Tiptree Reports Q4 and 2020 Financial Results

Rhea-AI Summary

Tiptree (NASDAQ:TIPT) reported robust financial results for Q4 2020, posting a net income of $14.3 million, up from $4.2 million in Q4 2019. The total revenue for the year reached $810.3 million, marking a significant increase from $772.7 million in 2019. Adjusted net income for Q4 surged 54.2%, totaling $16.2 million. However, the company experienced a net loss of $29.2 million for the year due to unrealized losses on equities. Book value per share decreased 4.0% to $10.90. The insurance segment reported $490.9 million in gross written premiums for Q4, reflecting a 35.7% increase year-over-year.

Positive

• Q4 2020 net income of $14.3 million, up from $4.2 million in Q4 2019.
• Total revenue for 2020 was $810.3 million, an increase from $772.7 million in 2019.
• Adjusted net income for Q4 increased 54.2% to $16.2 million.
• Gross written premiums for Q4 reached $490.9 million, a 35.7% rise from Q4 2019.
• Adjusted return on average equity improved to 13.1% from 6.8% in 2019.

Negative

• Net loss for 2020 was $29.2 million, primarily due to unrealized losses on equities.

Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), a holding company that combines specialty insurance operations with investment management, today announced its financial results for the quarter and year ended December 31, 2020.

($ in thousands, except per share information)	Three Months Ended December 31,								For the Year Ended December 31,
GAAP:	2020				2019				2020				2019
Total revenues	$	257,395			$	208,568			$	810,301			$	772,728
Net income (loss) attributable to common stockholders	$	14,270			$	4,147			$	(29,158	)		$	18,361
Diluted earnings per share	$	0.40			$	0.11			$	(0.86	)		$	0.50
Cash dividends paid per common share	$	0.04			$	0.04			$	0.16			$	0.155
Return on average equity	17.6		%		4.5		%		(6.4		)%		5.0		%
Non-GAAP: (1)
Adjusted net income	$	16,191			$	10,502			$	51,431			$	27,598
Adjusted return on average equity	17.6		%		10.3		%		13.1		%		6.8		%
Book value per share	$	10.90			$	11.52			$	10.90			$	11.52

____________________________

(1) For information relating to Adjusted net income, Adjusted return on average equity and book value per share, including a reconciliation to GAAP financials, see “—Non-GAAP Reconciliations” below.

Earnings Conference Call

Tiptree will host a conference call on Friday, March 12, 2021 at 9:00 a.m. Eastern Time to discuss its Q4 and full year 2020 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 http://www.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 Friday, March 12, 2021 at 1:00 p.m. Eastern Time, until midnight Eastern on Friday, March 19, 2021. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13714442.

Financial Highlights

Overall:

• Net income for Q4’20 of $14.3 million, up from $4.2 million in Q4’19 driven by improved performance in our insurance and mortgage operations. Net loss for total year 2020 of $29.2 million was driven by unrealized losses on equities, primarily our holding of Invesque, partially offset by growth in insurance underwriting operations and growth in volume and margins in our mortgage business.
• Adjusted net income for Q4’20 of $16.2 million, up 54.2% from Q4’19. Adjusted net income increased 86.4% to $51.4 million, from $27.6 million in 2019, driven by growth and improved margins in our insurance and mortgage operations. Adjusted return on average equity was 13.1% in 2020, as compared to 6.8% in 2019.
• Book value per share of $10.90 as of December 31, 2020, when combined with dividends paid, decreased 4.0% from 2019, driven by a combination of net losses, partially offset by share repurchases at discounts to book value per share.
• In 2020, 2019 and 2018, we purchased and retired 2,384,286, 1,472,730 and 2,177,235 shares of our common stock, respectively, for $37.1 million in aggregate, at an average 42% discount to book value per share.
• Cash and cash equivalents of $136.9 million as of December 31, 2020, of which $80.0 million resides outside our statutory insurance subsidiaries.

Insurance (Fortegra Group):

• Gross written premiums and premium equivalents were $490.9 million in Q4’20, up 35.7% from Q4’19. The metric was $1,666.9 million in 2020, as compared to $1,297.0 million in 2019, up 28.5% as a result of growth in our U.S. Insurance programs including commercial, warranty, and niche personal lines, and the acquisition of Smart AutoCare.
• Income before taxes of $26.5 million in Q4’20, up $13.6 million from Q4’19. Income before taxes of $26.9 million decreased 27.2% as compared to $37.0 million in 2019, primarily driven by net realized and unrealized losses on investments as compared to gains in the prior year. Return on average equity was 8.1% in 2020 as compared to 10.7% in 2019.
• Adjusted net income of $13.6 million in Q4’20, up 28.1% from Q4’19. Adjusted net income increased 32.4% to $43.4 million in 2020, as compared to $32.8 million in 2019. Adjusted return on average equity was 15.2% in 2020, as compared to 12.3% in 2019 driven by growth in commercial, warranty and niche personal lines programs.
• The combined ratio in Q4’20 was 90.0%, as compared to 91.1% in Q4’19. For total year 2020, the combined ratio improved to 91.5%, as compared to 92.4% in 2019, driven by the shift in business mix toward more profitable warranty and commercial programs.
• In January 2020, we acquired Smart AutoCare, a growing vehicle warranty and service contract administrator in the U.S. which contributed $248.8 million of gross written premiums and premium equivalents in 2020. The acquisition expanded our distribution channels and dramatically increased our presence in the auto warranty sector.
• In September 2020, we formed a new excess and surplus lines subsidiary, Fortegra Specialty Insurance

FAQ

What were Tiptree's earnings for Q4 2020?

Tiptree reported a net income of $14.3 million for Q4 2020.

What is Tiptree's total revenue for 2020?

The total revenue for Tiptree in 2020 was $810.3 million.

How much did Tiptree's adjusted net income increase in Q4 2020?

Adjusted net income for Q4 2020 increased by 54.2% to $16.2 million.

What was Tiptree's book value per share as of December 31, 2020?

The book value per share was $10.90 as of December 31, 2020.

What are the gross written premiums reported by Tiptree for Q4 2020?

Tiptree reported gross written premiums of $490.9 million for Q4 2020.