Tiptree Reports Third Quarter 2022 Results

Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), today announced its financial results for the three and nine months ended September 30, 2022.

Third Quarter 2022 Summary

  • Revenues for the quarter of $363.5 million, an increase of 26.8% from Q3'21, driven by growth in Fortegra’s specialty insurance lines and increased vessel revenues. Excluding investment gains and losses, revenues were up 17.7%.
  • Net income of $14.2 million compared to net income of $2.0 million in Q3'21, driven by the gain on sale of dry-bulk vessels and growth in our insurance business.
  • Adjusted net income of $19.4 million decreased by 6.4% from $20.7 million in Q3'21, driven by declines in our mortgage business. Adjusted return on average equity was 14.8% for the quarter.
  • Completed the sale of two remaining dry bulk vessels for $46.2 million, representing a gain of $14.1 million. Total proceeds from dry-bulk vessel sales in 2022 were $67.7 million, or a gain of $21.2 million.
  • Signed definitive agreements to sell remaining two product tankers for an aggregate of $49.0 million, representing an approximate 44% gain as compared to Q3’22 book value. The two tankers are expected to close in Q4’22.
  • The Company repurchased 158,162 shares for the nine months ended September 30, 2022 at an average price of $10.43 per share.
  • Declared a dividend of $0.04 per share to stockholders of record on November 21, 2022 with a payment date of November 28, 2022.

 

Third Quarter

 

Nine Months

 

($ in thousands, except per share information)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

Total revenues

$

363,478

 

 

$

286,605

 

 

$

1,028,224

 

 

$

880,980

 

 

Net income (loss) attributable to common stockholders

$

14,223

 

 

$

2,008

 

 

$

(9,145

)

 

$

38,558

 

 

Diluted earnings per share

$

0.38

 

 

$

0.06

 

 

$

(0.26

)

 

$

1.11

 

 

Cash dividends paid per common share

$

0.04

 

 

$

0.04

 

 

$

0.12

 

 

$

0.12

 

 

Return on average equity

 

15.4

%

 

 

3.3

%

 

 

(0.7

)%

 

 

14.8

%

 

 

 

 

 

 

 

 

 

 

Non-GAAP: (1)

 

 

 

 

 

 

 

 

Adjusted net income

$

19,395

 

 

$

20,730

 

 

$

48,833

 

 

$

47,010

 

 

Adjusted return on average equity

 

14.8

%

 

 

20.5

%

 

 

14.2

%

 

 

16.2

%

 

Book value per share

$

10.68

 

 

$

11.37

 

 

$

10.68

 

 

$

11.37

 

 

(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.

Nine Months 2022 Summary

  • In June 2022, Tiptree closed the previously announced $200 million strategic investment in Fortegra by Warburg Pincus. As part of the closing, $113 million of Tiptree’s corporate debt was repaid in full. For the nine months, Tiptree recognized a $63.2 million pre-tax gain in stockholders’ equity from the investment in Fortegra, which was partially offset by an increase in deferred tax liability associated with the tax deconsolidation of Fortegra. Of the total deferred tax liability of $38.2 million, $24.1 million impacted net income with the remainder impacting stockholders’ equity directly.
  • In 2022, we sold all three dry bulk vessels for $67.7 million and signed definitive agreements to sell the remaining two product tankers for $49.0 million. The gain on the two product tankers is expected to be approximately 44% as compared to Q3’22 book value and we expect the sales to close in Q4’22.
  • Year-to-date revenues of $1.03 billion, an increase of 16.7% from 2021 driven by similar factors impacting the quarter. Excluding investment gains and losses, revenues were up 19.3%.
  • Net loss of $9.1 million compared to net income of $38.6 million in 2021, driven by the deferred tax liability associated with the tax deconsolidation of Fortegra and unrealized losses on investments as compared to gains in the prior year period, partially offset by growth in insurance and shipping operations.
  • Adjusted net income of $48.8 million increased by 3.9% from prior year, driven by growth in specialty insurance and shipping operations. Adjusted return on average equity was 14.2%.

