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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tiptree Inc | NASDAQ:TIPT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.66 | 3.75% | 18.26 | 17.29 | 29.13 | 18.27 | 17.55 | 17.55 | 59,340 | 22:30:00 |
Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), today announced its financial results for the quarter and year ended December 31, 2022.
“2022 was a strong year for Tiptree, with our operating businesses performing well. Revenues for the year increased to a record $1.4 billion, while contributing an adjusted return on equity of 13.6%. As we look forward, we see significant opportunities to grow our businesses and are confident in the long-term outlook for the company”, said Tiptree’s Executive Chairman, Michael Barnes.
Fourth Quarter
Year Ended
($ in thousands, except per share information)
2022
2021
2022
2021
Total revenues
$
369,528
$
319,534
$
1,397,752
$
1,200,514
Net income (loss) attributable to common stockholders
$
871
$
(426
)
$
(8,274
)
$
38,132
Diluted earnings per share
$
0.02
$
(0.01
)
$
(0.23
)
$
1.09
Cash dividends paid per common share
$
0.04
$
0.04
$
0.16
$
0.16
Return on average equity
0.9
%
(0.4
) %
(2.1
) %
11.4
%
Non-GAAP: (1)
Adjusted net income
$
14,568
$
16,859
$
63,401
$
63,869
Adjusted return on average equity
11.1
%
16.8
%
13.6
%
16.5
%
Book value per share
$
10.92
$
11.22
$
10.92
$
11.22
(1)
See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures. Adjusted net income is presented before the impacts of non-controlling interests.
Fourth Quarter 2022 Summary
Full-Year 2022 Summary
Segment Financial Highlights - Fourth Quarter 2022 and Total Year 2022
Insurance (The Fortegra Group):
Fourth Quarter
Year Ended
($ in thousands)
2022
2021
2022
2021
Gross written premiums and premium equivalents
$
723,773
$
575,948
$
2,680,771
$
2,194,024
Revenues
$
345,408
$
262,606
$
1,248,796
$
984,130
Income before taxes
$
29,093
$
20,288
$
68,150
$
69,857
Return on average equity
23.2
%
17.4
%
14.6
%
17.1
%
Combined ratio
89.8
%
89.4
%
90.7
%
90.6
%
Non-GAAP: (1)
Adjusted net income
$
23,939
$
20,382
$
83,832
$
66,782
Adjusted return on average equity
29.3
%
27.2
%
26.1
%
22.2
%
(1)
See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures. Adjusted net income is presented before the impacts of non-controlling interests.
Tiptree Capital:
Fourth Quarter
Year Ended
($ in thousands)
2022
2021
2022
2021
Revenues
$
24,120
$
56,928
$
148,956
$
216,384
Income before taxes
$
8,459
$
7,584
$
32,277
$
45,617
Return on average equity
21.8
%
14.4
%
16.9
%
22.2
%
Non-GAAP: (1)
Adjusted net income
$
(787
)
$
4,559
$
8,969
$
28,197
Adjusted return on average equity
(2.5
) %
10.1
%
5.8
%
16.2
%
(1)
See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures. Adjusted net income is presented before the impacts of non-controlling interests.
Corporate:
Corporate includes expenses of the holding company for interest expense, employee compensation and benefits, audit and professional fees, and public company and other expenses. For the quarter, corporate expenses were $12.5 million compared to $17.0 million in Q4'21 and for the year were $46.4 million compared to $50.1 million. The decrease for each respective period was driven by lower incentive compensation expense and interest expense as we repaid our corporate holding company borrowings in June 2022.
Non-GAAP
Management uses Adjusted net income and Adjusted return on average equity as measurements of operating performance. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and comparison among companies. Management uses Adjusted net income and adjusted return on average equity as part of its capital allocation process and to assess comparative returns on invested capital. Adjusted net income represents income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, stock-based compensation, net realized and unrealized gains (losses), and intangibles amortization associated with purchase accounting. Adjusted net income and Adjusted return on average equity are presented before the impacts of non-controlling interests. Adjusted net income and Adjusted return on average equity are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income. See “Non-GAAP Reconciliations” for a reconciliation of these measures to their GAAP equivalents.
