Tiptree Reports Q4 and 2020 Financial Results

March 11, 2021 4:07 PM EST

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  •  Revenues of $257.4 million for the quarter, up 23.4% from Q4’19. 2020 revenues of $810.3 million, up 4.9% from 2019, driven by growth in our insurance and mortgage operations, partially offset by unrealized investment mark-to-market losses. Excluding realized and unrealized gains and losses, 2020 revenues increased 17.4% versus 2019.
  • Net income for Q4’20 of $14.3 million, up from $4.2 million in Q4’19. Adjusted net income for the quarter of $16.2 million, up 54.2% from Q4’19, driven by growth in revenues and margin improvement in our insurance and mortgage operations.
  • Net loss for 2020 of $29.2 million compared to net income of $18.4 million for the prior year. 2020 adjusted net income increased 86.4% to $51.4 million, from $27.6 million in 2019, driven by growth in revenues and margin improvement in our insurance and mortgage operations. Return on average equity was (6.4)% in 2020, as compared to 5.0% in 2019. Adjusted return on average equity was 13.1% in 2020, as compared to 6.8% in 2019.
  • Book value per share of $10.90 as of December 31, 2020, when combined with dividends paid of $0.16 per share, decreased 4.0% from the prior year, driven by a combination of net losses, partially offset by 2,384,286 share repurchases during the year at an average 43% discount to book value per share.
  • Declared a dividend of $0.04 per share to stockholders of record on March 22, 2021 with a payment date of March 29, 2021.

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

($ in thousands, except per share information)

Three Months Ended

December 31,

 

For the Year Ended

December 31,

GAAP:

2020

 

2019

 

2020

 

2019

Total revenues

$

257,395

 

 

$

208,568

 

 

$

810,301

 

 

$

772,728

 

Net income (loss) attributable to common stockholders

$

14,270

 

 

$

4,147

 

 

$

(29,158

)

 

$

18,361

 

Diluted earnings per share

$

0.40

 

 

$

0.11

 

 

$

(0.86

)

 

$

0.50

 

Cash dividends paid per common share

$

0.04

 

 

$

0.04

 

 

$

0.16

 

 

$

0.155

 

Return on average equity

17.6

%

 

4.5

%

 

(6.4

)%

 

5.0

%

 

 

 

 

 

 

 

 

Non-GAAP: (1)

 

 

 

 

 

 

 

Adjusted net income

$

16,191

 

 

$

10,502

 

 

$

51,431

 

 

$

27,598

 

Adjusted return on average equity

17.6

%

 

10.3

%

 

13.1

%

 

6.8

%

Book value per share

$

10.90

 

 

$

11.52

 

 

$

10.90

 

 

$

11.52

 

____________________________

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

Earnings Conference Call

Tiptree will host a conference call on Friday, March 12, 2021 at 9:00 a.m. Eastern Time to discuss its Q4 and full year 2020 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company’s website, located at www.tiptreeinc.com.

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

A replay of the call will be available from Friday, March 12, 2021 at 1:00 p.m. Eastern Time, until midnight Eastern on Friday, March 19, 2021. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13714442.

Financial Highlights

Overall:

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

Insurance (Fortegra Group):

