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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 06, 2025

 

 

American Coastal Insurance Corporation

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-35761

75-3241967

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

570 Carillon Parkway, Suite 100

 

St. Petersburg, Florida

 

33716

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (727) 633-0851

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

ACIC

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 6, 2025, American Coastal Insurance Corporation (the Company, we, our) issued a press release relating to our earnings for the second quarter ended June 30, 2025 (the Earnings Release). We have attached a copy of the Earnings Release as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.

 

The executive officers of the Company intend to use the materials filed herewith, in whole or in part, in one or more meetings with investors and analysts, beginning on August 6, 2025. A copy of the Earnings presentation is attached hereto as Exhibit 99.2.

 

The information furnished under this Item 2.02 and 7.01, including Exhibit 99.1 and Exhibit 99.2 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.

Item 9.01 Financial Statements and Exhibits.

 

 

 

 

Exhibit

No.

Description

99.1

Earnings release issued by the Company on August 6, 2025

99.2

 

Earnings presentation issued by the Company on August 6, 2025

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

AMERICAN COASTAL INSURANCE CORPORATION

 

 

 

 

Date:

August 6, 2025

By:

/s/ B. Bradford Martz

 

 

 

B. Bradford Martz, President & Chief Executive Officer

 

EX-99.1 2 acic-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

img216366889_0.jpg

FOR IMMEDIATE RELEASE

AMERICAN COASTAL INSURANCE CORPORATION REPORTS FINANCIAL RESULTS

FOR ITS SECOND QUARTER ENDED JUNE 30, 2025

 

Company to Host Quarterly Conference Call at 5:00 P.M. ET on August 6, 2025

The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations.

St. Petersburg, FL - August 6, 2025: American Coastal Insurance Corporation (Nasdaq: ACIC) ("ACIC" or the "Company"), a property and casualty insurance holding company, today reported its financial results for the second quarter ended June 30, 2025.

($ in thousands, except for per share data)

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2025

 

 

2024

 

 

Change

 

 

2025

 

 

2024

 

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

$

228,346

 

 

$

229,449

 

 

 

(0.5

)%

 

$

426,198

 

 

$

414,050

 

 

 

2.9

%

Gross premiums earned

 

165,460

 

 

 

155,450

 

 

 

6.4

%

 

 

327,561

 

 

 

315,720

 

 

 

3.8

%

Net premiums earned

 

78,443

 

 

 

63,381

 

 

 

23.8

%

 

 

146,715

 

 

 

126,012

 

 

 

16.4

%

Total revenue

 

86,467

 

 

 

68,656

 

 

 

25.9

%

 

 

158,669

 

 

 

135,254

 

 

 

17.3

%

Income from continuing operations, net of tax

 

28,037

 

 

 

19,073

 

 

 

47.0

%

 

 

47,748

 

 

 

42,782

 

 

 

11.6

%

Income (loss) from discontinued operations, net of tax

 

(1,595

)

 

 

(19

)

 

NM

 

 

 

42

 

 

 

(129

)

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

$

26,442

 

 

$

19,054

 

 

 

38.8

%

 

$

47,790

 

 

$

42,653

 

 

 

12.0

%

Net income available to ACIC stockholders per diluted share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing Operations

$

0.56

 

 

$

0.39

 

 

 

43.6

%

 

$

0.96

 

 

$

0.87

 

 

 

10.3

%

Discontinued Operations

 

(0.03

)

 

 

—

 

 

 

100.0

%

 

 

—

 

 

 

—

 

 

 

—

%

Total

$

0.53

 

 

$

0.39

 

 

 

35.9

%

 

$

0.96

 

 

$

0.87

 

 

 

10.3

%

 

Reconciliation of net income to core income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus: Non-cash amortization of intangible assets and goodwill impairment

$

610

 

 

$

609

 

 

 

0.2

%

 

$

1,219

 

 

$

1,421

 

 

 

(14.2

)%

Less: Income (loss) from discontinued operations, net of tax

 

(1,595

)

 

 

(19

)

 

NM

 

 

 

42

 

 

 

(129

)

 

NM

 

Less: Net realized gains (losses) on investment portfolio

 

—

 

 

 

(121

)

 

 

100.0

%

 

 

1,382

 

 

 

(121

)

 

NM

 

Less: Unrealized gains (losses) on equity securities

 

2,231

 

 

 

49

 

 

NM

 

 

 

268

 

 

 

(1

)

 

NM

 

Less: Net tax impact (1)

 

(340

)

 

 

143

 

 

NM

 

 

 

(91

)

 

 

324

 

 

NM

 

Core income(2)

 

26,756

 

 

 

19,611

 

 

 

36.4

%

 

 

47,408

 

 

 

44,001

 

 

 

7.7

%

Core income per diluted share (2)

$

0.54

 

 

$

0.40

 

 

 

35.0

%

 

$

0.96

 

 

$

0.90

 

 

 

6.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

 

 

 

 

 

 

 

 

$

6.00

 

 

$

4.63

 

 

 

29.6

%

NM = Not Meaningful

(1) In order to reconcile net income to the core income measures, the Company included the tax impact of all adjustments using the 21% federal corporate tax rate.

