thousands) | 2022 | 2021 | % Change | |||||||
Gross written premiums | $ | 125,710 | $ | 127,036 | (1.0) % | |||||
Net written premiums | $ | 20,205 | $ | 22,005 | (8.2) % | |||||
Net earned premiums | $ | 19,318 | $ | 16,357 | 18.1 | % | ||||
Losses and loss adjustment expenses | (15,435 | ) | (10,742 | ) | 43.7 | % | ||||
Underwriting expenses | (3,674 | ) | (4,349 | ) | (15.5) % | |||||
Underwriting profit (a), (b) | $ | 209 | $ | 1,266 | (83.5)% | |||||
Ratios: | ||||||||||
Loss ratio | 79.9 | % | 65.7 | % | ||||||
Expense ratio | 19.0 | % | 26.6 | % | ||||||
Combined ratio | 98.9 | % | 92.3 | % | ||||||
Accident year loss ratio | 79.6 | % | 71.8 | % | ||||||
(a) See "Reconciliation of Non-GAAP Measures". | ||||||||||
(b) Underwriting results include gross fee income of |
CASUALTY REINSURANCE | ||||||||||
Three Months Ended March 31, | ||||||||||
($ in thousands) | 2022 | 2021 | % Change | |||||||
Gross written premiums | $ | 29,944 | $ | 64,861 | (53.8)% | |||||
Net written premiums | $ | 29,944 | $ | 44,161 | (32.2)% | |||||
Net earned premiums | $ | 39,205 | $ | 30,528 | 28.4 | % | ||||
Losses and loss adjustment expenses | (35,248 | ) | (21,016 | ) | 67.7 | % | ||||
Underwriting expenses | (12,794 | ) | (11,137 | ) | 14.9 | % | ||||
Underwriting loss (a) | $ | (8,837 | ) | $ | (1,625 | ) | — | |||
Ratios: | ||||||||||
Loss ratio | 89.9 | % | 68.8 | % | ||||||
Expense ratio | 32.6 | % | 36.5 | % | ||||||
Combined ratio | 122.5 | % | 105.3 | % | ||||||
Accident year loss ratio | 72.6 | % | 60.7 | % | ||||||
(a) See "Reconciliation of Non-GAAP Measures". | ||||||||||
RECONCILIATION OF NON-GAAP MEASURES
Underwriting Profit (Loss)
The following table reconciles the underwriting profit (loss) by individual operating segment and for the entire Company to consolidated income (loss) before taxes. We believe that these measures are useful to investors in evaluating the performance of our Company and its operating segments because our objective is to consistently earn underwriting profits. We evaluate the performance of our operating segments and allocate resources based primarily on underwriting profit (loss) of operating segments. Our definition of underwriting profit (loss) of operating segments and underwriting profit (loss) may not be comparable to that of other companies.
Three Months Ended March 31, | |||||||
($ in thousands) | 2022 | 2021 | |||||
Underwriting profit (loss) of the operating segments: | |||||||
Excess and Surplus Lines | $ | 21,457 | $ | (150,946 | ) | ||
Specialty Admitted Insurance | 209 | 1,266 | |||||
Casualty Reinsurance | (8,837 | ) | (1,625 | ) | |||
Total underwriting profit (loss) of operating segments | 12,829 | (151,305 | ) | ||||
Other operating expenses of the Corporate and Other segment | (7,874 | ) | (8,056 | ) | |||
Underwriting profit (loss) (a) | 4,955 | (159,361 | ) | ||||
Net investment income | 16,267 | 15,089 | |||||
Net realized and unrealized (losses) gains on investments | (5,010 | ) | 6,272 | ||||
Other expense | (301 | ) | (522 | ) | |||
Interest expense | (2,292 | ) | (2,216 | ) | |||
Amortization of intangible assets | (91 | ) | (91 | ) | |||
Consolidated income (loss) before taxes | $ | 13,528 | $ | (140,829 | ) | ||
(a) Included in underwriting results for the three months ended March 31, 2022 and 2021 is gross fee income of |
Adjusted Net Operating Income (Loss)
We define adjusted net operating income (loss) as net income (loss) available to common shareholders excluding net realized and unrealized (losses) gains on investments, and certain non-operating expenses such as professional service fees related to a purported class action lawsuit, various strategic initiatives, and the filing of registration statements for the offering of securities, and severance costs associated with terminated employees. We use adjusted net operating income (loss) as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net operating income (loss) should not be viewed as a substitute for net income (loss) calculated in accordance with GAAP, and our definition of adjusted net operating income (loss) may not be comparable to that of other companies.
Our income (loss) available to common shareholders reconciles to our adjusted net operating income (loss) as follows:
Three Months Ended March 31, | |||||||||||||
2022 | 2021 | ||||||||||||
($ in thousands) | Income Before Taxes | Net Income | Loss Before Taxes | Net Loss | |||||||||
Income (loss) available to common shareholders | $ | 12,653 | $ | 9,330 | $ | (140,829 | ) | $ | (103,460 | ) | |||
Net realized and unrealized losses (gains) on investments | 5,010 | 4,190 | (6,272 | ) | (5,751 | ) | |||||||
Other expenses | 347 | 347 | 527 | 416 | |||||||||
Adjusted net operating income (loss) | $ | 18,010 | $ | 13,867 | $ | (146,574 | ) | $ | (108,795 | ) |
Tangible Equity (per Share) and Tangible Common Equity (per Share)
We define tangible equity as shareholders' equity plus mezzanine Series A preferred shares less goodwill and intangible assets (net of amortization). We define tangible common equity as tangible equity less mezzanine Series A preferred shares. Our definition of tangible equity and tangible common equity may not be comparable to that of other companies, and it should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. We use tangible equity and tangible common equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure. The following table reconciles shareholders’ equity to tangible equity and tangible common equity for March 31, 2022, December 31, 2021, and March 31, 2021.
March 31, 2022 | December 31, 2021 | March 31, 2021 | |||||||||||||||
($ in thousands, except for share data) | Equity | Equity per share | Equity | Equity per share | Equity | Equity per share | |||||||||||
Shareholders' equity | $ | 647,677 | $ | 17.30 | $ | 725,362 | $ | 19.41 | $ | 639,628 | $ | 20.78 | |||||
Plus: Series A redeemable preferred shares | 144,898 | — | — | ||||||||||||||
Less: Goodwill and intangible assets | 217,779 | 217,870 | 218,142 | ||||||||||||||
Tangible equity | $ | 574,796 | $ | 13.34 | $ | 507,492 | $ | 13.58 | $ | 421,486 | $ | 13.70 | |||||
Less: Series A redeemable preferred shares | 144,898 | — | — | ||||||||||||||
Tangible common equity | $ | 429,898 | $ | 11.48 | $ | 507,492 | $ | 13.58 | $ | 421,486 | $ | 13.70 | |||||
Common shares outstanding | 37,448,314 | 37,373,066 | 30,774,930 | ||||||||||||||
Common shares from assumed conversion of Series A preferred shares | 5,640,158 | — | — | ||||||||||||||
Common shares outstanding after assumed conversion of Series A preferred shares | 43,088,472 | 37,373,066 | 30,774,930 |
FAQ
What were James River Group's net income figures for Q1 2022?
How did the adjusted net operating income change in Q1 2022 for JRVR?
What is the combined ratio for James River Group in the first quarter of 2022?
How much did gross written premiums increase in Excess and Surplus Lines for JRVR?