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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 three and nine months ended September 30, 2022.
Third Quarter 2022 Summary
Third Quarter
Nine Months
($ in thousands, except per share information)
2022
2021
2022
2021
Total revenues
$
363,478
$
286,605
$
1,028,224
$
880,980
Net income (loss) attributable to common stockholders
$
14,223
$
2,008
$
(9,145
)
$
38,558
Diluted earnings per share
$
0.38
$
0.06
$
(0.26
)
$
1.11
Cash dividends paid per common share
$
0.04
$
0.04
$
0.12
$
0.12
Return on average equity
15.4
%
3.3
%
(0.7
)%
14.8
%
Non-GAAP: (1)
Adjusted net income
$
19,395
$
20,730
$
48,833
$
47,010
Adjusted return on average equity
14.8
%
20.5
%
14.2
%
16.2
%
Book value per share
$
10.68
$
11.37
$
10.68
$
11.37
(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.
Nine Months 2022 Summary
Segment Financial Highlights - Third Quarter 2022
Insurance (The Fortegra Group):
Third Quarter
Nine Months
($ in thousands)
2022
2021
2022
2021
Gross written premiums and premium equivalents
$
761,446
$
588,063
$
1,956,998
$
1,618,076
Revenues
$
327,028
$
246,706
$
903,388
$
721,524
Income before taxes
$
15,304
$
13,337
$
39,057
$
49,569
Return on average equity
14.4
%
13.7
%
12.1
%
17.3
%
Combined ratio
91.5
%
89.6
%
91.0
%
91.0
%
Non-GAAP: (1)
Adjusted net income
$
19,831
$
19,533
$
59,893
$
46,400
Adjusted return on average equity
24.8
%
26.8
%
25.8
%
20.9
%
(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:
Third Quarter
Nine Months
($ in thousands)
2022
2021
2022
2021
Revenues
$
36,450
$
39,899
$
124,836
$
159,456
Income before taxes
$
18,136
$
1,567
$
23,817
$
38,033
Return on average equity
40.3
%
6.8
%
17.0
%
24.9
%
Non-GAAP: (1)
Adjusted net income
$
4,879
$
9,483
$
9,756
$
23,638
Adjusted return on average equity
13.8
%
20.2
%
8.5
%
18.2
%
(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, and public company and other expenses. For the quarter, corporate expenses were $8.3 million compared to $11.3 million in Q3'21 and for the year were $33.9 million compared to $33.2 million. The decrease in the quarter was driven by lower incentive compensation expense and interest expense as we repaid our corporate holding company borrowings in June 2022. Effective November 1, 2022, Tiptree has relocated its headquarters to 660 Steamboat Road, Greenwich, CT 06830.
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 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, November 3, 2022 at 9:00 a.m. Eastern Time to discuss its Q3 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 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 1-855-327-6837 (domestic) or 1-631-891-4304 (international). Please dial in at least five minutes prior to the start time.
A replay of the call will be available from Thursday, November 3, 2022 at 12:00 p.m. Eastern Time, until midnight Eastern on Thursday, November 10, 2022. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 10020271.
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
September 30, 2022
December 31, 2021
Assets:
Investments:
Available for sale securities, at fair value, net of allowance for credit losses
$
584,081
$
577,448
Loans, at fair value
70,784
105,583
Equity securities
85,103
138,483
Other investments
76,535
168,656
Total investments
816,503
990,170
Cash and cash equivalents
503,488
175,718
Restricted cash
10,344
19,368
Notes and accounts receivable, net
481,985
454,369
Reinsurance receivables
1,194,327
880,836
Deferred acquisition costs
485,199
379,373
Goodwill
185,944
179,103
Intangible assets, net
120,340
122,758
Other assets
162,118
146,844
Assets held for sale
33,836
250,608
Total assets
$
3,994,084
$
3,599,147
Liabilities and Stockholders’ Equity
Liabilities:
Debt, net
$
266,255
$
393,349
Unearned premiums
1,349,357
1,123,952
Policy liabilities and unpaid claims
512,924
331,703
Deferred revenue
628,876
534,863
Reinsurance payable
317,199
265,569
Other liabilities and accrued expenses
399,899
306,536
Liabilities held for sale
—
242,994
Total liabilities
$
3,474,510
$
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, 36,247,257 and 34,124,153 shares issued and outstanding, respectively
36
34
Additional paid-in capital
380,196
317,459
Accumulated other comprehensive income (loss), net of tax
(47,670
)
(2,685
)
Retained earnings
54,717
68,146
Total Tiptree Inc. stockholders’ equity
387,279
382,954
Non-controlling interests:
Fortegra preferred interests
77,679
—
Common interests
54,616
17,227
Total non-controlling interests
132,295
17,227
Total stockholders’ equity
519,574
400,181
Total liabilities and stockholders’ equity
$
3,994,084
$
3,599,147
Tiptree Inc.
