EX-99.1 2 ex991er-09302024.htm EX-99.1 Document

Exhibit 99.1

tiptree_logoxupdated.jpg
TIPTREE ANNOUNCES THIRD QUARTER 2024 RESULTS
Greenwich, Connecticut - October 30, 2024 - Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), today announced its financial results for the three and nine months ended September 30, 2024.

Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands, except per share information)2024202320242023
Total revenues$494,362 $416,514 $1,539,256 $1,202,657 
Net income (loss) attributable to common stockholders$11,915 $2,153 $33,816 $7,080 
Diluted earnings per share$0.29 $0.04 $0.83 $0.18 
Cash dividends paid per common share$0.06 $0.05 $0.18 $0.15 
Return on average equity10.6 %2.2 %10.3 %2.4 %
Non-GAAP: (1)
Adjusted net income
$27,872 $17,874 $72,827 $48,063 
Adjusted return on average equity24.8 %17.9 %22.1 %16.2 %
(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures. Adjusted net income is presented after the impacts of non-controlling interests.

Third Quarter 2024 Summary

•Revenues of $494.4 million for the quarter, an increase of 18.7% from Q3'23, driven by growth in Fortegra’s specialty insurance lines. Excluding investment gains and losses, revenues increased 17.2%.

•Net income of $11.9 million compared to a net income of $2.2 million in Q3'23, driven by growth in our insurance business.

•Adjusted net income of $27.9 million increased by 55.9% from $17.9 million in Q3'23, driven by growth in insurance revenues while maintaining a consistent combined ratio. Annualized adjusted return on average equity was 24.8% for the quarter, as compared to 17.9% in Q3'23.

•Declared a dividend of $0.06 per share to stockholders of record on November 18, 2024 with a payment date of November 25, 2024.

Year-to-date 2024 Summary

•Year-to-date revenues of $1.54 billion, an increase of 28.0% from 2023, driven by growth in specialty insurance lines, net investment income, investment gains, and mortgage revenues. Excluding investment gains and losses, revenues increased 25.8%.

•Net income of $33.8 million compared to net income of $7.1 million in 2023, driven by growth in our insurance business and improved mortgage operations.

•Adjusted net income of $72.8 million increased by 51.5% from $48.1 million in 2023. Adjusted return on average equity was 22.1% for the year, as compared to 16.2% in 2023.

Page 1


•In March and April 2024, Tiptree, Warburg and Fortegra directors contributed $30.0 million, $9.9 million, and $0.1 million, respectively, to Fortegra in exchange for Fortegra Common Stock. As of September 30, 2024, Fortegra was owned approximately 79.3% by Tiptree, 17.7% by Warburg and 3.0% by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and management options and the conversion of outstanding preferred stock.

Segment Financial Highlights - Third Quarter 2024

Insurance (The Fortegra Group):
Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands)2024202320242023
Gross written premiums and premium equivalents$776,847 $686,509 $2,216,323 $2,023,730 
Net written premiums$389,273 $333,921 $1,073,321 $935,639 
Total revenues$481,013 $406,779 $1,489,711 $1,159,900 
Income before taxes$47,209 $35,722 $135,270 $85,584 
Return on average equity24.3 %27.5 %25.1 %22.9 %
Combined ratio90.2 %90.2 %90.2 %90.5 %
Non-GAAP: (1)
Adjusted net income (before NCI)$40,042 $30,043 $114,491 $83,101 
Adjusted return on average equity27.7 %31.2 %28.8 %30.3 %
(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.

•Gross written premiums and premium equivalents of $776.8 million for the quarter, an increase of 13.2%, and $2.22 billion for the year, an increase of 9.5%, driven by growth in specialty E&S insurance lines.

•Net written premiums were $389.3 million for the quarter, an increase of 16.6%, and $1.07 billion for the year, an increase of 14.7%. The increases in both periods were consistent with the growth in gross written premiums and premium equivalents and increased retention on Fortegra’s whole account quota share reinsurance agreement.

•Revenues increased 18.2% for the quarter and 28.4% for the year driven by premium growth in specialty E&S and admitted lines. Excluding the impact of investment gains and losses, revenues increased by 17.2% for the quarter and 26.6% for the year.

•The combined ratio for the quarter was 90.2%, flat to Q3’23, reflecting the consistent underwriting performance and scalability of the Company’s operations. Year-to-date combined ratio was 90.2%, as compared to 90.5% in 2023.

•Income before taxes was $47.2 million for the quarter, an increase of 32.2%. Year-to-date income before taxes was $135.3 million, an increase of 58.1%. Annualized after-tax return on average equity for the year was 25.1%, compared to 22.9% in 2023.

•Adjusted net income for the quarter of $40.0 million, up 33.3% from Q3'23. Year-to-date adjusted net income of $114.5 million, up 37.8%. Annualized adjusted return on average equity for the year was 28.8%, compared to 30.3% in 2023.