(2) Core income and core income per diluted share, both of which are measures that are not based on generally accepted accounting principles ("GAAP"), are reconciled above to net income and net income per diluted share, respectively, the most directly comparable GAAP measures. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below.

1

Exhibit 99.1

 

 

Comments from Chief Executive Officer, B. Bradford Martz:

 

“I’m pleased that our team delivered another strong quarter, achieving year-over-year growth in both total revenue and underwriting profit. We continue to gain market share in the commercial residential segment, highlighting the strength of our competitive positioning and disciplined execution. We are committed to delivering value to our shareholders and believe these results, combined with our recent credit rating upgrades from Kroll Bond Rating Agency, reflect a very positive outlook for American Coastal.”

 

 

Return on Equity and Core Return on Equity

 

The calculations of the Company's return on equity and core return on equity are shown below.

($ in thousands)

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Income from continuing operations, net of tax

$

28,037

 

 

$

19,073

 

 

$

47,748

 

 

$

42,782

 

Return on equity based on GAAP income from continuing operations, net of tax (1)

 

43.6

%

 

 

45.6

%

 

 

37.1

%

 

 

51.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net of tax

$

(1,595

)

 

$

(19

)

 

$

42

 

 

$

(129

)

Return on equity based on GAAP income (loss) from discontinued operations, net of tax (1)

 

(2.5

)%

 

 

—

%

 

 

—

%

 

 

(0.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

$

26,442

 

 

$

19,054

 

 

$

47,790

 

 

$

42,653

 

Return on equity based on GAAP net income (1)

 

41.1

%

 

 

45.6

%

 

 

37.1

%

 

 

51.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Core income

$

26,756

 

 

$

19,611

 

 

$

47,408

 

 

$

44,001

 

Core return on equity (1)(2)

 

41.6

%

 

 

46.9

%

 

 

36.8

%

 

 

52.6

%

(1) Return on equity for the three and six months ended June 30, 2025 and 2024 is calculated on an annualized basis by dividing the net income or core income for the period by the average stockholders' equity for the trailing twelve months.

(2) Core return on equity, a measure that is not based on GAAP, is calculated based on core income, which is reconciled on the first page of this press release to net income, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below.

 

2

Exhibit 99.1

Combined Ratio and Underlying Ratio

 

The calculations of the Company's combined ratio and underlying combined ratio are shown below.

($ in thousands)

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2025

 

 

2024

 

 

Change

 

2025

 

 

2024

 

 

Change

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss ratio, net(1)

 

19.8

%

 

 

24.1

%

 

 

(4.3

)

pts

 

 

18.4

%

 

 

22.0

%

 

 

(3.6

)

pts

Expense ratio, net(2)

 

40.8

%

 

 

40.8

%

 

 

—

 

pts

 

 

44.3

%

 

 

37.1

%

 

 

7.2

 

pts

Combined ratio (CR)(3)

 

60.6

%

 

 

64.9

%

 

 

(4.3

)

pts

 

 

62.7

%

 

 

59.1

%

 

 

3.6

 

pts

Effect of current year catastrophe losses on CR

 

—

%

 

 

—

%

 

 

—

 

pts

 

 

—

%

 

 

0.2

%

 

 

(0.2

)

pts

Effect of prior year favorable development on CR

 

(1.6

)%

 

 

(1.5

)%

 

 

(0.1

)

pts

 

 

(2.4

)%

 

 

(0.8

)%

 

 

(1.6

)

pts

Underlying combined ratio(4)

 

62.2

%

 

 

66.4

%

 

 

(4.2

)

pts

 

 

65.0

%

 

 

59.7

%

 

 

5.3

 

pts

(1) Loss ratio, net is calculated as losses and loss adjustment expenses ("LAE"), net of losses ceded to reinsurers, relative to net premiums earned.

(2) Expense ratio, net is calculated as the sum of all operating expenses, less interest expense relative to net premiums earned.

(3) Combined ratio is the sum of the loss ratio, net and expense ratio, net.

(4) Underlying combined ratio, a measure that is not based on GAAP, is reconciled above to the combined ratio, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below.

