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Tiptree Announces Second Quarter 2024 Results

Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), today announced its financial results for the three and six months ended June 30, 2024.

“We are extremely pleased with the second quarter results and remain well-positioned for future growth,” said Tiptree’s Executive Chairman, Michael Barnes. “Fortegra posted record results in the first half with growth in revenues of 34% and adjusted net income of 40%. As always, we remain committed to growing long term shareholder value and will continue to seek constructive ways to more fully reflect the intrinsic value of Tiptree’s businesses in our share price.”

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

($ in thousands, except per share information)

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

Total revenues

$

546,673

 

 

$

404,518

 

 

$

1,044,894

 

 

$

786,143

 

 

Net income (loss) attributable to common stockholders

$

12,851

 

 

$

5,989

 

 

$

21,901

 

 

$

4,927

 

 

Diluted earnings per share

$

0.31

 

 

$

0.16

 

 

$

0.54

 

 

$

0.13

 

 

Cash dividends paid per common share

$

0.06

 

 

$

0.05

 

 

$

0.12

 

 

$

0.10

 

 

Return on average equity

 

11.9

%

 

 

6.0

%

 

 

10.3

%

 

 

2.5

%

 

 

 

 

 

 

 

 

 

 

Non-GAAP: (1)

 

 

 

 

 

 

 

 

Adjusted net income

$

24,422

 

 

$

17,630

 

 

$

44,955

 

 

$

30,189

 

 

Adjusted return on average equity

 

22.7

%

 

 

17.6

%

 

 

21.1

%

 

 

15.1

%

 

(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures. Adjusted net income is presented after the impacts of non-controlling interests.

Second Quarter 2024 Summary

  • Revenues of $546.7 million for the quarter, an increase of 35.1% from Q2'23, driven by growth in Fortegra’s specialty insurance lines. Excluding investment gains and losses, revenues increased 33.9%.
  • Net income of $12.9 million compared to a net income of $6.0 million in Q2'23, driven by growth in our insurance business.
  • Adjusted net income of $24.4 million increased by 38.5% from $17.6 million in Q2'23. Annualized adjusted return on average equity was 22.7% for the quarter, as compared to 17.6% in Q2'23.
  • Declared a dividend of $0.06 per share to stockholders of record on August 19, 2024 with a payment date of August 26, 2024.

Year-to-date 2024 Summary

  • Year-to-date revenues of $1.045 billion, an increase of 32.9% from 2023, driven by growth in Fortegra’s specialty insurance lines, net realized and unrealized gains, and higher mortgage revenues. Excluding investment gains and losses, revenues were up 30.4%.
  • Net income of $21.9 million compared to net income of $4.9 million in 2023, driven by growth in our insurance business and improved mortgage operations.
  • Adjusted net income of $45.0 million increased by 48.9% from $30.2 million in 2023, driven by growth in insurance revenues while maintaining a consistent combined ratio. Adjusted return on average equity was 21.1% for the year, as compared to 15.1% in 2023.
  • In March and April 2024, Tiptree, Warburg and Fortegra directors contributed $30.0 million, $9.9 million, and $0.1 million, respectively, to Fortegra in exchange for Fortegra Common Stock. As of June 30, 2024, Fortegra was owned approximately 79.3% by Tiptree, 17.7% by Warburg and 3.0% by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and the conversion of outstanding preferred stock.

Segment Financial Highlights - Second Quarter 2024

Insurance (The Fortegra Group):

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

($ in thousands)

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

Gross written premiums and premium equivalents

$

776,059

 

 

$

716,063

 

 

$

1,439,476

 

 

$

1,337,221

 

 

Net written premiums

$

365,897

 

 

$

320,572

 

 

$

684,048

 

 

$

601,718

 

 

Total revenues

$

529,942

 

 

$

384,677

 

 

$

1,008,698

 

 

$

753,121

 

 

Income before taxes

$

51,250

 

 

$

30,417

 

 

$

88,061

 

 

$

49,862

 

 

Return on average equity

 

28.4

%

 

 

23.1

%

 

 

25.8

%

 

 

20.2

%

 

Combined ratio

 

89.9

%

 

 

90.2

%

 

 

90.0

%

 

 

90.8

%

 

 

 

 

 

 

 

 

 

 

Non-GAAP: (1)

 

 

 

 

 

 

 

 

Adjusted net income

$

40,316

 

 

$

30,119

 

 

$

74,449

 

 

$

53,058

 

 

Adjusted return on average equity

 

30.3

%

 

 

32.4

%

 

 

29.7

%

 

 

29.6

%

 

(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.

