Palomar Holdings, Inc. Reports Third Quarter 2024 Results
Palomar Holdings (NASDAQ:PLMR) reported strong Q3 2024 results with net income of $30.5 million ($1.15 per diluted share), up from $18.4 million in Q3 2023. Gross written premiums increased 32.2% to $415.0 million, while adjusted net income grew 39.3% to $32.4 million. The company achieved a combined ratio of 80.5% and an annualized return on equity of 19.7%. Despite heightened catastrophe activity, Palomar maintained strong performance with a 77.1% adjusted combined ratio. The company successfully raised $116 million in August to fund expansion into the surety market and support organic growth initiatives.
Palomar Holdings (NASDAQ:PLMR) ha riportato risultati solidi per il terzo trimestre del 2024, con un reddito netto di 30,5 milioni di dollari (1,15 dollari per azione diluita), in aumento rispetto ai 18,4 milioni di dollari del terzo trimestre del 2023. I premi lordi scritti sono aumentati del 32,2% a 415,0 milioni di dollari, mentre il reddito netto rettificato è cresciuto del 39,3% a 32,4 milioni di dollari. L'azienda ha ottenuto un rapporto combinato dell'80,5% e un rendimento annuo del capitale proprio del 19,7%. Nonostante l'aumento dell'attività catastrofica, Palomar ha mantenuto ottime performance con un rapporto combinato rettificato del 77,1%. L'azienda ha anche raccolto con successo 116 milioni di dollari ad agosto per finanziare l'espansione nel mercato delle garanzie e supportare le iniziative di crescita organica.
Palomar Holdings (NASDAQ:PLMR) reportó sólidos resultados para el tercer trimestre de 2024, con un ingreso neto de 30.5 millones de dólares (1.15 dólares por acción diluida), un aumento respecto a los 18.4 millones de dólares en el tercer trimestre de 2023. Las primas brutas escritas crecieron un 32.2% a 415.0 millones de dólares, mientras que el ingreso neto ajustado aumentó un 39.3% a 32.4 millones de dólares. La compañía logró una relación combinada del 80.5% y un rendimiento anualizado del capital del 19.7%. A pesar de la actividad catastrofista intensa, Palomar mantuvo un excelente rendimiento con una relación combinada ajustada del 77.1%. La empresa también recaudó con éxito 116 millones de dólares en agosto para financiar la expansión en el mercado de garantías y apoyar las iniciativas de crecimiento orgánico.
팔로마 홀딩스 (NASDAQ:PLMR)는 2024년 3분기 강력한 실적을 발표했으며, 순이익은 3,050만 달러(희석 주당 1.15달러)로, 2023년 3분기 1,840만 달러에서 증가했습니다. 총 인수된 보험료는 32.2% 증가한 4억 1,500만 달러에 달했으며, 조정된 순이익은 39.3% 증가해 3,240만 달러에 이르렀습니다. 이 회사는 80.5%의 결합 비율과 19.7%의 연환산 자기자본 수익률을 달성했습니다. 재해 활동이 증가했음에도 불구하고 팔로마는 77.1%의 조정된 결합 비율로 강력한 성과를 유지했습니다. 이 회사는 8월에 1억 1,600만 달러를 성공적으로 모집해 보증 시장으로의 확장을 자금 지원하고 유기적 성장 이니셔티브를 지원했습니다.
Palomar Holdings (NASDAQ:PLMR) a publié de solides résultats pour le troisième trimestre de 2024, avec un revenu net de 30,5 millions de dollars (1,15 dollar par action diluée), en hausse par rapport à 18,4 millions de dollars au troisième trimestre de 2023. Les primes brutes souscrites ont augmenté de 32,2 % pour atteindre 415,0 millions de dollars, tandis que le revenu net ajusté a crû de 39,3 % pour atteindre 32,4 millions de dollars. L'entreprise a réalisé un ratio combiné de 80,5 % et un rendement des capitaux propres annualisé de 19,7 %. Malgré une activité catastrophique accrue, Palomar a maintenu des performances solides avec un ratio combiné ajusté de 77,1 %. La société a également réussi à lever 116 millions de dollars en août pour financer son expansion sur le marché des cautions et soutenir ses initiatives de croissance organique.