Segment Financial Highlights - Third Quarter 2022

Insurance (The Fortegra Group):

 

Third Quarter

 

Nine Months

 

($ in thousands)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

Gross written premiums and premium equivalents

$

761,446

 

 

$

588,063

 

 

$

1,956,998

 

 

$

1,618,076

 

 

Revenues

$

327,028

 

 

$

246,706

 

 

$

903,388

 

 

$

721,524

 

 

Income before taxes

$

15,304

 

 

$

13,337

 

 

$

39,057

 

 

$

49,569

 

 

Return on average equity

 

14.4

%

 

 

13.7

%

 

 

12.1

%

 

 

17.3

%

 

Combined ratio

 

91.5

%

 

 

89.6

%

 

 

91.0

%

 

 

91.0

%

 

 

 

 

 

 

 

 

 

 

Non-GAAP: (1)

 

 

 

 

 

 

 

 

Adjusted net income

$

19,831

 

 

$

19,533

 

 

$

59,893

 

 

$

46,400

 

 

Adjusted return on average equity

 

24.8

%

 

 

26.8

%

 

 

25.8

%

 

 

20.9

%

 

(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.

  • Fortegra’s gross written premiums and premium equivalents increased 29.5% for the quarter and 20.9% for the year driven by growth in U.S. specialty insurance lines and service contract businesses in U.S. and Europe. As a function of Fortegra’s premium growth, the combination of unearned premiums and deferred revenues on the balance sheet grew to $2.0 billion, up $413.8 million, or 26.5%, from September 30, 2021.
  • Revenues increased 32.6% for the quarter and 25.2% for the year driven by premium growth in specialty admitted and E&S lines, partially offset by unrealized investment losses. Excluding the impact of investment gains and losses, revenues increased by 31.2% for the quarter and 29.3% for the year.
  • The combined ratio for the quarter was 91.5%, compared to 89.6% in Q3'21 driven by the scalability of Fortegra’s technology and shared service platform, which improved the expense ratio, while the underwriting ratio increased due to a shift in business mix toward lines with higher loss ratios and lower expense ratios. Year-to-date combined ratio was consistent at 91.0%.
  • Income before taxes for the quarter was $15.3 million. Year-to-date income before taxes of $39.1 million compared to $49.6 million in the prior year. Return on equity for the year-to-date period was 12.1%, as compared to 17.3% in 2021.
  • Adjusted net income for the quarter was $19.8 million, up 1.5% from Q3'21. Year-to-date adjusted net income was $59.9 million, up 29.1% from prior year driven by revenue growth and the improved combined ratio. The year-to-date adjusted return on average equity was 25.8%, as compared to 20.9% in 2021.
  • On April 1, 2022, Fortegra acquired ITC Compliance GRP Limited for net cash consideration of $15.0 million, which further establishes Fortegra's footprint in Europe and provides a wholly vertical compliance solution for the U.K. automotive market.

Tiptree Capital:

 

Third Quarter

 

Nine Months

 

($ in thousands)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

Revenues

$

36,450

 

 

$

39,899

 

 

$

124,836

 

 

$

159,456

 

 

Income before taxes

$

18,136

 

 

$

1,567

 

 

$

23,817

 

 

$

38,033

 

 

Return on average equity

 

40.3

%

 

 

6.8

%

 

 

17.0

%

 

 

24.9

%

 

 

 

 

 

 

 

 

 

 

Non-GAAP: (1)

 

 

 

 

 

 

 

 

Adjusted net income

$

4,879

 

 

$

9,483

 

 

$

9,756

 

 

$

23,638

 

 

Adjusted return on average equity

 

13.8

%

 

 

20.2

%

 

 

8.5

%

 

 

18.2

%

 

(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 income before taxes for the quarter was $18.1 million compared to $1.6 million in the prior year driven by improved dry bulk and tanker charter rates and the gain on sale of two of our dry bulk vessels.
  • Income before taxes for the year was $23.8 million, down substantially from the prior year as declines in origination volumes and gain on sale margins in our mortgage business and unrealized losses on Invesque more than offset the improvements in our shipping business.