•Fortegra’s total stockholders’ equity was $606.4 million as of September 30, 2024, compared to $452.6 million as of December 31, 2023, with the increase driven by net income and the aggregate capital contribution from Tiptree, Warburg and Fortegra directors of $40 million, and a decrease in the accumulated other comprehensive loss position.

Tiptree Capital:
Page 2


Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands)2024202320242023
Total revenues$13,349 $9,735 $49,545 $42,757 
Income before taxes$(2,692)$(6,135)$1,794 $(4,491)
Return on average equity(9.0)%(10.4)%0.8 %(3.2)%
Non-GAAP: (1)
Adjusted net income$1,401 $(322)$2,101 $248 
Adjusted return on average equity4.9 %(0.7)%1.9 %0.2 %
(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 loss before taxes was $2.7 million for the quarter, compared to a loss of $6.1 million in Q3'23, driven by unrealized investment losses. For the year, income before taxes was $1.8 million, compared to a loss of $4.5 million in 2023, with the comparative improvement driven by gains on securities in the Company’s investment holdings and a reduction of investment losses on Invesque.

•Mortgage loss before taxes was $0.1 million for the quarter, as compared to an income of $0.4 million in Q3'23, and an income of $1.2 million for the year, as compared to a loss of $0.9 million in 2023, driven by higher origination volumes and loan servicing fees, partially offset by unrealized losses on our mortgage servicing asset.

Corporate:

Corporate includes expenses of the holding company for employee compensation and benefits, audit and professional fees, and public company and other expenses. For the quarter, corporate expenses were $7.7 million compared to $8.4 million in Q3'23 driven by decreased professional fees, lease and insurance expense.

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, all of which is reduced for non-controlling interests. 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, October 31, 2024 at 10:30 a.m. Eastern Time to discuss its Q3 2024 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company’s website, located at www.tiptreeinc.com.

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

A replay of the call will be available from Thursday, October 31, 2024 at 1:30 p.m. Eastern Time, until midnight Eastern on Thursday, November 7, 2024. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13748819.
Page 3



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, Tiptree has a significant track record investing across a variety of industries and asset types, including the insurance, asset management, specialty finance, real estate and shipping sectors. With proprietary access and a flexible capital base, Tiptree seeks 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. In addition, we make certain forward-looking statements regarding the Company’s plans to take Fortegra public. Any initial public offering by Fortegra would be subject to a variety of factors, including market conditions, and may not be consummated. 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.
Page 4


Tiptree Inc.
Condensed Consolidated Balance Sheets
($ in thousands, except share data)
As of
September 30,
2024		December 31, 2023
Assets:
Investments:
Available for sale securities, at fair value, net of allowance for credit losses$1,010,067 $802,609 
Loans, at fair value81,816 69,556 
Equity securities95,330 68,308 
Other investments59,250 111,088 
Total investments1,246,463 1,051,561 
Cash and cash equivalents 396,187 468,711 
Restricted cash108,183 23,850 
Notes and accounts receivable, net789,624 684,608 
Reinsurance recoverable
932,656 953,886 
Prepaid reinsurance premiums
978,149 900,524 
Deferred acquisition costs570,923 565,746 
Goodwill208,565 206,155 
Intangible assets, net108,482 118,757 
Other assets166,501 165,515 
Total assets$5,505,733 $5,139,313 
Liabilities and Stockholders’ Equity
Liabilities:
Debt, net$388,523 $402,411 
Unearned premiums1,709,966 1,695,058 
Policy liabilities and unpaid claims1,192,857 844,848 
Deferred revenue692,389 673,085 
Reinsurance payable458,610 543,602 
Other liabilities and accrued expenses407,188 403,744 
Total liabilities$4,849,533 $4,562,748 
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, 36,789,571 and 36,756,187 shares issued and outstanding, respectively
37 37 
Additional paid-in capital389,275 382,239 
Accumulated other comprehensive income (loss), net of tax(15,171)(26,073)
Retained earnings87,805 60,663 
Total Tiptree Inc. stockholders’ equity461,946 416,866 
Non-controlling interests:
Fortegra preferred interests77,679 77,679 
Common interests116,575 82,020 
Total non-controlling interests194,254 159,699 
Total stockholders’ equity656,200 576,565 
Total liabilities and stockholders’ equity$5,505,733 $5,139,313 