Palomar Holdings (NASDAQ:PLMR) hat starke Ergebnisse für das dritte Quartal 2024 veröffentlicht, mit einem Nettogewinn von 30,5 Millionen Dollar (1,15 Dollar pro verwässerter Aktie), ein Anstieg von 18,4 Millionen Dollar im dritten Quartal 2023. Die brutto geschriebenen Prämien stiegen um 32,2% auf 415,0 Millionen Dollar, während der bereinigte Nettogewinn um 39,3% auf 32,4 Millionen Dollar zunahm. Das Unternehmen erzielte eine kombinierte Quote von 80,5% und eine annualisierte Eigenkapitalrendite von 19,7%. Trotz einer erhöhten Katastrophenaktivität konnte Palomar eine starke Leistung mit einer bereinigten kombinierte Quote von 77,1% aufrechterhalten. Das Unternehmen hat im August erfolgreich 116 Millionen Dollar gesammelt, um die Expansion in den Garantie-Markt zu finanzieren und organische Wachstumsinitiativen zu unterstützen.
- Net income increased 65.8% YoY to $30.5 million
- Gross written premiums grew 32.2% to $415.0 million
- Adjusted net income rose 39.3% to $32.4 million
- Net investment income increased 56.0% to $9.4 million
- Same-store premium growth rate of 38%
- Successfully raised $116 million for expansion
- Total loss ratio increased to 29.7% from 18.8% YoY
- Catastrophe loss ratio rose to 9.5% from -0.6% YoY
- Combined ratio deteriorated to 80.5% from 75.8% YoY
- Additional Q4 catastrophe losses of $8 million expected from Hurricane Milton
Insights
This earnings report shows strong performance with several key positive indicators. Gross written premiums surged
The company's strategic diversification into Crop and Surety insurance, backed by a recent
The results demonstrate excellent underwriting discipline despite challenging market conditions. The
The acquisition of First Indemnity and increased risk participation in Crop and Earthquake segments indicate confident market positioning. With
LA JOLLA, Calif., Nov. 04, 2024 (GLOBE NEWSWIRE) -- Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or “Company”) reported net income of
Third Quarter 2024 Highlights
- Gross written premiums increased by
32.2% to$415.0 million compared to$314.0 million in the third quarter of 2023 - Net income of
$30.5 million compared to$18.4 million in the third quarter of 2023 - Adjusted net income(1) increased
39.3% to$32.4 million compared to$23.3 million in the third quarter of 2023 - Total loss ratio of
29.7% compared to18.8% in the third quarter of 2023 - Catastrophe loss ratio(1) of
9.5% compared to -0.6% in the third quarter of 2023 - Combined ratio of
80.5% compared to75.8% in the third quarter of 2023 - Adjusted combined ratio(1) of
77.1% compared to70.9% , in the third quarter of 2023 - Adjusted combined ratio excluding catastrophe losses(1) of
67.6% compared to71.5% , in the third quarter of 2023 - Annualized return on equity of
19.7% compared to17.7% in the third quarter of 2023 - Annualized adjusted return on equity(1) of
21.0% compared to22.3% in the third 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 third quarter results as they clearly demonstrate our successful efforts to deliver consistent earnings and returns. In a quarter that experienced a heightened level of cat activity, we delivered
Mr. Armstrong continued, “We have numerous energizing opportunities and initiatives associated with our Palomar 2X strategy. To capitalize on them, we successfully raised
(2) Excludes the impact of lines of business exited or discontinued during the quarter.
Underwriting Results
Gross written premiums increased
Losses and loss adjustment expenses for the third quarter were
Underwriting income(1) for the third quarter was
Investment Results
Net investment income increased by
Tax Rate
The effective tax rate for the three months ended September 30, 2024 was
Stockholders’ Equity and Returns
Stockholders' equity was
Full Year 2024 Outlook
For the full year 2024, the Company expects to achieve adjusted net income of
Conference Call