Corporate:

Corporate includes expenses of the holding company for interest expense, employee compensation and benefits, and public company and other expenses. For the quarter, corporate expenses were $8.3 million compared to $11.3 million in Q3'21 and for the year were $33.9 million compared to $33.2 million. The decrease in the quarter was driven by lower incentive compensation expense and interest expense as we repaid our corporate holding company borrowings in June 2022. Effective November 1, 2022, Tiptree has relocated its headquarters to 660 Steamboat Road, Greenwich, CT 06830.

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. 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, November 3, 2022 at 9:00 a.m. Eastern Time to discuss its Q3 2022 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 1-855-327-6837 (domestic) or 1-631-891-4304 (international). Please dial in at least five minutes prior to the start time.

A replay of the call will be available from Thursday, November 3, 2022 at 12:00 p.m. Eastern Time, until midnight Eastern on Thursday, November 10, 2022. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 10020271.

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, we have a significant track record investing in the insurance sector and across a variety of other industries, including mortgage origination, specialty finance and shipping. With proprietary access and a flexible capital base, we seek 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. 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

 

September 30,

2022

 

December 31,

2021

Assets:

 

 

 

Investments:

 

 

 

Available for sale securities, at fair value, net of allowance for credit losses

$

584,081

 

 

$

577,448

 

Loans, at fair value

 

70,784

 

 

 

105,583

 

Equity securities

 

85,103

 

 

 

138,483

 

Other investments

 

76,535

 

 

 

168,656

 

Total investments

 

816,503

 

 

 

990,170

 

Cash and cash equivalents

 

503,488

 

 

 

175,718

 

Restricted cash

 

10,344

 

 

 

19,368

 

Notes and accounts receivable, net

 

481,985

 

 

 

454,369

 

Reinsurance receivables

 

1,194,327

 

 

 

880,836

 

Deferred acquisition costs

 

485,199

 

 

 

379,373

 

Goodwill

 

185,944

 

 

 

179,103

 

Intangible assets, net

 

120,340

 

 

 

122,758

 

Other assets

 

162,118

 

 

 

146,844

 

Assets held for sale

 

33,836

 

 

 

250,608

 

Total assets

$

3,994,084

 

 

$

3,599,147

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Liabilities:

 

 

 

Debt, net

$

266,255

 

 

$

393,349

 

Unearned premiums

 

1,349,357

 

 

 

1,123,952

 

Policy liabilities and unpaid claims

 

512,924

 

 

 

331,703

 

Deferred revenue

 

628,876

 

 

 

534,863

 

Reinsurance payable

 

317,199

 

 

 

265,569

 

Other liabilities and accrued expenses

 

399,899

 

 

 

306,536

 

Liabilities held for sale

 

 

 

 

242,994

 

Total liabilities

$

3,474,510

 

 

$

3,198,966

 

 

 

 

 

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, 36,247,257 and 34,124,153 shares issued and outstanding, respectively

 

36

 

 

 

34

 

Additional paid-in capital

 

380,196

 

 

 

317,459

 

Accumulated other comprehensive income (loss), net of tax

 

(47,670

)

 

 

(2,685

)

Retained earnings

 

54,717

 

 

 

68,146

 

Total Tiptree Inc. stockholders’ equity

 

387,279

 

 

 

382,954

 

Non-controlling interests:

 

 

 

Fortegra preferred interests

 

77,679

 

 

 

 

Common interests

 

54,616

 

 

 

17,227

 

Total non-controlling interests

 

132,295

 

 

 

17,227

 

Total stockholders’ equity

 

519,574

 

 

 

400,181

 

Total liabilities and stockholders’ equity

$

3,994,084

 

 

$

3,599,147

 

Tiptree Inc.

