Tiptree Reports Third Quarter and Nine-Month 2021 Results

  • Revenues for the quarter of $286.6 million, an increase of 27.9% from 2020. Year-to-date revenues of $881.0 million, an increase of 59.3%, driven by growth in insurance, mortgage and shipping operations and investment gains in 2021 compared to losses in 2020. Excluding the impact from investment gains and losses, year-to-date revenues increased 33.7% versus prior year.
  • Net income for the quarter was $2.0 million, a decrease from $12.8 million in 2020 driven by mark to market unrealized losses in our equity position in Invesque. Year-to-date net income of $38.6 million, up significantly from a net loss in the prior year, represented an annualized ROAE of 14.8%.
  • Adjusted net income of $20.7 million for the quarter, an increase of 16.4% from prior year. Year-to-date adjusted net income of $47.0 million, an increase of 33.4%, driven by improvement in insurance, mortgage and shipping operations. Year-to-date annualized Adjusted ROAE of 16.2%, compared to 12.2% in the prior year period.
  • On October 12, 2021, Tiptree announced a $200 million investment in Fortegra from Warburg Pincus, which upon closing will result in an approximate 24% ownership of the business on an as converted basis.
  • On November 2, 2021, the Board appointed Randy Maultsby as the seventh member of the Tiptree Board of Directors.
  • Declared a dividend of $0.04 per share to stockholders of record on November 22, 2021 with a payment date of November 29, 2021.

Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), today announced its financial results for the three and nine months ended September 30, 2021.

“Our performance in the third quarter reflects the strength and diversification of our underlying operating businesses,” said Tiptree Executive Chairman, Michael Barnes. "Fortegra's revenues have grown 50% this year and with our recently announced strategic partnership, we believe Fortegra will continue to produce best-in-class growth and returns over the long-term."

Barnes added, “Our mortgage and shipping businesses also reported excellent results in the quarter, benefiting from favorable market conditions. Looking ahead, our businesses are well-positioned to drive continued growth in value for shareholders.”

($ in thousands, except per share information)

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

GAAP:

2021

 

2020

 

2021

 

2020

 

Total revenues

$

286,605

 

 

$

224,041

 

 

$

880,980

 

 

$

552,906

 

 

Net income (loss) attributable to common stockholders

$

2,008

 

 

$

12,763

 

 

$

38,558

 

 

$

(43,428

)

 

Diluted earnings per share

$

0.06

 

 

$

0.35

 

 

$

1.11

 

 

$

(1.27

)

 

Cash dividends paid per common share

$

0.04

 

 

$

0.04

 

 

$

0.12

 

 

$

0.12

 

 

Return on average equity

3.3

%

 

16.6

%

 

14.8

%

 

(14.3

)%

 

 

 

 

 

 

 

 

 

 

Non-GAAP: (1)

 

 

 

 

 

 

 

 

Adjusted net income

$

20,730

 

 

$

17,807

 

 

$

47,010

 

 

$

35,240

 

 

Adjusted return on average equity

20.5

%

 

20.1

%

 

16.2

%

 

12.2

%

 

Book value per share

$

11.37

 

 

$

10.36

 

 

$

11.37

 

 

$

10.36

 

 

____________________________

(1) For information relating to Adjusted net income, Adjusted return on average equity and book value per share, including a reconciliation to GAAP financials, see “—Non-GAAP Reconciliations” below.

Earnings Conference Call

Tiptree will host a conference call on Thursday, November 4, 2021 at 9:00 a.m. Eastern Time to discuss its third quarter 2021 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company’s website, located at www.tiptreeinc.com.

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

A replay of the call will be available from Thursday, November 4, 2021 at 1:00 p.m. Eastern Time, until midnight Eastern on Thursday, November 11, 2021. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13722943.