 

 

 

Combined Ratio Analysis

 

The calculations of the Company's loss ratios and underlying loss ratios are shown below.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

 

2024

 

 

Change

 

2025

 

 

2024

 

 

Change

Net loss and LAE

$

15,540

 

 

$

15,277

 

 

$

263

 

 

 

$

26,929

 

 

$

27,751

 

 

$

(822

)

 

% of Gross earned premiums

 

9.4

%

 

 

9.8

%

 

 

(0.4

)

pts

 

 

8.2

%

 

 

8.8

%

 

 

(0.6

)

pts

% of Net earned premiums

 

19.8

%

 

 

24.1

%

 

 

(4.3

)

pts

 

 

18.4

%

 

 

22.0

%

 

 

(3.6

)

pts

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

$

—

 

 

$

(8

)

 

$

8

 

 

 

$

—

 

 

$

203

 

 

$

(203

)

 

Prior year reserve favorable development

 

(1,275

)

 

 

(968

)

 

 

(307

)

 

 

 

(3,469

)

 

 

(1,022

)

 

 

(2,447

)

 

Underlying loss and LAE (1)

$

16,815

 

 

$

16,253

 

 

$

562

 

 

 

$

30,398

 

 

$

28,570

 

 

$

1,828

 

 

% of Gross earned premiums

 

10.2

%

 

 

10.5

%

 

 

(0.3

)

pts

 

 

9.3

%

 

 

9.0

%

 

 

0.3

 

pts

% of Net earned premiums

 

21.4

%

 

 

25.6

%

 

 

(4.2

)

pts

 

 

20.7

%

 

 

22.7

%

 

 

(2.0

)

pts

(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

 

The calculations of the Company's expense ratios are shown below.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

 

2024

 

 

Change

 

2025

 

 

2024

 

 

Change

Policy acquisition costs

$

24,257

 

 

$

13,939

 

 

$

10,318

 

 

 

$

47,723

 

 

$

23,534

 

 

$

24,189

 

 

General and administrative

 

7,778

 

 

 

11,938

 

 

 

(4,160

)

 

 

 

17,284

 

 

 

23,190

 

 

 

(5,906

)

 

Total operating expenses

$

32,035

 

 

$

25,877

 

 

$

6,158

 

 

 

$

65,007

 

 

$

46,724

 

 

$

18,283

 

 

% of Gross earned premiums

 

19.4

%

 

 

16.6

%

 

 

2.8

 

pts

 

 

19.8

%

 

 

14.8

%

 

 

5.0

 

pts

% of Net earned premiums

 

40.8

%

 

 

40.8

%

 

 

0.0

 

pts

 

 

44.3

%

 

 

37.1

%

 

 

7.2

 

pts

 

 

3

Exhibit 99.1

 

Quarter to Date Financial Results

Net income for the second quarter ended June 30, 2025 was $26.4 million, or $0.53 per diluted share, compared to net income of $19.1 million, or $0.39 per diluted share, for the second quarter ended June 30, 2024. Drivers of net income during the second quarter of 2025 included increased gross premiums earned and decreased ceded premiums earned, driving an overall increase in revenues. This increase in revenue was offset by increased policy acquisition costs quarter-over-quarter, partially offset by decreased general and administrative expenses. During the second quarter of 2025, the Company's net loss attributable to discontinued operations was $1.6 million, compared to a net loss of $19 thousand attributable to discontinued operations during the second quarter of 2024.

 

The Company's total gross written premium decreased by $1.1 million, or 0.5%, to $228.3 million for the second quarter ended June 30, 2025, from $229.4 million for the second quarter ended June 30, 2024. The breakdown of the quarter-over-quarter changes in both direct written and assumed premiums are shown in the table below.

($ in thousands)

Three Months Ended June 30,

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

Change $

 

 

Change %

 

Direct Written and Assumed Premium

 

 

 

 

 

 

 

 

 

 

 

Direct premium

$

228,373

 

 

$

229,449

 

 

$

(1,076

)

 

 

(0.5

)%

Assumed premium (1)

 

(27

)

 

 

—

 

 

 

(27

)

 

 

(100.0

)%

Total commercial property gross written premium

$

228,346

 

 

$

229,449

 

 

$

(1,103

)

 

 

(0.5

)%

(1) Assumed premium written for 2025 primarily included commercial property business assumed from unaffiliated insurers that was subsequently cancelled.

 

Loss and LAE increased by $263,000, or 1.7%, to $15.5 million for the second quarter ended June 30, 2025, from $15.3 million for the second quarter ended June 30, 2024. Loss and LAE expense as a percentage of net earned premiums decreased 4.3 points to 19.8% for the second quarter ended June 30, 2025, compared to 24.1% for the second quarter ended June 30, 2024. Excluding catastrophe losses and reserve development, the Company's gross underlying loss and LAE ratio for the second quarter ended June 30, 2025, would have been 10.2%, a decrease of 0.3 points from 10.5% for the second quarter ended June 30, 2024.

 

Policy acquisition costs increased by $10.4 million, or 74.8%, to $24.3 million for the second quarter ended June 30, 2025, from $13.9 million for the second quarter ended June 30, 2024, primarily due to a decrease in ceding commission income as the result of the Company's decrease in quota share reinsurance coverage from 40% to 20%, effective June 1, 2024 and from 20% to 15%, effective June 1, 2025. External management fees also increased as a result of a one percent increase in the management fee and profit share accrual agreed to in our contract renewal with AmRisc, LLC.

