Tiptree Announces Fourth Quarter 2023 Results

Rhea-AI Summary

Tiptree Inc. (TIPT) announces strong financial results for Q4 2023, with revenues reaching $1.6 billion and an adjusted return on equity of 15.2%. Fortegra, the specialty insurance business, achieved record results with premium growth of 21%. The company sees significant growth opportunities ahead.

Positive

• Strong financial performance in Q4 2023 with revenues of $1.6 billion and an adjusted return on equity of 15.2%.
• Fortegra, the specialty insurance business, achieved record results with premium growth of 21%.
• Significant opportunities for business expansion and long-term growth outlook.
• Adjusted net income increased by 43.1% in Q4 2023, driven by growth in insurance operations.
• Declared a dividend of $0.06 per share, representing a 20% increase.
• Full-year 2023 revenues increased by 18.0% to $1.6 billion, driven by growth in Fortegra's specialty insurance lines.
• Net income improved to $14.0 million compared to a net loss of $8.3 million in 2022.
• Adjusted net income for the year increased by 16.7% to $61.9 million.
• Fortegra's outstanding balance on its revolving line of credit increased to $130.0 million to fund capital requirements.
• Entered into a commutation agreement resulting in a reduction of policy liabilities and unpaid claims.
• Tiptree Capital reported a loss before taxes of $2.1 million for Q4 2023, down from income of $8.5 million in Q4 2022.
• Corporate expenses decreased to $12.1 million for the quarter compared to $12.5 million in Q4 2022.

Negative

• None.

Insights

Financial Analyst

Reviewing the financial results of Tiptree Inc., the significant growth in revenues and net income compared to the previous year is a strong indicator of the company's operational success. The revenue increase to $1.6 billion and the substantial improvement in net income, from a loss in the prior year to a profit, reflect robust business performance, particularly in the specialty insurance sector. The adjusted return on equity (ROE) of 15.2% surpasses the industry's average, suggesting efficient use of shareholder equity. These figures are especially noteworthy considering the challenging economic climate and competitive insurance market.

The growth in Fortegra's specialty insurance business, with a 21% increase in premiums and premium equivalent growth, underscores the company's strategic positioning and potential for sustained profitability. The consistent combined ratio, which measures underwriting profitability, indicates disciplined risk management and operational efficiency. Investors will likely view the dividend increase positively as it signals confidence in the company's financial health and commitment to shareholder returns.

However, the increase in borrowing on Fortegra's revolving line of credit to fund statutory capital requirements raises questions about liquidity management and capital structure. This warrants monitoring in subsequent quarters to assess the long-term sustainability of the company's leverage and financial strategy.

Insurance Industry Analyst

The reported growth in gross written premiums and premium equivalents by 37.5% for the quarter and 21.4% for the year is a testament to Tiptree Inc.'s expansion in specialty E&S (Excess and Surplus) and admitted insurance lines. The strategic book-roll transaction with an MGA partner and the increase in retention on Fortegra's whole account quota share reinsurance agreement from 30% to 40% reflect proactive management and expansion efforts within the insurance sector.

The consistent combined ratio of around 90% is competitive within the industry, indicating that Fortegra has maintained underwriting discipline despite growth. The record income before taxes and the increase in adjusted net income both quarterly and annually illustrate the company's ability to translate top-line growth into bottom-line profitability. These results are likely to bolster investor confidence in the company's underwriting capabilities and strategic initiatives.

Moreover, the commutation agreement entered in December 2023, which resulted in a reduction of policy liabilities and unpaid claims, is a notable development. It demonstrates Fortegra's active management of its reinsurance recoverables and claims liabilities, which can have a positive impact on financial stability and risk management.

Market Research Analyst

From a market perspective, Tiptree Inc.'s financial performance, particularly the exceptional results from its specialty insurance segment, positions the company well within the broader financial sector. The company's growth in revenues and net income, coupled with an impressive adjusted return on equity, indicates a strong market position and operational efficiency that is likely to attract investor attention.

The specialty insurance market, characterized by its focus on high-risk, high-reward policies, is highly competitive and subject to regulatory changes. Tiptree's ability to navigate this complexity and achieve growth in its Fortegra segment suggests a deep understanding of market dynamics and customer needs. The increase in net written premiums and the strategic positioning for long-term top-line growth may serve as a catalyst for future expansion and market share acquisition.

