American Coastal (Nasdaq: ACIC) Q2 2026 profit dips as book value climbs
Rhea-AI Filing Summary
American Coastal Insurance Corporation reported Q2 2026 net income of $21.9 million, or $0.44 per diluted share, down from $26.4 million, or $0.53, in Q2 2025. Total revenue slipped to $82.6 million as gross premiums earned fell 16.2% and net premiums earned declined 11.1%, reflecting a 24% decrease in net pricing in a softening market.
Underwriting remained profitable, with a combined ratio of 74.3% and an underlying combined ratio of 68.7%, though both worsened year over year due to higher catastrophe losses and less favorable prior-year development. Core income dropped to $16.5 million, or $0.33 per diluted share, and core return on equity was 20.0%.
Capital metrics strengthened. Book value per share rose to $7.21, a 20.2% increase from $6.00 a year earlier, and underlying book value per share reached $7.39. Cash, cash equivalents, restricted cash and investments totaled $650.0 million, while reinsurance costs as a percentage of gross earned premium improved to a 49.8% ceding ratio from 52.6%.
Positive
- Despite softer pricing, underwriting was profitable with a 74.3% combined ratio and 68.7% underlying combined ratio, supporting a 20.0% core return on equity and lifting book value per share to $7.21, up 20.2% year over year.
- Book value strength was reinforced by an improved reinsurance profile: the total ceding ratio fell to 49.8% from 52.6%, and cash, cash equivalents, restricted cash and investments reached $650.0 million at June 30, 2026.
Negative
- Earnings momentum weakened as Q2 2026 consolidated net income fell to $21.9 million and core income to $16.5 million, declines of 17.2% and 38.5% year over year, driven by a 16.2% drop in gross premiums earned and lower net pricing.
- Profitability ratios deteriorated: the combined ratio rose to 74.3% from 60.6%, and the loss ratio increased to 27.0% from 19.8%, reflecting higher catastrophe losses and less favorable prior-year reserve development.
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FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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(Address of Principal Executive Offices) |
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Registrant’s Telephone Number, Including Area Code: |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 5, 2026, American Coastal Insurance Corporation (the Company, we, our) issued a press release relating to our earnings for the second quarter ended June 30, 2026 (the Earnings Release). We have attached a copy of the Earnings Release as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure.
The executive officers of the Company intend to use the materials filed herewith, in whole or in part, in one or more meetings with investors and analysts, beginning on August 5, 2026. A copy of the Earnings presentation is attached hereto as Exhibit 99.2.
The information furnished under this Item 2.02 and 7.01, including Exhibit 99.1 and Exhibit 99.2 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.
Item 9.01 Financial Statements and Exhibits.
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Exhibit No. |
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Description |
99.1 |
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Earnings release issued by the Company on August 5, 2026 |
99.2 |
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Earnings presentation issued by the Company on August 5, 2026 |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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AMERICAN COASTAL INSURANCE CORPORATION |
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Date: |
August 5, 2026 |
By: |
/s/ B. Bradford Martz |
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B. Bradford Martz, President & Chief Executive Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AMERICAN COASTAL INSURANCE CORPORATION REPORTS FINANCIAL RESULTS
FOR ITS SECOND QUARTER ENDED JUNE 30, 2026
Company to Host Quarterly Conference Call at 5:00 P.M. ET on August 5, 2026
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/events-and-presentations.
St. Petersburg, FL - August 5, 2026: American Coastal Insurance Corporation (Nasdaq: ACIC) ("ACIC" or the "Company"), a property and casualty insurance holding company, today reported its financial results for the second quarter ended June 30, 2026.