Earnings Conference Call
Tiptree will host a conference call on Thursday, March 9, 2023 at 9:00 a.m. Eastern Time to discuss its Q4 and full year 2022 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company’s website, located at investors.tiptreeinc.com.
The conference call will be available via live or archived webcast at investors.tiptreeinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. To participate in the telephone conference call, please dial 1-877-407-4018 (domestic) or 1-201-689-8471 (international). Please dial in at least five minutes prior to the start time.
A replay of the call will be available from Thursday, March 9, 2023 at 12:00 p.m. Eastern Time, until midnight Eastern on Thursday, March 16, 2023. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13734675.
About Tiptree
Tiptree Inc. (NASDAQ: TIPT) allocates capital to select small and middle market companies with the mission of building long-term value. Established in 2007, we have a significant track record investing in the insurance sector and across a variety of other industries, including mortgage origination, specialty finance and shipping. With proprietary access and a flexible capital base, we seek to uncover compelling investment opportunities and support management teams in unlocking the full value potential of their businesses. For more information, please visit tiptreeinc.com and follow us on LinkedIn.
Forward-Looking Statements
This release contains “forward-looking statements” which involve risks, uncertainties and contingencies, many of which are beyond the Company’s control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the Company’s plans, objectives, expectations for our businesses and intentions. The forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to those described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K, and as described in the Company’s other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of this release. The factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statements.
Tiptree Inc.
Condensed Consolidated Balance Sheets
($ in thousands, except share data)
As of
December 31, 2022
December 31, 2021
Assets:
Investments:
Available for sale securities, at fair value, net of allowance for credit losses
$
611,980
$
577,448
Loans, at fair value
64,843
105,583
Equity securities
85,776
138,483
Other investments
73,025
168,656
Total investments
835,624
990,170
Cash and cash equivalents
538,065
175,718
Restricted cash
12,782
19,368
Notes and accounts receivable, net
502,311
454,369
Reinsurance receivables
1,176,090
880,836
Deferred acquisition costs
498,925
379,373
Goodwill
186,608
179,103
Intangible assets, net
117,015
122,758
Other assets
172,143
146,844
Assets held for sale
—
250,608
Total assets
$
4,039,563
$
3,599,147
Liabilities and Stockholders’ Equity
Liabilities:
Debt, net
$
259,366
$
393,349
Unearned premiums
1,357,436
1,123,952
Policy liabilities and unpaid claims
567,193
331,703
Deferred revenue
649,150
534,863
Reinsurance payable
305,097
265,569
Other liabilities and accrued expenses
367,748
306,536
Liabilities held for sale
—
242,994
Total liabilities
$
3,505,990
$
3,198,966
Stockholders’ Equity:
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding
$
—
$
—
Common stock: $0.001 par value, 200,000,000 shares authorized, 36,385,299 and 34,124,153 shares issued and outstanding, respectively
36
34
Additional paid-in capital
382,645
317,459
Accumulated other comprehensive income (loss), net of tax
(39,429
)
(2,685
)
Retained earnings
54,113
68,146
Total Tiptree Inc. stockholders’ equity
397,365
382,954
Non-controlling interests:
Fortegra preferred interests
77,679
—
Common interests
58,529
17,227
Total non-controlling interests
136,208
17,227
Total stockholders’ equity
533,573
400,181
Total liabilities and stockholders’ equity
$
4,039,563
$
3,599,147
Tiptree Inc.