As previously announced, Palomar will host a conference call Tuesday, November 5, 2024, to discuss its third 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 Third Quarter 2024 Earnings Conference Call. A replay will be available starting at 4:00 p.m. (Eastern Time) on November 5, 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 November 12, 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
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 nine months ended September 30, 2024 and 2023:
Three Months Ended | |||||||||||||||
September 30, | |||||||||||||||
2024 | 2023 | Change | % Change | ||||||||||||
($ in thousands, except per share data) | |||||||||||||||
Gross written premiums | $ | 414,977 | $ | 313,998 | $ | 100,979 | 32.2 | % | |||||||
Ceded written premiums | (255,267 | ) | (203,336 | ) | (51,931 | ) | 25.5 | % | |||||||
Net written premiums | 159,710 | 110,662 | 49,048 | 44.3 | % | ||||||||||
Net earned premiums | 135,646 | 85,817 | 49,829 | 58.1 | % | ||||||||||
Commission and other income | 715 | 465 | 250 | 53.8 | % | ||||||||||
Total underwriting revenue (1) | 136,361 | 86,282 | 50,079 | 58.0 | % | ||||||||||
Losses and loss adjustment expenses | 40,315 | 16,139 | 24,176 | 149.8 | % | ||||||||||
Acquisition expenses, net of ceding commissions and fronting fees | 41,469 | 27,004 | 14,465 | 53.6 | % | ||||||||||
Other underwriting expenses | 28,129 | 22,390 | 5,739 | 25.6 | % | ||||||||||
Underwriting income (1) | 26,448 | 20,749 | 5,699 | 27.5 | % | ||||||||||
Interest expense | (87 | ) | (867 | ) | 780 | (90.0 | )% | ||||||||
Net investment income | 9,408 | 6,029 | 3,379 | 56.0 | % | ||||||||||
Net realized and unrealized gains (losses) on investments | 2,734 | (1,376 | ) | 4,110 | (298.7 | )% | |||||||||
Income before income taxes | 38,503 | 24,535 | 13,968 | 56.9 | % | ||||||||||
Income tax expense | 8,006 | 6,103 | 1,903 | 31.2 | % | ||||||||||
Net income | $ | 30,497 | $ | 18,432 | $ | 12,065 | 65.5 | % | |||||||
Adjustments: | |||||||||||||||
Net realized and unrealized (gains) losses on investments | (2,734 | ) | 1,376 | (4,110 | ) | (298.7 | )% | ||||||||
Expenses associated with transactions | 84 | 229 | (145 | ) | (63.3 | )% | |||||||||
Stock-based compensation expense | 4,117 | 3,589 | 528 | 14.7 | % | ||||||||||
Amortization of intangibles | 389 | 390 | (1 | ) | (0.3 | )% | |||||||||
Tax impact | 91 | (725 | ) | 816 | (112.6 | )% | |||||||||
Adjusted net income (1) | $ | 32,444 | $ | 23,291 | $ | 9,153 | 39.3 | % | |||||||
Key Financial and Operating Metrics | |||||||||||||||
Annualized return on equity | 19.7 | % | 17.7 | % | |||||||||||
Annualized adjusted return on equity (1) | 21.0 | % | 22.3 | % | |||||||||||
Loss ratio | 29.7 | % | 18.8 | % | |||||||||||
Expense ratio | 50.8 | % | 57.0 | % | |||||||||||
Combined ratio | 80.5 | % | 75.8 | % | |||||||||||
Adjusted combined ratio (1) | 77.1 | % | 70.9 | % | |||||||||||
Diluted earnings per share | $ | 1.15 | $ | 0.73 | |||||||||||
Diluted adjusted earnings per share (1) | $ | 1.23 | $ | 0.92 | |||||||||||
Catastrophe losses | $ | 12,924 | $ | (533 | ) | ||||||||||
Catastrophe loss ratio (1) | 9.5 | % | (0.6 | )% | |||||||||||
Adjusted combined ratio excluding catastrophe losses (1) | 67.6 | % | 71.5 | % | |||||||||||
Adjusted underwriting income (1) | $ | 31,038 | $ | 24,957 | $ | 6,081 | 24.4 | % |
(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.
Nine Months Ended | |||||||||||||||
September 30, | |||||||||||||||
2024 | 2023 | Change | % Change | ||||||||||||
($ in thousands, except per share data) | |||||||||||||||
Gross written premiums | $ | 1,168,239 | $ | 838,406 | $ | 329,833 | 39.3 | % | |||||||
Ceded written premiums | (692,620 | ) | (542,789 | ) | (149,831 | ) | 27.6 | % | |||||||
Net written premiums | 475,619 | 295,617 | 180,002 | 60.9 | % | ||||||||||
Net earned premiums | 365,796 | 252,164 | 113,632 | 45.1 | % | ||||||||||