  • Gross written premiums and premium equivalents were $490.9 million in Q4’20, up 35.7% from Q4’19. The metric was $1,666.9 million in 2020, as compared to $1,297.0 million in 2019, up 28.5% as a result of growth in our U.S. Insurance programs including commercial, warranty, and niche personal lines, and the acquisition of Smart AutoCare.
  • Income before taxes of $26.5 million in Q4’20, up $13.6 million from Q4’19. Income before taxes of $26.9 million decreased 27.2% as compared to $37.0 million in 2019, primarily driven by net realized and unrealized losses on investments as compared to gains in the prior year. Return on average equity was 8.1% in 2020 as compared to 10.7% in 2019.
  • Adjusted net income of $13.6 million in Q4’20, up 28.1% from Q4’19. Adjusted net income increased 32.4% to $43.4 million in 2020, as compared to $32.8 million in 2019. Adjusted return on average equity was 15.2% in 2020, as compared to 12.3% in 2019 driven by growth in commercial, warranty and niche personal lines programs.
  • The combined ratio in Q4’20 was 90.0%, as compared to 91.1% in Q4’19. For total year 2020, the combined ratio improved to 91.5%, as compared to 92.4% in 2019, driven by the shift in business mix toward more profitable warranty and commercial programs.
  • In January 2020, we acquired Smart AutoCare, a growing vehicle warranty and service contract administrator in the U.S. which contributed $248.8 million of gross written premiums and premium equivalents in 2020. The acquisition expanded our distribution channels and dramatically increased our presence in the auto warranty sector.
  • In September 2020, we formed a new excess and surplus lines subsidiary, Fortegra Specialty Insurance Company, which we expect will broaden our product reach and scope within the U.S.
  • On December 31, 2020, we acquired Sky Auto for approximately $25 million of cash consideration to further expand our presence in the auto warranty sector. The acquisition supplements our distribution with direct marketing capabilities.

Mortgage:

  • Income before taxes of $31.1 million in 2020, as compared to $3.0 million in 2019. Adjusted net income of $28.6 million in 2020, an increase of $24.6 million from 2019, driven by growth in volumes and margins as interest rates dropped and home prices increased in 2020.
  • Return on average equity of 50.9% and adjusted return on average equity of 60.5% in 2020, as compared to 7.1% and 12.0%, respectively, in 2019.

Results of Operations

Revenues

For the three months ended December 31, 2020, revenues were $257.4 million, which increased $48.8 million or 23.4% compared to the prior year period. For the year ended December 31, 2020, revenues were $810.3 million, which increased $37.6 million, or 4.9% compared to the prior year, primarily due to a combination of growth in commercial and warranty programs in our insurance business and revenues associated with our mortgage business. Offsetting these increases were net realized and unrealized losses of $83.6 million for the year ended December 31, 2020, on Invesque and other equity securities.

The combination of unearned premiums and deferred revenues of $1,259.7 million on the balance sheet grew by $410.4 million, or 48.3%, from December 31, 2019 to December 31, 2020 as a result of increased gross written premiums and premium equivalents, primarily in commercial and warranty programs and the acquisition of Smart AutoCare.

The table below provides a breakdown between net realized and unrealized gains and losses from Invesque and other securities, which impacted our consolidated results on a pre-tax basis. Many of our investments are carried at fair value and marked to market through unrealized gains and losses. As a result, we expect our earnings relating to these investments to be relatively volatile between periods. Our fixed income securities are primarily marked to market through accumulated other comprehensive income (AOCI) in stockholders’ equity and do not impact net realized and unrealized gains and losses until they are sold.

($ in thousands)

Three Months Ended

December 31,

 

For the Year Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Net realized and unrealized gains (losses)(1)

$

14,452

 

 

$

1,330

 

 

$

(1,817

)

 

$

12,189

 

Net realized and unrealized gains (losses) - Invesque

$

(2,038

)

 

$

499

 

 

$

(81,813

)

 

$

(1,200

)

(1) Excludes Invesque and Mortgage realized and unrealized gains and losses. The year ended December 31, 2019 includes a $7.6 million gain on sale of our CLO business.

Net Income (Loss) Attributable to Common Stockholders

For the three months ended December 31, 2020, net income attributable to common stockholders was $14.3 million, an increase of $10.2 million. For the year ended December 31, 2020, net loss available to common stockholders was $29.2 million, a decrease of $47.5 million from net income of $18.4 million in 2019. The decrease for the year ended December 31, 2020 was primarily driven by the same factors that impacted revenues in the respective periods.

Non-GAAP

Management uses Adjusted net income and book value per share 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.