Condensed Consolidated Statements of Operations

($ in thousands, except share data)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

Earned premiums, net

$

237,877

 

 

$

175,026

 

 

$

662,234

 

 

$

498,903

 

Service and administrative fees

 

83,423

 

 

 

69,664

 

 

 

232,883

 

 

 

191,414

 

Ceding commissions

 

4,023

 

 

 

2,722

 

 

 

9,886

 

 

 

8,827

 

Net investment income

 

3,632

 

 

 

3,330

 

 

 

10,164

 

 

 

9,331

 

Net realized and unrealized gains (losses)

 

17,159

 

 

 

14,805

 

 

 

50,050

 

 

 

120,268

 

Other revenue

 

17,364

 

 

 

21,058

 

 

 

63,007

 

 

 

52,237

 

Total revenues

 

363,478

 

 

 

286,605

 

 

 

1,028,224

 

 

 

880,980

 

Expenses:

 

 

 

 

 

 

 

Policy and contract benefits

 

121,242

 

 

 

80,831

 

 

 

330,353

 

 

 

237,198

 

Commission expense

 

137,559

 

 

 

104,392

 

 

 

382,435

 

 

 

292,580

 

Employee compensation and benefits

 

38,210

 

 

 

48,643

 

 

 

142,927

 

 

 

147,260

 

Interest expense

 

5,503

 

 

 

8,657

 

 

 

24,837

 

 

 

26,890

 

Depreciation and amortization

 

5,549

 

 

 

6,119

 

 

 

17,714

 

 

 

18,261

 

Other expenses

 

30,290

 

 

 

34,379

 

 

 

100,978

 

 

 

104,340

 

Total expenses

 

338,353

 

 

 

283,021

 

 

 

999,244

 

 

 

826,529

 

Income (loss) before taxes

 

25,125

 

 

 

3,584

 

 

 

28,980

 

 

 

54,451

 

Less: provision (benefit) for income taxes

 

5,068

 

 

 

237

 

 

 

31,537

 

 

 

11,416

 

Net income (loss)

 

20,057

 

 

 

3,347

 

 

 

(2,557

)

 

 

43,035

 

Less: net income (loss) attributable to non-controlling interests

 

5,834

 

 

 

1,339

 

 

 

6,588

 

 

 

4,477

 

Net income (loss) attributable to common stockholders

$

14,223

 

 

$

2,008

 

 

$

(9,145

)

 

$

38,558

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

Basic earnings per share

$

0.39

 

 

$

0.06

 

 

$

(0.26

)

 

$

1.15

 

Diluted earnings per share

$

0.38

 

 

$

0.06

 

 

$

(0.26

)

 

$

1.11

 

 

 

 

 

 

 

 

 

Weighted average number of common shares:

 

 

 

 

 

 

 

Basic

 

36,304,385

 

 

33,558,106

 

 

35,261,659

 

 

 

32,963,451

Diluted

 

36,783,248

 

 

 

34,132,182

 

 

 

35,261,659

 

 

 

35,025,211

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.04

 

 

$

0.04

 

 

$

0.12

 

 

$

0.12

 

Tiptree Inc.

Non-GAAP Reconciliations (Unaudited)

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

The Company defines Adjusted net income 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. We use adjusted net income as an internal operating performance measure in the management of business as part of our capital allocation process. We 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. Adjusted net income should not be viewed as a substitute for income before taxes calculated in accordance with GAAP, and other companies may define adjusted net income differently. Adjusted net income is presented before the impacts of non-controlling interests.

We define Adjusted return on average equity as Adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholder’s equity during the period. We use Adjusted return on average equity as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted return on average equity should not be viewed as a substitute for return on average equity calculated in accordance with GAAP, and other companies may define adjusted return on average equity differently.