($ in thousands, except for per share data) |
Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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Change |
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2026 |
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2025 |
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Change |
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Gross premiums written |
$ |
216,304 |
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$ |
228,346 |
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(5.3 |
)% |
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$ |
365,699 |
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$ |
426,198 |
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(14.2 |
)% |
Gross premiums earned |
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138,730 |
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165,460 |
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(16.2 |
)% |
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279,864 |
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327,561 |
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(14.6 |
)% |
Net premiums earned |
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69,698 |
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78,443 |
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(11.1 |
)% |
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135,309 |
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146,715 |
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(7.8 |
)% |
Total revenue |
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82,597 |
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86,467 |
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(4.5 |
)% |
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153,821 |
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158,669 |
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(3.1 |
)% |
Income from continuing operations, net of tax |
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21,896 |
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28,037 |
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(21.9 |
)% |
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41,150 |
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47,748 |
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(13.8 |
)% |
Income (loss) from discontinued operations, net of tax |
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— |
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(1,595 |
) |
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NM |
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— |
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42 |
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NM |
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Consolidated net income |
$ |
21,896 |
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$ |
26,442 |
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(17.2 |
)% |
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$ |
41,150 |
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$ |
47,790 |
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(13.9 |
)% |
Net income available to ACIC stockholders per diluted share |
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Continuing Operations |
$ |
0.44 |
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$ |
0.56 |
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(21.4 |
)% |
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$ |
0.83 |
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$ |
0.96 |
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(13.5 |
)% |
Discontinued Operations |
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— |
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(0.03 |
) |
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NM |
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— |
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— |
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NM |
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Total |
$ |
0.44 |
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$ |
0.53 |
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(17.0 |
)% |
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$ |
0.83 |
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$ |
0.96 |
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(13.5 |
)% |
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Reconciliation of net income to core income: |
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Plus: Non-cash amortization of intangible assets |
$ |
610 |
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$ |
610 |
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— |
% |
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$ |
1,220 |
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$ |
1,219 |
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0.1 |
% |
Less: Income (loss) from discontinued operations, net of tax |
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— |
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(1,595 |
) |
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NM |
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— |
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42 |
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NM |
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Less: Net realized gains on investment portfolio |
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3,264 |
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— |
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NM |
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3,270 |
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1,382 |
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NM |
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Less: Unrealized gains on equity securities |
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4,233 |
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2,231 |
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89.7 |
% |
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4,761 |
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268 |
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NM |
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Less: Net tax impact (1) |
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(1,446 |
) |
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(340 |
) |
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NM |
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(1,430 |
) |
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(91 |
) |
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NM |
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Core income(2) |
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16,455 |
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26,756 |
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(38.5 |
)% |
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35,769 |
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47,408 |
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(24.6 |
)% |
Core income per diluted share (2) |
$ |
0.33 |
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$ |
0.54 |
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(38.9 |
)% |
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$ |
0.72 |
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$ |
0.96 |
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(25.0 |
)% |
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Book value per share |
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$ |
7.21 |
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$ |
6.00 |
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20.2 |
% |
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NM = Not Meaningful
(1) In order to reconcile net income to the core income measures, the Company included the tax impact of all adjustments using the 21% federal corporate tax rate.
(2) Core income and core income per diluted share, both of which are measures that are not based on generally accepted accounting principles ("GAAP"), are reconciled above to net income and net income 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.
1
Exhibit 99.1
Comments from President & Chief Executive Officer, B. Bradford Martz:
“Our second quarter reflects the discipline we've committed to at every stage of the market cycle. As Florida pricing comes off a generational peak, we remain focused on underwriting profitability rather than chasing new business at inadequate rates. That brought core income during the quarter to $16.5 million while still delivering a 68.7% underlying combined ratio and a 20% core return on equity, both among the best in the industry.
What matters most is that American Coastal got stronger. Book value per share grew more than 20% over the past year to $7.21, Kroll upgraded our rating during the quarter, and our June 1 reinsurance renewal secured broader protection at a lower cost that mitigates much of the impact of rate change on net premiums earned. We built the number one commercial-residential franchise in the peak zone for hurricane risk in the world, and our E&S growth platform is how we intend to take that same underwriting discipline into other classes of commercial property as well as new geographies. With E&S already adding $28.7 million of premium year to date and a track record of profitability every year since 2007, we're confident we can keep compounding value and extend our business to new markets with sustainable competitive advantages.”
Return on Equity and Core Return on Equity
The calculations of the Company's return on equity and core return on equity are shown below.