Commission and other income | 2,035 | 1,781 | 254 | 14.3 | % | ||||||||||
Total underwriting revenue (1) | 367,831 | 253,945 | 113,886 | 44.8 | % | ||||||||||
Losses and loss adjustment expenses | 97,583 | 54,696 | 42,887 | 78.4 | % | ||||||||||
Acquisition expenses, net of ceding commissions and fronting fees | 109,072 | 78,740 | 30,332 | 38.5 | % | ||||||||||
Other underwriting expenses | 84,165 | 63,962 | 20,203 | 31.6 | % | ||||||||||
Underwriting income (1) | 77,011 | 56,547 | 20,464 | 36.2 | % | ||||||||||
Interest expense | (1,052 | ) | (2,952 | ) | 1,900 | (64.4 | )% | ||||||||
Net investment income | 24,506 | 16,690 | 7,816 | 46.8 | % | ||||||||||
Net realized and unrealized gains (losses) on investments | 5,768 | (103 | ) | 5,871 | NM | ||||||||||
Income before income taxes | 106,233 | 70,182 | 36,051 | 51.4 | % | ||||||||||
Income tax expense | 23,625 | 16,877 | 6,748 | 40.0 | % | ||||||||||
Net income | $ | 82,608 | $ | 53,305 | $ | 29,303 | 55.0 | % | |||||||
Adjustments: | |||||||||||||||
Net realized and unrealized (gains) losses on investments | (5,768 | ) | 103 | (5,871 | ) | NM | |||||||||
Expenses associated with transactions | 557 | 229 | 328 | 143.2 | % | ||||||||||
Stock-based compensation expense | 11,905 | 10,737 | 1,168 | 10.9 | % | ||||||||||
Amortization of intangibles | 1,168 | 1,092 | 76 | 7.0 | % | ||||||||||
Expenses associated with catastrophe bond | 2,483 | 1,640 | 843 | 51.4 | % | ||||||||||
Tax impact | (734 | ) | (1,582 | ) | 848 | (53.6 | )% | ||||||||
Adjusted net income (1) | $ | 92,219 | $ | 65,524 | $ | 26,695 | 40.7 | % | |||||||
Key Financial and Operating Metrics | |||||||||||||||
Annualized return on equity | 18.8 | % | 17.6 | % | |||||||||||
Annualized adjusted return on equity (1) | 20.9 | % | 21.7 | % | |||||||||||
Loss ratio | 26.7 | % | 21.7 | % | |||||||||||
Expense ratio | 52.3 | % | 55.9 | % | |||||||||||
Combined ratio | 78.9 | % | 77.6 | % | |||||||||||
Adjusted combined ratio (1) | 74.5 | % | 72.1 | % | |||||||||||
Diluted earnings per share | $ | 3.19 | $ | 2.10 | |||||||||||
Diluted adjusted earnings per share (1) | $ | 3.56 | $ | 2.59 | |||||||||||
Catastrophe losses | $ | 19,724 | $ | 3,432 | |||||||||||
Catastrophe loss ratio (1) | 5.4 | % | 1.4 | % | |||||||||||
Adjusted combined ratio excluding catastrophe losses (1) | 69.2 | % | 70.8 | % | |||||||||||
Adjusted underwriting income (1) | $ | 93,124 | $ | 70,245 | $ | 22,879 | 32.6 | % | |||||||
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.
Condensed Consolidated Balance sheets
Palomar Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) (in thousands, except shares and par value data) | |||||||
September 30, | December 31, | ||||||
2024 | 2023 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Investments: | |||||||
Fixed maturity securities available for sale, at fair value (amortized cost: | $ | 882,980 | $ | 643,799 | |||
Equity securities, at fair value (cost: | 40,196 | 43,160 | |||||
Equity method investment | 2,499 | 2,617 | |||||
Other investments | 5,207 | — | |||||
Total investments | 930,882 | 689,576 | |||||
Cash and cash equivalents | 86,479 | 51,546 | |||||
Restricted cash | 105 | 306 | |||||
Accrued investment income | 7,495 | 5,282 | |||||
Premiums receivable | 326,674 | 261,972 | |||||
Deferred policy acquisition costs, net of ceding commissions and fronting fees | 86,408 | 60,990 | |||||
Reinsurance recoverable on paid losses and loss adjustment expenses | 58,889 | 32,172 | |||||
Reinsurance recoverable on unpaid losses and loss adjustment expenses | 360,164 | 244,622 | |||||
Ceded unearned premiums | 298,509 | 265,808 | |||||
Prepaid expenses and other assets | 104,831 | 72,941 | |||||
Deferred tax assets, net | 4,019 | 10,119 | |||||
Property and equipment, net | 409 | 373 | |||||
Goodwill and intangible assets, net | 11,147 | 12,315 | |||||
Total assets | $ | 2,276,011 | $ | 1,708,022 | |||
Liabilities and stockholders' equity | |||||||