Investors may also interpret the increase in dividends as a positive market signal, reinforcing the company's financial stability and the potential for future capital appreciation. The company's performance, if sustained, could contribute to a re-rating of the stock by the market, reflecting the improved fundamentals and growth trajectory.

GREENWICH, Conn.--(BUSINESS WIRE)-- Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), today announced its financial results for the fourth quarter 2023.

“We are extremely pleased with our performance in the fourth quarter and full-year 2023. Our operating businesses demonstrated strong performance, resulting in an increase of revenues to $1.6 billion for the year, accompanied by an adjusted return on equity of 15.2%. Notably, Fortegra, our specialty insurance business, achieved record results, with premium and premium equivalent growth of 21%, and an adjusted return on equity of 29%. We firmly believe Fortegra is strategically positioned to maintain a trajectory of consistent top-line growth and sustained underwriting profitability over the long-term. Looking ahead, we see significant opportunities to expand our businesses and remain confident in the long-term outlook for the company”, said Tiptree’s Executive Chairman, Michael Barnes.

Financial results for the quarter and year ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,								Year Ended December 31,
($ in thousands, except per share information)		2023				2022				2023				2022
Total revenues	$	446,374			$	369,528			$	1,649,031			$	1,397,752
Net income (loss) attributable to common stockholders	$	6,871			$	871			$	13,951			$	(8,274	)
Diluted earnings per share	$	0.15			$	0.02			$	0.33			$	(0.23	)
Cash dividends paid per common share	$	0.05			$	0.04			$	0.20			$	0.16
Return on average equity		6.8	%			0.9	%			3.4	%			(2.1	)%
Non-GAAP: (1)
Adjusted net income	$	13,854			$	9,684			$	61,917			$	53,034
Adjusted return on average equity		13.6	%			9.9	%			15.2	%			13.6	%
(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures. Adjusted net income is presented after the impacts of non-controlling interests.

Fourth Quarter 2023 Summary

• Revenues of $446.4 million for the quarter, an increase of 20.8% from Q4'22, driven by growth in Fortegra’s specialty insurance lines. Excluding investment gains and losses, revenues increased 23.8%.

• Net income of $6.9 million compared to $0.9 million in Q4'22, driven by growth in our insurance business, partially offset by lower shipping income as a result of the sale of our vessels in 2022.

• Adjusted net income of $13.9 million increased by 43.1% from $9.7 million in Q4'22, driven by growth in our insurance operations. Annualized Adjusted return on average equity was 13.6% for the quarter, as compared to 9.9% in Q4'22.

• Declared a dividend of $0.06 per share (an increase of 20%) to stockholders of record on March 11, 2024 with a payment date of March 18, 2024.

Full Year 2023 Summary

• Revenues of $1.6 billion, an increase of 18.0% from 2022, driven by growth in Fortegra’s specialty insurance lines. Excluding investment gains and losses, revenues increased 19.3%.

• Net income of $14.0 million compared to net loss of $8.3 million in 2022, driven by growth in insurance operations and the decrease in tax expense related to the tax deconsolidation of Fortegra from $33.1 million in 2022 to $19.1 million in 2023, partially offset by lower mortgage and the sale of our vessels in 2022.

• Adjusted net income of $61.9 million increased by 16.7% from $53.0 million in 2022, driven by revenue growth in our insurance operations while maintaining a consistent combined ratio. Adjusted return on average equity was 15.2% for the year, as compared to 13.6% in 2022.

Segment Financial Highlights - Fourth Quarter 2023

Insurance (The Fortegra Group):

	Three Months Ended December 31,								Year Ended December 31,
($ in thousands)		2023				2022				2023				2022
Gross written premiums and premium equivalents	$	724,124			$	526,557			$	2,747,854			$	2,263,128
Net written premiums	$	384,309			$	245,178			$	1,319,948			$	1,089,390
Revenues	$	433,170			$	345,408			$	1,593,070			$	1,248,796
Income before taxes	$	44,232			$	29,093			$	129,816			$	68,150
Return on average equity		36.9	%			23.2	%			25.7	%			14.6	%
Combined ratio		89.8	%			89.8	%			90.3	%			90.4	%
Non-GAAP: (1)
Adjusted net income	$	32,604			$	23,939			$	115,705			$	83,832
Adjusted return on average equity		30.9	%			29.3	%			29.2	%			26.1	%
(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures. Adjusted net income is presented before the impacts of non-controlling interests.