 

Three Months Ended September 30, 2022

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

Total

Income (loss) before taxes

$

15,304

 

 

$

(940

)

 

$

19,077

 

 

$

(8,316

)

 

$

25,125

 

Less: Income tax (benefit) expense

 

(3,765

)

 

 

92

 

 

 

(3,963

)

 

 

2,568

 

 

 

(5,068

)

Less: Net realized and unrealized gains (losses)

 

6,382

 

 

 

(82

)

 

 

(12,694

)

 

 

 

 

 

(6,394

)

Plus: Intangibles amortization (1)

 

4,115

 

 

 

 

 

 

 

 

 

 

 

 

4,115

 

Plus: Stock-based compensation expense

 

33

 

 

 

 

 

 

75

 

 

 

1,588

 

 

 

1,696

 

Plus: Non-recurring expenses

 

89

 

 

 

 

 

 

53

 

 

 

 

 

 

142

 

Plus: Non-cash fair value adjustments

 

 

 

 

 

 

 

(130

)

 

 

 

 

 

(130

)

Less: Tax on adjustments (2)

 

(2,327

)

 

 

153

 

 

 

3,238

 

 

 

(1,155

)

 

 

(91

)

Adjusted net income

$

19,831

 

 

$

(777

)

 

$

5,656

 

 

$

(5,315

)

 

$

19,395

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

19,831

 

 

$

(777

)

 

$

5,656

 

 

$

(5,315

)

 

$

19,395

 

Average stockholders’ equity

$

319,703

 

 

$

57,133

 

 

$

84,445

 

 

$

61,178

 

 

$

522,459

 

Adjusted return on average equity

 

24.8

%

 

 

(5.4

)%

 

 

26.8

%

 

NM%

 

 

14.8

%

 

Three Months Ended September 30, 2021

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

Total

Income (loss) before taxes

$

13,337

 

 

$

6,267

 

 

$

(4,700

)

 

$

(11,320

)

 

$

3,584

 

Less: Income tax (benefit) expense

 

(3,394

)

 

 

14

 

 

 

1,591

 

 

 

1,552

 

 

 

(237

)

Less: Net realized and unrealized gains (losses)

 

7,428

 

 

 

(1,055

)

 

 

10,396

 

 

 

 

 

 

16,769

 

Plus: Intangibles amortization (1)

 

3,830

 

 

 

 

 

 

 

 

 

 

 

 

3,830

 

Plus: Stock-based compensation expense

 

475

 

 

 

 

 

 

197

 

 

 

832

 

 

 

1,504

 

Plus: Non-recurring expenses

 

(28

)

 

 

 

 

 

448

 

 

 

 

 

 

420

 

Plus: Non-cash fair value adjustments

 

 

 

 

 

 

 

(815

)

 

 

 

 

 

(815

)

Less: Tax on adjustments (2)

 

(2,115

)

 

 

(1,265

)

 

 

(1,595

)

 

 

650

 

 

 

(4,325

)

Adjusted net income

$

19,533

 

 

$

3,961

 

 

$

5,522

 

 

$

(8,286

)

 

$

20,730

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

19,533

 

 

$

3,961

 

 

$

5,522

 

 

$

(8,286

)

 

$

20,730

 

Average stockholders’ equity

$

291,281

 

 

$

68,925

 

 

$

118,729

 

 

$

(75,340

)

 

$

403,595

 

Adjusted return on average equity

 

26.8

%

 

 

23.0

%

 

 

18.6

%

 

NM%

 

 

20.5

%

 

Nine Months Ended September 30, 2022

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

Total

Income (loss) before taxes

$

39,057

 

 

$

3,350

 

 

$

20,468

 

 

$

(33,895

)

 

$

28,980

 

Less: Income tax (benefit) expense

 

(11,099

)

 

 

(874

)

 

 

(3,469

)

 

 

(16,095

)

 

 

(31,537

)

Less: Net realized and unrealized gains (losses)

 

23,151

 

 

 

(7,976

)

 

 

(8,293

)

 

 

 

 

 

6,882

 

Plus: Intangibles amortization (1)

 

12,146

 

 

 

 

 

 

 

 

 

 

 

 

12,146

 

Plus: Stock-based compensation expense

 

2,376

 

 

 

 

 

 

98

 

 