 

General and administrative expenses decreased by $4.1 million, or 34.5%, to $7.8 million for the second quarter ended June 30, 2025, from $11.9 million for the second quarter ended June 30, 2024, driven by a non-recurring employee retention tax credit refund submitted to the Internal Revenue Service in 2022 and received during the second quarter of 2025. This non-recurring refund was previously disclosed in our Quarterly Report on Form 10-Q, filed on May 8, 2025, as a gain contingency. In addition, external spending for professional and consulting services decreased quarter-over-quarter.

 

 

 

 

 

 

 

 

 

 

 

 

Reinsurance Costs as a Percentage of Gross Earned Premium

4

Exhibit 99.1

 

Reinsurance costs as a percentage of gross earned premium in the second quarter of 2025 and 2024 were as follows:

 

2025

 

 

2024

 

 

 

 

 

 

 

Non-at-Risk

 

(0.3

)%

 

 

(0.2

)%

Quota Share

 

(15.1

)%

 

 

(26.4

)%

All Other

 

(37.2

)%

 

 

(32.7

)%

Total Ceding Ratio

 

(52.6

)%

 

 

(59.3

)%

 

Ceded premiums earned related to the Company's catastrophe excess of loss contracts increased year-over-year, driven by a decrease in quota share reinsurance coverage from 40% to 20% effective June 1, 2024, and a further decrease to 15% effective June 1, 2025. As a result of the decreased quota share percentage and also exposure growth, the Company purchased additional excess-of-loss coverage in 2025. These decreases in quota share reinsurance coverage lowered the Company's overall ceding ratio, as replacement excess of loss coverage was more cost effective than the higher quota share coverage.

 

 

Investment Portfolio Highlights

 

The Company's cash, restricted cash and investment holdings increased from $540.8 million at December 31, 2024, to $726.2 million at June 30, 2025. This increase was driven by cash flows from operations. The Company's cash and investment holdings consist of investments in U.S. government and agency securities, corporate debt, mutual funds and investment grade money market instruments. Fixed maturities represented approximately 78.0 % of total investments at June 30, 2025, compared to 82.3 % of total investments at December 31, 2024. The Company's fixed maturity investments had a modified duration of 2.2 years at June 30, 2025 and December 31, 2024.

 

 

5

Exhibit 99.1

Book Value Analysis

 

Book value per common share increased 22.6% from $4.89 at December 31, 2024, to $6.00 at June 30, 2025. Underlying book value per common share increased 18.9% from $5.21 at December 31, 2024, to $6.20 at June 30, 2025. An increase in the Company's retained earnings as a result of net income for the first half of 2025 drove the increase in the Company's book value per share. As shown in the table below, removing the effect of Accumulated Other Comprehensive Income ("AOCI"), caused by capital market conditions, increases the Company's book value per common share at June 30, 2025.

($ in thousands, except for share and per share data)

 

 

 

 

 

 

 

 

June 30, 2025

 

 

December 31, 2024

 

Book Value per Share

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

Common stockholders' equity

 

$

292,300

 

 

$

235,660

 

Denominator:

 

 

 

 

 

 

Total Shares Outstanding

 

 

48,746,722

 

 

 

48,204,962

 

Book Value Per Common Share

 

$

6.00

 

 

$

4.89

 

 

 

 

 

 

 

 

Book Value per Share, Excluding the Impact of AOCI

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

Common stockholders' equity

 

$

292,300

 

 

$

235,660

 

Less: Accumulated other comprehensive loss

 

 

(9,794

)

 

 

(15,666

)

Stockholders' Equity, excluding AOCI

 

$

302,094

 

 

$

251,326

 

Denominator:

 

 

 

 

 

 

Total Shares Outstanding

 

 

48,746,722

 

 

 

48,204,962

 

Underlying Book Value Per Common Share(1)

 

$

6.20

 

 

$

5.21

 

(1) Underlying book value per common share is a non-GAAP financial measure and is reconciled above to book value per common share, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below.

 

Conference Call Details

 

Date and Time: August 6, 2025 - 5:00 P.M. ET

 

Participant Dial-In: (United States): 877-445-9755

(International): 201-493-6744

 

Webcast: To listen to the live webcast, please go to https://investors.amcoastal.com and click on the conference call link at the top of the page or go to: https://event.webcasts.com/starthere.jsp?ei=1727195&tp_key=9825ec9393

 

An archive of the webcast will be available for a limited period of time thereafter.

 

Presentation: The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations.

 

About American Coastal Insurance Corporation

 

American Coastal Insurance Corporation (amcoastal.com) is the holding company of the insurance carrier, American Coastal Insurance Company, which was founded in 2007 for the purpose of insuring Condominium and Homeowner Association properties, and Apartments in the state of Florida. American Coastal Insurance Company has an exclusive partnership for distribution of Condominium Association properties in the state of Florida with AmRisc Group (amriscgroup.com), one of the largest Managing General Agents in the country specializing in hurricane-exposed properties. American Coastal Insurance Company has earned a Financial Stability Rating of “A”, "Exceptional" from Demotech, and maintains an “A-” insurance financial strength rating with a Positive outlook by Kroll. ACIC maintains a ‘BBB-’ issuer rating with a Positive outlook by Kroll.