Condensed Consolidated Statements of Operations
($ in thousands, except share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021
Revenues:
Earned premiums, net
$
237,877
$
175,026
$
662,234
$
498,903
Service and administrative fees
83,423
69,664
232,883
191,414
Ceding commissions
4,023
2,722
9,886
8,827
Net investment income
3,632
3,330
10,164
9,331
Net realized and unrealized gains (losses)
17,159
14,805
50,050
120,268
Other revenue
17,364
21,058
63,007
52,237
Total revenues
363,478
286,605
1,028,224
880,980
Expenses:
Policy and contract benefits
121,242
80,831
330,353
237,198
Commission expense
137,559
104,392
382,435
292,580
Employee compensation and benefits
38,210
48,643
142,927
147,260
Interest expense
5,503
8,657
24,837
26,890
Depreciation and amortization
5,549
6,119
17,714
18,261
Other expenses
30,290
34,379
100,978
104,340
Total expenses
338,353
283,021
999,244
826,529
Income (loss) before taxes
25,125
3,584
28,980
54,451
Less: provision (benefit) for income taxes
5,068
237
31,537
11,416
Net income (loss)
20,057
3,347
(2,557
)
43,035
Less: net income (loss) attributable to non-controlling interests
5,834
1,339
6,588
4,477
Net income (loss) attributable to common stockholders
$
14,223
$
2,008
$
(9,145
)
$
38,558
Net income (loss) per common share:
Basic earnings per share
$
0.39
$
0.06
$
(0.26
)
$
1.15
Diluted earnings per share
$
0.38
$
0.06
$
(0.26
)
$
1.11
Weighted average number of common shares:
Basic
36,304,385
33,558,106
35,261,659
32,963,451
Diluted
36,783,248
34,132,182
35,261,659
35,025,211
Dividends declared per common share
$
0.04
$
0.04
$
0.12
$
0.12
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 September 30, 2022
Tiptree Capital
($ in thousands)
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
15,304
$
(940
)
$
19,077
$
(8,316
)
$
25,125
Less: Income tax (benefit) expense
(3,765
)
92
(3,963
)
2,568
(5,068
)
Less: Net realized and unrealized gains (losses)
6,382
(82
)
(12,694
)
—
(6,394
)
Plus: Intangibles amortization (1)
4,115
—
—
—
4,115
Plus: Stock-based compensation expense
33
—
75
1,588
1,696
Plus: Non-recurring expenses
89
—
53
—
142
Plus: Non-cash fair value adjustments
—
—
(130
)
—
(130
)
Less: Tax on adjustments (2)
(2,327
)
153
3,238
(1,155
)
(91
)
Adjusted net income
$
19,831
$
(777
)
$
5,656
$
(5,315
)
$
19,395
Adjusted net income
$
19,831
$
(777
)
$
5,656
$
(5,315
)
$
19,395
Average stockholders’ equity
$
319,703
$
57,133
$
84,445
$
61,178
$
522,459
Adjusted return on average equity
24.8
%
(5.4
)%
26.8
%
NM%
14.8
%
Three Months Ended September 30, 2021
Tiptree Capital
($ in thousands)
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
13,337
$
6,267
$
(4,700
)
$
(11,320
)
$
3,584
Less: Income tax (benefit) expense
(3,394
)
14
1,591
1,552
(237
)
Less: Net realized and unrealized gains (losses)
7,428
(1,055
)
10,396
—
16,769
Plus: Intangibles amortization (1)
3,830
—
—
—
3,830
Plus: Stock-based compensation expense
475
—
197
832
1,504
Plus: Non-recurring expenses
(28
)
—
448
—
420
Plus: Non-cash fair value adjustments
—
—
(815
)
—
(815
)
Less: Tax on adjustments (2)
(2,115
)
(1,265
)
(1,595
)
650
(4,325
)
Adjusted net income
$
19,533
$
3,961
$
5,522
$
(8,286
)
$
20,730
