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Palomar Holdings, Inc. (PLMR)

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Neutralpattern detected
Previous Close101.56
Open101.92
Bid100.18 x 800
Ask100.38 x 1200
Day's Range98.91 - 102.78
52 Week Range32.57 - 107.00
Volume191,353
Avg. Volume393,706
Market Cap2.555B
Beta (5Y Monthly)N/A
PE Ratio (TTM)58.39
EPS (TTM)1.72
Earnings DateNov 02, 2020 - Nov 06, 2020
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est112.17
  • Palomar (PLMR) Surpasses Q2 Earnings and Revenue Estimates
    Zacks

    Palomar (PLMR) Surpasses Q2 Earnings and Revenue Estimates

    Palomar (PLMR) second-quarter earnings reflect higher premiums, and underwriting income, offset by higher expenses.

  • GlobeNewswire

    Palomar Holdings, Inc. Reports Second Quarter 2020 Results

    LA JOLLA, Calif., Aug. 04, 2020 (GLOBE NEWSWIRE) -- Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or the “Company”) reported net income of $12.0 million, or $0.48 per diluted share, for the second quarter of 2020 compared to a net income of $6.7 million, or $0.30 per diluted share, for the second quarter of 2019. Adjusted net income(1) was $13.0 million, or $0.52 per diluted share, an increase of 63.0% for the second quarter of 2020 as compared to $8.0 million, or $0.36 per diluted share, for the second quarter of 2019.  Second Quarter 2020 Highlights * Gross written premiums increased by 43.6% to $83.8 million compared to $58.3 million in the second quarter of 2019 * Net income increased by 79.3% to $12.0 million, or $0.48 per diluted share, compared to a net income of $6.7 million, or $0.30 per diluted share, in the second quarter of 2019 * Adjusted net income(1) increased by 63.0% to $13.0 million, or $0.52 per diluted share, compared to $8.0 million, or $0.36 per diluted share, in the second quarter of 2019 * Total loss ratio of 10.1% compared to 2.8% in the second quarter of 2019 * Combined ratio of 68.4% compared to 69.2% in the second quarter of 2019 * Adjusted combined ratio(1) of 65.1%, compared to 63.8% in the second quarter of 2019 * Annualized return on equity of 15.1%, compared to 17.8% in the second quarter of 2019 * Annualized adjusted return on equity(1) of 16.4%, compared to 21.2% in the second quarter of 2019(1) See discussion of “Non-GAAP and Key Performance Indicators” below.Mac Armstrong, Chairman and Chief Executive Officer, commented, “The second quarter found Palomar continuing to operate capably in a difficult environment. While the COVID -19 pandemic and civil unrest challenged our nation, we navigated and will continue to navigate through these uncharted waters by focusing on Palomar’s founding principles, which compel us to help build and restore challenged and damaged areas of our country. That mantra along with our Company’s values and culture will allow us to ably face today’s challenges and moreover make a meaningful and lasting impact. A hallmark of our success has been our ability to not only embrace change but also to anticipate it. This mentality is ingrained in our people and our operations and it will ensure that we remain focused on delivering innovative products that meet the needs of our customers.” Mr. Armstrong continued, “Our ability to execute in this tumultuous environment is seen in our second quarter 2020 results. We delivered year-over-year gross written premium growth of 43.6% and year-over-year adjusted net income growth of 63.0%. We also successfully completed our June 1st reinsurance placement procuring an incremental $200 million of limit to support future growth. Lastly, we announced the formation of Palomar Excess and Surplus Insurance Company (“Palomar E&S”), our newly established surplus lines insurance company. Palomar E&S presents a natural and exciting progression in our Company’s evolution as we extend our specialty property franchise to the surplus lines insurance market. We capitalized Palomar E&S with approximately $100 million in surplus including proceeds from a primary share issuance in June. We expect to begin writing business during the third quarter.”Underwriting Results Gross written premiums increased 43.6% to $83.8 million compared to $58.3 million in the second quarter of 2019, while net earned premiums increased 69.4% compared to the prior year’s second quarter. Losses and loss adjustment expenses for the second quarter were $4.0 million, which resulted in a 10.1% loss ratio. Loss activity during the second quarter was primarily attributable to attritional losses in the Company’s commercial all risk and specialty homeowners lines. The second quarter results include $0.1 million of unfavorable prior year development. Underwriting income(1) was $12.4 