Adjusted net income for the three months ended December 31, 2020 was $16.2 million, an increase of $5.7 million from the prior year period. Adjusted net income for the year ended December 31, 2020 was $51.4 million, an increase of $23.8 million from 2019. For the year ended December 31, 2020, the key drivers of the increase were driven by improved performance in our insurance and mortgage operations.

Adjusted return on average equity for the three months ended December 31, 2020 was 17.6% as compared to 10.3% from the prior year period. The 2020 Adjusted return on average equity was 13.1%, as compared to 6.8% in 2019, with the increase in both periods driven by improved performance in our insurance and mortgage operations.

Total stockholders’ equity was $373.5 million as of December 31, 2020 compared to $411.4 million as of December 31, 2019. In 2020, Tiptree returned $19.3 million to shareholders through share repurchases and dividends paid. Book value per share for the period ended December 31, 2020 was $10.90, a decrease from book value per share of $11.52 as of December 31, 2019. The key drivers of the reduction from the prior year were losses per share and dividends paid of $0.16 per share. The decrease was partially offset by the purchase of 2,384,286 million shares at an average 43% discount to book value.

Results by Segment

We classify our business into two reportable segments, Insurance and Mortgage, with the remainder of our operations aggregated into Tiptree Capital - Other. Corporate activities include holding company interest expense, corporate employee compensation and benefits, and other expenses, including, but not limited to, public company expenses.

Pre-tax Income

($ in thousands)

Three Months Ended

December 31,

 

For the Year Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Insurance

$

26,530

 

 

$

12,935

 

 

$

26,948

 

 

$

37,030

 

Mortgage

9,627

 

 

1,772

 

 

31,102

 

 

2,959

 

Tiptree Capital - other

(1,833

)

 

4,111

 

 

(61,242

)

 

23,391

 

Corporate

(9,756

)

 

(8,941

)

 

(35,660

)

 

(34,241

)

Income (loss) before taxes

$

24,568

 

 

$

9,877

 

 

$

(38,852

)

 

$

29,139

 

 

Adjusted net income - Non-GAAP (1)

The following tables present the components of Adjusted net income.

($ in thousands)

Three Months Ended

December 31,

 

For the Year Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Insurance

$

13,588

 

 

$

10,611

 

 

$

43,423

 

 

$

32,806

 

Mortgage

9,090

 

 

1,597

 

 

28,578

 

 

3,929

 

Tiptree Capital - other

931

 

 

3,655

 

 

4,497

 

 

14,083

 

Corporate

(7,418

)

 

(5,361

)

 

(25,067

)

 

(23,220

)

Adjusted net income (1)

$

16,191

 

 

$

10,502

 

 

$

51,431

 

 

$

27,598

 

(1) For further information relating to the Company’s Adjusted net income, including a reconciliation to GAAP income (loss) before taxes, see “—Non-GAAP Reconciliations.”

About Tiptree

Tiptree Inc. (NASDAQ: TIPT) is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Our principal operating business, Fortegra, is a specialty insurance program underwriter and service provider, which focuses on niche business lines and fee-oriented services. We also allocate capital to a diverse group of select investments that we refer to as Tiptree Capital. For more information, please visit www.tiptreeinc.com.

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.

Consolidated Balance Sheets

($ in thousands, except share data)

 

As of

 

December 31,

2020

 

December 31,

2019

Assets:

 

 

 

Investments:

 

 

 

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

$

377,133

 

 

$

335,192

 

Loans, at fair value

90,732

 

 

108,894

 

Equity securities

123,838

 

 

155,378

 

Other investments

219,701

 

 

137,472

 

Total investments

811,404

 

 

736,936

 

Cash and cash equivalents

136,920

 

 

133,117

 

Restricted cash

58,355

 

 

11,473

 

Notes and accounts receivable, net

370,452

 

 

286,968

 

Reinsurance receivables

728,009

 

 

539,833

 

Deferred acquisition costs

229,430

 

 