• Gross written premiums and premium equivalents grew 37.5% for the quarter and 21.4% for the year, driven by growth in specialty E&S and admitted insurance lines in the U.S. and Europe, along with benefits from a book-roll transaction with one of Fortegra’s MGA partners.

• Net written premiums were $384.3 million for the quarter, an increase of 56.7%, and $1,319.9 million for the year, an increase of 21.2%. The increases in both periods were consistent with the growth in gross written premiums and premium equivalents and increased retention on Fortegra’s whole account quota share reinsurance agreement from 30% to 40%, effective April 1, 2023.

• Record revenues increased 25.4% for the quarter and 27.6% for the year driven by premium growth in specialty E&S and admitted lines, and services businesses in the U.S. and Europe, along with growth in net investment income. Excluding the impact of investment gains and losses, revenues increased by 24.6% for the quarter and 25.9% for the year.

• The combined ratio for the quarter was 89.8%, in-line with the prior year’s period. Total year 2023 combined ratio was 90.3%, as compared to 90.4% in 2022, reflecting the consistent underwriting performance and scalability of the Company’s operating platform.

• Record income before taxes for the quarter of $44.2 million, up $15.1 million. Total year 2023 income before the taxes was $129.8 million, up $61.7 million. After-tax return on equity for the year was 25.7%, compared to 14.6% in 2022. The increases were driven by growth in underwriting and fee revenues, the consistent combined ratio and improved contributions from the investment portfolio.

• Adjusted net income for the quarter of $32.6 million, up 36.2% from Q4'22. Total year 2023 adjusted net income was $115.7 million, up 38.0% from prior year. Adjusted return on average equity for the year was 29.2%, compared to 26.1% in 2022. The increases in both periods were driven by growth in underwriting and fee income and increased net investment income.

• As of December 31, 2023, Fortegra held an outstanding balance of $130.0 million on its revolving line of credit, as compared to a balance of $46.0 million as of September 30, 2023. The increase in borrowings was primarily to fund statutory capital requirements and general corporate purposes.

• In December 2023, Fortegra entered into a commutation agreement with a partner resulting in a reduction of policy liabilities and unpaid claims of $75.6 million relating to policies written in the 2020 and 2021 treaty years.

Tiptree Capital:

	Three Months Ended December 31,								Year Ended December 31,
($ in thousands)		2023				2022				2023				2022
Revenues	$	13,204			$	24,120			$	55,961			$	148,956
Income before taxes	$	(2,058	)		$	8,459			$	(6,549	)		$	32,277
Return on average equity		(3.8	)%			21.8	%			(3.6	)%			16.9	%
Non-GAAP: (1)
Adjusted net income	$	(407	)		$	(787	)		$	(159	)		$	8,969
Adjusted return on average equity		(0.9	)%			(2.5	)%			(0.1	)%			5.8	%
(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures. Adjusted net income is presented before the impacts of non-controlling interests.

• Tiptree Capital loss before taxes was $2.1 million for the quarter, compared to income of $8.5 million in Q4’22, driven by lower mortgage revenues and the sale of vessels in 2022.

• Loss before taxes was $6.5 million for the year, down from the prior year driven by the sale of five vessels in 2022, losses on Invesque and lower mortgage revenues, partially offset by improved performance in the Company’s other investment holdings.

• Total Tiptree Capital book value was $178.1 million as of Q4’23.

Corporate:

Corporate includes expenses of the holding company for employee compensation and benefits, audit and professional fees, and public company and other expenses. For the quarter, corporate expenses were $12.1 million compared to $12.5 million in Q4'22. For the year, the corporate expenses were $40.2 million compared to $46.4 million in the prior year. The decrease was primarily driven by lower interest expense as we repaid our corporate holding company borrowings in June 2022.