million resulting in a combined ratio of 68.4% compared to underwriting income of $7.2 million and a combined ratio of 69.2% during the same period last year. The second quarter of 2020 combined ratio includes certain expenses related to the Company’s stock offerings, stock-based compensation, and expenses associated with a catastrophe bond. The second quarter of 2019 combined ratio includes certain expenses related to the Company’s initial public offering (IPO) and tax restructuring, stock-based compensation, and expenses associated with the retirement of debt. Excluding those items, the Company’s adjusted combined ratio(1) was 65.1% in the second quarter compared 63.8% in the same period in 2019. The Company’s adjusted net income(1) increased by 63.0% to $13.0 million in the second quarter compared to $8.0 million in last year’s second quarter.Investment Results Net investment income increased by 42.5% to $2.1 million compared to $1.5 million in the prior year’s second quarter. The year-over-year increase was primarily due to a higher average balance of investments held during the three months ended June 30, 2020 due primarily to proceeds from the Company’s April 2019 IPO, investing of cash generated from operations, and proceeds from the Company’s January 2020 secondary offering. Funds are generally invested conservatively in high quality securities, including government agency, asset and mortgage-backed securities, and municipal and corporate bonds with an average credit quality of "A1/A+." The Company’s fixed income investment portfolio had a book yield of 2.83% as of June 30, 2020. Cash and invested assets totaled $430.4 million at June 30, 2020. During the second quarter, the Company recognized realized and unrealized gains of $0.8 million related to its investment portfolio compared to $0.5 million in last year’s second quarter.Tax Rate The effective tax rate for the three months ended June 30, 2020 was 21.5% compared to 21.1% for the three months ended June 30, 2019.Stockholders’ Equity and Returns Stockholders' equity was $375.2 million at June 30, 2020, compared to $218.6 million at December 31, 2019. For the three months ended June 30, 2020, the Company’s annualized return on equity was 15.1% compared to 17.8% for the same period last year and annualized adjusted return on equity(1) was 16.4% compared to 21.2% for the same period last year. The change in return on equity reflects a significant increase in the Company’s stockholders’ equity, primarily due to the addition of $213.1 million in capital raised in multiple stock offerings which have taken place since April 2019.Full Year 2020 Outlook For the full year 2020, the Company affirms prior guidance of adjusted net income of $50.5 to $53.0 million, equating to a growth rate of 33% to 40% compared to the full year 2019.Conference Call As previously announced, Palomar will host a conference call August 5, 2020, to discuss its second quarter 2020 results at 12:00 p.m. (Eastern Time). The conference call can be accessed by dialing 1-877-423-9813 (domestic) or 1-201-689-8573 (international) and asking for the Palomar Second Quarter 2020 Earnings Call. A telephonic replay will be available approximately two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers 1-412-317-6671 and providing the access code 13706037. The telephonic replay will be available until 11:59 pm (Eastern Time) on August 12, 2020.Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at http://ir.palomarspecialty.com/. The online replay will remain available for a limited time beginning immediately following the call.About Palomar Holdings, Inc. Palomar Holdings, Inc. is the ultimate parent and insurance holding company of its operating subsidiaries, Palomar Specialty Insurance Company, Palomar Specialty Reinsurance Company Bermuda Ltd., Palomar Insurance Agency, Inc. and Palomar Excess and Surplus Insurance Company. Palomar is an innovative insurer that focuses on the provision of specialty property insurance for residential and commercial clients. Palomar’s underwriting and analytical acumen allow it to concentrate on certain markets that it believes are underserved by other insurance companies, such as the markets for earthquake, wind and flood insurance. Palomar’s insurance subsidiaries, Palomar Specialty Insurance Company, Palomar Specialty Reinsurance Company Bermuda Ltd., and Palomar Excess and Surplus Insurance Company, have a financial strength rating of “A-” (Excellent) from A.M. Best.Non-GAAP and Key Performance Indicators Palomar discusses certain key financial and operating metrics, described below, which provide useful information about the Company’s business and the operational factors underlying