Company to Host Quarterly Conference Call at
5:00 P.M. ET on November 13, 2023
The information in this press release should
be read in conjunction with an earnings presentation that is
available on the Company's website at
investors.amcoastal.com/Presentations.
American Coastal Insurance Corporation (Nasdaq: ACIC) ("ACIC" or
"the Company"), a property and casualty insurance holding company,
today reported its financial results for the third quarter ended
September 30, 2023.
($ in thousands, except for per share
data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
Change
2023
2022
Change
Gross premiums written
$
103,872
$
103,153
0.7
%
$
534,880
$
453,199
18.0
%
Gross premiums earned
$
165,760
$
138,360
19.8
%
$
468,435
$
390,576
19.9
%
Net premiums earned
$
55,808
$
70,226
(20.5
)%
$
226,301
$
192,504
17.6
%
Total revenues
$
58,714
$
72,752
(19.3
)%
$
228,329
$
195,094
17.0
%
Earnings from continuing operations, net
of tax
$
14,373
$
(27,446
)
NM
$
65,092
$
(41,030
)
NM
Income (loss) from discontinued
operations, net of tax
$
(3,805
)
$
(43,438
)
91.2
%
$
230,535
$
(132,166
)
NM
Consolidated net income (loss)
attributable to ACIC
$
10,568
$
(70,884
)
NM
$
295,627
$
(173,085
)
NM
Net income (loss) available to ACIC
stockholders per diluted share
Continuing Operations
$
0.33
$
(0.64
)
NM
$
1.48
$
(0.95
)
NM
Discontinued Operations
$
(0.09
)
$
(1.01
)
91.1
%
5.25
(3.07
)
NM
Total
$
0.24
$
(1.65
)
NM
$
6.73
$
(4.02
)
NM
Reconciliation of net income (loss) to
core income (loss):
Plus: Non-cash amortization of intangible
assets and goodwill impairment (1)
$
812
$
10,968
(92.6
)%
$
2,436
$
12,592
(80.7
)%
Less: Income (loss) from discontinued
operations, net of tax
$
(3,805
)
$
(43,438
)
91.2
%
$
230,535
$
(132,166
)
NM
Less: Net realized gains (losses) on
investment portfolio
$
2
$
(4
)
NM
$
(6,806
)
$
(44
)
NM
Less: Unrealized gains (losses) on equity
securities
$
177
$
(897
)
NM
$
792
$
(4,058
)
NM
Less: Net tax impact (2)
$
133
$
2,493
94.7
%
$
1,775
$
3,506
(49.4
)%
Core income (loss) (3)
$
14,873
$
(18,070
)
NM
$
71,767
$
(27,731
)
NM
Core income (loss) per diluted share
(3)
$
0.34
$
(0.42
)
NM
$
1.64
$
(0.64
)
NM
Book value per share
$
2.78
$
1.86
49.5
%
NM = Not Meaningful
(1)
For both the three and nine months ended
September 30, 2022, non-cash amortization of intangible assets
included $10.2 million related to the impairment of goodwill
attributable to the Company's personal residential property and
casualty insurance policies (personal lines) operating segment.
(2)
In order to reconcile net income (loss) to
the core income (loss) measures, the Company included the tax
impact of all adjustments using the 21% federal corporate tax
rate.
(3)
Core income (loss), and core income (loss)
per diluted share, both of which are measures that are not based on
GAAP, are reconciled above to net income (loss) and net income
(loss) per diluted share, respectively, the most directly
comparable GAAP measures. Additional information regarding non-GAAP
financial measures presented in this press release can be found in
the "Definitions of Non-GAAP Measures" section, below.
Comments from Chief Executive Officer, Dan Peed: “We are
pleased to again deliver value to our shareholders. Our book value
per share at September 30th increased to $2.78, and our continuing
operations reported a core return on equity of 170.3%, with $14.4
million in third quarter earnings. American Coastal continues to
outperform its peers and expectations. Although our personal lines
segment experienced a pre-tax loss of $5.5 million, this is a
significant improvement quarter-over-quarter, and we continue to
take pricing and underwriting actions that improve the outlook of
the personal lines segment. Consolidated net income for the third
quarter was $10.6 million, including a loss on discontinued
operations of $3.8 million, which shows the strength of American
Coastal’s earnings power. Our focus on expense reduction and the
quality of our book of business has delivered results.”
Return on Equity and Core Return on Equity
The calculations of the Company's return on equity and core
return on equity are shown below.
