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Form 8-K UNIVERSAL INSURANCE HOLD For: Jul 27

July 27, 2022 4:34 PM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 27, 2022
uve-20220727_g1.jpg
Universal Insurance Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 001-33251 65-0231984
(State or other jurisdiction
of incorporation)
 (Commission
File Number)
 (IRS Employer
Identification No.)
1110 W. Commercial Blvd., Fort Lauderdale, Florida 33309
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (954958-1200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValueUVENew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  



Item 2.02Results of Operations and Financial Condition
On July 27, 2022, Universal Insurance Holdings, Inc. issued a press release announcing its financial results for the fiscal quarter ended June 30, 2022. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01Financial Statements and Exhibits
(d) Exhibits:
 
Exhibit NumberDescription
104
The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101).






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: July 27, 2022UNIVERSAL INSURANCE HOLDINGS, INC.
By:/s/ Frank C. Wilcox
Name:Frank C. Wilcox
Title:Chief Financial Officer


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Exhibit 99.1
Universal Reports Second Quarter 2022 Results

Diluted GAAP earnings per share (“EPS”) of $0.24, adjusted EPS1 of $0.47
Annualized return on average common equity (“ROCE”) of 7.7%, adjusted1 ROCE of 12.8%
Direct premiums written of $532.5 million, up 12.4% from the prior year quarter
Repurchased 282,552 shares for $3.5 million. Total capital returned to shareholders of $8.5 million, including $0.16 per share regular quarterly dividend.
1 Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

Fort Lauderdale, Fla., July 27, 2022 – Universal Insurance Holdings (NYSE: UVE) (“Universal” or the “Company”) reported 2022 second quarter diluted GAAP EPS of $0.24 and adjusted EPS of $0.47.

“We reported a 12.8% annualized adjusted return on common equity in the quarter, an impressive feat in the current environment,” said Stephen J. Donaghy, Chief Executive Officer. “Direct premiums written growth of 12.4% accelerated from 8.5% in the first quarter of this year, and significantly outpaced an 8.5% policies in force decline. In addition to rate increases, we continue to optimize and rebalance our portfolio, increasing exposure to more profitable regions, while reducing exposure to less profitable geographies. Our capital position remains strong at both of our insurance subsidiaries and on an enterprise-wide basis, and I’m particularly proud of the robust reinsurance program that we completed prior to the June 1 renewal date. Despite the challenging reinsurance market, our program includes full protection for both hurricanes and tropical storms, has no gaps in coverage and no co-participation and provides coverage across multiple events. We are well prepared for hurricane season and expect the actions we’ve taken to bear fruit in future periods.”
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Quarterly Financial Results

Summary Financial Results
($thousands, except per share data)Three Months Ended June 30,Six Months Ended June 30,
20222021Change20222021Change
GAAP comparison
Total revenues$292,006 $279,181 4.6 %$579,488 $541,938 6.9 %
Income before income taxes$10,680 $30,059 (64.5)%$33,151 $66,410 (50.1)%
Income before income taxes margin3.7 %10.8 %(7.1)pts5.7 %12.3 %(6.6)pts
Net income$7,370 $21,941 (66.4)%$24,907 $48,349 (48.5)%
Diluted EPS$0.24 $0.70 (65.7)%$0.80 $1.54 (48.1)%
Annualized ROCE7.7 %18.8 %(11.1) pts12.5 %20.8 %(8.3)pts
Book value per share, end of period$11.93 $15.37 (22.4)%11.9315.37(22.4)%
Non-GAAP comparison2
Core revenue$301,615 $277,456 8.7 %$592,435 $540,165 9.7 %
Adjusted operating income$22,020 $28,369 (22.4)%$49,437 $64,692 (23.6)%
Adjusted operating income margin7.3 %10.2 %(2.9)pts8.3 %12.0 %(3.7)pts
Adjusted net income$14,648 $20,627 (29.0)%$34,711 $46,995 (26.1)%
Adjusted EPS$0.47 $0.65 (27.7)%$1.12 $1.50 (25.3)%
Annualized adjusted ROCE12.8 %17.3 %(4.5) pts15.3 %20.2 %(4.9) pts
Adjusted book value per share, end of period$14.80 $15.55 (4.8)%$14.80 $15.55 (4.8)%
Underwriting Summary
Premiums:
Premiums in force$1,766,542 $1,618,576 9.1 %$1,766,542 $1,618,576 9.1 %
Policies in force894,618 977,251 (8.5)%894,618 977,251 (8.5)%
Direct premiums written$532,527 $473,627 12.4 %$929,008 $838,941 10.7 %
Direct premiums earned$428,805 $392,574 9.2 %$843,408 $768,180 9.8 %
Ceded premiums earned$(151,744)$(136,402)11.2 %$(297,283)$(268,703)10.6 %
Ceded premium ratio35.4 %34.7 %0.7  pts35.2 %35.0 %0.2  pts
Net premiums earned$277,061 $256,172 8.2 %$546,125 $499,477 9.3 %
Net ratios:
Loss ratio72.3 %65.3 %7.0  pts70.6 %62.3 %8.3  pts
Expense ratio28.6 %32.0 %(3.4)pts28.8 %32.9 %(4.1)pts
Combined ratio100.9 %97.3 %3.6  pts99.4 %95.2 %4.2  pts
2 Reconciliation of GAAP to non-GAAP financial measures are provided in the attached tables. Adjusted net income, adjusted EPS and core revenue exclude net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities. Adjusted operating income excludes net realized and unrealized gains and losses on investments and interest and amortization of debt issuance costs. Adjusted book value per share excludes accumulated other comprehensive income, net of taxes. Adjusted ROCE is calculated by dividing annualized adjusted net income attributable to common stockholders by average adjusted book value per share, with the denominator further excluding current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities.