166,493

 

Goodwill

179,236

 

 

99,147

 

Intangible assets, net

138,215

 

 

47,974

 

Other assets

162,034

 

 

68,510

 

Assets held for sale

181,705

 

 

107,835

 

Total assets

$

2,995,760

 

 

$

2,198,286

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Liabilities:

 

 

 

Debt, net

$

366,246

 

 

$

374,454

 

Unearned premiums

860,690

 

 

754,993

 

Policy liabilities and unpaid claims

233,438

 

 

144,384

 

Deferred revenue

399,211

 

 

94,601

 

Reinsurance payable

224,660

 

 

143,869

 

Other liabilities and accrued expenses

362,865

 

 

172,140

 

Liabilities held for sale

175,112

 

 

102,430

 

Total liabilities

$

2,622,222

 

 

$

1,786,871

 

 

 

 

 

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, 32,682,462 and 34,562,553 shares issued and outstanding, respectively

33

 

 

35

 

Additional paid-in capital

315,014

 

 

326,140

 

Accumulated other comprehensive income (loss), net of tax

5,674

 

 

1,698

 

Retained earnings

35,423

 

 

70,189

 

Total Tiptree Inc. stockholders’ equity

356,144

 

 

398,062

 

Non-controlling interests

17,394

 

 

13,353

 

Total stockholders’ equity

373,538

 

 

411,415

 

Total liabilities and stockholders’ equity

$

2,995,760

 

 

$

2,198,286

 

Tiptree Inc.

Consolidated Statements of Operations

($ in thousands, except share data)

 

Three Months Ended

December 31,

 

For the Year Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

Earned premiums, net

$

132,997

 

 

$

134,396

 

 

$

477,991

 

 

$

499,108

 

Service and administrative fees

52,683

 

 

27,558

 

 

186,973

 

 

106,239

 

Ceding commissions

4,884

 

 

2,458

 

 

21,101

 

 

9,608

 

Net investment income

1,113

 

 

3,304

 

 

9,916

 

 

14,017

 

Net realized and unrealized gains (losses)

55,782

 

 

25,122

 

 

62,410

 

 

83,868

 

Other revenue

9,936

 

 

15,730

 

 

51,910

 

 

59,888

 

Total revenues

257,395

 

 

208,568

 

 

810,301

 

 

772,728

 

Expenses:

 

 

 

 

 

 

 

Policy and contract benefits

69,137

 

 

46,425

 

 

236,898

 

 

170,681

 

Commission expense

73,038

 

 

77,987

 

 

280,210

 

 

303,057

 

Employee compensation and benefits

47,843

 

 

35,181

 

 

172,737

 

 

129,479

 

Interest expense

9,064

 

 

6,876

 

 

32,582

 

 

27,059

 

Depreciation and amortization

5,334

 

 

3,661

 

 

17,578

 

 

13,569

 

Other expenses

28,411

 

 

28,561

 

 

109,148

 

 

99,744

 

Total expenses

232,827

 

 

198,691

 

 

849,153

 

 

743,589

 

Income (loss) before taxes

24,568

 

 

9,877

 

 

(38,852

)

 

29,139

 

Less: provision (benefit) for income taxes

8,403

 

 

5,311

 

 

(13,627

)

 

9,017

 

Net income (loss)

16,165

 

 

4,566

 

 

(25,225

)

 

20,122

 

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

1,895

 

 

419

 

 

3,933

 

 

1,761

 

Net income (loss) attributable to common stockholders

$

14,270

 

 

$

4,147

 

 

$

(29,158

)

 

$

18,361

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

Basic earnings per share

$

0.42

 

 

$

0.12

 

 

$

(0.86

)

 

$

0.52

 

Diluted earnings per share

$

0.40

 

 

$

0.11

 

 

$

(0.86

)

 

$

0.50

 

 

 

 

 

 

 

 

 

Weighted average number of common shares:

 

 

 

 

 

 

 

Basic

33,213,307

 

 

34,562,219

 

 

33,859,775

 

 

34,578,292

 

Diluted

33,213,307

 

 

34,562,219

 

 

33,859,775

 

 

34,578,292

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.04

 

 

$

0.04

 

 

$

0.16

 

 

$

0.16

 

 

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.