Page 5


Tiptree Inc.
Condensed Consolidated Statements of Operations
($ in thousands, except share data)
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2024202320242023
Revenues:
Earned premiums, net$359,496 $291,293 $1,105,273 $826,418 
Service and administrative fees95,362 100,146 311,696 290,291 
Ceding commissions3,716 2,440 11,525 10,761 
Net investment income9,111 5,416 22,250 19,613 
Net realized and unrealized gains (losses)8,316 1,457 36,518 12,459 
Other revenue18,361 15,762 51,994 43,115 
Total revenues494,362 416,514 1,539,256 1,202,657 
Expenses:
Policy and contract benefits203,442 153,966 645,081 443,375 
Commission expense154,005 153,744 484,232 442,893 
Employee compensation and benefits52,335 45,663 151,438 130,844 
Interest expense7,614 6,716 23,919 20,225 
Depreciation and amortization5,395 6,347 16,254 17,475 
Other expenses34,790 28,937 111,206 94,857 
Total expenses457,581 395,373 1,432,130 1,149,669 
Income (loss) before taxes36,781 21,141 107,126 52,988 
Less: provision (benefit) for income taxes16,308 12,273 48,799 29,119 
Net income (loss)20,473 8,868 58,327 23,869 
Less: net income (loss) attributable to non-controlling interests8,558 6,715 24,511 16,789 
Net income (loss) attributable to common stockholders$11,915 $2,153 $33,816 $7,080 
Net income (loss) per common share:
Basic earnings per share$0.32 $0.06 $0.91 $0.19 
Diluted earnings per share$0.29 $0.04 $0.83 $0.18 
Weighted average number of common shares:
Basic36,789,571 36,749,199 36,781,408 36,672,120 
Diluted37,818,491 37,684,131 37,784,637 37,569,405 
Dividends declared per common share$0.06 $0.05 $0.18 $0.15 
Page 6


Tiptree Inc.
Non-GAAP Reconciliations (Unaudited)

Non-GAAP Financial Measures — Adjusted net income and Adjusted return on average equity

Adjusted net income is defined 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, all of which is reduced for non-controlling interests. The calculation of adjusted net income excludes net realized and unrealized gains (losses) that relate to investments or assets rather than business operations. Adjusted net income is presented before the impacts of non-controlling interests. Adjusted return on average equity represents adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. 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. We believe adjusted net income provides additional clarity on the results of the Company’s underlying business operations as a whole for the periods presented by excluding distortions created by the unpredictability and volatility of realized and unrealized gains (losses). We also 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.
Three Months Ended September 30, 2024
Tiptree Capital
($ in thousands)InsuranceMortgageOtherCorporateTotal
Income (loss) before taxes$47,209 $(89)$(2,603)$(7,736)$36,781 
Less: Income tax (benefit) expense(12,114)32 104 (4,330)(16,308)
Less: Net realized and unrealized gains (losses) (1)
(2,218)1,877 2,764 — 2,423 
Plus: Intangibles amortization (2)
3,859 — — — 3,859 
Plus: Stock-based compensation expense4,195 — — 1,762 5,957 
Plus: Non-recurring expenses (3)
119 — — — 119 
Plus: Non-cash fair value adjustments (4)
946 — — — 946 
Plus: Impact of tax deconsolidation of Fortegra(5)
— — — 5,907 5,907 
Less: Tax on adjustments (6)
(1,954)(461)(223)(860)(3,498)
Adjusted net income (before NCI)
$40,042 $1,359 $42 $(5,257)$36,186 
Less: Impact of non-controlling interests(8,314)— — — (8,314)
Adjusted net income
$31,728 $1,359 $42 $(5,257)$27,872 
Adjusted net income (before NCI)$40,042 $1,359 $42 $(5,257)$36,186 
Average stockholders’ equity$577,776 $53,272 $59,943 $(53,856)$637,135 
Adjusted return on average equity (7)
27.7 %10.2 %0.3 %NM%22.7 %
Three Months Ended September 30, 2023
Tiptree Capital
($ in thousands)InsuranceMortgageOtherCorporateTotal
Income (loss) before taxes$35,722 $359 $(6,494)$(8,446)$21,141 
Less: Income tax (benefit) expense(9,261)(76)1,179 (4,115)(12,273)
Less: Net realized and unrealized gains (losses) (1)
1,616 (788)6,625 — 7,453 
Plus: Intangibles amortization (2)
4,878 — — — 4,878 
Plus: Stock-based compensation expense717 — — 1,246 1,963 
Plus: Non-recurring expenses (3)
113 — — — 113 
Plus: Non-cash fair value adjustments (4)
(2,447)— — — (2,447)
Plus: Impact of tax deconsolidation of Fortegra (5)
— — — 4,396 4,396 
Less: Tax on adjustments (6)
(1,295)178 (1,305)1,231 (1,191)
Adjusted net income (before NCI)
$30,043 $(327)$5 $(5,688)$24,033 
Less: Impact of non-controlling interests
(6,159)— — — (6,159)
Adjusted net income
$23,884 $(327)$5 $(5,688)$17,874 
Adjusted net income (before NCI)$30,043 $(327)$5 $(5,688)$24,033 
Average stockholders’ equity$385,266 $53,939 $139,786 $(34,169)$544,822 
Adjusted return on average equity (7)
31.2 %(2.4)%— %NM%17.6 %
Page 7