Liabilities: | |||||||
Accounts payable and other accrued liabilities | $ | 75,424 | $ | 42,376 | |||
Reserve for losses and loss adjustment expenses | 497,438 | 342,275 | |||||
Unearned premiums | 739,623 | 597,103 | |||||
Ceded premium payable | 235,157 | 181,742 | |||||
Funds held under reinsurance treaty | 25,056 | 13,419 | |||||
Income taxes payable | — | 7,255 | |||||
Borrowings from credit agreements | — | 52,600 | |||||
Total liabilities | 1,572,698 | 1,236,770 | |||||
Stockholders' equity: | |||||||
Preferred stock, | — | — | |||||
Common stock, | 3 | 3 | |||||
Additional paid-in capital | 486,198 | 350,597 | |||||
Accumulated other comprehensive loss | (10,139 | ) | (23,991 | ) | |||
Retained earnings | 227,251 | 144,643 | |||||
Total stockholders' equity | 703,313 | 471,252 | |||||
Total liabilities and stockholders' equity | $ | 2,276,011 | $ | 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 | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenues: | |||||||||||||||
Gross written premiums | $ | 414,977 | $ | 313,998 | $ | 1,168,239 | $ | 838,406 | |||||||
Ceded written premiums | (255,267 | ) | (203,336 | ) | (692,620 | ) | (542,789 | ) | |||||||
Net written premiums | 159,710 | 110,662 | 475,619 | 295,617 | |||||||||||
Change in unearned premiums | (24,064 | ) | (24,845 | ) | (109,823 | ) | (43,453 | ) | |||||||
Net earned premiums | 135,646 | 85,817 | 365,796 | 252,164 | |||||||||||
Net investment income | 9,408 | 6,029 | 24,506 | 16,690 | |||||||||||
Net realized and unrealized gains (losses) on investments | 2,734 | (1,376 | ) | 5,768 | (103 | ) | |||||||||
Commission and other income | 715 | 465 | 2,035 | 1,781 | |||||||||||
Total revenues | 148,503 | 90,935 | 398,105 | 270,532 | |||||||||||
Expenses: | |||||||||||||||
Losses and loss adjustment expenses | 40,315 | 16,139 | 97,583 | 54,696 | |||||||||||
Acquisition expenses, net of ceding commissions and fronting fees | 41,469 | 27,004 | 109,072 | 78,740 | |||||||||||
Other underwriting expenses | 28,129 | 22,390 | 84,165 | 63,962 | |||||||||||
Interest expense | 87 | 867 | 1,052 | 2,952 | |||||||||||
Total expenses | 110,000 | 66,400 | 291,872 | 200,350 | |||||||||||
Income before income taxes | 38,503 | 24,535 | 106,233 | 70,182 | |||||||||||
Income tax expense | 8,006 | 6,103 | 23,625 | 16,877 | |||||||||||
Net income | $ | 30,497 | $ | 18,432 | $ | 82,608 | $ | 53,305 | |||||||
Other comprehensive income, net: | |||||||||||||||
Net unrealized gains (losses) on securities available for sale | 17,917 | (8,494 | ) | 13,852 | (6,706 | ) | |||||||||
Net comprehensive income | $ | 48,414 | $ | 9,938 | $ | 96,460 | $ | 46,599 | |||||||
Per Share Data: | |||||||||||||||
Basic earnings per share | $ | 1.18 | $ | 0.75 | $ | 3.28 | $ | 2.15 | |||||||
Diluted earnings per share | $ | 1.15 | $ | 0.73 | $ | 3.19 | $ | 2.10 | |||||||
Weighted-average common shares outstanding: | |||||||||||||||
Basic | 25,766,697 | 24,740,455 | 25,194,114 | 24,847,164 | |||||||||||
Diluted | 26,479,566 | 25,244,828 | 25,877,257 | 25,340,602 | |||||||||||
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 September 30, | |||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||
% of | % of | % | |||||||||||||||||||||
Amount | GWP | Amount | GWP | Change | Change | ||||||||||||||||||
Product (1) | |||||||||||||||||||||||
Earthquake | $ | 135,329 | 32.6 | % | $ | 113,386 | 36.1 | % | $ | 21,943 | 19.4 | % | |||||||||||
Fronting | 84,945 | 20.5 | % | 94,954 | 30.2 | % | (10,009 | ) | (10.5 | )% | |||||||||||||
Inland Marine and Other Property | 78,734 | 19.0 | % | 64,499 | 20.5 | % | 14,235 | 22.1 | % | ||||||||||||||
Crop | 59,662 | 14.4 | % | 11,627 | 3.7 | % | 48,035 | NM | |||||||||||||||
Casualty | 56,307 | 13.5 | % | 29,532 | 9.5 | % | 26,775 | 90.7 | % | ||||||||||||||
Total Gross Written Premiums | $ | 414,977 | 100.0 | % | $ | 313,998 | 100.0 | % | $ | 100,979 | 32.2 | % | |||||||||||