($ in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Income (loss) from continuing operations,
net of tax
$
14,373
$
(27,446
)
$
65,092
$
(41,030
)
Return on equity based on GAAP earnings
from continuing operations, net of tax (1)
170.3
%
(47.1
)%
257.1
%
(23.5
)%
Income (loss) from discontinued
operations, net of tax
$
(3,805
)
$
(43,438
)
$
230,535
$
(132,166
)
Return on equity based on GAAP income
(loss) from discontinued operations, net of tax (1)
(45.1
)%
(74.6
)%
NM
(75.7
)%
Consolidated net income (loss)
attributable to ACIC
$
10,568
$
(70,884
)
$
295,627
$
(173,085
)
Return on equity based on GAAP net income
(loss) attributable to ACIC (1)
125.2
%
(121.8
)%
NM
(99.1
)%
Core income (loss)
$
14,873
$
(18,070
)
$
71,767
$
(27,731
)
Core return on equity (1)(2)
176.2
%
(31.0
)%
283.5
%
(15.9
)%
(1)
Return on equity for the three and nine
months ended September 30, 2023 and 2022 is calculated on an
annualized basis by dividing the net income (loss) or core income
(loss) for the period by the average stockholders' equity for the
trailing twelve months.
(2)
Core return on equity, a measure that is
not based on GAAP, is calculated based on core income (loss), which
is reconciled on the first page of this press release to net income
(loss), the most directly comparable GAAP measure. Additional
information regarding non-GAAP financial measures presented in this
press release can be found in the "Definitions of Non-GAAP
Measures" section below.
Combined Ratio and Underlying Ratio
The calculations of the Company's combined ratio and underlying
combined ratio on a consolidated basis and attributable to both the
Company's personal lines and commercial residential property and
casualty insurance policies (commercial lines) operating segments
are shown below.
($ in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
Change
2023
2022
Change
Consolidated
Loss ratio, net(1)
24.7
%
75.1
%
(50.4) pts
22.6
%
48.4
%
(25.8) pts
Expense ratio, net(2)
44.0
%
64.2
%
(20.2) pts
43.2
%
58.6
%
(15.4) pts
Combined ratio (CR)(3)
68.7
%
139.3
%
(70.6) pts
65.8
%
107.0
%
(41.2) pts
Effect of current year catastrophe losses
on CR
10.5
%
50.7
%
(40.2) pts
6.6
%
20.3
%
(13.7) pts
Effect of prior year unfavorable
(favorable) development on CR
(6.0
)%
(2.6
)%
(3.4) pts
(5.2
)%
(4.6
)%
(0.6) pts
Underlying combined ratio(4)
64.2
%
91.2
%
(27.0) pts
64.4
%
91.3
%
(26.9) pts
Personal Lines
Loss ratio, net(1)
71.2
%
173.1
%
(101.9) pts
47.6
%
101.3
%
(53.7) pts
Expense ratio, net(2)
138.1
%
178.5
%
(40.4) pts
105.9
%
116.7
%
(10.8) pts
Combined ratio (CR)(3)
209.3
%
351.6
%
(142.3) pts
153.5
%
218.0
%
(64.5) pts
Effect of current year catastrophe losses
on CR
17.2
%
78.2
%
(61.0) pts
7.8
%
31.2
%
(23.4) pts
Effect of prior year unfavorable
(favorable) development on CR
(4.4
)%
(0.5
)%
(3.9) pts
(1.9
)%
(9.2
)%
7.3 pts
Underlying combined ratio(4)
196.5
%
273.9
%
(77.4) pts
147.6
%
196.0
%
(48.4) pts
Commercial Lines
Loss ratio, net(1)
19.5
%
57.5
%
(38.0) pts
19.7
%
36.1
%
(16.4) pts
Expense ratio, net(2)
33.0
%
43.0
%
(10.0) pts
35.6
%
44.2
%
(8.6) pts
Combined ratio (CR)(3)
52.5
%
100.5
%
(48.0) pts
55.3
%
80.3
%
(25.0) pts
Effect of current year catastrophe losses
on CR
9.7
%
45.8
%
(36.1) pts
6.5
%
17.7
%
(11.2) pts
Effect of prior year favorable development
on CR
(6.2
)%
(3.0
)%
(3.2) pts
(5.5
)%
(3.5
)%
(2.0) pts
Underlying combined ratio(5)
49.0
%
57.7
%
(8.7) pts
54.3
%
66.1
%
(11.8) pts
(1)
Loss ratio, net is calculated as losses
and loss adjustment expenses (LAE), net of losses ceded to
reinsurers, relative to net premiums earned.