Nine Months Ended September 30, 2024
Tiptree Capital
($ in thousands)InsuranceMortgageOtherCorporateTotal
Income (loss) before taxes$135,270 $1,192 $602 $(29,938)$107,126 
Less: Income tax (benefit) expense(35,604)(244)(704)(12,247)(48,799)
Less: Net realized and unrealized gains (losses) (1)
(7,582)428 726 — (6,428)
Plus: Intangibles amortization (2)
11,557 — — — 11,557 
Plus: Stock-based compensation expense5,999 — — 7,190 13,189 
Plus: Non-recurring expenses (3)
3,455 — — — 3,455 
Plus: Non-cash fair value adjustments (4)
6,018 — — — 6,018 
Plus: Impact of tax deconsolidation of Fortegra (5)
— — — 16,729 16,729 
Less: Tax on adjustments (6)
(4,622)(145)246 (1,752)(6,273)
Adjusted net income (before NCI)
$114,491 $1,231 $870 $(20,018)$96,574 
Less: Impact of non-controlling interests
(23,747)— — — (23,747)
Adjusted net income
$90,744 $1,231 $870 $(20,018)$72,827 
Adjusted net income (before NCI)$114,491 $1,231 $870 $(20,018)$96,574 
Average stockholders’ equity$529,486 $52,771 $91,263 $(57,137)$616,383 
Adjusted return on average equity (7)
28.8 %3.1 %1.3 %NM%20.9 %
Nine Months Ended September 30, 2023
Tiptree Capital
($ in thousands)InsuranceMortgageOtherCorporateTotal
Income (loss) before taxes$85,584 $(894)$(3,597)$(28,105)$52,988 
Less: Income tax (benefit) expense(22,936)231 419 (6,833)(29,119)
Less: Net realized and unrealized gains (losses) (1)
10,602 (933)5,885 — 15,554 
Plus: Intangibles amortization (2)
12,667 — — — 12,667 
Plus: Stock-based compensation expense1,238 — — 5,032 6,270 
Plus: Non-recurring expenses (3)
2,476 — — — 2,476 
Plus: Non-cash fair value adjustments (4)
(2,611)— — — (2,611)
Plus: Impact of tax deconsolidation of Fortegra (5)
— — — 10,210 10,210 
Less: Tax on adjustments (6)
(3,919)207 (1,070)1,468 (3,314)
Adjusted net income (before NCI)
$83,101 $(1,389)$1,637 $(18,228)$65,121 
Less: Impact of non-controlling interests(17,058)— — — (17,058)
Adjusted net income
$66,043 $(1,389)$1,637 $(18,228)$48,063 
Adjusted net income (before NCI)$83,101 $(1,389)$1,637 $(18,228)$65,121 
Average stockholders’ equity$365,375 $54,411 $103,332 $15,456 $538,574 
Adjusted return on average equity (7)
30.3 %(3.4)%2.1 %NM%16.1 %
Notes
(1)
Net realized and unrealized gains (losses) added back in Adjusted net income excludes net realized and unrealized gains (losses) from the mortgage segment and unrealized gains (losses) on mortgage servicing rights.
(2)
Specifically associated with acquisition purchase accounting. See Note (8) Goodwill and Intangible Assets, net, of the Company’s Form 10-Q for the period ended September 30, 2024.
(3)
For the three and nine months ended September 30, 2024 and 2023, included in other expenses were expenses related to legal and other expenses associated with preparation of the registration statement for the withdrawn Fortegra initial public offering in 2024 and acquisitions of services businesses in 2023.
(4)
For the three and nine months ended September 30, 2024 and 2023, non-cash fair-value adjustments represent a change in fair value of the Fortegra Additional Warrant liability which are added-back to adjusted net income.
(5)
For the three and nine months ended September 30, 2024 and 2023, included in the adjustment is an add-back of $5.9 million and $16.7 million, respectively, and $4.4 million and $10.2 million, respectively, related to deferred tax expense from the WP Transaction.
(6)Tax on adjustments represents the tax applied to the total non-GAAP adjustments and includes adjustments for non-recurring or discrete tax impacts.
(7)
Total Adjusted return on average equity after non-controlling interests was 24.8% and 17.9% for the three months ended September 30, 2024 and 2023, respectively, based on $27.9 million and $17.9 million of Adjusted net income over $449.2 million and $399.0 million of average Tiptree Inc. stockholders’ equity. Total Adjusted return on average equity after non-controlling interests was 22.1% and 16.2% for the nine months ended September 30, 2024 and 2023, respectively, based on $72.8 million and $48.1 million of Adjusted net income over $439.4 million and $396.7 million of average Tiptree Inc. stockholders’ equity.
Page 8