Segment Financial Highlights - Third Quarter and Year-to-date 2021

Insurance (The Fortegra Group):

  • Gross written premiums and premium equivalents (GWPPE) of $613.1 million in the third quarter, an increase of 31.9% from the prior year period. Year-to-date GWPPE of $1,689.6 million, up 43.7%, driven by growth in all business lines.
  • Total revenues of $246.7 million, up 41.8% compared to third quarter 2020. Year-to-date revenues of $721.5 million, up 49.6%, driven by growth in domestic admitted and surplus insurance lines, as well as fee-based warranty programs. Excluding the impact of investment gains and losses, revenues increased by 40.6% over the prior year-to-date period.
  • The combined ratio for the quarter was 89.6%, compared to 90.6% in third quarter 2020. The year-to-date 2021 combined ratio was 91.0%, compared to 92.1% in the prior year period. Operating and technology efficiencies contributed to an improved expense ratio, while the underwriting ratio remained stable.
  • Income before taxes for the quarter of $13.3 million, flat to prior year driven by growth in underwriting and fee income, offset by unrealized investment losses in the period. Year-to-date 2021 income before taxes of $49.6 million compared to $0.4 million in the prior year. Annualized ROAE was 17.3% for year-to-date 2021, as compared to 1.5% in 2020.
  • Adjusted net income for the quarter was $19.5 million, up 61.3% from the prior year period. Adjusted net income year-to-date was $46.4 million, up 55.5%, driven by revenue growth and an improved combined ratio. The annualized adjusted ROAE was 20.9% for year-to-date 2021, as compared to 14.2% in 2020.
  • The combination of unearned premiums and deferred revenues on the balance sheet of $1,564.4 million grew by $413.1 million, or 35.9%, from September 30, 2020 to September 30, 2021 as a function of Fortegra’s growth in GWPPE.

Tiptree Capital:

  • Mortgage income before taxes was $25.1 million in 2021, as compared to $20.8 million in 2020, driven by higher servicing fees and positive fair value adjustments on the mortgage servicing portfolio. Return on average equity was 44.4% in the 2021 period.
  • Maritime transportation income before taxes was $7.7 million in 2021, as compared to $1.0 million in 2020, with the increase driven by a rise in dry-bulk charter rates.

Results by Segment

We classify our business into two reportable segments, Insurance and Mortgage, with the remainder of our operations aggregated into Tiptree Capital - Other. Corporate activities include holding company interest expense, corporate employee compensation and benefits, and other expenses, including, but not limited to, public company expenses. The following table present summary financial data for the three and nine months ended September 30, 2021 and 2020.

($ in thousands)

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

Insurance

$

246,706

 

 

$

174,005

 

 

$

721,524

 

 

$

482,299

 

Mortgage

27,425

 

 

35,879

 

 

87,191

 

 

80,911

 

Tiptree Capital - other

12,474

 

 

14,157

 

 

72,265

 

 

(10,304

)

Corporate

 

 

 

 

 

 

 

Total revenues

$

286,605

 

 

$

224,041

 

 

$

880,980

 

 

$

552,906

 

 

 

 

 

 

 

 

 

Income (loss) before taxes:

 

 

 

 

 

 

 

Insurance

$

13,337

 

 

$

13,447

 

 

$

49,569

 

 

$

418

 

Mortgage

6,267

 

 

14,453

 

 

25,119

 

 

20,768

 

Tiptree Capital - other

(4,700

)

 

(4,978

)

 

12,914

 

 

(59,407

)

Corporate

(11,320

)

 

(9,025

)

 

(33,151

)

 

(25,199

)

Total income (loss) before taxes

$

3,584

 

 

$

13,897

 

 

$

54,451

 

 

$

(63,420

)

 

 

 

 

 

 

 

 

Non-GAAP - Adjusted net income:

 

 

 

 

 

 

 

Insurance

$

19,533

 

 

$

12,111

 

 

$

46,400

 

 

$

29,835

 

Mortgage

3,961

 

 

11,865

 

 

15,485

 

 

19,488

 

Tiptree Capital - other

5,522

 

 

495

 

 

8,153

 

 