(2)
Expense ratio, net is calculated as the
sum of all operating expenses less interest expense relative to net
premiums earned.
(3)
Includes impairment of goodwill, which had
an impact of 14.5% and 5.3% on the Company's consolidated expense
ratios and a 94.9% & 28.1% impact on the Company's personal
lines expense ratios during the three and nine month periods ended
September 30, 2022, respectively.
(4)
Combined ratio is the sum of the loss
ratio, net and expense ratio, net.
(5)
Underlying combined ratio, a measure that
is not based on GAAP, is reconciled above to the combined ratio,
the most directly comparable GAAP measure. Additional information
regarding non-GAAP financial measures presented in this press
release can be found in the "Definitions of Non-GAAP
Measures" section, below.
Combined Ratio Analysis
The calculations of the Company's loss ratios and underlying
loss ratios are shown below.
($ in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
Change
2023
2022
Change
Loss and LAE
$
13,764
$
52,765
$
(39,001
)
$
51,091
$
93,112
$
(42,021
)
% of Gross earned premiums
8.3
%
38.1
%
(29.8) pts
10.9
%
23.8
%
(12.9) pts
% of Net earned premiums
24.7
%
75.1
%
(50.4) pts
22.6
%
48.4
%
(25.8) pts
Less:
Current year catastrophe losses
$
5,847
$
35,605
$
(29,758
)
$
15,002
$
39,021
$
(24,019
)
Prior year reserve unfavorable (favorable)
development
(3,349
)
(1,846
)
(1,503
)
(11,665
)
(8,787
)
(2,878
)
Underlying loss and LAE (1)
$
11,266
$
19,006
$
(7,740
)
$
47,754
$
62,878
$
(15,124
)
% of Gross earned premiums
6.8
%
13.7
%
(6.9) pts
10.2
%
16.1
%
(5.9) pts
% of Net earned premiums
20.2
%
27.1
%
(6.9) pts
21.2
%
32.7
%
(11.5) pts
(1)
Underlying loss and LAE is a non-GAAP
financial measure and is reconciled above to loss and LAE, the most
directly comparable GAAP measure. Additional information regarding
non-GAAP financial measures presented in this press release can be
found in the "Definitions of Non-GAAP Measures" section,
below.
The calculations of the Company's expense ratios are shown
below.
($ in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
Change
2023
2022
Change
Policy acquisition costs
$
15,600
$
26,030
$
(10,430
)
$
68,117
$
69,908
$
(1,791
)
Operating and underwriting
2,799
3,123
(324
)
8,241
10,650
(2,409
)
General and administrative
6,131
15,959
(9,828
)
21,507
32,231
(10,724
)
Total Operating Expenses
$
24,530
$
45,112
$
(20,582
)
$
97,865
$
112,789
$
(14,924
)
% of Gross earned premiums
14.8
%
32.6
%
(17.8) pts
20.9
%
28.9
%
(8.0) pts
% of Net earned premiums
44.0
%
64.2
%
(20.2) pts
43.2
%
58.6
%
(15.4) pts
Quarterly Financial Results
Net income attributable to the Company for the third quarter of
2023 was $10.6 million, or $0.24 per diluted share, compared to a
net loss of $70.9 million, or $1.65 per diluted share, for the
third quarter of 2022. Of this income, $14.4 million is
attributable to continuing operations for the three months ended
September 30, 2023, an increase of $41.8 million from a net loss of
$27.4 million for the same period in 2022. Drivers of net income
from continuing operations during the third quarter of 2023
included increased gross premiums earned partially offset by
increased ceded premiums earned driven by our 2023 quota share
agreements, a decrease in our loss and LAE incurred, driven by
decreased catastrophe losses, and decreased policy acquisition
costs and administrative costs, as described below. This was
partially offset by the recognition of losses from discontinued
operations of $3.8 million, driven by the deconsolidation of
activities related directly to supporting the business conducted by
UPC.
The Company's total gross written premium increased by $0.7
million, or 0.7%, to $103.9 million for the third quarter of 2023,
from $103.2 million for the third quarter of 2022. This increase
was driven primarily by an increase in our commercial premiums
written, offset by decreased personal lines premiums written. Both
of these changes are driven by our focus on transitioning towards a
specialty commercial lines underwriter. The breakdown of the
quarter-over-quarter changes in both direct written and assumed
premiums by state and gross written premium by line of business are
shown in the table below.