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.

 

Year Ended December 31, 2020

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

Expenses

 

Total

Income (loss) before taxes

$

26,948

 

 

$

31,102

 

 

$

(61,242

)

 

$

(35,660

)

 

 

$

(38,852

)

Less: Income tax (benefit) expense

(3,725

)

 

(7,066

)

 

13,624

 

 

10,794

 

 

 

13,627

 

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

13,804

 

 

4,018

 

 

67,668

 

 

 

 

 

85,490

 

Plus: Intangibles amortization (2)

9,213

 

 

 

 

 

 

 

 

 

9,213

 

Plus: Stock-based compensation expense

2,287

 

 

2,482

 

 

174

 

 

3,172

 

 

 

8,115

 

Plus: Non-recurring expenses

3,418

 

 

 

 

624

 

 

758

 

 

 

4,800

 

Plus: Non-cash fair value adjustments

 

 

 

 

(2,141

)

 

 

 

 

(2,141

)

Less: Tax on adjustments

(8,522

)

 

(1,958

)

 

(14,210

)

 

(4,131

)

 

 

(28,821

)

Adjusted net income

$

43,423

 

 

$

28,578

 

 

$

4,497

 

 

$

(25,067

)

 

 

$

51,431

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

43,423

 

 

$

28,578

 

 

$

4,497

 

 

$

(25,067

)

 

 

$

51,431

 

Average stockholders’ equity

285,760

 

 

47,202

 

 

138,606

 

 

(79,092

)

 

 

392,476

 

Adjusted return on average equity

15.2

%

 

60.5

%

 

3.2

%

 

 

NM

%

 

13.1

%

(1)

 

Specifically associated with acquisition purchase accounting.

(2)

 

For the year ended December 31, 2020, included $1,860 of incentive fees paid with respect to specific unrealized and realized gains that are added-back to Adjusted net income.

 

 

Three Months Ended December 31, 2020

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

Expenses

 

Total

Income (loss) before taxes

$

26,530

 

 

$

9,627

 

 

$

(1,833

)

 

$

(9,756

)

 

$

24,568

 

Less: Income tax (benefit) expense

(6,436

)

 

(3,005

)

 

(1,118

)

 

2,156

 

 

(8,403

)

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

(13,505

)

 

1,265

 

 

1,686

 

 

 

 

(10,554

)

Plus: Intangibles amortization (2)

2,255

 

 

 

 

 

 

 

 

2,255

 

Plus: Stock-based compensation expense

909

 

 

1,069

 

 

19

 

 

(39

)

 

1,958

 

Plus: Non-recurring expenses

1,232

 

 

 

 

284

 

 

405

 

 

1,921

 

Plus: Non-cash fair value adjustments

 

 

 

 

820

 

 

 

 

820

 

Less: Tax on adjustments

2,603

 

 

134

 

 

1,073

 

 

(184

)

 

3,626

 

Adjusted net income

$

13,588

 

 

$

9,090

 

 

$

931

 

 

$

(7,418

)

 

$

16,191

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

13,588

 

 

$

9,090

 

 

$

931

 

 

$

(7,418

)

 

$

16,191

 

Average stockholders’ equity

291,845

 

 

55,254

 

 

111,248

 

 

(90,732

)

 

367,615

 

Adjusted return on average equity

18.6

%

 

65.8

%

 

3.3

%

 

 

NM

%

 

17.6

%

(1)

 

Specifically associated with acquisition purchase accounting.

(2)

 

For the three months ended December 31, 2020, included $1,860 of incentive fees paid with respect to specific unrealized and realized gains that are added-back to Adjusted net income.