3,565

 

Corporate

(8,286

)

 

(6,664

)

 

(23,028

)

 

(17,648

)

Total adjusted net income (1)

$

20,730

 

 

$

17,807

 

 

$

47,010

 

 

$

35,240

 

(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

The table below provides a break down between net realized and unrealized gains and losses from Invesque and other securities which impacted our consolidated results on a pre-tax basis. Many of our investments are carried at fair value and marked to market through unrealized gains and losses. As a result, we expect our earnings relating to these investments to be relatively volatile between periods. Our fixed income securities are primarily marked to market through AOCI in stockholders’ equity and do not impact net realized and unrealized gains and losses until they are sold.

($ in thousands)

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

 

2020

 

 

2021

 

2020

 

Net realized and unrealized gains (losses)(1)

$

(4,267

)

 

 

$

2,310

 

 

 

$

9,345

 

 

$

(16,270

)

 

Net realized and unrealized gains (losses) - Invesque

$

(12,566

)

 

 

$

(9,170

)

 

 

$

4,246

 

 

$

(79,774

)

 

(1) Excludes Invesque and Mortgage realized and unrealized gains and losses.

Non-GAAP

Management uses Adjusted net income and Adjusted return on average equity as measurements of operating performance. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and comparison among companies. Management uses Adjusted net income and adjusted return on average equity as part of its capital allocation process and to assess comparative returns on invested capital. Adjusted net income represents income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, stock-based compensation, net realized and unrealized gains (losses), and intangibles amortization associated with purchase accounting. Adjusted net income and Adjusted return on average equity are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income. See “Non-GAAP Reconciliations” for a reconciliation of these measures to their GAAP equivalents.

About Tiptree

Tiptree Inc. (NASDAQ: TIPT) is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Our largest operating business, Fortegra, is a specialty insurance underwriter and service provider, which focuses on niche business lines and fee-oriented services. We also allocate capital to a diverse group of businesses and investments that we refer to as Tiptree Capital. For more information, please visit www.tiptreeinc.com.

Forward-Looking Statements

This release contains “forward-looking statements” which involve risks, uncertainties and contingencies, many of which are beyond the Company’s control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the Company’s plans, objectives, expectations for our businesses and intentions. The forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to those described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K, and as described in the Company’s other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of this release. The factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statements.

 

Tiptree Inc.

Condensed Consolidated Balance Sheets

($ in thousands, except share data)

 

 

As of

 

September 30,

2021

 

December 31,

2020

Assets:

 

 

 

Investments:

 

 

 

Available for sale securities, at fair value, net of allowance for credit losses

$

541,121

 

 

$

377,133

 

Loans, at fair value

89,326

 

 

90,732

 

Equity securities

139,418

 

 

123,838

 

Other investments

168,829

 

 

219,701

 

Total investments

938,694

 

 

811,404

 

Cash and cash equivalents

150,496

 

 

136,920

 

Restricted cash

21,588

 

 

58,355

 

Notes and accounts receivable, net

443,150

 

 

370,452

 

Reinsurance receivables

827,199

 

 

728,009

 

Deferred acquisition costs

352,940

 

 

229,430

 

Goodwill

179,103

 

 

179,236

 

Intangible assets, net

126,649

 

 

138,215

 

Other assets

152,938

 

 

162,034

 

Assets held for sale

185,595

 

 

181,705

 

Total assets

$

3,378,352

 

 

$

2,995,760

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Liabilities:

 

 

 

Debt, net

$

374,842

 

 

$

366,246

 

Unearned premiums

1,053,120

 

 

860,690

 

Policy liabilities and unpaid claims

313,614

 

 

233,438

 

Deferred revenue

511,273

 

 

399,211

 

Reinsurance payable

239,499

 

 

224,660

 

Other liabilities and accrued expenses

305,519

 

 

362,865

 

Liabilities held for sale

178,343

 

 

175,112

 

Total liabilities

$

2,976,210

 

 

$

2,622,222

 