the Company’s financial performance.Underwriting revenue is a non‑GAAP financial measure defined as total revenue, excluding net investment income and net realized and unrealized gains and losses on investments. See “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of total revenue calculated in accordance with GAAP to underwriting revenue.Underwriting income is a non‑GAAP financial measure defined as income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments and interest expense. See “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to underwriting income.Adjusted net income is a non‑GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. Palomar calculates the tax impact only on adjustments which would be included in calculating the Company’s income tax expense using the effective tax rate at the end of each period. See “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of net income calculated in accordance with GAAP to adjusted net income.Return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.Adjusted return on equity is a non‑GAAP financial measure defined as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of return on equity calculated using unadjusted GAAP numbers to adjusted return on equity.Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses, to net earned premiums.Expense ratio, expressed as a percentage, is the ratio of acquisition and other underwriting expenses, net of commission and other income to net earned premiums.Combined ratio is defined as the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.Adjusted combined ratio is a non‑GAAP financial measure defined as the sum of the loss ratio and the expense ratio calculated excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio.Diluted adjusted earnings per share is a non‑GAAP financial measure defined as adjusted net income divided by the weighted-average common shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. See “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of diluted earnings per share calculated in accordance with GAAP to diluted adjusted earnings per share.Tangible stockholders’ equity is a non‑GAAP financial measure defined as stockholders’ equity less intangible assets. See “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of stockholders’ equity calculated in accordance with GAAP to tangible stockholders’ equity.Safe Harbor Statement Palomar cautions you that statements contained in this press release may regard matters that are not historical facts but are forward-looking statements. These statements are based on the company’s current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by Palomar that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business. The forward-looking statements are typically, but not always, identified through use of the words "believe," "expect," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected results or delays in development and regulatory review, regulatory approval requirements, the frequency and severity of adverse events. competitive conditions, and the impact of COVID-19 and related economic conditions, including the Company's assessment of the vulnerability of certain categories of investments to the economic disruptions associated with COVID-19 and legislative or regulatory developments affecting the insurance industry. These and other factors that may result in differences are discussed in greater detail in the Company's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.Investor Relations 1-619-771-1743 investors@palomarspecialty.com Source: Palomar Holdings, Inc.Summary of Operating ResultsThe following table summarizes the Company’s results for the three months ended June 30, 2020 and 2019:                Three months ended          June 30,     Percent   2020 2019 Change Change             ($ in thousands, except per share data)  Revenue:             Gross written premiums $ 83,807   58,346 $ 25,461  43.6% Ceded written premiums   (30,198)   (24,632)   (5,566)  22.6% Net written premiums   53,609   33,714   19,895  59.0% Net earned premiums   39,320   23,208   16,112  69.4% Commission and other income   937   721   216  30.0% Total underwriting revenue (1)   40,257   23,929   16,328  68.2% Losses and loss adjustment expenses   3,978   643   3,335  518.7% Acquisition expenses   14,886   8,971   5,915  65.9% Other underwriting expenses   8,976   7,165   1,811  25.3% Underwriting income (1)   12,417   7,150   5,267  73.7% Interest expense   —   (639)   639  (100.0)% Net investment income   2,114   1,483   631  42.5% Net realized and unrealized gains on investments   778   493   285  57.8% Income before income taxes   15,309   8,487   6,822  80.4% Income tax expense   