  • Record gross written premiums and premium equivalents of $776.1 million for the quarter, an increase of 8.4%, and $1.4 billion for the year, an increase of 7.6%, driven primarily by growth in specialty E&S insurance lines.
  • Net written premiums were $365.9 million for the quarter, an increase of 14.1%, and $684.0 million for the year, an increase of 13.7%. The increases in both periods were consistent with the growth in gross written premiums and premium equivalents and increased retention on Fortegra’s whole account quota share reinsurance agreement.
  • Record revenues increased 37.8% for the quarter and 33.9% for the year driven by premium growth in specialty E&S and admitted lines, and services businesses in the U.S. and Europe. Excluding the impact of investment gains and losses, revenues increased by 35.6% for the quarter and 31.7% for the year.
  • The combined ratio for the quarter was 89.9%, compared to 90.2% in Q2’23, reflecting the consistent underwriting performance and scalability of the Company’s operating platform. Year-to-date combined ratio was 90.0%, as compared to 90.8% in 2023.
  • Record income before taxes was $51.3 million for the quarter, an increase of 68.5%. Year-to-date income before taxes was $88.1 million, an increase of 76.6%. Annualized after-tax return on average equity for the year was 25.8%, compared to 20.2% in 2023.
  • Record adjusted net income for the quarter of $40.3 million, up 33.9% from Q2'23. Year-to-date adjusted net income of $74.4 million, up 40.3%. Annualized adjusted return on average equity for the year was 29.7%, compared to 29.6% in 2023.
  • Fortegra’s total stockholders’ equity was $549.2 million as of June 30, 2024, compared to $452.6 million as of December 31, 2023, with the increase driven by net income and the aggregate capital contribution from Tiptree, Warburg and Fortegra directors of $40 million.

Tiptree Capital:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

($ in thousands)

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

Total revenues

$

16,731

 

 

$

19,841

 

 

$

36,196

 

 

$

33,022

 

 

Income before taxes

$

740

 

 

$

2,767

 

 

$

4,486

 

 

$

1,644

 

 

Return on average equity

 

1.7

%

 

 

3.9

%

 

 

4.6

%

 

 

1.4

%

 

 

 

 

 

 

 

 

 

 

Non-GAAP: (1)

 

 

 

 

 

 

 

 

Adjusted net income

$

356

 

 

$

10

 

 

$

700

 

 

$

570

 

 

Adjusted return on average equity

 

1.2

%

 

 

%

 

 

1.0

%

 

 

0.7

%

 

(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 was $0.7 million for the quarter, compared to an income of $2.8 million in Q2'23, and $4.5 million for the year, compared to $1.6 million in 2023, driven by higher mortgage revenues and investment gains on securities in the Company’s investment holdings.
  • Mortgage income before taxes was $0.5 million for the quarter, as compared to an income of $1.3 million in Q2'23, and $1.3 million for the year, as compared to a loss of $1.3 million in 2023, driven by higher origination volumes and higher positive marks on the MSR asset in 2024 compared to 2023.
  • In April 2024, the Company sold its Invesque shares for $0.6 million, thus eliminating quarterly mark-to-market volatility, and crystallizing a capital loss for tax purposes of $106.8 million.

Corporate:

Corporate includes expenses of the holding company for employee compensation and benefits, audit and professional fees, and public company and other expenses. For the quarter, corporate expenses were $11.3 million compared to $9.5 million in Q2'23 driven by increased incentive compensation accruals.