($ in thousands)
Three Months Ended
September 30,
2023
2022
Change $
Change %
Direct Written and Assumed Premium by
State (1)
Florida
$
93,965
$
76,606
$
17,359
22.7
%
New York
9,886
9,749
137
1.4
Texas
—
114
(114
)
(100.0
)
Total direct written premium by state
103,851
86,469
17,382
20.1
Assumed premium (2)
21
16,684
(16,663
)
(99.9
)
Total gross written premium by state
$
103,872
$
103,153
$
719
0.7
%
Gross Written Premium by Line of
Business
Commercial property
$
93,986
$
76,867
$
17,119
22.3
%
Personal property
9,886
26,286
(16,400
)
(62.4
)
Total gross written premium by line of
business
$
103,872
$
103,153
$
719
0.7
%
(1)
We are no longer writing in Texas or South
Carolina as of May 31, 2022.
(2)
Assumed premium written for 2023 primarily
included commercial property business assumed from unaffiliated
insurers. Assumed premium written for 2022 primarily included
personal property business assumed from our former subsidiary, UPC
totaling $16,537,000.
Loss and LAE decreased by $39.0 million, or 73.9%, to $13.8
million for the third quarter of 2023, from $52.8 million for the
third quarter of 2022. Loss and LAE expense as a percentage of net
earned premiums decreased 50.4 points to 24.7% for the third
quarter of 2023, compared to 75.1% for the third quarter of 2022.
Excluding catastrophe losses and reserve development, the Company's
gross underlying loss and LAE ratio for the third quarter of 2023
would have been 6.8%, a decrease of 6.9 points from 13.7% during
the third quarter of 2022.
Policy acquisition costs decreased by $10.4 million, or 40.0%,
to $15.6 million for the third quarter of 2023, from $26.0 million
for the third quarter of 2022, primarily due to an increase in
reinsurance commission income, driven by our quota share coverage
entered into in the second quarter of 2023 in our commercial lines
business. This was partially offset by increases in agent
commissions, external management fees and premium taxes, all of
which are driven by increased commercial lines written premiums
described above.
Operating and underwriting expenses decreased by $324 thousand,
or 10.4%, to $2.8 million for the third quarter of 2023, from $3.1
million for the third quarter of 2022, primarily due to decreased
investments in technology quarter-over-quarter.
General and administrative expenses decreased by $9.9 million,
or 61.9%, to $6.1 million for the third quarter of 2023, from $16.0
million for the third quarter of 2022, driven by the $10,157,000
impairment of goodwill attributable to our personal lines operating
segment in the third quarter of 2022. This was a one-time charge,
skewing our expense higher in the third quarter of the prior year.
There was no similar transaction that occurred in 2023.
Commercial Lines Operating Segment Highlights
Pre-tax earnings attributable to the Company's commercial lines
operating segment totaled $25.9 million for the third quarter of
2023 compared to $1.8 million for the third quarter of 2022. This
increase can be attributed to a decrease in Loss and LAE incurred
of $24.4 million, driven by decreased catastrophe losses
quarter-over-quarter. In addition, policy acquisition costs
decreased $8.8 million, driven by reinsurance commission income
earned during the period.
This decrease in Loss and LAE incurred was partially offset by
decreased revenues of $9.2 million quarter-over-quarter, driven by
decreased net premiums earned during the period. Operating and
underwriting expenses and general and administrative expenses
remained relatively flat, with a net decrease of $184 thousand
experienced quarter-over-quarter.
Personal Lines Operating Segment Highlights
Pre-tax loss attributable to the Company's personal lines
operating segment totaled $5.5 million for the third quarter of
2023 compared to a pre-tax loss of $26.5 million for the third
quarter of 2022. Drivers of the quarter-over-quarter decrease in
pre-tax loss included: a decrease in administrative costs of $9.5
million, driven by a one-time impairment of goodwill attributable
to our personal lines during 2022, a decrease in policy acquisition
costs of $1.6 million driven by decreased ceding commission
expense, partially offset by increased agent commission and policy
administration costs, a decrease in loss and LAE incurred of $14.6
million due to decreased non-catastrophe losses and a decrease in
operating expenses of $312 thousand driven by decreased investments
in technology and underwriting expenses.