Non-GAAP

Management uses Adjusted net income and Adjusted return on average equity as measurements of operating performance. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and comparison among companies. Management uses Adjusted net income and adjusted return on average equity as part of its capital allocation process and to assess comparative returns on invested capital. Adjusted net income represents income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, stock-based compensation, net realized and unrealized gains (losses), and intangibles amortization associated with purchase accounting, all of which is reduced for non-controlling interests. Adjusted net income and Adjusted return on average equity are presented before the impacts of non-controlling interests. Adjusted net income and Adjusted return on average equity are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income. See “Non-GAAP Reconciliations” for a reconciliation of these measures to their GAAP equivalents.

Earnings Conference Call

Tiptree will host a conference call on Thursday, February 29, 2024 at 10:30 a.m. Eastern Time to discuss its Q4 2023 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company’s website, located at www.tiptreeinc.com.

The conference call will be available via live or archived webcast at https://investors.tiptreeinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. To participate in the telephone conference call, please dial 1-877-407-4018 (domestic) or 1-201-689-8471 (international). Please dial in at least five minutes prior to the start time.

A replay of the call will be available from Thursday, February 29, 2024 at 01:30 p.m. Eastern Time, until midnight Eastern on Thursday, March 7, 2024. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13743665.

About Tiptree

Tiptree Inc. (NASDAQ: TIPT) allocates capital to select small and middle market companies with the mission of building long-term value. Established in 2007, Tiptree has a significant track record investing across a variety of industries and asset types, including the insurance, asset management, specialty finance, real estate and shipping sectors. With proprietary access and a flexible capital base, Tiptree seeks to uncover compelling investment opportunities and support management teams in unlocking the full value potential of their businesses. For more information, please visit tiptreeinc.com and follow us on LinkedIn.

Forward-Looking Statements

This release contains “forward-looking statements” which involve risks, uncertainties and contingencies, many of which are beyond the Company’s control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the Company’s plans, objectives, expectations for our businesses and intentions. In addition, we make certain forward-looking statements regarding the Company’s plans to take Fortegra public. Any initial public offering by Fortegra would be subject to a variety of factors, including market conditions, and may not be consummated. The forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to those described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K, and as described in the Company’s other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of this release. The factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statements.

Tiptree Inc. Condensed Consolidated Balance Sheets ($ in thousands, except share data)
	As of December 31,
		2023				2022
Assets:
Investments:
Available for sale securities, at fair value, net of allowance for credit losses	$	802,609			$	611,980
Loans, at fair value		69,556				64,843
Equity securities		68,308				85,776
Other investments		111,088				73,025
Total investments		1,051,561				835,624
Cash and cash equivalents		468,711				538,065
Restricted cash		23,850				12,782
Notes and accounts receivable, net		684,608				502,311
Reinsurance recoverable		953,886				450,620
Prepaid reinsurance premiums		900,524				725,470
Deferred acquisition costs		565,746				498,925
Goodwill		206,155				186,608
Intangible assets, net		118,757				117,015
Other assets		165,515				172,143
Total assets	$	5,139,313			$	4,039,563
Liabilities and Stockholders’ Equity
Liabilities:
Debt, net	$	402,411			$	259,366
Unearned premiums		1,695,058				1,357,436
Policy liabilities and unpaid claims		844,848				567,193
Deferred revenue		673,085				649,150
Reinsurance payable		543,602				305,097
Other liabilities and accrued expenses		403,744				367,748
Total liabilities	$	4,562,748			$	3,505,990
Stockholders’ Equity:
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding	$	—			$	—
Common stock: $0.001 par value, 200,000,000 shares authorized, 36,756,187 and 36,385,299 shares issued and outstanding, respectively		37				36
Additional paid-in capital		382,239				382,645
Accumulated other comprehensive income (loss), net of tax		(26,073	)			(39,429	)
Retained earnings		60,663				54,113
Total Tiptree Inc. stockholders’ equity		416,866				397,365
Non-controlling interests:
Fortegra preferred interests		77,679				77,679
Common interests		82,020				58,529
Total non-controlling interests		159,699				136,208
Total stockholders’ equity		576,565				533,573
Total liabilities and stockholders’ equity	$	5,139,313			$	4,039,563