Non-GAAP

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

Earnings Conference Call

Tiptree will host a conference call on Thursday, August 1, 2024 at 10:30 a.m. Eastern Time to discuss its Q2 2024 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company’s website, located at www.tiptreeinc.com.

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

A replay of the call will be available from Thursday, August 1, 2024 at 1:30 p.m. Eastern Time, until midnight Eastern on Thursday, August 8, 2024. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13746746.

About Tiptree

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

Forward-Looking Statements

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

 

Tiptree Inc.

Condensed Consolidated Balance Sheets

($ in thousands, except share data)

 

 

As of

 

June 30,

2024

 

December 31, 2023

Assets:

 

 

 

Investments:

 

 

 

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

$

825,223

 

 

$

802,609

 

Loans, at fair value

 

74,326

 

 

 

69,556

 

Equity securities

 

69,499

 

 

 

68,308

 

Other investments

 

59,337

 

 

 

111,088

 

Total investments

 

1,028,385

 

 

 

1,051,561

 

Cash and cash equivalents

 

497,343

 

 

 

468,711

 

Restricted cash

 

108,034

 

 

 

23,850

 

Notes and accounts receivable, net

 

779,105

 

 

 

684,608

 

Reinsurance recoverable

 

904,692

 

 

 

953,886

 

Prepaid reinsurance premiums

 

962,159

 

 

 

900,524

 

Deferred acquisition costs

 

545,033

 

 

 

565,746

 

Goodwill

 

205,972

 

 

 

206,155

 

Intangible assets, net

 

110,835

 

 

 

118,757

 

Other assets

 

163,152

 

 

 

165,515

 

Total assets

$

5,304,710

 

 

$

5,139,313

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Liabilities:

 

 

 

Debt, net

$

387,338

 

 

$

402,411

 

Unearned premiums

 

1,671,294

 

 

 

1,695,058

 

Policy liabilities and unpaid claims

 

1,087,203

 

 

 

844,848

 

Deferred revenue

 

683,513

 

 

 

673,085

 

Reinsurance payable

 

478,168

 

 

 

543,602

 

Other liabilities and accrued expenses

 

379,125

 

 

 

403,744

 

Total liabilities

$

4,686,641

 

 

$

4,562,748

 

 

 

 

 

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, 36,785,305 and 36,756,187 shares issued and outstanding, respectively

 

37

 

 

 

37

 

Additional paid-in capital

 

387,513

 

 

 

382,239

 

Accumulated other comprehensive income (loss), net of tax

 

(29,216

)

 

 

(26,073

)

Retained earnings

 

78,115

 

 

 

60,663

 

Total Tiptree Inc. stockholders’ equity

 

436,449

 

 

 

416,866

 

Non-controlling interests:

 

 

 

Fortegra preferred interests

 

77,679

 

 

 

77,679

 

Common interests

 

103,941

 

 

 

82,020

 

Total non-controlling interests

 

181,620

 

 

 

159,699

 

Total stockholders’ equity

 

618,069

 

 

 

576,565

 

Total liabilities and stockholders’ equity

$

5,304,710

 

 

$

5,139,313

 

 

Tiptree Inc.

Condensed Consolidated Statements of Operations

($ in thousands, except share data)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

Earned premiums, net

$

398,467

 

$

269,795

 

$

745,777

 

$

535,125

Service and administrative fees

 

105,847

 

 

98,113

 

 

216,334

 

 

190,145

Ceding commissions

 

5,065

 

 

4,676

 

 

7,809

 

 

8,321

Net investment income

 

6,381

 

 

9,088

 

 

13,139

 

 

14,197

Net realized and unrealized gains (losses)

 

12,578

 

 

8,825

 

 

28,202

 

 

11,002

Other revenue

 

18,335

 

 

14,021

 

 

33,633

 

 

27,353

Total revenues

 

546,673

 

 

404,518

 

 

1,044,894

 

 

786,143

Expenses:

 

 

 

 

 

 

 

Policy and contract benefits

 

233,975

 

 

147,734

 

 

441,639

 

 

289,409

Commission expense

 

173,279

 