These decreases were partially offset by a $4.8 million decrease
in revenues quarter-over-quarter. All of these changes can be
attributed to the Company's shift towards becoming a specialty
commercial lines underwriter, resulting in reduced writings,
exposure, and lower costs associated with the servicing of this
business.
Reinsurance Costs as a Percentage of Gross Earned
Premium
Reinsurance costs as a percentage of gross earned premium in the
third quarter of 2023 and 2022 were as follows:
2023
2022
Non-at-Risk
(0.4
)%
(0.5
)%
Quota Share
(29.9
)%
(11.7
)%
All Other
(36.0
)%
(37.0
)%
Total Ceding Ratio
(66.3
)%
(49.2
)%
Ceded premiums earned related to the Company's catastrophe
program decreased, driven by the need for less coverage for the
2023-2024 treaty year due to the reduction in the Company's
geographic footprint and exposure, as well as the utilization of
quota share reinsurance coverage for our commercial lines operating
segment. The resulting increase in quota share reinsurance coverage
increased the Company's ceding ratio overall.
Reinsurance costs as a percentage of gross earned premium in the
third quarter of 2023 and 2022 for the Company's personal lines and
commercial lines operating segments were as follows:
Personal
Commercial
2023
2022
2023
2022
Non-at-Risk
(2.8
)%
(1.0
)%
(0.2
)%
(0.5
)%
Quota Share
—
%
—
%
(31.4
)%
(13.5
)%
All Other
(27.8
)%
(41.3
)%
(36.4
)%
(36.3
)%
Total Ceding Ratio
(30.6
)%
(42.3
)%
(68.0
)%
(50.3
)%
Investment Portfolio Highlights
The Company's cash, restricted cash and investment holdings
decreased from $340.9 million at December 31, 2022 to $286.9
million at September 30, 2023. The Company's cash and investment
holdings consist of investments in U.S. government and agency
securities, corporate debt and investment grade money market
instruments. Fixed maturities represented approximately 98.3% of
total investments at September 30, 2023 compared to 91% of total
investments at December 31, 2022. The Company's fixed maturity
investments had a modified duration of 4.0 years at both September
30, 2023 and December 31, 2022.
Book Value Analysis
Book value per common share increased 166.1% from $(4.21) at
December 31, 2022, to $2.78 at September 30, 2023. Underlying book
value per common share increased 195.3% from $(3.49) at December
31, 2022 to $3.33 at September 30, 2023. An increase in the
Company's retained earnings as the result of net income from both
continuing and discontinued operations in the first nine months of
2023 drove the increase in the Company's book value per share. As
shown in the table below, removing the effect of AOCI increases the
Company's book value per common share, as the Company has
experienced unfavorable capital market conditions resulting in an
accumulated other comprehensive loss position at September 30,
2023.
($ in thousands, except for share and per
share data)
September 30, 2023
December 31, 2022
Book Value per Share
Numerator:
Common stockholders' equity attributable
to ACIC
$
120,649
$
(182,039
)
Denominator:
Total Shares Outstanding
43,411,686
43,280,173
Book Value Per Common Share
$
2.78
$
(4.21
)
Book Value per Share, Excluding the
Impact of Accumulated Other Comprehensive Income (AOCI)
Numerator:
Common stockholders' equity attributable
to ACIC
$
120,649
$
(182,039
)
Less: Accumulated other comprehensive
loss
(23,835
)
(30,947
)
Stockholders' Equity, excluding AOCI
$
144,484
$
(151,092
)
Denominator:
Total Shares Outstanding
43,411,686
43,280,173
Underlying Book Value Per Common
Share(1)
$
3.33
$
(3.49
)
(1)
Underlying book value per common share is
a non-GAAP financial measure and is reconciled above to book value
per common share, the most directly comparable GAAP measure.
Additional information regarding non-GAAP financial measures
presented in this press release can be found in the "Definitions of
Non-GAAP Measures" section below.
Conference Call Details
Date and Time:
November 13, 2023 - 5:00 P.M. ET
Participant Dial-In:
(United States): 877-445-9755
(International): 201-493-6744
Webcast:
To listen to the live webcast, please go
to https://investors.amcoastal.com and click on the conference call
link at the top of the page or go to:
https://event.webcasts.com/starthere.jsp?ei=1639571&tp_key=a0e6e73e3d
An archive of the webcast will be
available for a limited period of time thereafter.
Presentation:
The information in this press release
should be read in conjunction with an earnings presentation that is
available on the Company's website at
investors.amcoastal.com/Presentations.
