American Coastal Insurance Corporation Reports Financial Results for Its Third Quarter Ended September 30, 2023
American Coastal Insurance Corporation (Nasdaq: ACIC) announced its financial results for Q3 2023, reporting a 0.7% increase in gross premiums written and a 19.8% increase in gross premiums earned. The company's net premiums earned decreased by 20.5%. The CEO highlighted the increase in book value per share and a core return on equity of 170.3%, emphasizing the company's outperformance and focus on expense reduction.
Positive
The company reported a 0.7% increase in gross premiums written and a 19.8% increase in gross premiums earned, showcasing growth in the business. The CEO emphasized the increase in book value per share and a core return on equity of 170.3%, reflecting a strong performance and focus on expense reduction.
11/13/2023 - 04:05 PM
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 .
ST. PETERSBURG, Fla. --(BUSINESS WIRE)--
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
(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 $2.78 170.3% , with $14.4 million $5.5 million $10.6 million $3.8 million
Return on Equity and Core Return on Equity
The calculations of the Company's return on equity and core return on equity are shown below.
($ 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 $0.24 $70.9 million $1.65 $14.4 million $41.8 million $27.4 million $3.8 million
The Company's total gross written premium increased by $0.7 million 0.7% , to $103.9 million $103.2 million
($ 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 73.9% , to $13.8 million $52.8 million 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 40.0% , to $15.6 million $26.0 million
Operating and underwriting expenses decreased by $324 thousand 10.4% , to $2.8 million $3.1 million
General and administrative expenses decreased by $9.9 million 61.9% , to $6.1 million $16.0 million $10,157,000
Commercial Lines Operating Segment Highlights
Pre-tax earnings attributable to the Company's commercial lines operating segment totaled $25.9 million $1.8 million $24.4 million $8.8 million
This decrease in Loss and LAE incurred was partially offset by decreased revenues of $9.2 million $184 thousand
Personal Lines Operating Segment Highlights
Pre-tax loss attributable to the Company's personal lines operating segment totaled $5.5 million $26.5 million $9.5 million $1.6 million $14.6 million $312 thousand
These decreases were partially offset by a $4.8 million
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 $286.9 million 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) $2.78 195.3% from $(3.49) $3.33
($ 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
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, $0.00 01
—
—
Common stock, $0.00 01
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
abaty@amcoastal.com
Karin Daly
kdaly@equityny.com
Source: American Coastal Insurance Corporation
What are the financial results announced by American Coastal Insurance Corporation for Q3 2023?
American Coastal Insurance Corporation reported a 0.7% increase in gross premiums written and a 19.8% increase in gross premiums earned, along with a 20.5% decrease in net premiums earned.
What is the core return on equity mentioned in the press release?
The core return on equity was reported as 170.3%, indicating a strong performance and focus on expense reduction.
How did the book value per share change for American Coastal Insurance Corporation?
The book value per share increased to $2.78, reflecting positive growth for the company.
What was the total revenue reported for Q3 2023?
The total revenue for Q3 2023 was $58.7 million, showing a decrease of 19.3% compared to the same period last year.
What is the impact of non-cash amortization of intangible assets and goodwill impairment on core income?
The impact of non-cash amortization of intangible assets and goodwill impairment on core income was a decrease of 92.6% for the three months ended September 30, 2023.
How did the loss ratio change for the personal lines operating segment?
The loss ratio for the personal lines operating segment decreased from 173.1% to 71.2%, showing improvement in the segment's performance.
What was the net income attributable to the Company for Q3 2023?
The net income attributable to the Company for Q3 2023 was $10.6 million, compared to a net loss of $70.9 million for Q3 2022.
How did the company's gross written premium change for Q3 2023?
The total gross written premium increased by $0.7 million, or 0.7%, to $103.9 million for Q3 2023, driven primarily by an increase in commercial premiums written.
What was the pre-tax earnings for the commercial lines operating segment in Q3 2023?
The pre-tax earnings for the commercial lines operating segment totaled $25.9 million for Q3 2023, showing a significant increase from the same period in 2022.