($ in thousands) |
Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Income from continuing operations, net of tax |
$ |
21,896 |
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$ |
28,037 |
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$ |
41,150 |
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$ |
47,748 |
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Return on equity based on GAAP income from continuing operations, net of tax (1) |
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26.6 |
% |
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43.6 |
% |
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25.0 |
% |
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37.1 |
% |
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Income (loss) from discontinued operations, net of tax |
$ |
— |
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$ |
(1,595 |
) |
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$ |
— |
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$ |
42 |
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Return on equity based on GAAP income (loss) from discontinued operations, net of tax (1) |
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— |
% |
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(2.5 |
)% |
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— |
% |
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— |
% |
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Consolidated net income |
$ |
21,896 |
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$ |
26,442 |
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$ |
41,150 |
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$ |
47,790 |
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Return on equity based on GAAP net income (1) |
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26.6 |
% |
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41.1 |
% |
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25.0 |
% |
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37.1 |
% |
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Core income |
$ |
16,455 |
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$ |
26,756 |
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$ |
35,769 |
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$ |
47,408 |
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Core return on equity (1)(2) |
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20.0 |
% |
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41.6 |
% |
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21.7 |
% |
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36.8 |
% |
(1) Return on equity for the three and six months ended June 30, 2026 and 2025 is calculated on an annualized basis by dividing the net income or core income 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, which is reconciled on the first page of this press release to net income, 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.
2
Exhibit 99.1
Combined Ratio and Underlying Ratio
The calculations of the Company's combined ratio and underlying combined ratio are shown below.
($ in thousands) |
Three Months Ended |
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Six Months Ended |
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2026 |
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2025 |
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Change |
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2026 |
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2025 |
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Change |
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Loss ratio, net(1) |
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27.0 |
% |
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19.8 |
% |
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7.2 |
|
pts |
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21.5 |
% |
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18.4 |
% |
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3.1 |
|
pts |
Expense ratio, net(2) |
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47.3 |
% |
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40.8 |
% |
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|
6.5 |
|
pts |
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48.8 |
% |
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44.3 |
% |
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|
4.5 |
|
pts |
Combined ratio (CR)(3) |
|
74.3 |
% |
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|
60.6 |
% |
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|
13.7 |
|
pts |
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70.3 |
% |
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|
62.7 |
% |
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|
7.6 |
|
pts |
Effect of current year catastrophe losses on CR |
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4.5 |
% |
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|
— |
% |
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|
4.5 |
|
pts |
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|
2.4 |
% |
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|
— |
% |
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|
2.4 |
|
pts |
Effect of prior year unfavorable (favorable) development on CR |
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1.1 |
% |
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(1.6 |
)% |
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|
2.7 |
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pts |
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(0.7 |
)% |
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(2.4 |
)% |
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|
1.7 |
|
pts |
Underlying combined ratio(4) |
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68.7 |
% |
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62.2 |
% |
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|
6.5 |
|
pts |
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68.6 |
% |
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65.0 |
% |
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3.6 |
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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) Combined ratio is the sum of the loss ratio, net, and expense ratio, net.
(4) 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.
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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Change |
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2026 |
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2025 |
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Change |
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Net loss and LAE |
$ |
18,833 |
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$ |
15,540 |
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$ |
3,293 |
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$ |
29,076 |
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$ |
26,929 |
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$ |
2,147 |
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% of Gross earned premiums |
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13.6 |
% |
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|
9.4 |
% |
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|
4.2 |
|
pts |
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|
10.4 |
% |
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|
8.2 |
% |
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|
2.2 |
|
pts |
% of Net earned premiums |
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27.0 |
% |
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19.8 |
% |
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|
7.2 |
|
pts |
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21.5 |
% |
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18.4 |
% |
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3.1 |
|
pts |
Less: |
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Current year catastrophe losses |
$ |
3,118 |
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$ |
— |
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$ |
3,118 |
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$ |
3,232 |
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|
$ |
— |
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$ |
3,232 |
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|
Prior year reserve unfavorable (favorable) development |
|
767 |
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|
(1,275 |
) |
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|
2,042 |
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|
(899 |
) |
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|
(3,469 |
) |
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|
2,570 |
|
|
Underlying loss and LAE (1) |
$ |
14,948 |
|
|
$ |
16,815 |
|
|
$ |
(1,867 |
) |
|
|
$ |
26,743 |
|
|
$ |
30,398 |
|
|
$ |
(3,655 |
) |
|
% of Gross earned premiums |
|
10.8 |
% |
|
|
10.2 |
% |
|
|
0.6 |
|
pts |
|
|
9.6 |
% |
|
|
9.3 |
% |
|
|
0.3 |
|
pts |
% of Net earned premiums |
|
21.5 |
% |
|
|
21.4 |
% |
|
|
0.1 |
|
pts |
|
|
19.8 |
% |
|
|
20.7 |
% |
|
|
(0.9 |
) |
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.