About American Coastal Insurance Corporation
American Coastal Insurance Corporation (amcoastal.com) is the
holding company of the insurance carrier, American Coastal
Insurance Company, which was founded in 2007 for the purpose of
insuring Condominium and Homeowner Association properties, and
apartments in the state of Florida. American Coastal Insurance
Company has an exclusive partnership for distribution of
Condominium Association properties in the state of Florida with
AmRisc Group (amriscgroup.com), a subsidiary of Truist Insurance
Holdings, one of the largest Managing General Agents in the country
specializing in hurricane-exposed properties. American Coastal
Insurance Company has earned a Financial Stability Rating of ‘A,
Exceptional’ from Demotech.
American Coastal Insurance Corporation’s portfolio of
investments also includes Interboro Insurance Company, a New York
domiciled personal lines carrier founded in 1914.
Definitions of Non-GAAP Measures
The Company believes that investors' understanding of ACIC's
performance is enhanced by the Company's disclosure of the
following non-GAAP measures. The Company's methods for calculating
these measures may differ from those used by other companies and
therefore comparability may be limited.
Net income (loss) excluding the effects of amortization of
intangible assets, income (loss) from discontinued operations,
realized gains (losses) and unrealized gains (losses) on equity
securities, net of tax (core income (loss)) is a non-GAAP
measure that is computed by adding amortization, net of tax, to net
income (loss) and subtracting income (loss) from discontinued
operations, net of tax, realized gains (losses) on the Company's
investment portfolio, net of tax, and unrealized gains (losses) on
the Company's equity securities, net of tax, from net income
(loss). Amortization expense is related to the amortization of
intangible assets acquired, including goodwill, through mergers
and, therefore, the expense does not arise through normal
operations. Investment portfolio gains (losses) and unrealized
equity security gains (losses) vary independent of the Company's
operations. The Company believes it is useful for investors to
evaluate these components both separately and in the aggregate when
reviewing the Company's performance. The most directly comparable
GAAP measure is net income (loss). The core income (loss) measure
should not be considered a substitute for net income (loss) and
does not reflect the overall profitability of the Company's
business.
Core return on equity is a non-GAAP ratio calculated
using non-GAAP measures. It is calculated by dividing the core
income (loss) for the period by the average stockholders’ equity
for the trailing twelve months (or one quarter of such average, in
the case of quarterly periods). Core income (loss) is an after-tax
non-GAAP measure that is calculated by excluding from net income
(loss) the effect of income (loss) from discontinued operations,
net of tax, non-cash amortization of intangible assets, including
goodwill, unrealized gains or losses on the Company's equity
security investments and net realized gains or losses on the
Company's investment portfolio. In the opinion of the Company’s
management, core income (loss), core income (loss) per share and
core return on equity are meaningful indicators to investors of the
Company's underwriting and operating results, since the excluded
items are not necessarily indicative of operating trends.
Internally, the Company’s management uses core income (loss), core
income (loss) per share and core return on equity to evaluate
performance against historical results and establish financial
targets on a consolidated basis. The most directly comparable GAAP
measure is return on equity. The core return on equity measure
should not be considered a substitute for return on equity and does
not reflect the overall profitability of the Company's
business.
Combined ratio excluding the effects of current year
catastrophe losses and prior year reserve development (underlying
combined ratio) is a non-GAAP measure, that is computed by
subtracting the effect of current year catastrophe losses and prior
year development from the combined ratio. The Company believes that
this ratio is useful to investors, and it is used by management to
highlight the trends in the Company's business that may be obscured
by current year catastrophe losses and prior year development.
Current year catastrophe losses cause the Company's loss trends to
vary significantly between periods as a result of their frequency
of occurrence and severity and can have a significant impact on the
combined ratio. Prior year development is caused by unexpected loss
development on historical reserves. The Company believes it is
useful for investors to evaluate these components both separately
and in the aggregate when reviewing the Company's performance. The
most directly comparable GAAP measure is the combined ratio. The
underlying combined ratio should not be considered as a substitute
for the combined ratio and does not reflect the overall
profitability of the Company's business.