Adjusted net income
$
19,533
$
3,961
$
5,522
$
(8,286
)
$
20,730
Average stockholders’ equity
$
291,281
$
68,925
$
118,729
$
(75,340
)
$
403,595
Adjusted return on average equity
26.8
%
23.0
%
18.6
%
NM%
20.5
%
Nine Months Ended September 30, 2022
Tiptree Capital
($ in thousands)
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
39,057
$
3,350
$
20,468
$
(33,895
)
$
28,980
Less: Income tax (benefit) expense
(11,099
)
(874
)
(3,469
)
(16,095
)
(31,537
)
Less: Net realized and unrealized gains (losses)
23,151
(7,976
)
(8,293
)
—
6,882
Plus: Intangibles amortization (1)
12,146
—
—
—
12,146
Plus: Stock-based compensation expense
2,376
—
98
5,437
7,911
Plus: Non-recurring expenses
1,561
—
(869
)
2,108
2,800
Plus: Non-cash fair value adjustments
—
—
3,554
—
3,554
Less: Tax on adjustments (2)
(7,299
)
1,984
1,783
21,629
18,097
Adjusted net income
$
59,893
$
(3,516
)
$
13,272
$
(20,816
)
$
48,833
Adjusted net income
$
59,893
$
(3,516
)
$
13,272
$
(20,816
)
$
48,833
Average stockholders’ equity
$
309,042
$
58,558
$
94,169
$
(1,891
)
$
459,878
Adjusted return on average equity
25.8
%
(8.0
)%
18.8
%
NM%
14.2
%
Nine Months Ended September 30, 2021
Tiptree Capital
($ in thousands)
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
49,569
$
25,119
$
12,914
$
(33,151
)
$
54,451
Less: Income tax (benefit) expense
(11,157
)
(4,448
)
(1,350
)
5,539
(11,416
)
Less: Net realized and unrealized gains (losses)
(5,004
)
(5,075
)
(3,512
)
—
(13,591
)
Plus: Intangibles amortization (1)
11,499
—
—
—
11,499
Plus: Stock-based compensation expense
1,347
331
209
1,831
3,718
Plus: Non-recurring expenses
2,076
—
729
2,171
4,976
Plus: Non-cash fair value adjustments
—
—
(2,167
)
—
(2,167
)
Less: Tax on adjustments (2)
(1,930
)
(442
)
1,330
582
(460
)
Adjusted net income
$
46,400
$
15,485
$
8,153
$
(23,028
)
$
47,010
Adjusted net income
$
46,400
$
15,485
$
8,153
$
(23,028
)
$
47,010
Average stockholders’ equity
$
296,125
$
62,093
$
110,818
$
(81,196
)
$
387,840
Adjusted return on average equity
20.9
%
33.3
%
9.8
%
NM%
16.2
%
Notes
(1)
Specifically associated with acquisition purchase accounting. See Note (9) Goodwill and Intangible Assets, net, of the Company’s Form 10-Q for the period ended September 30, 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 and nine months ended September 30, 2022, included in the adjustment is an add-back of $(1.4) million and $24.1 million, respectively, related to deferred tax expense from the WP Transaction.
Non-GAAP Financial Measures — Book value per share
Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders’ equity and total shares outstanding, net of treasury shares.
($ in thousands, except per share information)
As of September 30,
2022
2021
Total stockholders’ equity
$
519,574
$
402,142
Less: Non-controlling interests
132,295
16,930
Total stockholders’ equity, net of non-controlling interests
$
387,279
$
385,212
Total common shares outstanding
36,247
33,889
Book value per share
$
10.68
$
11.37
View source version on businesswire.com: https://www.businesswire.com/news/home/20221101006312/en/
Tiptree Inc. Investor Relations, 212-446-1400 ir@tiptreeinc.com
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