6

Exhibit 99.1

Contact Information:

Alexander Baty

Vice President, Finance & Investor Relations, American Coastal Insurance Corp.

investorrelations@amcoastal.com

(727) 425-8076

 

Karin Daly

Investor Relations, Vice President, The Equity Group

kdaly@theequitygroup.com

(212) 836-9623

 

 

 

 

 

 

 

 

 

 

Definitions of Non-GAAP Measures

 

The Company believes that investors' understanding of ACIC's performance is enhanced by the Company's disclosure of the following non-GAAP measures. The Company's methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

 

Net income (loss) excluding the effects of amortization of intangible assets, income (loss) from discontinued operations, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure that is computed by adding amortization, net of tax, to net income (loss) and subtracting income (loss) from discontinued operations, net of tax, realized gains (losses) on the Company's investment portfolio, net of tax, and unrealized gains (losses) on the Company's equity securities, net of tax, from net income (loss). Amortization expense is related to the amortization of intangible assets acquired, including goodwill, through mergers and, therefore, the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of the Company's operations. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net income (loss). The core income (loss) measure should not be considered a substitute for net income (loss) and does not reflect the overall profitability of the Company's business.

 

Core return on equity is a non-GAAP ratio calculated using non-GAAP measures. It is calculated by dividing the core income (loss) for the period by the average stockholders’ equity for the trailing twelve months (or one quarter of such average, in the case of quarterly periods). Core income (loss) is an after-tax non-GAAP measure that is calculated by excluding from net income (loss) the effect of income (loss) from discontinued operations, net of tax, non-cash amortization of intangible assets, including goodwill, unrealized gains or losses on the Company's equity security investments and net realized gains or losses on the Company's investment portfolio. In the opinion of the Company’s management, core income (loss), core income (loss) per share and core return on equity are meaningful indicators to investors of the Company's underwriting and operating results, since the excluded items are not necessarily indicative of operating trends. Internally, the Company’s management uses core income (loss), core income (loss) per share and core return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis.

7

Exhibit 99.1

The most directly comparable GAAP measure is return on equity. The core return on equity measure should not be considered a substitute for return on equity and does not reflect the overall profitability of the Company's business.

 

Combined ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying combined ratio) is a non-GAAP measure, that is computed by subtracting the effect of current year catastrophe losses and prior year development from the combined ratio. The Company believes that this ratio is useful to investors, and it is used by management to highlight the trends in the Company's business that may be obscured by current year catastrophe losses and prior year development. Current year catastrophe losses cause the Company's loss trends to vary significantly between periods as a result of their frequency of occurrence and severity and can have a significant impact on the combined ratio. Prior year development is caused by unexpected loss development on historical reserves. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered as a substitute for the combined ratio and does not reflect the overall profitability of the Company's business.

 

Net loss and LAE excluding the effects of current year catastrophe losses and prior year reserve development (underlying loss and LAE) is a non-GAAP measure that is computed by subtracting the effect of current year catastrophe losses and prior year reserve development from net loss and LAE. The Company uses underlying loss and LAE figures to analyze the Company's loss trends that may be impacted by current year catastrophe losses and prior year development on the Company's reserves. As discussed previously, these two items can have a significant impact on the Company's loss trends in a given period. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net loss and LAE. The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of the Company's business.

 

Book value per common share, excluding the impact of accumulated other comprehensive loss (underlying book value per common share), is a non-GAAP measure that is computed by dividing common stockholders' equity after excluding accumulated other comprehensive income (loss), by total common shares outstanding plus dilutive potential common shares outstanding. The Company uses the trend in book value per common share, excluding the impact of accumulated other comprehensive income (loss), in conjunction with book value per common share to identify and analyze the change in net worth attributable to management efforts between periods. The Company believes this non-GAAP measure is useful to investors because it eliminates the effect of interest rates that can fluctuate significantly from period to period and are generally driven by economic and financial factors that are not influenced by management. Book value per common share is the most directly comparable GAAP measure. Book value per common share, excluding the impact of accumulated other comprehensive income (loss), should not be considered a substitute for book value per common share and does not reflect the recorded net worth of the Company's business.

 

Discontinued Operations

 

On May 9, 2024, the Company entered into the Sale Agreement with Forza Insurance Holdings, LLC ("Forza") in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of the Company's subsidiary, Interboro Insurance Company ("IIC"). Forza's application to acquire IIC was approved by the New York Department of Financial Services on February 13, 2025 and the sale closed on April 1, 2025. The Company received cash proceeds totaling $25,679,000 from the sale resulting in a loss on disposal of $247,000, net of tax impact. The Company also recognized a $1,348,000 loss, net of tax impact, on IIC's fixed maturity portfolio, which was included in Accumulated other comprehensive loss on the Company's Consolidated Balance Sheet prior to the sale.