3,297   1,789   1,508  84.3% Net income  $ 12,012 $ 6,698 $ 5,314  79.3% Adjustments:             Expenses associated with stock offerings and tax restructuring   456   50   406 NM  Stock-based compensation expense   464   306   158 NM  Expenses associated with retirement of debt   —   1,297   (1,297) NM  Expenses associated with catastrophe bond   399   —   399 NM  Tax impact   (284)   (349)   65 NM  Adjusted net income (1) $ 13,047 $ 8,002 $ 5,045  63.0% Key Financial and Operating Metrics             Annualized return on equity   15.1%   17.8%       Annualized adjusted return on equity (1)   16.4%   21.2%       Loss ratio   10.1%   2.8%       Expense ratio   58.3%   66.4%       Combined ratio   68.4%   69.2%       Adjusted combined ratio (1)  65.1%  63.8%       Diluted earnings per share $ 0.48 $0.30       Diluted adjusted earnings per share (1) $ 0.52 $0.36       NM- not meaningful              (1)- Indicates Non-GAAP financial measure- see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.The following table summarizes the Company’s results for the six months ended June 30, 2020 and 2019:                Six months ended          June 30,     Percent    2020 2019 Change Change               ($ in thousands, except per share data)  Revenue:             Gross written premiums $ 155,301 $ 112,377 $ 42,924  38.2% Ceded written premiums   (59,693)   (50,737)   (8,956)  17.7% Net written premiums   95,608   61,640   33,968  55.1% Net earned premiums   74,126   41,559   32,567  78.4% Commission and other income   1,675   1,306   369  28.3% Total underwriting revenue (1)   75,801   42,865   32,936  76.8% Losses and loss adjustment expenses   5,841   959   4,882  509.1% Acquisition expenses   27,933   15,946   11,987  75.2% Other underwriting expenses   16,928   36,017   (19,089)  (53.0)% Underwriting income (loss) (1)   25,099   (10,057)   35,156  (349.6)% Interest expense   —   (1,068)   1,068  (100.0)% Net investment income   4,148   2,443   1,705  69.8% Net realized and unrealized gains on investments   1,219   2,904   (1,685)  (58.0)% Income before income taxes   30,466   (5,778)   36,244  (627.3)% Income tax expense   6,681   1,934   4,747  245.4% Net income (loss)  $ 23,785 $ (7,712) $ 31,497  (408.4)% Adjustments:             Expenses associated with stock offerings and tax restructuring   708   408   300 NM  Stock-based compensation expense   907   23,267   (22,360) NM  Expenses associated with retirement of debt   —   1,297   (1,297) NM  Expenses associated with catastrophe bond   399   —   399 NM  Tax impact   (433)   (424)   (9) NM  Adjusted net income (1) $ 25,366 $ 16,836 $ 8,530  50.7% Key Financial and Operating Metrics             Annualized return on equity   16.0%   (10.4)%       Annualized adjusted return on equity (1)   17.1%   22.8%       Loss ratio   7.9%   2.3%       Expense ratio   58.3%   121.9%       Combined ratio   66.1%   124.2%       Adjusted combined ratio (1)  63.4%  65.1%       Diluted earnings per share $ 0.95 $ (0.40)       Diluted adjusted earnings per share (1) $ 1.02 $ 0.86       NM- not meaningful              (1)- Indicates Non-GAAP financial measure- see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.Condensed Consolidated Balance sheetsPalomar Holdings, Inc. and SubsidiariesCondensed Consolidated Balance Sheets (unaudited)(in thousands, except shares and par value data)          June 30,  December 31,    2020 2019   (Unaudited)    Assets       Investments:       Fixed maturity securities available for sale, at fair value (amortized cost: $270,852 in 2020; $211,278 in 2019) $ 282,855 $ 217,151 Equity securities, at fair value (cost: $35,577 in 2020; $21,336 in 2019)   37,649   22,328 Total investments   320,504   239,479 Cash and cash equivalents   109,323   33,119 Restricted cash   619   230 Accrued investment income   2,014   1,386 Premium receivable   44,626   36,237 Deferred policy acquisition costs   30,135   25,201 Reinsurance recoverable on unpaid losses and loss adjustment expenses   17,129   12,952 Reinsurance recoverable on paid losses and loss adjustment expenses   7,549   4,303 Ceded unearned premiums   24,298   26,105 Prepaid expenses and other assets   26,318   14,861 Property and equipment, net   791   845 Intangible assets   744   744 Total assets $ 584,050 $ 395,462 Liabilities and stockholders' equity       Liabilities:       Accounts payable and other accrued liabilities $ 10,469 $ 13,555 Reserve for losses and loss adjustment expenses   24,216   16,821 Unearned premiums   150,048   130,373 Ceded premium payable   10,575   11,383 Funds held under reinsurance treaty   2,420   1,658 Income and excise taxes payable   6,620   1,117 Deferred tax liabilities, net   4,459   1,999 Total