NM - not meaningful | |||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||
% of | % of | % | |||||||||||||||||||||
Amount | GWP | Amount | GWP | Change | Change | ||||||||||||||||||
Product (1) | |||||||||||||||||||||||
Earthquake | $ | 376,088 | 32.2 | % | $ | 314,810 | 37.6 | % | $ | 61,278 | 19.5 | % | |||||||||||
Fronting | 275,671 | 23.6 | % | 266,433 | 31.8 | % | 9,238 | 3.5 | % | ||||||||||||||
Inland Marine and Other Property | 249,147 | 21.3 | % | 186,983 | 22.3 | % | 62,164 | 33.2 | % | ||||||||||||||
Casualty | 166,762 | 14.3 | % | 58,065 | 6.9 | % | 108,697 | 187.2 | % | ||||||||||||||
Crop | 100,571 | 8.6 | % | 12,115 | 1.4 | % | 88,456 | NM | |||||||||||||||
Total Gross Written Premiums | $ | 1,168,239 | 100.0 | % | $ | 838,406 | 100.0 | % | $ | 329,833 | 39.3 | % | |||||||||||
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||||||||||||
% of | % of | % of | % of | ||||||||||||||||||||||||||||
Amount | GWP | Amount | GWP | Amount | GWP | Amount | GWP | ||||||||||||||||||||||||
State | |||||||||||||||||||||||||||||||
California | $ | 170,265 | 41.0 | % | $ | 163,806 | 52.2 | % | $ | 510,879 | 43.7 | % | $ | 450,752 | 53.8 | % | |||||||||||||||
Texas | 27,019 | 6.5 | % | 24,336 | 7.7 | % | 96,414 | 8.3 | % | 72,777 | 8.7 | % | |||||||||||||||||||
Hawaii | 23,171 | 5.6 | % | 13,490 | 4.3 | % | 53,922 | 4.6 | % | 35,824 | 4.3 | % | |||||||||||||||||||
North Dakota | 18,716 | 4.5 | % | 2,898 | 0.9 | % | 19,893 | 1.7 | % | 3,326 | 0.4 | % | |||||||||||||||||||
Washington | 16,828 | 4.1 | % | 17,792 | 5.7 | % | 41,893 | 3.6 | % | 43,409 | 5.2 | % | |||||||||||||||||||
Wisconsin | 15,519 | 3.7 | % | 1,211 | 0.4 | % | 17,374 | 1.5 | % | 3,095 | 0.4 | % | |||||||||||||||||||
Florida | 14,433 | 3.5 | % | 11,549 | 3.7 | % | 58,153 | 5.0 | % | 36,309 | 4.3 | % | |||||||||||||||||||
Oregon | 8,402 | 2.0 | % | 8,536 | 2.7 | % | 21,253 | 1.8 | % | 21,223 | 2.5 | % | |||||||||||||||||||
Other | 120,624 | 29.1 | % | 70,380 | 22.4 | % | 348,458 | 29.8 | % | 171,691 | 20.4 | % | |||||||||||||||||||
Total Gross Written Premiums | $ | 414,977 | 100.0 | % | $ | 313,998 | 100.0 | % | $ | 1,168,239 | 100.0 | % | $ | 838,406 | 100.0 | % | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||||||||||||
% of | % of | % of | % of | ||||||||||||||||||||||||||||
Amount | GWP | Amount | GWP | Amount | GWP | Amount | GWP | ||||||||||||||||||||||||
Subsidiary | |||||||||||||||||||||||||||||||
PSIC | $ | 236,624 | 57.0 | % | $ | 186,693 | 59.5 | % | $ | 652,988 | 55.9 | % | $ | 497,216 | 59.3 | % | |||||||||||||||
PESIC | 159,305 | 38.4 | % | 127,305 | 40.5 | % | 472,909 | 40.5 | % | 341,190 | 40.7 | % | |||||||||||||||||||
Laulima | 19,048 | 4.6 | % | — | — | % | 42,342 | 3.6 | % | — | — | % | |||||||||||||||||||
Total Gross Written Premiums | $ | 414,977 | 100.0 | % | $ | 313,998 | 100.0 | % | $ | 1,168,239 | 100.0 | % | $ | 838,406 | 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 | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||
2024 | 2023 | Change | % Change | 2024 | 2023 | Change | % Change | ||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||||||||||||
Gross earned premiums | $ | 395,881 | $ | 271,786 | $ | 124,095 | 45.7 | % | $ | 1,025,716 | $ | 739,219 | $ | 286,497 | 38.8 | % | |||||||||||||||
Ceded earned premiums | (260,235 | ) | (185,969 | ) | (74,266 | ) | 39.9 | % | (659,920 | ) | (487,055 | ) | (172,865 | ) | 35.5 | % | |||||||||||||||
Net earned premiums | $ | 135,646 | $ | 85,817 | $ | 49,829 | 58.1 | % | $ | 365,796 | $ | 252,164 | $ | 113,632 | 45.1 | % | |||||||||||||||
Net earned premium ratio | 34.3 | % | 31.6 | % | 35.7 | % | 34.1 | % | |||||||||||||||||||||||
Loss detail
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||
2024 | 2023 | Change | % Change | 2024 | 2023 | Change | % Change | ||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||||||||||||