 

142,699

 

 

330,227

 

 

289,149

Employee compensation and benefits

 

49,917

 

 

44,383

 

 

99,103

 

 

85,181

Interest expense

 

8,015

 

 

7,044

 

 

16,305

 

 

13,509

Depreciation and amortization

 

5,291

 

 

5,875

 

 

10,859

 

 

11,128

Other expenses

 

35,550

 

 

33,109

 

 

76,416

 

 

65,920

Total expenses

 

506,027

 

 

380,844

 

 

974,549

 

 

754,296

Income (loss) before taxes

 

40,646

 

 

23,674

 

 

70,345

 

 

31,847

Less: provision (benefit) for income taxes

 

18,673

 

 

11,824

 

 

32,491

 

 

16,846

Net income (loss)

 

21,973

 

 

11,850

 

 

37,854

 

 

15,001

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

 

9,122

 

 

5,861

 

 

15,953

 

 

10,074

Net income (loss) attributable to common stockholders

$

12,851

 

$

5,989

 

$

21,901

 

$

4,927

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

Basic earnings per share

$

0.35

 

$

0.16

 

$

0.59

 

$

0.13

Diluted earnings per share

$

0.31

 

$

0.16

 

$

0.54

 

$

0.13

 

 

 

 

 

 

 

 

Weighted average number of common shares:

 

 

 

 

 

 

 

Basic

 

36,785,305

 

 

36,742,295

 

 

36,777,557

 

 

36,633,226

Diluted

 

37,752,682

 

 

37,585,811

 

 

37,766,573

 

 

37,509,660

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.06

 

$

0.05

 

$

0.12

 

$

0.10

   

Tiptree Inc.

Non-GAAP Reconciliations (Unaudited)

 

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

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

 

Three Months Ended June 30, 2024

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

Total

Income (loss) before taxes

$

51,250

 

 

$

528

 

 

$

212

 

 

$

(11,344

)

 

$

40,646

 

Less: Income tax (benefit) expense

 

(13,568

)

 

 

(113

)

 

 

(116

)

 

 

(4,876

)

 

 

(18,673

)

Less: Net realized and unrealized gains (losses) (1)

 

(2,545

)

 

 

(289

)

 

 

103

 

 

 

 

 

 

(2,731

)

Plus: Intangibles amortization (2)

 

3,727

 

 

 

 

 

 

 

 

 

 

 

 

3,727

 

Plus: Stock-based compensation expense

 

1,022

 

 

 

 

 

 

 

 

 

2,375

 

 

 

3,397

 

Plus: Non-recurring expenses (3)

 

166

 

 

 

 

 

 

 

 

 

 

 

 

166

 

Plus: Non-cash fair value adjustments (4)

 

861

 

 

 

 

 

 

 

 

 

 

 

 

861

 

Plus: Impact of tax deconsolidation of Fortegra(5)

 

 

 

 

 

 

 

 

 

 

6,357

 

 

 

6,357

 

Less: Tax on adjustments (6)

 

(597

)

 

 

55

 

 

 

(24

)

 

 

(405

)

 

 

(971

)

Adjusted net income (before NCI)

$

40,316

 

 

$

181

 

 

$

175

 

 

$

(7,893

)

 

$

32,779

 

Less: Impact of non-controlling interests

 

(8,357

)

 

 

 

 

 

 

 

 

 

 

 

(8,357

)

Adjusted net income

$

31,959

 

 

$

181

 

 

$

175

 

 

$

(7,893

)

 

$

24,422

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (before NCI)

$

40,316

 

 

$

181

 

 

$

175

 

 

$

(7,893

)

 

$

32,779

 

Average stockholders’ equity

$

531,447

 

 

$

53,092

 

 

$

66,580

 

 

$

(42,766

)

 

$

608,353

 

Adjusted return on average equity (7)

 

30.3

%

 

 

1.4

%

 

 

1.1

%

 

NM%

 

 

21.6

%

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2023

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

Total

Income (loss) before taxes

$

30,417

 

 

$

1,312

 

 