liabilities   208,807   176,906 Stockholders' equity:       Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of June 30, 2020 and December 31, 2019, respectively, 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019   —   — Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,468,321 and 23,468,750 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively   2   2 Additional paid-in capital   308,071   180,012 Accumulated other comprehensive income   9,529   4,686 Retained earnings   57,641   33,856 Total stockholders' equity   375,243   218,556 Total liabilities and stockholders' equity $ 584,050 $ 395,462 Condensed Consolidated Income StatementPalomar Holdings, Inc. and SubsidiariesCondensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (Unaudited)(in thousands, except shares and per share data)                Three Months Ended  Six Months Ended   June 30,  June 30,    2020 2019 2020 2019 Revenues:             Gross written premiums $ 83,807 $ 58,346 $ 155,301 $ 112,377 Ceded written premiums   (30,198)   (24,632)   (59,693)   (50,737) Net written premiums   53,609   33,714   95,608   61,640 Change in unearned premiums   (14,289)   (10,506)   (21,482)   (20,081) Net earned premiums   39,320   23,208   74,126   41,559 Net investment income   2,114   1,483   4,148   2,443 Net realized and unrealized gains on investments   778   493   1,219   2,904 Commission and other income   937   721   1,675   1,306 Total revenues   43,149   25,905   81,168   48,212 Expenses:             Losses and loss adjustment expenses   3,978   643   5,841   959 Acquisition expenses   14,886   8,971   27,933   15,946 Other underwriting expenses (includes stock-based compensation of $464 and $306 for the three months ended June 30, 2020 and 2019, respectively and $907 and $23,267 for the six months ended June 30, 2020 and 2019, respectively)   8,976   7,165   16,928   36,017 Interest expense   —   639   —   1,068 Total expenses   27,840   17,418   50,702   53,990 Income (loss) before income taxes   15,309   8,487   30,466   (5,778) Income tax expense   3,297   1,789   6,681   1,934 Net income (loss)   12,012   6,698   23,785   (7,712) Other comprehensive income, net:             Net unrealized gains on securities available for sale for the three and six months ended June 30, 2020 and 2019, respectively   10,676   3,298   4,843   5,485 Net comprehensive income (loss) $ 22,688 $ 9,996 $ 28,628 $ (2,227) Per Share Data:             Basic earnings per share $ 0.49 $ 0.30 $ 0.98 $ (0.40) Diluted earnings per share $ 0.48 $ 0.30 $ 0.95 $ (0.40)               Weighted-average common shares outstanding:             Basic   24,343,425   21,975,962   24,231,344   19,501,727 Diluted   25,057,029   22,105,009   24,922,630   19,501,727 Underwriting Segment DataThe Company has a single reportable segment and offers primarily earthquake, wind, and flood insurance products. Gross written premiums (GWP) by product and location are presented below:                          Three Months Ended June 30,   Six Months Ended June 30,    2020 2019  2020 2019                ($ in thousands)  ($ in thousands)       % of    % of     % of    % of    Amount GWP Amount GWP  Amount GWP Amount GWP  Product                       Residential Earthquake $ 34,240  40.9% $ 29,987 51.4% $ 62,996  40.6% $ 59,294 52.8% Commercial All Risk   14,841  17.7%   7,288 12.5%   27,297  17.6%   14,852 13.2% Commercial Earthquake   11,818  14.1%   8,085 13.8%   22,666  14.6%   14,618 13.0% Specialty Homeowners   11,568  13.8%   8,646 14.8%   21,413  13.8%   16,426 14.6% Inland Marine   3,451  4.1%  229 0.4%   5,341  3.4%   229 0.2%  Hawaii Hurricane   3,242  3.9%   2,675 4.6%   5,937  3.8%   4,750 4.2% Residential Flood   2,032  2.4%   1,271 2.2%   3,558  2.3%   2,043 1.8% Other   2,615  3.1%   165  0.3%   6,093  3.9%   165  0.2% Total Gross Written Premiums $ 83,807  100.0% $ 58,346 100.0% $ 155,301  100.0% $ 112,377 100.0%                           Three Months Ended June 30,   Six Months Ended June 30,    2020 2019  2020 2019                ($ in thousands)  ($ in thousands)       % of    % of     % of    % of    Amount GWP Amount GWP  Amount GWP Amount GWP  State                       California $ 38,420  45.9% $ 32,306 55.4% $ 71,172  45.8% $ 62,754 55.8% Texas   18,796  22.4%   11,000 18.8%   34,587  22.3%   21,439 19.1% Hawaii   3,840  4.6%   2,921 5.0%   6,892  4.5%   5,013 4.5% Washington   3,055  3.7%   1,926 3.3%   5,661  3.6%   3,520 3.1% South Carolina   2,704  3.2%   1,686 2.9%   5,114  3.3%   3,355 3.0% North Carolina   2,609  3.1%   947 1.6%   4,293  2.8%   1,687 1.5% Oregon   2,289  2.7%   1,671 2.9%   4,386  2.8%   3,126 2.8% Mississippi   2,034  2.4%   1,222 2.1%   3,455  2.2%   2,068 