Condensed Consolidated Statements of Operations
($ in thousands, except share data)
Three Months Ended
December 31,
Year Ended
December 31,
2022
2021
2022
2021
Revenues:
Earned premiums, net
$
242,531
$
186,649
$
904,765
$
685,552
Service and administrative fees
87,837
69,111
320,720
260,525
Ceding commissions
3,994
2,957
13,880
11,784
Net investment income
2,055
8,565
12,219
17,896
Net realized and unrealized gains (losses)
19,933
31,082
69,983
151,350
Other revenue
13,178
21,170
76,185
73,407
Total revenues
369,528
319,534
1,397,752
1,200,514
Expenses:
Policy and contract benefits
122,252
89,814
452,605
327,012
Commission expense
140,251
104,103
522,686
396,683
Employee compensation and benefits
39,730
60,062
182,657
207,322
Interest expense
5,403
10,784
30,240
37,674
Depreciation and amortization
5,259
6,176
22,973
24,437
Other expenses
31,602
37,704
132,580
142,044
Total expenses
344,497
308,643
1,343,741
1,135,172
Income (loss) before taxes
25,031
10,891
54,011
65,342
Less: provision (benefit) for income taxes
18,913
9,875
50,450
21,291
Net income (loss)
6,118
1,016
3,561
44,051
Less: net income (loss) attributable to non-controlling interests
5,247
1,442
11,835
5,919
Net income (loss) attributable to common stockholders
$
871
$
(426
)
$
(8,274
)
$
38,132
Net income (loss) per common share:
Basic earnings per share
$
0.02
$
(0.01
)
$
(0.23
)
$
1.13
Diluted earnings per share
$
0.02
$
(0.01
)
$
(0.23
)
$
1.09
Weighted average number of common shares:
Basic
36,330,653
33,996,324
35,531,149
33,223,792
Diluted
37,161,862
33,996,324
35,531,149
33,688,256
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. Adjusted net income is presented before the impacts of non-controlling interests.
We define Adjusted return on average equity as Adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholder’s equity during the period. We use Adjusted return on average equity as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted return on average equity should not be viewed as a substitute for return on average equity calculated in accordance with GAAP, and other companies may define adjusted return on average equity differently.
Three Months Ended December 31, 2022
Tiptree Capital
($ in thousands)
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
29,093
$
(2,476
)
$
10,935
$
(12,521
)
$
25,031
Less: Income tax (benefit) expense
(10,152
)
511
(2,076
)
(7,196
)
(18,913
)
Less: Net realized and unrealized gains (losses)
(2,804
)
973
(10,495
)
—
(12,326
)
Plus: Intangibles amortization (1)
4,083
—
—
—
4,083
Plus: Stock-based compensation expense
47
—
(98
)
1,656
1,605
Plus: Non-recurring expenses
1,813
—
140
—
1,953
Plus: Non-cash fair value adjustments
(939
)
—
1
—
(938
)
Less: Tax on adjustments (2)
2,798
(150
)
1,948
9,477
14,073
Adjusted net income
$
23,939
$
(1,142
)
$
355
$
(8,584
)
$
14,568
Adjusted net income
$
23,939
$
(1,142
)
$
355
$
(8,584
)
$
14,568
Average stockholders’ equity
$
326,431
$
55,726
$
70,628
$
73,789
$
526,574
Adjusted return on average equity
29.3
%
(8.2
) %
2.0
%
NM%
11.1
%
Three Months Ended December 31, 2021
Tiptree Capital
($ in thousands)
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
20,288
$
3,288
$
4,296
$
(16,981
)
$
10,891
Less: Income tax (benefit) expense
(7,281
)
(434
)
(642
)
(1,518
)
(9,875
)
Less: Net realized and unrealized gains (losses)
1,272
(723
)
421
—
970
Plus: Intangibles amortization (1)
3,830
—
—
—
3,830
Plus: Stock-based compensation expense
659
—
4
6,750
7,413
Plus: Non-recurring expenses