Net Income and Adjusted Net Income
Net income was $7.4 million, down from $21.9 million in the prior year quarter, and adjusted net income was $14.6 million, down from $20.6 million in the prior year quarter. The decline in adjusted net income primarily stems from a higher net loss ratio, partly offset by a lower net expense ratio and higher commission revenue and net investment income.


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Revenues
Overall revenue was $292.0 million, up 4.6% from the prior year quarter and core revenue was $301.6 million, up 8.7% from the prior year quarter. The increase in core revenue primarily stems from higher net premiums earned, net investment income and commission revenue.

Direct premiums written were $532.5 million, up 12.4% from the prior year quarter. The increase stems from 13.2% growth in Florida and 8.3% growth in other states. Overall growth primarily reflects rate increases, partly offset by lower policies in force.

Direct premiums earned were $428.8 million, up 9.2% from the prior year quarter. The increase stems from direct premiums written growth over the past twelve months.

The ceded premium ratio was 35.4%, up from 34.7% in the prior year quarter. The increase primarily reflects higher reinsurance pricing and higher reinsurance costs associated with the increase in insured values.

Net premiums earned were $277.1 million, up 8.2% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned, partly offset by higher ceded premiums earned, as described above.

Net investment income was $5.2 million, up from $2.9 million in the prior year quarter. The increase primarily stems from higher fixed income reinvestment yields and higher average invested assets.

Commissions, policy fees and other revenue were $19.3 million, up 4.9% from the prior year quarter. The increase primarily reflects higher reinsurance brokerage commission revenue, which benefited from higher ceded premiums and the difference in our reinsurance program’s structure relative to the prior year quarter, partly offset by policy fee and other revenue declines associated with lower policies in force.

Margins
The income before income taxes margin was 3.7%, down 7.1 points from the prior year quarter and the adjusted operating margin was 7.3%, down from 10.2% in the prior year. The lower adjusted operating margin primarily reflects a higher net combined ratio, partly offset by higher net investment income and commission revenues.

The net loss ratio was 72.3%, up 7.0 points compared to the prior year quarter. The increase primarily reflects a higher initial accident year attritional loss pick associated with the challenging Florida claims environment and inflationary and weather trends, partly offset by lower adverse prior year reserve development as a percentage of net premiums earned.

The net expense ratio was 28.6%, down 3.4 points compared to the prior year quarter. The reduction primarily reflects lower renewal commission rates paid to distribution partners, economies of scale and disciplined expense management.

The net combined ratio was 100.9%, up 3.6 points compared to the prior year quarter. The increase reflects a higher net loss ratio, partly offset by a lower net expense ratio, as described above.

Capital Deployment
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During the second quarter, the Company repurchased approximately 283 thousand shares at an aggregate cost of $3.5 million. The Company’s current share repurchase authorization program has $10.4 million remaining as of June 30, 2022 and runs through November 3, 2022.

On July 19, 2022, the Board of Directors declared a quarterly cash dividend of 16 cents per share of common stock, payable on August 9, 2022, to shareholders of record as of the close of business on August 2, 2022.