1.8% Other   10,060  12.0%   4,667 8.0%   19,741  12.7%   9,415 8.4% Total Gross Written Premiums $ 83,807  100.0% $ 58,346 100.0% $ 155,301  100.0% $ 112,377 100.0% Gross and net earned premiumsThe table below shows the amount of premiums the Company earned on a gross and net basis and the Company’s net earned premiums as a percentage of gross earned premiums for each period presented:                            Three Months Ended        Six Months Ended          June 30,        June 30,          2020 2019 Change % Change 2020 2019 Change % Change                     ($ in thousands)  ($ in thousands) Gross earned premiums $ 70,864 $ 47,208 $ 23,656  50.1% $ 135,838 $ 88,102 $ 47,736  54.2% Ceded earned premiums   (31,544)   (24,000)   (7,544)  31.4%   (61,712)   (46,543)   (15,169)  32.6% Net earned premiums $ 39,320 $ 23,208 $ 16,112  69.4% $ 74,126 $ 41,559 $ 32,567  78.4%                           Net earned premium ratio  55.5%  49.2%        54.6%  47.2%       Reconciliation of Non‑GAAP Financial MeasuresFor the three and six months ended March 31, 2020 and 2019, the Non-GAAP financial measures discussed above reconcile to their most comparable GAAP measures as follows:Underwriting revenue                 Three Months Ended   Six Months Ended   June 30,   June 30,    2020 2019  2020 2019              (in thousands)  (in thousands) Total revenue $ 43,149 $ 25,905  $ 81,168 $ 48,212 Net investment income   (2,114)   (1,483)    (4,148)   (2,443) Net realized and unrealized gains on investments   (778)   (493)    (1,219)   (2,904) Underwriting revenue $ 40,257 $ 23,929  $ 75,801 $ 42,865 Underwriting income (loss)                 Three Months Ended   Six Months Ended   June 30,   June 30,    2020 2019  2020 2019              (in thousands)  (in thousands) Income (loss) before income taxes $ 15,309 $ 8,487  $ 30,466 $ (5,778) Net investment income   (2,114)   (1,483)    (4,148)   (2,443) Net realized and unrealized gains on investments   (778)   (493)    (1,219)   (2,904) Interest expense   —   639    —   1,068 Underwriting income (loss) $ 12,417 $ 7,150  $ 25,099 $ (10,057) Adjusted net income                 Three Months Ended   Six Months Ended   June 30,   June 30,    2020 2019  2020 2019              (in thousands)  (in thousands) Net income (loss) $ 12,012 $ 6,698  $ 23,785 $ (7,712) Adjustments:              Expenses associated with stock offerings and tax restructuring   456   50    708   408 Stock-based compensation expense   464   306    907   23,267 Expenses associated with retirement of debt   —   1,297    —   1,297 Expenses associated with catastrophe bond   399   —    399   — Tax impact   (284)   (349)    (433)   (424) Adjusted net income $ 13,047 $ 8,002  $ 25,366 $ 16,836 Annualized adjusted return on equity                  Three Months Ended   Six Months Ended   June 30,   June 30,    2020 2019  2020 2019                ($ in thousands)  ($ in thousands)                  Annualized adjusted net income $ 52,188 $ 32,008  $ 50,732 $ 33,672  Average stockholders' equity $ 318,032 $ 150,773  $ 296,900 $ 147,964  Annualized adjusted return on equity   16.4%   21.2%   17.1%   22.8% Adjusted combined ratio                  Three Months Ended   Six Months Ended   June 30,   June 30,    2020 2019  2020 2019                ($ in thousands)  ($ in thousands)  Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income $ 26,903 $ 16,058  $ 49,027 $ 51,616  Denominator: Net earned premiums $ 39,320 $ 23,208  $ 74,126 $ 41,559  Combined ratio  68.4%  69.2%   66.1%  124.2%  Adjustments to numerator:               Expenses associated with stock offerings and tax restructuring $ (456) $ (50)  $ (708) $ (408)  Stock-based compensation expense   (464)   (306)    (907)   (23,267)  Portion of expenses associated with retirement of debt classified as other underwriting expenses   —   (897)    —   (897)  Expenses associated with catastrophe bond   (399)   —    (399)   —  Adjusted combined ratio  65.1%  63.8%   63.4%  65.1%  Diluted adjusted earnings per share                 Three Months Ended   Six Months Ended   June 30,   June 30,    2020 2019  2020 2019              (in thousands, except per share data)  (in thousands, except per share data)                Adjusted net income $ 13,047 $ 8,002  $ 25,366 $ 16,836 Weighted-average common shares outstanding, diluted $ 25,057,029   22,105,009    24,922,630   19,501,727 Diluted adjusted earnings per share $ 0.52 $ 0.36  $ 1.02 $ 0.86 Tangible Stockholders’ equity          June 30,  December 31,   2020 2019         (in thousands) Stockholders' equity $ 375,243 $ 218,556 Intangible assets   (744)   (744) Tangible stockholders' equity $ 374,499 $ 217,812

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