Catastrophe losses | $ | 12,924 | $ | (533 | ) | $ | 13,457 | NM | $ | 19,724 | $ | 3,432 | $ | 16,292 | NM | ||||||||||||||||
Non-catastrophe losses | 27,391 | 16,672 | 10,719 | 64.3 | % | 77,859 | 51,264 | 26,595 | 51.9 | % | |||||||||||||||||||||
Total losses and loss adjustment expenses | $ | 40,315 | $ | 16,139 | $ | 24,176 | 149.8 | % | $ | 97,583 | $ | 54,696 | $ | 42,887 | 78.4 | % | |||||||||||||||
Catastrophe loss ratio | 9.5 | % | (0.6 | )% | 5.4 | % | 1.4 | % | |||||||||||||||||||||||
Non-catastrophe loss ratio | 20.2 | % | 19.4 | % | 21.3 | % | 20.3 | % | |||||||||||||||||||||||
Total loss ratio | 29.7 | % | 18.8 | % | 26.7 | % | 21.7 | % | |||||||||||||||||||||||
NM - not meaningful | |||||||||||||||||||||||||||||||
The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Reserve for losses and LAE net of reinsurance recoverables at beginning of period | $ | 118,761 | $ | 81,300 | $ | 97,653 | $ | 77,520 | |||||||
Add: Incurred losses and LAE, net of reinsurance, related to: | |||||||||||||||
Current year | 40,536 | 15,116 | 100,225 | 50,954 | |||||||||||
Prior years | (221 | ) | 1,023 | (2,642 | ) | 3,742 | |||||||||
Total incurred | 40,315 | 16,139 | 97,583 | 54,696 | |||||||||||
Deduct: Loss and LAE payments, net of reinsurance, related to: | |||||||||||||||
Current year | 16,153 | 6,646 | 27,909 | 14,215 | |||||||||||
Prior years | 5,649 | (1,385 | ) | 30,053 | 25,823 | ||||||||||
Total payments | 21,802 | 5,261 | 57,962 | 40,038 | |||||||||||
Reserve for losses and LAE net of reinsurance recoverables at end of period | 137,274 | 92,178 | 137,274 | 92,178 | |||||||||||
Add: Reinsurance recoverables on unpaid losses and LAE at end of period | 360,164 | 232,170 | 360,164 | 232,170 | |||||||||||
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period | $ | 497,438 | $ | 324,348 | $ | 497,438 | $ | 324,348 | |||||||
Reconciliation of Non-GAAP Financial Measures
For the three and nine months ended September 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 | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Total revenue | $ | 148,503 | $ | 90,935 | $ | 398,105 | $ | 270,532 | |||||||
Net investment income | (9,408 | ) | (6,029 | ) | (24,506 | ) | (16,690 | ) | |||||||
Net realized and unrealized (gains) losses on investments | (2,734 | ) | 1,376 | (5,768 | ) | 103 | |||||||||
Underwriting revenue | $ | 136,361 | $ | 86,282 | $ | 367,831 | $ | 253,945 | |||||||
Underwriting income and adjusted underwriting income
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Income before income taxes | $ | 38,503 | $ | 24,535 | $ | 106,233 | $ | 70,182 | |||||||
Net investment income | (9,408 | ) | (6,029 | ) | (24,506 | ) | (16,690 | ) | |||||||
Net realized and unrealized (gains) losses on investments | (2,734 | ) | 1,376 | (5,768 | ) | 103 | |||||||||
Interest expense | 87 | 867 | 1,052 | 2,952 | |||||||||||
Underwriting income | $ | 26,448 | $ | 20,749 | $ | 77,011 | $ | 56,547 | |||||||
Expenses associated with transactions | 84 | 229 | 557 | 229 | |||||||||||
Stock-based compensation expense | 4,117 | 3,589 | 11,905 | 10,737 | |||||||||||
Amortization of intangibles | 389 | 390 | 1,168 | 1,092 | |||||||||||
Expenses associated with catastrophe bond | — | — | 2,483 | 1,640 | |||||||||||
Adjusted underwriting income | $ | 31,038 | $ | 24,957 | $ | 93,124 | $ | 70,245 | |||||||
Adjusted net income
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Net income | $ | 30,497 | $ | 18,432 | $ | 82,608 | $ | 53,305 | |||||||
Adjustments: | |||||||||||||||
Net realized and unrealized (gains) losses on investments | (2,734 | ) | 1,376 | (5,768 | ) | 103 | |||||||||
Expenses associated with transactions | 84 | 229 | 557 | 229 | |||||||||||
Stock-based compensation expense | 4,117 | 3,589 | 11,905 | 10,737 | |||||||||||
Amortization of intangibles | 389 | 390 | 1,168 | 1,092 | |||||||||||
Expenses associated with catastrophe bond | — | — | 2,483 | 1,640 | |||||||||||