Guidance
The Company is maintaining its guidance for 2022 (assuming no further extraordinary weather events):

Adjusted EPS in a range of $1.80 - $2.20
Annualized adjusted ROCE in a range of 12.5% - 15.0%


Conference Call and Webcast
Thursday, July 28, 2022 at 10:00 a.m. ET
Investors and other interested parties may listen to the call by accessing the online, real-time webcast at universalinsuranceholdings.com/investors or by registering in advance via teleconference at https://register.vevent.com/register/BIdd1435dd6e8c4f96b2f705a2f37d27d0. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. An online replay of the call will be available at universalinsuranceholdings.com/investors shortly after the investor call concludes.


About Universal
Universal Insurance Holdings, Inc. (NYSE: UVE) is a holding company offering property and casualty insurance and value-added insurance services. We develop, market, and write insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management and distribution. We sell insurance products through both our appointed independent agents and through our direct online distribution channels in the United States across 19 states (primarily Florida). Learn more at universalinsuranceholdings.com.

Non-GAAP Financial Measures and Key Performance Indicators
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the U.S. Securities and Exchange Commission (“SEC”), including core revenue, adjusted net income attributable to common stockholders and diluted adjusted earnings per common share, which exclude the impact of net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities. Adjusted operating income and adjusted operating income margin exclude the impact of net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities and interest and amortization of debt issuance costs. Adjusted common stockholders’ equity and adjusted book value per share exclude accumulated other comprehensive income (AOCI), net of taxes. Adjusted return on common equity excludes after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities from the numerator and AOCI, net of taxes, and current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities from the denominator. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts,
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or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). UVE management believes that these non-GAAP financial measures are meaningful, as they allow investors to evaluate underlying revenue and profitability trends and enhance comparability across periods. When considered together with the GAAP financial measures, management believes these metrics provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. UVE management also believes that these non-GAAP financial measures enhance the ability of investors to analyze UVE’s business trends and to understand UVE’s operational performance. UVE’s management utilizes these non-GAAP financial measures as guides in long-term planning. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP. For more information regarding our key performance indicators, please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” in our forthcoming Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “will,” “plan,” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, including those risks and uncertainties described under the heading “Risk Factors” and “Liquidity and Capital Resources” in our 2021 Annual Report on Form 10-K, and supplemented in our subsequent Quarterly Reports on Form 10-Q. Future results could differ materially from those described, and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information regarding risk factors that could affect the Company’s operations and future results, refer to the Company’s reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K and the most recent quarterly reports on Form 10-Q.



Investors/Media:
Arash Soleimani, CFA, CPA
Chief Strategy Officer
954-804-8874
asoleimani@universalproperty.com
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share data)
June 30,December 31,
20222021
ASSETS:
Invested Assets
  Fixed maturities, at fair value$1,021,006 $1,040,455 
  Equity securities, at fair value79,844 47,334 
  Investment real estate, net5,798 5,891 
  Total invested assets1,106,648 1,093,680 
Cash and cash equivalents316,952 250,508 
Restricted cash and cash equivalents20,125 2,635 
Prepaid reinsurance premiums590,093 240,993 
Reinsurance recoverable33,344 185,589 
Premiums receivable, net79,309 64,923 
Property and equipment, net54,027 53,682 
Deferred policy acquisition costs110,983 108,822 
Goodwill2,319 2,319 
Other assets68,968 52,990 
TOTAL ASSETS$2,382,768 $2,056,141 
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses$186,349 $346,216 
Unearned premiums943,369 857,769 
Advance premium86,271 53,694 
Reinsurance payable, net637,846 188,662 
Long-term debt, net103,161 103,676 
Other liabilities59,221 76,422 
     Total liabilities2,016,217 1,626,439 
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock ($0.01 par value)3
— — 
Common stock ($0.01 par value)4
471 470 
Treasury shares, at cost - 16,400 and 15,797(234,496)(227,115)
Additional paid-in capital110,089 108,202 
Accumulated other comprehensive income (loss), net of taxes(88,134)(15,568)
Retained earnings578,621 563,713 
     Total stockholders' equity366,551 429,702 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,382,768 $2,056,141 
Notes:
3 Cumulative convertible preferred stock ($0.01 par value): Authorized - 1,000 shares; Issued - 10 and 10 shares; Outstanding - 10 and 10 shares; Minimum liquidation preference - $9.99 and $9.99 per share.
4 Common stock ($0.01 par value): Authorized - 55,000 shares; Issued - 47,116 and 47,018 shares; Outstanding 30,716 and 31,221 shares.