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||||||
2026 |
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2025 |
|
|
Change |
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2026 |
|
|
2025 |
|
|
Change |
|||||||||||
Policy acquisition costs |
$ |
22,703 |
|
|
$ |
24,257 |
|
|
$ |
(1,554 |
) |
|
|
$ |
45,096 |
|
|
$ |
47,723 |
|
|
$ |
(2,627 |
) |
|
General and administrative |
|
10,266 |
|
|
|
7,778 |
|
|
|
2,488 |
|
|
|
|
20,969 |
|
|
|
17,284 |
|
|
|
3,685 |
|
|
Total operating expenses |
$ |
32,969 |
|
|
$ |
32,035 |
|
|
$ |
934 |
|
|
|
$ |
66,065 |
|
|
$ |
65,007 |
|
|
$ |
1,058 |
|
|
% of Gross earned premiums |
|
23.8 |
% |
|
|
19.4 |
% |
|
|
4.4 |
|
pts |
|
|
23.6 |
% |
|
|
19.8 |
% |
|
|
3.8 |
|
pts |
% of Net earned premiums |
|
47.3 |
% |
|
|
40.8 |
% |
|
|
6.5 |
|
pts |
|
|
48.8 |
% |
|
|
44.3 |
% |
|
|
4.5 |
|
pts |
3
Exhibit 99.1
Quarter to Date Financial Results
Net income for the second quarter ended June 30, 2026 was $21.9 million, or $0.44 per diluted share, compared to net income of $26.4 million, or $0.53 per diluted share, for the second quarter ended June 30, 2025. The primary driver of the change in net income during the second quarter of 2026 was lower net premiums earned driven by decreased gross premiums earned.
The Company's total gross written premium decreased by $12.0 million, or 5.3%, to $216.3 million for the second quarter ended June 30, 2026, from $228.3 million for the second quarter ended June 30, 2025. Gross premiums earned decreased $26.8 million, or 16.2%, to $138.7 million for the second quarter ended June 30, 2026 from $165.5 million for the second quarter ended June 30, 2025. These changes are attributed to a 24% decrease in our net pricing year-over-year as the market continued to soften. Ceded premiums earned decreased $18.0 million, or 20.7%, to $69.0 million for the second quarter ended June 30, 2026 from $87.0 million for the second quarter ended June 30, 2025. The breakdown of the quarter-over-quarter changes in these premiums is shown in the table below. More detail regarding the Company's ceded premiums can be seen in the "Reinsurance Costs as a Percentage of Gross Earned Premium" section below.