Tiptree Inc. Condensed Consolidated Statements of Operations ($ in thousands, except share data)
	Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
Revenues:
Earned premiums, net	$	301,416			$	242,531			$	1,127,834			$	904,765
Service and administrative fees		105,678				87,837				395,969				320,720
Ceding commissions		4,154				3,994				14,915				13,880
Net investment income		7,061				2,055				26,674				12,219
Net realized and unrealized gains (losses)		12,277				19,933				24,736				69,983
Other revenue		15,788				13,178				58,903				76,185
Total revenues		446,374				369,528				1,649,031				1,397,752
Expenses:
Policy and contract benefits		158,419				122,252				601,794				452,605
Commission expense		160,140				140,251				603,033				522,686
Employee compensation and benefits		48,231				39,730				179,075				182,657
Interest expense		7,467				5,403				27,692				30,240
Depreciation and amortization		5,991				5,259				23,466				22,973
Other expenses		36,061				31,602				130,918				132,580
Total expenses		416,309				344,497				1,565,978				1,343,741
Income (loss) before taxes		30,065				25,031				83,053				54,011
Less: provision (benefit) for income taxes		13,937				18,913				43,056				50,450
Net income (loss)		16,128				6,118				39,997				3,561
Less: net income (loss) attributable to non-controlling interests		9,257				5,247				26,046				11,835
Net income (loss) attributable to common stockholders	$	6,871			$	871			$	13,951			$	(8,274	)
Net income (loss) per common share:
Basic earnings per share	$	0.19			$	0.02			$	0.38			$	(0.23	)
Diluted earnings per share	$	0.15			$	0.02			$	0.33			$	(0.23	)
Weighted average number of common shares:
Basic		36,755,768				36,330,653				36,693,204				35,531,149
Diluted		37,744,257				37,161,862				37,619,095				35,531,149
Dividends declared per common share	$	0.05			$	0.04			$	0.20			$	0.16

Tiptree Inc.
Non-GAAP Reconciliations (Unaudited)

Non-GAAP Financial Measures — Adjusted net income and Adjusted return on average equity

Adjusted net income is defined as income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses) and intangibles amortization associated with purchase accounting, all of which is reduced for non-controlling interests. The calculation of adjusted net income excludes net realized and unrealized gains (losses) that relate to investments or assets rather than business operations. Adjusted net income is presented before the impacts of non-controlling interests. Adjusted return on average equity represents adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. Management uses Adjusted net income and adjusted return on average equity as part of its capital allocation process and to assess comparative returns on invested capital. We believe adjusted net income provides additional clarity on the results of the Company’s underlying business operations as a whole for the periods presented by excluding distortions created by the unpredictability and volatility of realized and unrealized gains (losses). We also believe adjusted net income provides useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies.

	Three Months Ended December 31, 2023
					Tiptree Capital
($ in thousands)	Insurance				Mortgage				Other				Corporate				Total
Income (loss) before taxes	$	44,232			$	(2,391	)		$	333			$	(12,109	)		$	30,065
Less: Income tax (benefit) expense		(5,288	)			606				(266	)			(8,989	)			(13,937	)
Less: Net realized and unrealized gains (losses) (1)		(6,395	)			2,794				(596	)			—				(4,197	)
Plus: Intangibles amortization (2)		4,252				—				—				—				4,252
Plus: Stock-based compensation expense		780				—				—				1,219				1,999
Plus: Non-recurring expenses (3)		348				—				—				—				348
Plus: Non-cash fair value adjustments (4)		842				—				—				—				842
Plus: Impact of tax deconsolidation of Fortegra(5)		—				—				—				8,891				8,891
Less: Tax on adjustments (6)		(6,167	)			(702	)			(185	)			(671	)			(7,725	)
Adjusted net income (before NCI)	$	32,604			$	307			$	(714	)		$	(11,659	)		$	20,538
Less: Impact of non-controlling interests		(6,684	)			—				—				—				(6,684	)
Adjusted net income	$	25,920			$	307			$	(714	)		$	(11,659	)		$	13,854
Adjusted net income (before NCI)	$	32,604			$	307			$	(714	)		$	(11,659	)		$	20,538
Average stockholders’ equity	$	422,327			$	53,188			$	128,827			$	(44,272	)		$	560,070
Adjusted return on average equity (7)		30.9	%			2.3	%			(2.2	)%		NM%					14.7	%
	Three Months Ended December 31, 2022
($ in thousands)					Tiptree Capital
	Insurance				Mortgage				Other				Corporate				Total
Income (loss) before taxes	$	29,093			$	(2,476	)		$	10,935			$	(12,521	)		$	25,031
Less: Income tax (benefit) expense		(10,152	)			511				(2,076	)			(7,196	)			(18,913	)
Less: Net realized and unrealized gains (losses) (1)		(2,804	)			973				(10,495	)			—				(12,326	)
Plus: Intangibles amortization (2)		4,083				—				—				—				4,083
Plus: Stock-based compensation expense		47				—				(98	)			1,656				1,605
Plus: Non-recurring expenses (3)		1,813				—				140				—				1,953
Plus: Non-cash fair value adjustments (4)		(939	)			—				1				—				(938	)
Plus: Impact of tax deconsolidation of Fortegra (5)		—				—				—				9,029				9,029
Less: Tax on adjustments (6)		2,798				(150	)			1,948				448				5,044
Adjusted net income (before NCI)	$	23,939			$	(1,142	)		$	355			$	(8,584	)		$	14,568
Less: Impact of non-controlling interests		(4,884	)			—				—				—				(4,884	)
Adjusted net income	$	19,055			$	(1,142	)		$	355			$	(8,584	)		$	9,684
Adjusted net income (before NCI)	$	23,939			$	(1,142	)		$	355			$	(8,584	)		$	14,568
Average stockholders’ equity	$	326,431			$	55,726			$	70,628			$	73,789			$	526,574
Adjusted return on average equity (7)		29.3	%			(8.2	)%			2.0	%		NM%					11.1	%