 

Forward-Looking Statements

 

Statements made in this press release, or on the conference call identified above, and otherwise, that are not historical facts are “forward-looking statements”. The Company believes these statements are based on reasonable estimates, assumptions and

8

Exhibit 99.1

plans. However, if the estimates, assumptions, or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those expressed in, or implied by, the forward-looking statements. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words such as “may,” “will,” “expect,” "endeavor," "project," “believe,” "plan," “anticipate,” “intend,” “could,” “would,” “estimate” or “continue” or the negative variations thereof or comparable terminology. Factors that could cause actual results to differ materially may be found in the Company's filings with the U.S. Securities and Exchange Commission, in the “Risk Factors” section in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made, and, except as required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements.

9

Exhibit 99.1

Consolidated Statements of Comprehensive Income

In thousands, except share and per share amounts

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

$

228,346

 

 

$

229,449

 

 

$

426,198

 

 

$

414,050

 

Change in gross unearned premiums

 

 

(62,886

)

 

 

(73,999

)

 

 

(98,637

)

 

 

(98,330

)

Gross premiums earned

 

 

165,460

 

 

 

155,450

 

 

 

327,561

 

 

 

315,720

 

Ceded premiums earned

 

 

(87,017

)

 

 

(92,069

)

 

 

(180,846

)

 

 

(189,708

)

Net premiums earned

 

 

78,443

 

 

 

63,381

 

 

 

146,715

 

 

 

126,012

 

Net investment income

 

 

5,793

 

 

 

5,347

 

 

 

10,304

 

 

 

9,364

 

Net realized investment gains (losses)

 

 

—

 

 

 

(121

)

 

 

1,382

 

 

 

(121

)

Net unrealized gains (losses) on equity securities

 

 

2,231

 

 

 

49

 

 

 

268

 

 

 

(1

)

Total revenue

 

 

86,467

 

 

 

68,656

 

 

 

158,669

 

 

 

135,254

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

 

15,540

 

 

 

15,277

 

 

 

26,929

 

 

 

27,751

 

Policy acquisition costs

 

 

24,257

 

 

 

13,939

 

 

 

47,723

 

 

 

23,534

 

General and administrative expenses

 

 

7,778

 

 

 

11,938

 

 

 

17,284

 

 

 

23,190

 

Interest expense

 

 

2,719

 

 

 

3,426

 

 

 

5,436

 

 

 

6,145

 

Total expenses

 

 

50,294

 

 

 

44,580

 

 

 

97,372

 

 

 

80,620

 

Income before other income

 

 

36,173

 

 

 

24,076

 

 

 

61,297

 

 

 

54,634

 

Other income

 

 

1,379

 

 

 

811

 

 

 

2,449

 

 

 

1,621

 

Income before income taxes

 

 

37,552

 

 

 

24,887

 

 

 

63,746

 

 

 

56,255

 

Provision for income taxes

 

 

9,515

 

 

 

5,814

 

 

 

15,998

 

 

 

13,473

 

Income from continuing operations, net of tax

 

$

28,037

 

 

$

19,073

 

 

$

47,748

 

 

$

42,782

 

Income (loss) from discontinued operations, net of tax

 

 

(1,595

)

 

 

(19

)

 

 

42

 

 

 

(129

)

Net income

 

$

26,442

 

 

$

19,054

 

 

$

47,790

 

 

$

42,653

 

OTHER COMPREHENSIVE INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Change in net unrealized gains (losses) on investments

 

 

3,042

 

 

 

73

 

 

 

7,254

 

 

 

(125

)

Reclassification adjustment for net realized investment losses (gains)

 

 

—

 

 

 

121

 

 

 

(1,382

)

 

 

121

 

Total comprehensive income

 

$

29,484

 

 

$

19,248

 

 

$

53,662

 

 

$

42,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

48,434,446

 

 

 

47,821,115

 

 

 

48,285,665

 

 

 

47,572,236

 

Diluted

 

 

49,636,088

 

 

 

49,398,463

 

 

 

49,556,882

 

 

 

49,162,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings available to ACIC common stockholders per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.58

 

 

$

0.40

 

 

$

0.99

 

 

$

0.90

 

Discontinued operations

 

 

(0.03

)

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

0.55

 

 

$

0.40

 

 

$

0.99

 

 

$

0.90

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.56

 

 

$

0.39

 

 

$

0.96

 

 

$

0.87

 

Discontinued operations

 

 

(0.03

)

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

0.53

 

 

$

0.39

 

 

$

0.96

 

 

$

0.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

10

Exhibit 99.1

Consolidated Balance Sheets

In thousands, except share amounts

 

 

June 30,
2025

 

 

December 31,
2024

 

ASSETS

 

 

 

 

 

 

Investments, at fair value:

 

 

 

 

 

 

Fixed maturities, available-for-sale

 

$

248,944

 

 