82
—
209
—
291
Plus: Non-cash fair value adjustments
—
—
(1,003
)
—
(1,003
)
Less: Tax on adjustments (2)
1,532
(182
)
(675
)
3,667
4,342
Adjusted net income
$
20,382
$
1,949
$
2,610
$
(8,082
)
$
16,859
Adjusted net income
$
20,382
$
1,949
$
2,610
$
(8,082
)
$
16,859
Average stockholders’ equity
$
299,236
$
62,065
$
119,016
$
(79,155
)
$
401,162
Adjusted return on average equity
27.2
%
12.6
%
8.8
%
NM%
16.8
%
Year Ended December 31, 2022
Tiptree Capital
($ in thousands)
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
68,150
$
874
$
31,403
$
(46,416
)
$
54,011
Less: Income tax (benefit) expense
(21,251
)
(363
)
(5,545
)
(23,291
)
(50,450
)
Less: Net realized and unrealized gains (losses)
20,347
(7,003
)
(18,788
)
—
(5,444
)
Plus: Intangibles amortization (1)
16,229
—
—
—
16,229
Plus: Stock-based compensation expense
2,423
—
—
7,093
9,516
Plus: Non-recurring expenses
3,374
—
(729
)
2,108
4,753
Plus: Non-cash fair value adjustments
(939
)
—
3,555
—
2,616
Less: Tax on adjustments (2)
(4,501
)
1,834
3,731
31,106
32,170
Adjusted net income
$
83,832
$
(4,658
)
$
13,627
$
(29,400
)
$
63,401
Adjusted net income
$
83,832
$
(4,658
)
$
13,627
$
(29,400
)
$
63,401
Average stockholders’ equity
$
321,320
$
57,575
$
98,373
$
(10,390
)
$
466,878
Adjusted return on average equity
26.1
%
(8.1
) %
13.9
%
NM %
13.6
%
Year Ended December 31, 2021
Tiptree Capital
($ in thousands)
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
69,857
$
28,407
$
17,210
$
(50,132
)
$
65,342
Less: Income tax (benefit) expense
(18,438
)
(4,882
)
(1,992
)
4,021
(21,291
)
Less: Net realized and unrealized gains (losses)
(3,732
)
(5,798
)
(3,091
)
—
(12,621
)
Plus: Intangibles amortization (1)
15,329
—
—
—
15,329
Plus: Stock-based compensation expense
2,006
331
213
8,581
11,131
Plus: Non-recurring expenses
2,158
—
938
2,171
5,267
Plus: Non-cash fair value adjustments
—
—
(3,170
)
—
(3,170
)
Less: Tax on adjustments (2)
(398
)
(624
)
655
4,249
3,882
Adjusted net income
$
66,782
$
17,434
$
10,763
$
(31,110
)
$
63,869
Adjusted net income
$
66,782
$
17,434
$
10,763
$
(31,110
)
$
63,869
Average stockholders’ equity
$
300,820
$
60,433
$
113,717
$
(88,111
)
$
386,859
Adjusted return on average equity
22.2
%
28.8
%
9.5
%
NM%
16.5
%
Notes
(1)
Specifically associated with acquisition purchase accounting. See Note (9) Goodwill and Intangible Assets, net, of the Company’s Form 10-K for the period ended December 31, 2022.
(2)
Tax on adjustments represents the tax applied to the total non-GAAP adjustments and includes adjustments for non-recurring or discrete tax impacts. For the three months and year ended December 31, 2022, included in the adjustment is an add-back of $9.0 million and $33.1 million, respectively, related to deferred tax expense from the WP Transaction.
Non-GAAP Financial Measures — Book value per share
Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders’ equity and total shares outstanding, net of treasury shares.
($ in thousands, except per share information)
As of December 31,
2022
2021
Total stockholders’ equity
$
533,573
$
400,181
Less: Non-controlling interests
136,208
17,227
Total stockholders’ equity, net of non-controlling interests
$
397,365
$
382,954
Total common shares outstanding
36,385
34,124
Book value per share
$
10.92
$
11.22
View source version on businesswire.com: https://www.businesswire.com/news/home/20230308005160/en/
Tiptree Inc. Investor Relations, 212-446-1400 ir@tiptreeinc.com
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