 

 

 

 

Stockholders’ Equity:

 

 

 

Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding

$

 

 

$

 

Common stock: $0.001 par value, 200,000,000 shares authorized, 33,888,810 and 32,682,462 shares issued and outstanding, respectively

34

 

 

33

 

Additional paid-in capital

314,060

 

 

315,014

 

Accumulated other comprehensive income (loss), net of tax

1,157

 

 

5,674

 

Retained earnings

69,961

 

 

35,423

 

Total Tiptree Inc. stockholders’ equity

385,212

 

 

356,144

 

Non-controlling interests

16,930

 

 

17,394

 

Total stockholders’ equity

402,142

 

 

373,538

 

Total liabilities and stockholders’ equity

$

3,378,352

 

 

$

2,995,760

 

 

 

Tiptree Inc.

Condensed Consolidated Statements of Operations

($ in thousands, except share data)

 
 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

Earned premiums, net

$

175,026

 

 

$

116,418

 

 

$

498,903

 

 

$

344,994

 

Service and administrative fees

69,664

 

 

47,701

 

 

191,414

 

 

134,290

 

Ceding commissions

2,722

 

 

5,157

 

 

8,827

 

 

16,217

 

Net investment income

3,330

 

 

3,023

 

 

9,331

 

 

8,803

 

Net realized and unrealized gains (losses)

14,805

 

 

38,959

 

 

120,268

 

 

6,628

 

Other revenue

21,058

 

 

12,783

 

 

52,237

 

 

41,974

 

Total revenues

286,605

 

 

224,041

 

 

880,980

 

 

552,906

 

Expenses:

 

 

 

 

 

 

 

Policy and contract benefits

80,831

 

 

57,738

 

 

237,198

 

 

167,761

 

Commission expense

104,392

 

 

68,868

 

 

292,580

 

 

207,172

 

Employee compensation and benefits

48,643

 

 

45,715

 

 

147,260

 

 

124,894

 

Interest expense

8,657

 

 

8,321

 

 

26,890

 

 

23,518

 

Depreciation and amortization

6,119

 

 

4,010

 

 

18,261

 

 

12,244

 

Other expenses

34,379

 

 

25,492

 

 

104,340

 

 

80,737

 

Total expenses

283,021

 

 

210,144

 

 

826,529

 

 

616,326

 

Income (loss) before taxes

3,584

 

 

13,897

 

 

54,451

 

 

(63,420

)

Less: provision (benefit) for income taxes

237

 

 

(844

)

 

11,416

 

 

(22,030

)

Net income (loss)

3,347

 

 

14,741

 

 

43,035

 

 

(41,390

)

Less: net income (loss) attributable to non-controlling interests

1,339

 

 

1,978

 

 

4,477

 

 

2,038

 

Net income (loss) attributable to common stockholders

$

2,008

 

 

$

12,763

 

 

$

38,558

 

 

$

(43,428

)

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

Basic earnings per share

$

0.06

 

 

$

0.37

 

 

$

1.15

 

 

$

(1.27

)

Diluted earnings per share

$

0.06

 

 

$

0.35

 

 

$

1.11

 

 

$

(1.27

)

 

 

 

 

 

 

 

 

Weighted average number of common shares:

 

 

 

 

 

 

 

Basic

33,558,106

 

 

33,684,301

 

 

32,963,451

 

 

34,076,837

 

Diluted

34,132,182

 

 

33,684,301

 

 

35,025,211

 

 

34,076,837

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.04

 

 

$

0.04

 

 

$

0.12

 

 

$

0.12

 

Tiptree Inc.

Non-GAAP Reconciliations (Unaudited)

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

The Company defines Adjusted net income as income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses) and intangibles amortization associated with purchase accounting. We use adjusted net income as an internal operating performance measure in the management of business as part of our capital allocation process. We believe adjusted net income provides useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies. Adjusted net income should not be viewed as a substitute for income before taxes calculated in accordance with GAAP, and other companies may define adjusted net income differently.