($ in thousands) |
Three Months Ended June 30, |
|
|||||||||||||
|
2026 |
|
|
2025 |
|
|
Change $ |
|
|
Change % |
|
||||
Gross premiums written |
$ |
216,304 |
|
|
$ |
228,346 |
|
|
$ |
(12,042 |
) |
|
|
(5.3 |
)% |
Change in gross unearned premiums |
|
(77,574 |
) |
|
|
(62,886 |
) |
|
|
(14,688 |
) |
|
|
23.4 |
% |
Gross premiums earned |
|
138,730 |
|
|
|
165,460 |
|
|
|
(26,730 |
) |
|
|
(16.2 |
)% |
Ceded premiums written |
|
(203,070 |
) |
|
|
(222,652 |
) |
|
|
19,582 |
|
|
|
(8.8 |
)% |
Change in ceded unearned premiums |
|
134,038 |
|
|
|
135,635 |
|
|
|
(1,597 |
) |
|
|
(1.2 |
)% |
Ceded premiums earned |
|
(69,032 |
) |
|
|
(87,017 |
) |
|
|
17,985 |
|
|
|
(20.7 |
)% |
Net premiums earned |
$ |
69,698 |
|
|
$ |
78,443 |
|
|
$ |
(8,745 |
) |
|
|
(11.1 |
)% |
Losses and LAE increased by $3.3 million, or 21.3%, to $18.8 million for the second quarter ended June 30, 2026, from $15.5 million for the second quarter ended June 30, 2025. Loss and LAE expense as a percentage of net earned premiums increased 7.2 points to 27.0% for the second quarter ended June 30, 2026, compared to 19.8% for the second quarter ended June 30, 2025. Excluding catastrophe losses and reserve development, the Company's gross underlying loss and LAE ratio for the second quarter ended June 30, 2026, would have been 10.8%, an increase of 0.6 points, from 10.2% for the second quarter ended June 30, 2025.
Policy acquisition costs decreased by $1.6 million, or 6.6%, to $22.7 million for the second quarter ended June 30, 2026, from $24.3 million for the second quarter ended June 30, 2025, primarily due to decreased external management fees as a product of the decrease in gross premiums shown above. This was partially offset by a decrease in ceding commission income as a result of the Company's quota share reinsurance coverage decreasing from 20% to 15%, effective June 1, 2025.
General and administrative expenses increased by $2.5 million, or 32.1%, to $10.3 million for the second quarter ended June 30, 2026, from $7.8 million for the second quarter ended June 30, 2025, driven by increased salary-related expenses, primarily due to a non-recurring employee retention tax credit refund that was received during the second quarter of 2025. This change was partially offset by a decrease in amortization. This decrease in amortization corresponds with the decrease seen in other income.
Reinsurance Costs as a Percentage of Gross Earned Premium
4
Exhibit 99.1
Reinsurance costs as a percentage of gross earned premium in the second quarter of 2026 and 2025 were as follows:
|
2026 |
|
|
2025 |
|
||
Non-at-Risk |
|
(0.4 |
)% |
|
|
(0.3 |
)% |
Quota Share |
|
(11.9 |
)% |
|
|
(15.1 |
)% |
All Other |
|
(37.5 |
)% |
|
|
(37.2 |
)% |
Total Ceding Ratio |
|
(49.8 |
)% |
|
|
(52.6 |
)% |
Ceded premiums earned related to the Company's quota share reinsurance coverage decreased as the result of a decrease in the cession rate from 20% to 15% effective June 1, 2025. The Company's excess-of-loss coverage remained relatively flat, however, pricing decreases driven by a softening reinsurance market allowed the Company to purchase additional coverage in the current year to both raise the exhaustion point of our catastrophe coverage and replace the coverage lost with the decrease in quota share coverage. These actions resulted in a decrease in our overall ceding ratio, while enhancing our coverage in the current year.
Investment Portfolio Highlights
The Company's cash, cash equivalents, restricted cash and investment holdings increased from $647.7 million at December 31, 2025, to $650.0 million at June 30, 2026. The Company's cash and investment holdings consist primarily of investments in U.S. government and agency securities, corporate debt, mutual funds and investment grade money market instruments. Fixed maturities represented approximately 71.6% of total investments at June 30, 2026, compared to 71.3% of total investments at December 31, 2025. The Company's fixed maturity investments had a modified duration of 2.3 years at June 30, 2026, compared to 2.5 years at December 31, 2025.