Net loss and LAE excluding the effects of current year
catastrophe losses and prior year reserve development (underlying
loss and LAE) is a non-GAAP measure that is computed by
subtracting the effect of current year catastrophe losses and prior
year reserve development from net loss and LAE. The Company uses
underlying loss and LAE figures to analyze the Company's loss
trends that may be impacted by current year catastrophe losses and
prior year development on the Company's reserves. As discussed
previously, these two items can have a significant impact on the
Company's loss trends in a given period. The Company believes it is
useful for investors to evaluate these components both separately
and in the aggregate when reviewing the Company's performance. The
most directly comparable GAAP measure is net loss and LAE. The
underlying loss and LAE measure should not be considered a
substitute for net loss and LAE and does not reflect the overall
profitability of the Company's business.
Book value per common share, excluding the impact of
accumulated other comprehensive loss (underlying book value per
common share), is a non-GAAP measure that is computed by
dividing common stockholders' equity after excluding accumulated
other comprehensive income (loss), by total common shares
outstanding plus dilutive potential common shares outstanding. The
Company uses the trend in book value per common share, excluding
the impact of accumulated other comprehensive income (loss), in
conjunction with book value per common share to identify and
analyze the change in net worth attributable to management efforts
between periods. The Company believes this non-GAAP measure is
useful to investors because it eliminates the effect of interest
rates that can fluctuate significantly from period to period and
are generally driven by economic and financial factors that are not
influenced by management. Book value per common share is the most
directly comparable GAAP measure. Book value per common share,
excluding the impact of accumulated other comprehensive income
(loss), should not be considered a substitute for book value per
common share and does not reflect the recorded net worth of the
Company's business.
Discontinued Operations
On February 27, 2023, the Florida Department of Financial
Services was appointed as receiver of the Company's former
subsidiary, United Property & Casualty Insurance Company
("UPC"). As such, prior year financial results have been recast to
reflect the activity of UPC and activities related directly to
supporting the business conducted by UPC within discontinued
operations.
Forward-Looking Statements
Statements made in this press release, or on the conference call
identified above, and otherwise, that are not historical facts are
“forward-looking statements”. The Company believes these statements
are based on reasonable estimates, assumptions and plans. However,
if the estimates, assumptions, or plans underlying the
forward-looking statements prove inaccurate or if other risks or
uncertainties arise, actual results could differ materially from
those expressed in, or implied by, the forward-looking statements.
These statements are made subject to the safe-harbor provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements do not relate strictly to historical or
current facts and may be identified by their use of words such as
“may,” “will,” “expect,” "endeavor," "project," “believe,” "plan,"
“anticipate,” “intend,” “could,” “would,” “estimate” or “continue”
or the negative variations thereof or comparable terminology.
Factors that could cause actual results to differ materially may be
found in the Company's filings with the U.S. Securities and
Exchange Commission, in the “Risk Factors” section in the Company's
most recent Annual Report on Form 10-K and subsequent Quarterly
Reports on Form 10-Q. Forward-looking statements speak only as of
the date on which they are made, and, except as required by
applicable law, the Company undertakes no obligation to update or
revise any forward-looking statements.
Consolidated Statements of
Comprehensive Income (Loss)
In thousands, except share and
per share amounts
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
REVENUE:
Gross premiums written
$
103,872
$
103,153
$
534,880
$
453,199
Change in gross unearned premiums
61,888
35,207
(66,445
)
(62,623
)
Gross premiums earned
165,760
138,360
468,435
390,576
Ceded premiums earned
(109,952
)
(68,134
)
(242,134
)
(198,072
)
Net premiums earned
55,808
70,226
226,301
192,504
Net investment income
2,709
2,236
7,990
5,479