We define Adjusted return on average equity as Adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholder’s equity during the period. We use Adjusted return on average equity as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted return on average equity should not be viewed as a substitute for return on average equity calculated in accordance with GAAP, and other companies may define adjusted return on average equity differently.

 

Three Months Ended September 30, 2021

 

 

 

 

Tiptree Capital

 

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

 

Total

Income (loss) before taxes

$

13,337

 

 

$

6,267

 

 

$

(4,700

)

 

$

(11,320

)

 

$

3,584

 

Less: Income tax (benefit) expense

(3,394

)

 

14

 

 

1,591

 

 

1,552

 

 

(237

)

Less: Net realized and unrealized gains (losses)

7,428

 

 

(1,055

)

 

10,396

 

 

 

 

16,769

 

Plus: Intangibles amortization (1)

3,830

 

 

 

 

 

 

 

 

3,830

 

Plus: Stock-based compensation expense

475

 

 

 

 

197

 

 

832

 

 

1,504

 

Plus: Non-recurring expenses

(28

)

 

 

 

448

 

 

 

 

420

 

Plus: Non-cash fair value adjustments

 

 

 

 

(815

)

 

 

 

(815

)

Less: Tax on adjustments

(2,115

)

 

(1,265

)

 

(1,595

)

 

650

 

 

(4,325

)

Adjusted net income

$

19,533

 

 

$

3,961

 

 

$

5,522

 

 

$

(8,286

)

 

$

20,730

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

19,533

 

 

$

3,961

 

 

$

5,522

 

 

$

(8,286

)

 

$

20,730

 

Average stockholders’ equity

$

291,281

 

 

$

68,925

 

 

$

118,729

 

 

$

(75,340

)

 

$

403,595

 

Adjusted return on average equity

26.8

%

 

23.0

%

 

18.6

%

 

NM

%

 

20.5

%

 

Three Months Ended September 30, 2020

 

 

 

 

Tiptree Capital

 

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

 

Total

Income (loss) before taxes

$

13,447

 

 

$

14,453

 

 

$

(4,978

)

 

$

(9,025

)

 

$

13,897

 

Less: Income tax (benefit) expense

(2,167

)

 

(2,830

)

 

3,011

 

 

2,830

 

 

844

 

Less: Net realized and unrealized gains (losses)

(659

)

 

(66

)

 

7,586

 

 

 

 

6,861

 

Plus: Intangibles amortization (1)

2,256

 

 

 

 

 

 

 

 

2,256

 

Plus: Stock-based compensation expense

535

 

 

1,224

 

 

(3

)

 

678

 

 

2,434

 

Plus: Non-recurring expenses

(53

)

 

 

 

340

 

 

(93

)

 

194

 

Plus: Non-cash fair value adjustments

 

 

 

 

(2,441

)

 

 

 

(2,441

)

Less: Tax on adjustments

(1,248

)

 

(916

)

 

(3,020

)

 

(1,054

)

 

(6,238

)

Adjusted net income

$

12,111

 

 

$

11,865

 

 

$

495

 

 

$

(6,664

)

 

$

17,807

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

12,111

 

 

$

11,865

 

 

$

495

 

 

$

(6,664

)

 

$

17,807

 

Average stockholders’ equity

$

283,989

 

 

$

45,991

 

 

$

94,580

 

 

$

(70,116

)

 

$

354,441

 

Adjusted return on average equity

17.1

%

 

103.2

%

 

2.1

%

 

NM

%

 

20.1

%

Notes

(1)

 

Specifically associated with acquisition purchase accounting. See Note (3) Acquisitions.