Book Value Analysis
5
Exhibit 99.1
Book value per common share increased 10.7% from $6.51 at December 31, 2025, to $7.21 at June 30, 2026. Underlying book value per common share increased 10.9% from $6.66 at December 31, 2025, to $7.39 at June 30, 2026. An increase in the Company's retained earnings as a result of net income for the six months ended June 30, 2026 drove the increase in the Company's book value per share. As shown in the table below, removing the effect of Accumulated Other Comprehensive Income ("AOCI"), caused by capital market conditions, increases the Company's book value per common share at June 30, 2026.
($ in thousands, except for share and per share data) |
|
|
|
|
|
||
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Book Value per Share |
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
||
Common stockholders' equity |
$ |
340,788 |
|
|
$ |
317,565 |
|
Denominator: |
|
|
|
|
|
||
Total Shares Outstanding |
|
47,271,828 |
|
|
|
48,764,802 |
|
Book Value Per Common Share |
$ |
7.21 |
|
|
$ |
6.51 |
|
|
|
|
|
|
|
||
Book Value per Share, Excluding the Impact of AOCI |
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
||
Common stockholders' equity |
$ |
340,788 |
|
|
$ |
317,565 |
|
Less: Accumulated other comprehensive loss |
|
(8,544 |
) |
|
|
(7,242 |
) |
Stockholders' Equity, excluding AOCI |
$ |
349,332 |
|
|
$ |
324,807 |
|
Denominator: |
|
|
|
|
|
||
Total Shares Outstanding |
|
47,271,828 |
|
|
|
48,764,802 |
|
Underlying Book Value Per Common Share(1) |
$ |
7.39 |
|
|
$ |
6.66 |
|
(1) Underlying book value per common share is a non-GAAP financial measure and is reconciled above to book value per common share, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below.
Conference Call Details
Date and Time: August 5, 2026 - 5:00 P.M. ET
Participant Dial-In: (United States): 833-461-5787
(International): 585-542-9983
Meeting ID: 181 721 111
Webcast: To listen to the live webcast, please go to https://investors.amcoastal.com and click on the conference call link at the bottom of the page or go to: https://events.q4inc.com/attendee/181721111
An archive of the webcast will be available for a limited period of time thereafter.
Presentation: The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/events-and-presentations.
About American Coastal Insurance Corporation
American Coastal Insurance Corporation (amcoastal.com) is the holding company of the insurance carrier, American Coastal Insurance Company, which was founded in 2007 for the purpose of insuring Condominium and Homeowner Association properties, Apartments and Assisted Living Facilities 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), one of the largest Managing General Agents in the country specializing in hurricane-exposed properties. American Coastal Insurance Company has earned an “A”, (“Exceptional”) Financial Stability Rating from Demotech and maintains an “A” insurance financial strength rating with a Stable outlook from KBRA. ACIC maintains a “BBB” issuer rating with a Stable outlook from KBRA.
6
Exhibit 99.1
Contact Information: |
Alexander Baty |
Vice President, Finance & Investor Relations, American Coastal Insurance Corp. |
investorrelations@amcoastal.com |
(727) 425-8076 |
|
Glen Akselrod |
President & Founder, Bristol Investor Relations |
ga@bristolir.com |
(905) 326-1888 |
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, or one half of such average, in the case of six-month 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
7
Exhibit 99.1
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 May 9, 2024, the Company entered into the Sale Agreement with Forza Insurance Holdings, LLC ("Forza") in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of the Company's subsidiary, Interboro Insurance Company ("IIC"). Forza's application to acquire IIC was approved by the New York Department of Financial Services on February 13, 2025 and the sale closed on April 1, 2025. The Company received cash proceeds totaling $25,679,000 from the sale resulting in a loss on disposal of $247,000, net of tax impact. The Company also recognized a $1,348,000 loss, net of tax impact, on IIC's fixed maturity portfolio, which was included in Accumulated other comprehensive loss on the Company's Consolidated Balance Sheet prior to the sale.
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
8
Exhibit 99.1
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.