	Year Ended December 31, 2023
					Tiptree Capital
($ in thousands)	Insurance				Mortgage				Other				Corporate				Total
Income (loss) before taxes	$	129,816			$	(3,285	)		$	(3,264	)		$	(40,214	)		$	83,053
Less: Income tax (benefit) expense		(28,224	)			837				153				(15,822	)			(43,056	)
Less: Net realized and unrealized gains (losses) (1)		4,207				1,861				5,289				—				11,357
Plus: Intangibles amortization (2)		16,919				—				—				—				16,919
Plus: Stock-based compensation expense		2,018				—				—				6,251				8,269
Plus: Non-recurring expenses (3)		2,824				—				—				—				2,824
Plus: Non-cash fair value adjustments (4)		(1,769	)			—				—				—				(1,769	)
Plus: Impact of tax deconsolidation of Fortegra (5)		—				—				—				19,101				19,101
Less: Tax on adjustments (6)		(10,086	)			(495	)			(1,255	)			797				(11,039	)
Adjusted net income (before NCI)	$	115,705			$	(1,082	)		$	923			$	(29,887	)		$	85,659
Less: Impact of non-controlling interests		(23,742	)			—				—				—				(23,742	)
Adjusted net income	$	91,963			$	(1,082	)		$	923			$	(29,887	)		$	61,917
Adjusted net income (before NCI)	$	115,705			$	(1,082	)		$	923			$	(29,887	)		$	85,659
Average stockholders’ equity	$	395,661			$	53,520			$	100,325			$	5,564			$	555,070
Adjusted return on average equity (7)		29.2	%			(2.0	)%			0.9	%		NM%					15.4	%

	Year Ended December 31, 2022
					Tiptree Capital
($ in thousands)	Insurance				Mortgage				Other				Corporate				Total
Income (loss) before taxes	$	68,150			$	874			$	31,403			$	(46,416	)		$	54,011
Less: Income tax (benefit) expense		(21,251	)			(363	)			(5,545	)			(23,291	)			(50,450	)
Less: Net realized and unrealized gains (losses) (1)		20,347				(7,003	)			(18,788	)			—				(5,444	)
Plus: Intangibles amortization (2)		16,229				—				—				—				16,229
Plus: Stock-based compensation expense		2,423				—				—				7,093				9,516
Plus: Non-recurring expenses (3)		3,374				—				(729	)			2,108				4,753
Plus: Non-cash fair value adjustments (4)		(939	)			—				3,555				—				2,616
Plus: Impact of tax deconsolidation of Fortegra (5)		1,560				—				—				31,573				33,133
Less: Tax on adjustments (6)		(6,061	)			1,834				3,731				(467	)			(963	)
Adjusted net income (before NCI)	$	83,832			$	(4,658	)		$	13,627			$	(29,400	)		$	63,401
Less: Impact of non-controlling interests		(10,367	)			—				—				—				(10,367	)
Adjusted net income	$	73,465			$	(4,658	)		$	13,627			$	(29,400	)		$	53,034
Adjusted net income (before NCI)	$	83,832			$	(4,658	)		$	13,627			$	(29,400	)		$	63,401
Average stockholders’ equity	$	321,320			$	57,575			$	98,373			$	(10,390	)		$	466,878
Adjusted return on average equity (7)		26.1	%			(8.1	)%			13.9	%		NM%					13.6	%