$

1,455

 

 

$

(9,510

)

 

$

23,674

 

Less: Income tax (benefit) expense

 

(8,928

)

 

 

(306

)

 

 

(497

)

 

 

(2,093

)

 

 

(11,824

)

Less: Net realized and unrealized gains (losses) (1)

 

4,379

 

 

 

(1,588

)

 

 

(1,063

)

 

 

 

 

 

1,728

 

Plus: Intangibles amortization (2)

 

3,895

 

 

 

 

 

 

 

 

 

 

 

 

3,895

 

Plus: Stock-based compensation expense

 

488

 

 

 

 

 

 

 

 

 

1,504

 

 

 

1,992

 

Plus: Non-recurring expenses (3)

 

238

 

 

 

 

 

 

 

 

 

 

 

 

238

 

Plus: Non-cash fair value adjustments (4)

 

(46

)

 

 

 

 

 

 

 

 

 

 

 

(46

)

Plus: Impact of tax deconsolidation of Fortegra (5)

 

 

 

 

 

 

 

 

 

 

3,500

 

 

 

3,500

 

Less: Tax on adjustments (6)

 

(324

)

 

 

373

 

 

 

324

 

 

 

274

 

 

 

647

 

Adjusted net income (before NCI)

$

30,119

 

 

$

(209

)

 

$

219

 

 

$

(6,325

)

 

$

23,804

 

Less: Impact of non-controlling interests

 

(6,174

)

 

 

 

 

 

 

 

 

 

 

 

(6,174

)

Adjusted net income

$

23,945

 

 

$

(209

)

 

$

219

 

 

$

(6,325

)

 

$

17,630

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (before NCI)

$

30,119

 

 

$

(209

)

 

$

219

 

 

$

(6,325

)

 

$

23,804

 

Average stockholders’ equity

$

371,843

 

 

$

53,297

 

 

$

150,672

 

 

$

(31,999

)

 

$

543,813

 

Adjusted return on average equity (7)

 

32.4

%

 

 

(1.6

)%

 

 

0.6

%

 

NM%

 

 

17.5

%

 

Six Months Ended June 30, 2024

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

Total

Income (loss) before taxes

$

88,061

 

 

$

1,281

 

 

$

3,205

 

 

$

(22,202

)

 

$

70,345

 

Less: Income tax (benefit) expense

 

(23,490

)

 

 

(276

)

 

 

(808

)

 

 

(7,917

)

 

 

(32,491

)

Less: Net realized and unrealized gains (losses) (1)

 

(5,364

)

 

 

(1,449

)

 

 

(2,038

)

 

 

 

 

 

(8,851

)

Plus: Intangibles amortization (2)

 

7,698

 

 

 

 

 

 

 

 

 

 

 

 

7,698

 

Plus: Stock-based compensation expense

 

1,804

 

 

 

 

 

 

 

 

 

5,428

 

 

 

7,232

 

Plus: Non-recurring expenses (3)

 

3,336

 

 

 

 

 

 

 

 

 

 

 

 

3,336

 

Plus: Non-cash fair value adjustments (4)

 

5,072

 

 

 

 

 

 

 

 

 

 

 

 

5,072

 

Plus: Impact of tax deconsolidation of Fortegra (5)

 

 

 

 

 

 

 

 

 

 

10,822

 

 

 

10,822

 

Less: Tax on adjustments (6)

 

(2,668

)

 

 

316

 

 

 

469

 

 

 

(892

)

 

 

(2,775

)

Adjusted net income (before NCI)

$

74,449

 

 

$

(128

)

 

$

828

 

 

$

(14,761

)

 

$

60,388

 

Less: Impact of non-controlling interests

 

(15,433

)

 

 

 

 

 

 

 

 

 

 

 

(15,433

)

Adjusted net income

$

59,016

 

 

$

(128

)

 

$

828

 

 

$

(14,761

)

 

$

44,955

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (before NCI)

$

74,449

 

 

$

(128

)

 

$

828

 

 

$

(14,761

)

 

$

60,388

 