$

281,001

 

Equity securities

 

 

40,502

 

 

 

36,794

 

Other investments

 

 

29,585

 

 

 

23,623

 

Total investments

 

$

319,031

 

 

$

341,418

 

Cash and cash equivalents

 

 

315,485

 

 

 

137,036

 

Restricted cash

 

 

91,727

 

 

 

62,357

 

Total cash, cash equivalents and restricted cash

 

$

407,212

 

 

$

199,393

 

Accrued investment income

 

 

3,347

 

 

 

2,964

 

Property and equipment, net

 

 

3,745

 

 

 

5,736

 

Premiums receivable, net

 

 

53,504

 

 

 

46,564

 

Reinsurance recoverable on paid and unpaid losses, net

 

 

169,622

 

 

 

263,419

 

Ceded unearned premiums

 

 

256,772

 

 

 

160,893

 

Goodwill

 

 

59,476

 

 

 

59,476

 

Deferred policy acquisition costs, net

 

 

58,008

 

 

 

40,282

 

Intangible assets, net

 

 

4,689

 

 

 

5,908

 

Other assets

 

 

11,459

 

 

 

16,816

 

Assets held for sale

 

 

—

 

 

 

73,243

 

Total Assets

 

$

1,346,865

 

 

$

1,216,112

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

219,242

 

 

$

322,087

 

Unearned premiums

 

 

383,991

 

 

 

285,354

 

Reinsurance payable on premiums

 

 

226,856

 

 

 

83,130

 

Accounts payable and accrued expenses

 

 

65,355

 

 

 

86,140

 

Operating lease liability

 

 

3,248

 

 

 

3,323

 

Notes payable, net

 

 

149,187

 

 

 

149,020

 

Other liabilities

 

 

6,686

 

 

 

1,456

 

Liabilities held for sale

 

 

—

 

 

 

49,942

 

Total Liabilities

 

$

1,054,565

 

 

$

980,452

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding

 

$

—

 

 

$

—

 

Common stock, $0.0001 par value; 100,000,000 shares authorized; 48,958,805 and 48,417,045 issued, respectively; 48,746,722 and 48,204,962 outstanding, respectively

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

439,502

 

 

 

436,524

 

Treasury shares, at cost: 212,083 shares

 

 

(431

)

 

 

(431

)

Accumulated other comprehensive loss

 

 

(9,794

)

 

 

(15,666

)

Retained earnings (deficit)

 

 

(136,982

)

 

 

(184,772

)

Total Stockholders' Equity

 

$

292,300

 

 

$

235,660

 

Total Liabilities and Stockholders' Equity

 

$

1,346,865

 

 

$

1,216,112

 

 

11
EX-99.2 3 acic-ex99_2.htm EX-99.2

Slide 1

2nd Quarter 2025 August 6th, 2025 Earnings Presentation

Slide 2

Company Overview ACIC is a specialty underwriter of catastrophe exposed commercial property insurance. American Coastal Insurance Corp. (Nasdaq: ACIC) is the insurance holding company for American Coastal Insurance Company (AmCoastal), a Florida domiciled P&C carrier, and Skyway Underwriters (SKU), a managing general agency, along with other operating affiliates. AmCoastal is a balance sheet underwriter and has the #1 market share of commercial residential property insurance in Florida with roughly 4,400 policies and $657 million of premium in-force. AmCoastal has earned an underwriting profit every year since its inception in 2007. SKU is a fee-based MGA focused on producing and underwriting commercial property insurance without taking any underwriting risk. ACIC as of June 30, 2025 Total Assets: $1.35 billion Total Equity: $292.3 million Annualized Revenue: $317.3 million Employees: 66 Headquarters: St. Petersburg, FL Credit Rating: BBB- (KBRA as of 7/21/25) Specialty Commercial Property Managing General Agency

Slide 3

Executive Summary 2Q-25 Results Non-GAAP Core Income of $26.8m ($0.54) increased $7.2m (+36.4%) from $19.6m ($0.40) y/y due to quota share reduction from 40% to 20% as of June 1, 2024 and further to 15% as of June 1, 2025 and two employer retention tax credits received in 2025 related to 2021 totaling $3.7m. Net premiums earned grew $15.0m (+23.8%) to $78.4m y/y. Our combined ratio of 60.6% decreased from 64.9% last year due to higher net premiums earned and our Non-GAAP underlying combined ratio (which excludes current catastrophe losses and PY development) was 62.2% which decreased from 66.4% in the prior year also due to higher net premiums earned. Both were below our stated target of 65.0%. We experienced no catastrophe losses in the quarter and had $1.3m of favorable prior year reserve development. Stockholders’ equity increased $56.6 million from December 31, 2024, to $292.3m or $6.00 per share and $6.20 per share excluding unrealized losses in accumulated other comprehensive income. Tangible book value per share increased to $4.68 per share. Other Highlights The Florida commercial property market continued to soften during the second quarter with average premiums down ~7% since year-end. The Company completed its Core CAT reinsurance program effective June 1, 2025 with increased protection and a risk-adjusted decrease of -12.4%. ACIC was upgraded to investment grade status (BBB-) by KBRA on 7.21.25, saving approximately $1.5m per year in interest expense. Skyway Underwriters is tracking with its 2025 underwriting goals and production target related to its new Apartment product.