Tax impact | 91 | (725 | ) | (734 | ) | (1,582 | ) | ||||||||
Adjusted net income | $ | 32,444 | $ | 23,291 | $ | 92,219 | $ | 65,524 | |||||||
Annualized adjusted return on equity
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Annualized adjusted net income | $ | 129,776 | $ | 93,164 | $ | 122,959 | $ | 87,365 | |||||||
Average stockholders' equity | $ | 617,959 | $ | 417,521 | $ | 587,282 | $ | 403,044 | |||||||
Annualized adjusted return on equity | 21.0 | % | 22.3 | % | 20.9 | % | 21.7 | % | |||||||
Adjusted combined ratio
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 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 | $ | 109,198 | $ | 65,068 | $ | 288,785 | $ | 195,617 | |||||||
Denominator: Net earned premiums | $ | 135,646 | $ | 85,817 | $ | 365,796 | $ | 252,164 | |||||||
Combined ratio | 80.5 | % | 75.8 | % | 78.9 | % | 77.6 | % | |||||||
Adjustments to numerator: | |||||||||||||||
Expenses associated with transactions | $ | (84 | ) | $ | (229 | ) | $ | (557 | ) | $ | (229 | ) | |||
Stock-based compensation expense | (4,117 | ) | (3,589 | ) | (11,905 | ) | (10,737 | ) | |||||||
Amortization of intangibles | (389 | ) | (390 | ) | (1,168 | ) | (1,092 | ) | |||||||
Expenses associated with catastrophe bond | — | — | (2,483 | ) | (1,640 | ) | |||||||||
Adjusted combined ratio | 77.1 | % | 70.9 | % | 74.5 | % | 72.1 | % | |||||||
Diluted adjusted earnings per share
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(in thousands, except per share data) | (in thousands, except per share data) | ||||||||||||||
Adjusted net income | $ | 32,444 | $ | 23,291 | $ | 92,219 | $ | 65,524 | |||||||
Weighted-average common shares outstanding, diluted | 26,479,566 | 25,244,828 | 25,877,257 | 25,340,602 | |||||||||||
Diluted adjusted earnings per share | $ | 1.23 | $ | 0.92 | $ | 3.56 | $ | 2.59 | |||||||
Catastrophe loss ratio
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Numerator: Losses and loss adjustment expenses | $ | 40,315 | $ | 16,139 | $ | 97,583 | $ | 54,696 | |||||||
Denominator: Net earned premiums | $ | 135,646 | $ | 85,817 | $ | 365,796 | $ | 252,164 | |||||||
Loss ratio | 29.7 | % | 18.8 | % | 26.7 | % | 21.7 | % | |||||||
Numerator: Catastrophe losses | $ | 12,924 | $ | (533 | ) | $ | 19,724 | $ | 3,432 | ||||||
Denominator: Net earned premiums | $ | 135,646 | $ | 85,817 | $ | 365,796 | $ | 252,164 | |||||||
Catastrophe loss ratio | 9.5 | % | (0.6 | )% | 5.4 | % | 1.4 | % | |||||||
Adjusted combined ratio excluding catastrophe losses
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 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 | $ | 109,198 | $ | 65,068 | $ | 288,785 | $ | 195,617 | |||||||
Denominator: Net earned premiums | $ | 135,646 | $ | 85,817 | $ | 365,796 | $ | 252,164 | |||||||
Combined ratio | 80.5 | % | 75.8 | % | 78.9 | % | 77.6 | % | |||||||
Adjustments to numerator: | |||||||||||||||
Expenses associated with transactions | $ | (84 | ) | $ | (229 | ) | $ | (557 | ) | $ | (229 | ) | |||
Stock-based compensation expense | (4,117 | ) | (3,589 | ) | (11,905 | ) | (10,737 | ) | |||||||
Amortization of intangibles | (389 | ) | (390 | ) | (1,168 | ) | (1,092 | ) | |||||||
Expenses associated with catastrophe bond | — | — | (2,483 | ) | (1,640 | ) | |||||||||
Catastrophe losses | (12,924 | ) | 533 | (19,724 | ) | (3,432 | ) | ||||||||
Adjusted combined ratio excluding catastrophe losses | 67.6 | % | 71.5 | % | 69.2 | % | 70.8 | % | |||||||
Tangible Stockholders’ equity
September 30, | December 31, | ||||||
2024 | 2023 | ||||||
(in thousands) | |||||||
Stockholders' equity | $ | 703,313 | $ | 471,252 | |||
Goodwill and intangible assets | (11,147 | ) | (12,315 | ) | |||
Tangible stockholders' equity | $ | 692,166 | $ | 458,937 | |||
FAQ
What was Palomar Holdings (PLMR) earnings per share in Q3 2024?
How much did PLMR's gross written premiums grow in Q3 2024?
What was PLMR's combined ratio in Q3 2024?