9
Exhibit 99.1
Consolidated Statements of Comprehensive Income (Unaudited)
In thousands, except share and per share amounts
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross premiums written |
|
$ |
216,304 |
|
|
$ |
228,346 |
|
|
$ |
365,699 |
|
|
$ |
426,198 |
|
Change in gross unearned premiums |
|
|
(77,574 |
) |
|
|
(62,886 |
) |
|
|
(85,835 |
) |
|
|
(98,637 |
) |
Gross premiums earned |
|
|
138,730 |
|
|
|
165,460 |
|
|
|
279,864 |
|
|
|
327,561 |
|
Ceded premiums earned |
|
|
(69,032 |
) |
|
|
(87,017 |
) |
|
|
(144,555 |
) |
|
|
(180,846 |
) |
Net premiums earned |
|
|
69,698 |
|
|
|
78,443 |
|
|
|
135,309 |
|
|
|
146,715 |
|
Net investment income |
|
|
5,402 |
|
|
|
5,793 |
|
|
|
10,481 |
|
|
|
10,304 |
|
Net realized investment gains |
|
|
3,264 |
|
|
|
— |
|
|
|
3,270 |
|
|
|
1,382 |
|
Net unrealized gains on equity securities |
|
|
4,233 |
|
|
|
2,231 |
|
|
|
4,761 |
|
|
|
268 |
|
Total revenue |
|
|
82,597 |
|
|
|
86,467 |
|
|
|
153,821 |
|
|
|
158,669 |
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Losses and loss adjustment expenses |
|
|
18,833 |
|
|
|
15,540 |
|
|
|
29,076 |
|
|
|
26,929 |
|
Policy acquisition costs |
|
|
22,703 |
|
|
|
24,257 |
|
|
|
45,096 |
|
|
|
47,723 |
|
General and administrative expenses |
|
|
10,266 |
|
|
|
7,778 |
|
|
|
20,969 |
|
|
|
17,284 |
|
Interest expense |
|
|
2,344 |
|
|
|
2,719 |
|
|
|
4,688 |
|
|
|
5,436 |
|
Total expenses |
|
|
54,146 |
|
|
|
50,294 |
|
|
|
99,829 |
|
|
|
97,372 |
|
Income before other income |
|
|
28,451 |
|
|
|
36,173 |
|
|
|
53,992 |
|
|
|
61,297 |
|
Other income (loss) |
|
|
(48 |
) |
|
|
1,379 |
|
|
|
164 |
|
|
|
2,449 |
|
Income before income taxes |
|
|
28,403 |
|
|
|
37,552 |
|
|
|
54,156 |
|
|
|
63,746 |
|
Provision for income taxes |
|
|
6,507 |
|
|
|
9,515 |
|
|
|
13,006 |
|
|
|
15,998 |
|
Income from continuing operations, net of tax |
|
$ |
21,896 |
|
|
$ |
28,037 |
|
|
$ |
41,150 |
|
|
$ |
47,748 |
|
Income (loss) from discontinued operations, net of tax |
|
|
— |
|
|
|
(1,595 |
) |
|
|
— |
|
|
|
42 |
|
Net income |
|
$ |
21,896 |
|
|
$ |
26,442 |
|
|
$ |
41,150 |
|
|
$ |
47,790 |
|
OTHER COMPREHENSIVE INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in net unrealized gains on investments |
|
|
2,512 |
|
|
|
3,042 |
|
|
|
1,268 |
|
|
|
7,254 |
|
Reclassification adjustment for net realized investment gains |
|
|
(3,264 |
) |
|
|
— |
|
|
|
(3,270 |
) |
|
|
(1,382 |
) |
Income tax benefit related to items of other comprehensive income |
|
|
700 |
|
|
|
— |
|
|
|
700 |
|
|
|
— |
|
Total comprehensive income |
|
$ |
21,844 |
|
|
$ |
29,484 |
|
|
$ |
39,848 |
|
|
$ |
53,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
48,094,148 |
|
|
|
48,434,446 |
|
|
|
48,318,586 |
|
|
|
48,285,665 |
|
Diluted |
|
|
49,303,289 |
|
|
|
49,636,088 |
|
|
|
49,559,755 |
|
|
|
49,556,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings available to ACIC common stockholders per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations |
|
$ |
0.46 |
|
|
$ |
0.58 |
|
|
$ |
0.85 |
|
|
$ |
0.99 |
|