Slide 4

2Q-25 Financial Scorecard The Company is proud to report strong results for the second quarter. 2Q-25 = $0.54 vs. Analyst’s Est. = $0.38 2Q-25 = $6.00 vs. Analyst’s Est. = $5.78 2Q-25 = 60.6% vs. Analyst’s Est. = 71.1% 2Q-25 = 41.6% vs. Analyst’s Est. = 28.2% Core Earnings per Share (CEPS) Book Value per Share (BVPS) Combined Ratio (CR) Core Return on Equity (CROE)

Slide 5

2Q-25 & 1H-25 Summary of Key Results Net & Core Income improved y/y driven by lower reinsurance costs. Combined Ratio was below 65.0% target.

Slide 6

2Q-25 Operating Overview Net Income increased y/y as the impacts of quota share reductions & new business premiums are earned. Our 2024 and 2025 quota share step-downs, combined with new business writings, impacted our net earned premiums positively. This was partially offset by increased operating expense, but created net additional earnings y/y.

Slide 7

Balance Sheet Highlights Liquidity and Book Value surged in 1H-2025 due to strong underwriting results.

Slide 8

Investment Portfolio Overview The Company’s high quality fixed income investments have mitigated the impacts of Q2 market volatility. The Company’s cash position increased as we continue to take advantage of high cash yields and keep a conservative portfolio.

Slide 9

Skyway Underwriters Production Summary 1H-25 Apartments are diversifying our exposure in Florida, but we remain disciplined & selective.

Slide 10

Core CAT Reinsurance Program effective 6.1.25 Note: Return times projected as of 9.30.25 and calculated by blending AIRv10, AIRv11.5, RMSv22, &. RMSv23 LT+DS equally. Occurrence and aggregate limit increased y/y, but exhaustion point 201-year return time decreased slightly due to model changes in both AIR & RMS that increased probable maximum loss (PML) estimates incorporated into our view of risk. Consolidated group retention: 1st event - $29.75m (12.6% of equity at 12/31/24) vs. expiring $20.5m (12.2% of equity at 12/31/23) 2nd event - $18.5m (7.9% of equity at 12/31/24) vs. expiring $13.0m (7.7% of equity at 12/31/23) 3rd Event - $3.75m (1.6% of equity at 12/31/24) vs. expiring $13.0m (7.7% of equity at 12/31/23) Non-loss impacted layers down -10% to -22%, resulting in an overall risk-adjusted cost decrease of approximately -12.4% y/y. External gross CAT quota share reduced from 20% to 15% and internal quota share with our captive (Shoreline Re) increased from 30% to 45%. All incumbent markets renewed in 2025, and we added 7 new markets. Armor Re II bond issuances totaling $400m 2024-2 Bond has full cascading coverage excess of $50m Core Catastrophe Program Highlights Structure Illustration 201YR 100YR 50YR $518.0M $855.1M 130YR $1,027.9M

Slide 11

Cautionary Statements This presentation and the accompanying remarks contain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward­ looking statements include expectations regarding our diversification, growth opportunities, retention rates, liquidity, investment returns and ability to meet our investment objectives and to manage and mitigate market risk with respect to our investments. These statements are based on current expectations, estimates and projections about the industry and market in which we operate, and management’s current beliefs and assumptions. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "endeavor," "project," "believe," "anticipate," "intend," "could," "would," "estimate" or "continue" or the negative variations thereof, or comparable terminology, are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. The risks and uncertainties include, without limitation: the regulatory, economic and weather conditions in the states in which we operate; the impact of new federal or state regulations that affect the property and casualty insurance market; the cost, variability and availability of reinsurance; assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to attract and retain the services of senior management; the outcome of litigation pending against us, including the terms of any settlements; dependence on investment income and the composition of our investment portfolio and related market risks; our exposure to catastrophic events and severe weather conditions; downgrades in our financial strength ratings; risks and uncertainties relating to our acquisitions, including our ability to successfully integrate the acquired companies; and other risks and uncertainties described in the section entitled "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission (the "SEC"), including our Annual Report in Form 10-K for the year ended December 31, 2024 and 2023. We caution you not to place undue reliance on these forward­ looking statements, which are valid only as of the date they were made. Except as may be required by applicable law, we undertake no obligation to update or revise any forward-looking statements to reflect new information, the occurrence of unanticipated events, or otherwise. This presentation contains certain non-GAAP financial measures. These measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with GAAP and should not be viewed as a substitute for GAAP measures. See our earnings release, Form 10-K , Form 10-Q and Form 10-Q/A for further information regarding these non-GAAP financial measures.