Net realized investment gains (losses)
2
(4
)
(6,806
)
(44
)
Net unrealized gains (losses) on equity
securities
177
(897
)
792
(4,058
)
Other revenue
18
1,191
52
1,213
Total revenues
$
58,714
$
72,752
$
228,329
$
195,094
EXPENSES:
Losses and loss adjustment expenses
13,764
52,765
51,091
93,112
Policy acquisition costs
15,600
26,030
68,117
69,908
Operating expenses
2,799
3,123
8,241
10,650
General and administrative expenses
6,131
15,959
21,507
32,231
Interest expense
2,718
2,358
8,156
7,080
Total expenses
41,012
100,235
157,112
212,981
Income (loss) before other income
(loss)
17,702
(27,483
)
71,217
(17,887
)
Other income (loss)
(226
)
(29
)
1,168
1,562
Income (loss) before income taxes
17,476
(27,512
)
72,385
(16,325
)
Provision (benefit) for income taxes
3,103
(66
)
7,293
24,705
Income (loss) from continuing operations,
net of tax
$
14,373
$
(27,446
)
$
65,092
$
(41,030
)
Income (loss) from discontinued
operations, net of tax
(3,805
)
(43,438
)
230,535
(132,166
)
Net income (loss)
$
10,568
$
(70,884
)
$
295,627
$
(173,196
)
Less: Net loss attributable to
noncontrolling interests
—
—
—
(111
)
Net income (loss) attributable to ACIC
$
10,568
$
(70,884
)
$
295,627
$
(173,085
)
OTHER COMPREHENSIVE INCOME (LOSS):
Change in net unrealized losses on
investments
(2,761
)
(15,953
)
(698
)
(60,232
)
Reclassification adjustment for net
realized investment losses (gains)
(2
)
9
6,806
1,856
Income tax benefit related to items of
other comprehensive income (loss)
—
—
—
49
Total comprehensive income (loss)
$
7,805
$
(86,828
)
$
301,735
$
(231,523
)
Less: Comprehensive loss attributable to
noncontrolling interests
—
—
—
(164
)
Comprehensive income (loss) attributable
to ACIC
$
7,805
$
(86,828
)
$
301,735
$
(231,359
)
Weighted average shares outstanding
Basic
43,301,388
43,075,234
43,220,084
43,035,374
Diluted
44,142,693
43,075,234
43,888,665
43,035,374
Earnings available to ACIC common
stockholders per share
Basic
Continuing operations
$
0.33
$
(0.64
)
$
1.51
$
(0.95
)
Discontinued operations
(0.09
)
(1.01
)
5.33
(3.07
)
Total
$
0.24
$
(1.65
)
$
6.84
$
(4.02
)
Diluted
Continuing operations
$
0.33
$
(0.64
)
$
1.48
$
(0.95
)
Discontinued operations
(0.09
)
(1.01
)
5.25
(3.07
)
Total
$
0.24
$
(1.65
)
$
6.73
$
(4.02
)
Dividends declared per share
$
—
$
—
$
—
$
0.06
Consolidated Balance
Sheets
In thousands, except share
amounts
September 30, 2023
December 31, 2022
ASSETS
Investments, at fair value:
Fixed maturities, available-for-sale
$
153,857
$
204,682
Equity securities
—
15,657
Other investments
2,599
3,675
Total investments
$
156,456
$
224,014
Cash and cash equivalents
111,061
70,903
Restricted cash
19,427
45,988
Accrued investment income
1,540
1,605
Property and equipment, net
3,910
5,293
Premiums receivable, net
22,441
39,301
Reinsurance recoverable on paid and unpaid
losses
448,358
796,546
Ceded unearned premiums
241,270
90,496
Goodwill
59,476
59,476
Deferred policy acquisition costs
28,852
52,369
Intangible assets, net
10,135
12,770
Other assets
35,581
3,920
Assets held for disposal
11,183
1,434,815
Total Assets
$
1,149,690
$
2,837,496
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss adjustment
expenses
$
443,406
$
842,958
Unearned premiums
325,423
258,978
Reinsurance payable on premiums
3,963
30,503
Payments outstanding
11,636
2,000
Accounts payable and accrued expenses
84,772
74,386
Operating lease liability
941
1,689
Other liabilities
8,504
5,849
Notes payable, net
148,604
148,355
Liabilities held for disposal
1,792
1,654,817
Total Liabilities
$
1,029,041
$
3,019,535
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.0001 par value;
1,000,000 authorized; none issued or outstanding
—
—
Common stock, $0.0001 par value;
100,000,000 shares authorized; 43,623,769 and 43,492,256 issued,
respectively; 43,411,686 and 43,280,173 outstanding,
respectively
4
4
Additional paid-in capital
396,584
395,631
Treasury shares, at cost; 212,083
shares
(431
)
(431
)
Accumulated other comprehensive loss
(23,835
)
(30,947
)
Retained earnings (deficit)
(251,673
)
(546,296
)
Total Stockholders' Equity
$
120,649
$
(182,039
)
Total Liabilities and Stockholders'
Equity
$
1,149,690
$
2,837,496
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231113088943/en/
Alexander Baty Director of Financial Reporting, American Coastal
Insurance Corp. abaty@amcoastal.com (727) 895-7737
Karin Daly Investor Relations, Vice President, The Equity Group
kdaly@equityny.com (212) 836-9623
Grafico Azioni American Coastal Insurance (NASDAQ:ACIC)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni American Coastal Insurance (NASDAQ:ACIC)
Storico
Da Gen 2024 a Gen 2025