Average stockholders’ equity

$

500,903

 

 

$

52,798

 

 

$

94,500

 

 

$

(50,884

)

 

$

597,317

 

Adjusted return on average equity (7)

 

29.7

%

 

 

(0.5

)%

 

 

1.8

%

 

NM%

 

 

20.2

%

 

Six Months Ended June 30, 2023

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

Total

Income (loss) before taxes

$

49,862

 

 

$

(1,253

)

 

$

2,897

 

 

$

(19,659

)

 

$

31,847

 

Less: Income tax (benefit) expense

 

(13,675

)

 

 

307

 

 

 

(760

)

 

 

(2,718

)

 

 

(16,846

)

Less: Net realized and unrealized gains (losses) (1)

 

8,986

 

 

 

(145

)

 

 

(740

)

 

 

 

 

 

8,101

 

Plus: Intangibles amortization (2)

 

7,789

 

 

 

 

 

 

 

 

 

 

 

 

7,789

 

Plus: Stock-based compensation expense

 

521

 

 

 

 

 

 

 

 

 

3,786

 

 

 

4,307

 

Plus: Non-recurring expenses (3)

 

2,363

 

 

 

 

 

 

 

 

 

 

 

 

2,363

 

Plus: Non-cash fair value adjustments (4)

 

(164

)

 

 

 

 

 

 

 

 

 

 

 

(164

)

Plus: Impact of tax deconsolidation of Fortegra (5)

 

 

 

 

 

 

 

 

 

 

5,814

 

 

 

5,814

 

Less: Tax on adjustments (6)

 

(2,624

)

 

 

29

 

 

 

235

 

 

 

237

 

 

 

(2,123

)

Adjusted net income (before NCI)

$

53,058

 

 

$

(1,062

)

 

$

1,632

 

 

$

(12,540

)

 

$

41,088

 

Less: Impact of non-controlling interests

 

(10,899

)

 

 

 

 

 

 

 

 

 

 

 

(10,899

)

Adjusted net income

$

42,159

 

 

$

(1,062

)

 

$

1,632

 

 

$

(12,540

)

 

$

30,189

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (before NCI)

$

53,058

 

 

$

(1,062

)

 

$

1,632

 

 

$

(12,540

)

 

$

41,088

 

Average stockholders’ equity

$

358,600

 

 

$

54,272

 

 

$

111,285

 

 

$

15,665

 

 

$

539,822

 

Adjusted return on average equity (7)

 

29.6

%

 

 

(3.9

)%

 

 

2.9

%

 

NM%

 

 

15.2

%

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 and unrealized gains (losses) on mortgage servicing rights.

(2)

Specifically associated with acquisition purchase accounting. See Note (8) Goodwill and Intangible Assets, net, of the Company’s Form 10-Q for the period ended June 30, 2024.

(3)

For the three and six months ended June 30, 2024 and 2023, included in other expenses were expenses related to legal and other expenses associated with preparation of the registration statement for the withdrawn Fortegra initial public offering in 2024 and acquisitions of services businesses in 2023.

(4)

For the three and six months ended June 30, 2024 and 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.

(5)

For the three and six months ended June 30, 2024 and 2023, included in the adjustment is an add-back of $6.4 million and $10.8 million, respectively, and $3.5 million and $5.8 million, respectively, related to deferred tax expense from the WP Transaction.

(6)

Tax on adjustments represents the tax applied to the total non-GAAP adjustments and includes adjustments for non-recurring or discrete tax impacts.

(7)

Total Adjusted return on average equity after non-controlling interests was 22.7% and 17.6% for the three months ended June 30, 2024 and 2023, respectively, based on $24.4 million and $17.6 million of Adjusted net income over $430.6 million and $401.3 million of average Tiptree Inc. stockholders’ equity. Total Adjusted return on average equity after non-controlling interests was 21.1% and 15.1% for the six months ended June 30, 2024 and 2023, respectively, based on $45.0 million and $30.2 million of Adjusted net income over $426.7 million and $399.6 million of average Tiptree Inc. stockholders’ equity.

 

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