 

5,437

 

 

 

7,911

 

Plus: Non-recurring expenses

 

1,561

 

 

 

 

 

 

(869

)

 

 

2,108

 

 

 

2,800

 

Plus: Non-cash fair value adjustments

 

 

 

 

 

 

 

3,554

 

 

 

 

 

 

3,554

 

Less: Tax on adjustments (2)

 

(7,299

)

 

 

1,984

 

 

 

1,783

 

 

 

21,629

 

 

 

18,097

 

Adjusted net income

$

59,893

 

 

$

(3,516

)

 

$

13,272

 

 

$

(20,816

)

 

$

48,833

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

59,893

 

 

$

(3,516

)

 

$

13,272

 

 

$

(20,816

)

 

$

48,833

 

Average stockholders’ equity

$

309,042

 

 

$

58,558

 

 

$

94,169

 

 

$

(1,891

)

 

$

459,878

 

Adjusted return on average equity

 

25.8

%

 

 

(8.0

)%

 

 

18.8

%

 

NM%

 

 

14.2

%

 

Nine Months Ended September 30, 2021

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

Total

Income (loss) before taxes

$

49,569

 

 

$

25,119

 

 

$

12,914

 

 

$

(33,151

)

 

$

54,451

 

Less: Income tax (benefit) expense

 

(11,157

)

 

 

(4,448

)

 

 

(1,350

)

 

 

5,539

 

 

 

(11,416

)

Less: Net realized and unrealized gains (losses)

 

(5,004

)

 

 

(5,075

)

 

 

(3,512

)

 

 

 

 

 

(13,591

)

Plus: Intangibles amortization (1)

 

11,499

 

 

 

 

 

 

 

 

 

 

 

 

11,499

 

Plus: Stock-based compensation expense

 

1,347

 

 

 

331

 

 

 

209

 

 

 

1,831

 

 

 

3,718

 

Plus: Non-recurring expenses

 

2,076

 

 

 

 

 

 

729

 

 

 

2,171

 

 

 

4,976

 

Plus: Non-cash fair value adjustments

 

 

 

 

 

 

 

(2,167

)

 

 

 

 

 

(2,167

)

Less: Tax on adjustments (2)

 

(1,930

)

 

 

(442

)

 

 

1,330

 

 

 

582

 

 

 

(460

)

Adjusted net income

$

46,400

 

 

$

15,485

 

 

$

8,153

 

 

$

(23,028

)

 

$

47,010

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

46,400

 

 

$

15,485

 

 

$

8,153

 

 

$

(23,028

)

 

$

47,010

 

Average stockholders’ equity

$

296,125

 

 

$

62,093

 

 

$

110,818

 

 

$

(81,196

)

 

$

387,840

 

Adjusted return on average equity

 

20.9

%

 

 

33.3

%

 

 

9.8

%

 

NM%

 

 

16.2

%

Notes

(1)

Specifically associated with acquisition purchase accounting. See Note (9) Goodwill and Intangible Assets, net, of the Company’s Form 10-Q for the period ended September 30, 2022.

(2)

Tax on adjustments represents the tax applied to the total non-GAAP adjustments and includes adjustments for non-recurring or discrete tax impacts. For the three and nine months ended September 30, 2022, included in the adjustment is an add-back of $(1.4) million and $24.1 million, respectively, related to deferred tax expense from the WP Transaction.

Non-GAAP Financial Measures — Book value per share

Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders’ equity and total shares outstanding, net of treasury shares.

($ in thousands, except per share information)

As of September 30,

 

 

2022

 

 

 

2021

 

Total stockholders’ equity

$

519,574

 

 

$

402,142

 

Less: Non-controlling interests

 

132,295

 

 

 

16,930

 

Total stockholders’ equity, net of non-controlling interests

$

387,279

 

 

$

385,212

 

 

 

 

 

Total common shares outstanding

 

36,247

 

 

33,889

 

 

 

 

Book value per share

$

10.68

 

 

$

11.37

 

 

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