 

 

Year Ended December 31, 2019

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

Expenses

 

Total

Income (loss) before taxes

$

37,030

 

 

$

2,959

 

 

$

23,391

 

 

$

(34,241

)

 

$

29,139

 

Less: Income tax (benefit) expense

(8,455

)

 

(640

)

 

(4,457

)

 

4,535

 

 

(9,017

)

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

(6,896

)

 

2,056

 

 

(6,148

)

 

 

 

(10,988

)

Plus: Intangibles amortization (2)

7,510

 

 

 

 

 

 

 

 

7,510

 

Plus: Stock-based compensation expense

2,891

 

 

170

 

 

 

 

3,299

 

 

6,360

 

Plus: Non-recurring expenses

1,975

 

 

 

 

202

 

 

2,079

 

 

4,256

 

Plus: Non-cash fair value adjustments

 

 

 

 

(153

)

 

 

 

(153

)

Less: Tax on adjustments

(1,249

)

 

(616

)

 

1,248

 

 

1,108

 

 

491

 

Adjusted net income

$

32,806

 

 

$

3,929

 

 

$

14,083

 

 

$

(23,220

)

 

$

27,598

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

32,806

 

 

$

3,929

 

 

$

14,083

 

 

$

(23,220

)

 

$

27,598

 

Average stockholders’ equity

266,397

 

 

32,785

 

 

161,133

 

 

(54,978

)

 

405,337

 

Adjusted return on average equity

12.3

%

 

12.0

%

 

8.7

%

 

 

NM

%

 

6.8

%

(1)

 

Includes $7,598 gain on sale of our CLO management business.

(2)

 

Specifically associated with acquisition purchase accounting.

 

 

Three Months Ended December 31, 2019

 

 

 

Tiptree Capital

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

Expenses

 

Total

Income (loss) before taxes

$

12,935

 

 

$

1,772

 

 

$

4,111

 

 

$

(8,941

)

 

$

9,877

 

Less: Income tax (benefit) expense

(2,990

)

 

(415

)

 

(740

)

 

(1,166

)

 

(5,311

)

Less: Net realized and unrealized gains (losses)

(2,192

)

 

336

 

 

27

 

 

 

 

(1,829

)

Plus: Intangibles amortization (1)

1,772

 

 

 

 

 

 

 

 

1,772

 

Plus: Stock-based compensation expense

1,067

 

 

 

 

 

 

783

 

 

1,850

 

Plus: Non-recurring expenses

167

 

 

 

 

 

 

1,494

 

 

1,661

 

Plus: Non-cash fair value adjustments

 

 

 

 

263

 

 

 

 

263

 

Less: Tax on adjustments

(148

)

 

(96

)

 

(6

)

 

2,469

 

 

2,219

 

Adjusted net income

$

10,611

 

 

$

1,597

 

 

$

3,655

 

 

$

(5,361

)

 

$

10,502

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

10,611

 

 

$

1,597

 

 

$

3,655

 

 

$

(5,361

)

 

$

10,502

 

Average stockholders’ equity

271,105

 

 

33,342

 

 

170,402

 

 

(65,436

)

 

409,413

 

Adjusted return on average equity

15.7

%

 

19.2

%

 

8.6

%

 

 

NM

%

 

10.3

%

(1)

 

Specifically associated with acquisition purchase accounting.

 

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 December 31, 2020

 

2020

 

2019

Total stockholders’ equity

$

373,538

 

 

$

411,415

 

Less: Non-controlling interests

17,394

 

 

13,353

 

Total stockholders’ equity, net of non-controlling interests

$

356,144

 

 

$

398,062

 

 

 

 

 

Total common shares outstanding

32,682

 

 

34,563

 

 

 

 

 

Book value per share

$

10.90

 

 

$

11.52

 

 

Tiptree Inc.
Investor Relations, 212-446-1400
ir@tiptreeinc.com

Source: Tiptree Inc.



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