Maryland | 001-33549 | 38-3754322 | ||||||||||||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
660 Steamboat Road | 2nd Floor | Greenwich | CT | 06830 | |||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||
Common Stock, par value $0.001 per share | TIPT | NASDAQ | Capital Market |
Item 2.02 | Results of Operations and Financial Condition. |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01 | Financial Statements and Exhibits. |
99.1 | |||||
99.2 | |||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
TIPTREE INC. | |||||||||||
Date: | February 28, 2024 | By: | /s/ Jonathan Ilany | ||||||||
Name: Jonathan Ilany | |||||||||||
Title: Chief Executive Officer |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
($ 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) |
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Adjusted net income |
$ | 13,854 | $ | 9,684 | $ | 61,917 | $ | 53,034 | ||||||||||||||||||
Adjusted return on average equity | 13.6 | % | 9.9 | % | 15.2 | % | 13.6 | % | ||||||||||||||||||
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 | % |
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 | % |
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 |
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 |
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. |
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(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. |
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(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. |
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(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. |
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(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. |
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(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. |