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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands)
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
REVENUES
Net premiums earned$277,061 $256,172 $546,125 $499,477 
Net investment income5,221 2,858 9,263 5,844 
Net realized gains (losses) on investments(725)496 (667)1,038 
Net change in unrealized gains (losses) of equity securities(8,884)1,229 (12,280)735 
Commission revenue11,404 9,860 22,565 18,986 
Policy fees5,940 6,575 10,719 11,962 
Other revenue1,989 1,991 3,763 3,896 
     Total revenues292,006 279,181 579,488 541,938 
EXPENSES
Losses and loss adjustment expenses200,304 167,221 385,410 311,184 
Policy acquisition costs54,100 56,766 108,823 113,224 
Other operating expenses25,191 25,100 48,765 51,065 
     Total operating costs and expenses279,595 249,087 542,998 475,473 
Interest and amortization of debt issuance costs1,731 35 3,339 55 
Income before income taxes10,680 30,059 33,151 66,410 
     Income tax expense3,310 8,118 8,244 18,061 
NET INCOME$7,370 $21,941 $24,907 $48,349 


UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
SHARE AND PER SHARE INFORMATION
(in thousands, except per share data)
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Weighted average common shares outstanding - basic30,829 31,240 30,987 31,224 
Weighted average common shares outstanding - diluted30,883 31,310 31,060 31,292 
Shares outstanding, end of period30,716 31,269 30,716 31,269 
Basic earnings per common share$0.24 $0.70 $0.80 $1.55 
Diluted earnings per common share$0.24 $0.70 $0.80 $1.54 
Cash dividend declared per common share$0.16 $0.16 $0.32 $0.32 
Book value per share, end of period$11.93 $15.37 $11.93 $15.37 
Annualized return on average common equity (ROCE)7.7 %18.8 %12.5 %20.8 %





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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
(in thousands, except for Policies In Force data)
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Premiums
     Direct premiums written - Florida$453,168 $400,370 $787,605 $707,381 
     Direct premiums written - Other States79,359 73,257 141,403 131,560 
Direct premiums written - Total$532,527 $473,627 $929,008 $838,941 
Direct premiums earned$428,805 $392,574 $843,408 $768,180 
Net premiums earned$277,061 $256,172 $546,125 $499,477 
Underwriting Ratios - Net
Loss and loss adjustment expense ratio72.3 %65.3 %70.6 %62.3 %
  Policy acquisition cost ratio19.5 %22.2 %19.9 %22.7 %
  Other operating expense ratio9.1 %9.8 %8.9 %10.2 %
Expense ratio28.6 %32.0 %28.8 %32.9 %
Combined ratio100.9 %97.3 %99.4 %95.2 %
Other Items
(Favorable)/Unfavorable prior year's reserve development$3,710 $7,731 $4,365 $6,494 
Points on the loss and loss adjustment expense ratio1.3 pts3.0 pts0.8 pts1.3 pts
As of
June 30,
20222021
Policies in force
Florida654,276 723,390 
Other States240,342 253,861 
Total894,618 977,251 
Premiums in force
Florida$1,473,193 $1,345,532 
Other States293,349 273,044 
Total$1,766,542 $1,618,576 
Total Insured Value
Florida$202,691,987 $200,600,028 
Other States118,766,758 112,637,726 
Total$321,458,745 $313,237,754 

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 Three Months Ended June 30, 2022
 DirectLoss RatioCededLoss RatioNetLoss Ratio
Premiums earned$428,805  $151,744  $277,061  
Loss and loss adjustment expenses:      
Core losses$196,630 45.9 %$36 — %$196,594 71.0 %
Weather events5
— — %— — %— — %
Prior year’s reserve development63,600 14.8 %59,890 39.5 %3,710 1.3 %
Total losses and loss adjustment expenses$260,230 60.7 %$59,926 39.5 %$200,304 72.3 %
5 Includes only current year weather events beyond those expected.

 Three Months Ended June 30, 2021
 DirectLoss RatioCededLoss RatioNetLoss Ratio
Premiums earned$392,574  136,402  $256,172  
Loss and loss adjustment expenses:      
Core losses$159,412 40.6 %$(78)(0.1)%$159,490 62.3 %
Weather events5
— — %— — %— — %
Prior year’s reserve development116,890 29.8 %109,159 80.0 %7,731 3.0 %
Total losses and loss adjustment expenses$276,302 70.4 %$109,081 80.0 %$167,221 65.3 %
5 Includes only current year weather events beyond those expected.
 Six Months Ended June 30, 2022
 DirectLoss RatioCededLoss RatioNetLoss Ratio
Premiums earned$843,408 $297,283 $546,125 
Loss and loss adjustment expenses:
Core losses$376,580 44.7 %$80 — %$376,500 69.0 %
Weather events5
4,545 0.5 %— — %4,545 0.8 %
Prior year’s reserve development74,260 8.8 %69,895 23.5 %4,365 0.8 %
Total losses and loss adjustment expenses$455,385 54.0 %$69,975 23.5 %$385,410 70.6 %
5 Includes only current year weather events beyond those expected.
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 Six Months Ended June 30, 2021
 DirectLoss RatioCededLoss RatioNetLoss Ratio
Premiums earned$768,180 $268,703 $499,477 
Loss and loss adjustment expenses:
Core losses$304,640 39.7 %$(50)— %$304,690 61.0 %
Weather events5
— — %— — %— — %
Prior year’s reserve development208,960 27.2 %202,466 75.3 %6,494 1.3 %
Total losses and loss adjustment expenses$513,600 66.9 %$202,416 75.3 %$311,184 62.3 %
5 Includes only current year weather events beyond those expected.


