Notes
(1)		Net realized and unrealized gains (losses) added back in Adjusted net income excludes net realized and unrealized gains (losses) from the mortgage segment, those relating to our held-for-sale mortgage originator (Luxury), and unrealized gains (losses) on mortgage servicing rights.
(2)		Specifically associated with acquisition purchase accounting. See Note (9) Goodwill and Intangible Assets, net, of the Company’s Form 10-K for the period ended December 31, 2023.
(3)		For the three months and year ended December 31, 2023, included in other expenses were expenses related to banker and legal fees associated with the acquisitions of Premia and ITC.
(4)		For the three months and year ended December 31, 2023, non-cash fair-value adjustments represent a change in fair value of the Fortegra Additional Warrant liability which are added-back to adjusted net income. For the 2022 periods, maritime transportation depreciation and amortization was deducted as a reduction in the value of the vessel.
(5)		For the three months and year ended December 31, 2023, included in the adjustment is an add-back of $8.9 million and $19.1 million, respectively, related to deferred tax expense from the WP Transaction. For the three months and year ended December 31, 2022, included in the adjustment is an add-back of $9.0 million and $33.1 million, respectively, related to deferred tax expense from the WP Transaction.
(6)		Tax on adjustments represents the tax applied to the total non-GAAP adjustments and includes adjustments for non-recurring or discrete tax impacts.
(7)		Total Adjusted return on average equity, after non-controlling interests was 13.6% and 9.9% for the three months ended December 31, 2023 and 2022, respectively, based on $13.9 million and $9.7 million of Adjusted net income over $406.5 million and $392.3 million of average Tiptree Inc. stockholders’ equity, and 15.2% and 13.6% for the years ended December 31, 2023 and 2022, respectively, based on $61.9 million and $53.0 million of Adjusted net income over $407.1 million and $390.2 million of average Tiptree Inc. stockholders’ equity.

 

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Tiptree Inc.

Investor Relations, 212-446-1400

ir@tiptreeinc.com

Source: Tiptree Inc.

FAQ

What were Tiptree Inc.'s revenues for Q4 2023?

Tiptree Inc. reported revenues of $1.6 billion for Q4 2023.

What was the adjusted return on equity for Tiptree Inc. in Q4 2023?

Tiptree Inc. achieved an adjusted return on equity of 15.2% in Q4 2023.

How did Fortegra perform in Q4 2023?

Fortegra, the specialty insurance business, achieved record results with premium growth of 21% in Q4 2023.

What was the net income for Tiptree Inc. in Q4 2023?

Tiptree Inc. reported a net income of $6.9 million for Q4 2023.

Did Tiptree Inc. declare a dividend for Q4 2023?

Yes, Tiptree Inc. declared a dividend of $0.06 per share for Q4 2023.

How much did Tiptree Inc.'s net income improve in 2023 compared to 2022?

Tiptree Inc.'s net income improved to $14.0 million in 2023 from a net loss of $8.3 million in 2022.

What was the adjusted net income for Tiptree Inc. in 2023?

Tiptree Inc. reported an adjusted net income of $61.9 million in 2023.

What was the outstanding balance on Fortegra's revolving line of credit as of December 31, 2023?

Fortegra had an outstanding balance of $130.0 million on its revolving line of credit as of December 31, 2023.

What agreement did Fortegra enter into in December 2023?

Fortegra entered into a commutation agreement resulting in a reduction of policy liabilities and unpaid claims of $75.6 million.

How did Tiptree Capital perform in Q4 2023?

Tiptree Capital reported a loss before taxes of $2.1 million in Q4 2023, down from income of $8.5 million in Q4 2022.