 

Nine Months Ended September 30, 2021

 

 

 

Tiptree Capital

 

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

 

Total

Income (loss) before taxes

$

49,569

 

 

$

25,119

 

 

$

12,914

 

 

$

(33,151

)

 

$

54,451

 

Less: Income tax (benefit) expense

(11,157

)

 

(4,448

)

 

(1,350

)

 

5,539

 

 

(11,416

)

Less: Net realized and unrealized gains (losses)

(5,004

)

 

(5,075

)

 

(3,512

)

 

 

 

(13,591

)

Plus: Intangibles amortization (1)

11,499

 

 

 

 

 

 

 

 

11,499

 

Plus: Stock-based compensation expense

1,347

 

 

331

 

 

209

 

 

1,831

 

 

3,718

 

Plus: Non-recurring expenses

2,076

 

 

 

 

729

 

 

2,171

 

 

4,976

 

Plus: Non-cash fair value adjustments

 

 

 

 

(2,167

)

 

 

 

(2,167

)

Less: Tax on adjustments

(1,930

)

 

(442

)

 

1,330

 

 

582

 

 

(460

)

Adjusted net income

$

46,400

 

 

$

15,485

 

 

$

8,153

 

 

$

(23,028

)

 

$

47,010

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

46,400

 

 

$

15,485

 

 

$

8,153

 

 

$

(23,028

)

 

$

47,010

 

Average stockholders’ equity

$

296,125

 

 

$

62,093

 

 

$

110,818

 

 

$

(81,196

)

 

$

387,840

 

Adjusted return on average equity

20.9

%

 

33.3

%

 

9.8

%

 

NM

%

 

16.2

%

 

Nine Months Ended September 30, 2020

 

 

 

Tiptree Capital

 

 

 

 

 

($ in thousands)

Insurance

 

Mortgage

 

Other

 

Corporate

 

 

Total

Income (loss) before taxes

$

418

 

 

$

20,768

 

 

$

(59,407

)

 

$

(25,199

)

 

$

(63,420

)

Less: Income tax (benefit) expense

2,711

 

 

(4,061

)

 

14,742

 

 

8,638

 

 

22,030

 

Less: Net realized and unrealized gains (losses)

27,310

 

 

2,753

 

 

65,982

 

 

 

 

96,045

 

Plus: Intangibles amortization (1)

6,958

 

 

 

 

 

 

 

 

6,958

 

Plus: Stock-based compensation expense

1,378

 

 

2,120

 

 

155

 

 

2,504

 

 

6,157

 

Plus: Non-recurring expenses

2,185

 

 

 

 

340

 

 

353

 

 

2,878

 

Plus: Non-cash fair value adjustments

 

 

 

 

(2,961

)

 

 

 

(2,961

)

Less: Tax on adjustments

(11,125

)

 

(2,092

)

 

(15,286

)

 

(3,944

)

 

(32,447

)

Adjusted net income

$

29,835

 

 

$

19,488

 

 

$

3,565

 

 

$

(17,648

)

 

$

35,240

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

29,835

 

 

$

19,488

 

 

$

3,565

 

 

$

(17,648

)

 

$

35,240

 

Average stockholders’ equity

279,897

 

 

43,001

 

 

122,554

 

 

(58,899

)

 

386,553

 

Adjusted return on average equity

14.2

%

 

60.4

%

 

3.9

%

 

NM

%

 

12.2

%

___________________________

The footnotes below correspond to the tables above, under “—Adjusted Net Income - Non-GAAP and “—Adjusted Return on Average Equity - Non-GAAP”.

Notes

(1)

 

Specifically associated with acquisition purchase accounting. See Note (3) Acquisitions.

Non-GAAP Financial Measures — Book value per share

Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders’ equity and total shares outstanding, net of treasury shares.

($ in thousands, except per share information)

As of September 30,

 

2021

 

2020

Total stockholders’ equity

$

402,142

 

 

$

361,691

 

Less: Non-controlling interests

16,930

 

 

13,953

 

Total stockholders’ equity, net of non-controlling interests

$

385,212

 

 

$

347,738

 

 

 

 

 

Total common shares outstanding

33,889

 

 

33,563

 

 

 

 

 

Book value per share

$

11.37

 

 

$

10.36

 

 

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