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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except for per share data)
GAAP revenue to core revenue
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
GAAP revenue$292,006 $279,181 $579,488 $541,938 
less: Net realized gains (losses) on investments(725)496 (667)1,038 
less: Net change in unrealized gains (losses) of equity securities(8,884)1,229 (12,280)735 
Core revenue$301,615 $277,456 $592,435 $540,165 

GAAP income before income taxes to adjusted operating income
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
GAAP income before income taxes$10,680 $30,059 $33,151 $66,410 
add: Interest and amortization of debt issuance costs1,731 35 3,339 55 
GAAP operating income12,411 30,094 36,490 66,465 
less: Net realized gains (losses) on investments(725)496 (667)1,038 
less: Net change in unrealized gains (losses) of equity securities(8,884)1,229 (12,280)735 
Adjusted operating income$22,020 $28,369 $49,437 $64,692 

GAAP operating income margin to adjusted operating income margin
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
GAAP operating income (a)$12,411 $30,094 $36,490 $66,465 
GAAP revenue (b)292,006 279,181 579,488 541,938 
GAAP operating income margin (a÷b)4.3 %10.8 %6.3 %12.3 %
Adjusted operating income (c)22,020 28,369 49,437 64,692 
Core revenue (d)301,615 277,456 592,435 540,165 
Adjusted operating income margin (c÷d)7.3 %10.2 %8.3 %12.0 %

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GAAP net income (NI) to adjusted NI attributable to common stockholders
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
GAAP NI$7,370 $21,941 $24,907 $48,349 
less: Preferred dividends
GAAP NI attributable to common stockholders (e)7,368 21,939 24,902 48,344 
less: Net realized gains (losses) on investments(725)496 (667)1,038 
less: Net change in unrealized gains (losses) of equity securities(8,884)1,229 (12,280)735 
add: Income tax effect on above adjustments(2,329)413 (3,138)424 
Adjusted NI attributable to common stockholders (f)$14,648 $20,627 $34,711 $46,995 
Weighted average diluted common shares outstanding (g)30,883 31,310 31,060 31,292 
Diluted earnings per common share (e÷g)$0.24 $0.70 $0.80 $1.54 
Diluted adjusted earnings per common share (f÷g)$0.47 $0.65 $1.12 $1.50 

GAAP stockholders’ equity to adjusted common stockholders’ equity
As of
June 30,June 30,December 31,
202220212021
GAAP stockholders’ equity$366,551 $480,842 $429,702 
less: Preferred equity100100100
Common stockholders’ equity (h)366,451 480,742 429,602 
less: Accumulated other comprehensive (loss), net of taxes(88,134)(5,571)(15,568)
Adjusted common stockholders’ equity (i)$454,585 $486,313 $445,170 
Shares outstanding (j)30,716 31,269 31,221 
Book value per common share (h÷j)$11.93 $15.37 $13.76 
Adjusted book value per common share (i÷j)$14.80 $15.55 $14.26 

GAAP return on common equity (ROCE) to adjusted ROCE
Three Months EndedSix Months EndedYear Ended
June 30,June 30,December 31,
20222021202220212021
Annualized NI attributable to common stockholders (k)$29,472 $87,756 $49,804 $96,688 $20,397 
Average common stockholders’ equity (l)381,346 467,654 398,027 464,952 439,382 
ROCE (k÷l)7.7 %18.8 %12.5 %20.8 %4.6 %
Annualized adjusted NI attributable to common stockholders (m)$58,592 $82,508 $69,422 $93,990 $18,959 
Adjusted average common stockholders’ equity6 (n)
458,292 476,567 454,782 465,392 444,775 
Adjusted ROCE (m÷n)12.8 %17.3 %15.3 %20.2 %4.3 %
6 Adjusted average common stockholders’ equity excludes current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities.
12


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