Discontinued operations |
|
|
— |
|
|
|
(0.03 |
) |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
0.46 |
|
|
$ |
0.55 |
|
|
$ |
0.85 |
|
|
$ |
0.99 |
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations |
|
$ |
0.44 |
|
|
$ |
0.56 |
|
|
$ |
0.83 |
|
|
$ |
0.96 |
|
Discontinued operations |
|
|
— |
|
|
|
(0.03 |
) |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
0.44 |
|
|
$ |
0.53 |
|
|
$ |
0.83 |
|
|
$ |
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared per share |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
10
Exhibit 99.1
Consolidated Balance Sheets (Unaudited)
In thousands, except share amounts
|
|
June 30, |
|
|
December 31, |
|
||
ASSETS |
|
|
|
|
|
|
||
Investments, at fair value: |
|
|
|
|
|
|
||
Fixed maturities, available-for-sale |
|
$ |
238,403 |
|
|
$ |
253,152 |
|
Equity securities |
|
|
57,049 |
|
|
|
61,685 |
|
Other investments |
|
|
37,347 |
|
|
|
40,053 |
|
Total investments |
|
$ |
332,799 |
|
|
$ |
354,890 |
|
Cash and cash equivalents |
|
|
218,943 |
|
|
|
198,762 |
|
Restricted cash |
|
|
98,280 |
|
|
|
94,092 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
317,223 |
|
|
$ |
292,854 |
|
Accrued investment income |
|
|
3,441 |
|
|
|
3,156 |
|
Property and equipment, net |
|
|
869 |
|
|
|
723 |
|
Premiums receivable, net |
|
|
119,915 |
|
|
|
70,447 |
|
Reinsurance recoverable on paid and unpaid losses, net |
|
|
117,435 |
|
|
|
128,205 |
|
Ceded unearned premiums |
|
|
224,760 |
|
|
|
109,697 |
|
Goodwill |
|
|
59,476 |
|
|
|
59,476 |
|
Deferred policy acquisition costs, net |
|
|
54,693 |
|
|
|
37,815 |
|
Intangible assets, net |
|
|
2,203 |
|
|
|
3,471 |
|
Other assets |
|
|
10,980 |
|
|
|
11,998 |
|
Total Assets |
|
$ |
1,243,794 |
|
|
$ |
1,072,732 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
||
Unpaid losses and loss adjustment expenses |
|
$ |
118,920 |
|
|
$ |
165,701 |
|
Unearned premiums |
|
|
335,452 |
|
|
|
249,616 |
|
Reinsurance payable on premiums |
|
|
203,882 |
|
|
|
66,841 |
|
Accounts payable and accrued expenses |
|
|
79,719 |
|
|
|
112,781 |
|
Operating lease liability |
|
|
3,024 |
|
|
|
3,135 |
|
Notes payable, net |
|
|
149,519 |
|
|
|
149,353 |
|
Other liabilities |
|
|
12,490 |
|
|
|
7,740 |
|
Total Liabilities |
|
$ |
903,006 |
|
|
$ |
755,167 |
|
|
|
|
|
|
|
|
||
Stockholders' Equity: |
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding |
|
$ |
— |
|
|
$ |
— |
|
Common stock, $0.0001 par value; 100,000,000 shares authorized; 49,288,637 and 48,976,885 issued, respectively; 47,271,828 and 48,764,802 outstanding, respectively |
|
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
|
442,558 |
|
|
|
439,742 |
|
Treasury shares, at cost: 2,016,809 shares and 212,083 shares, respectively |
|
|
(19,872 |
) |
|
|
(431 |
) |
Accumulated other comprehensive loss |
|
|
(8,544 |
) |
|
|
(7,242 |
) |
Retained earnings (deficit) |
|
|
(73,359 |
) |
|
|
(114,509 |
) |
Total Stockholders' Equity |
|
$ |
340,788 |
|
|
$ |
317,565 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
1,243,794 |
|
|
$ |
1,072,732 |
|
11