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Company to Host Quarterly Conference Call at 5:00 P.M. ET on May 8, 2025
The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations.
ST. PETERSBURG, Fla., May 08, 2025 (GLOBE NEWSWIRE) -- American Coastal Insurance Corporation (Nasdaq: ACIC) ("ACIC" or the "Company"), a property and casualty insurance holding company, today reported its financial results for the first quarter ended March 31, 2025.
| ($ in thousands, except for per share data) | Three Months Ended | ||||||||||
| March 31, | |||||||||||
| 2025 | 2024 | Change | |||||||||
| Gross premiums written | $ | 197,852 | $ | 184,601 | 7.2 | % | |||||
| Gross premiums earned | 162,101 | 160,270 | 1.1 | ||||||||
| Net premiums earned | 68,272 | 62,631 | 9.0 | ||||||||
| Total revenue | 72,202 | 66,598 | 8.4 | ||||||||
| Income from continuing operations, net of tax | 19,711 | 23,709 | (16.9 | ) | |||||||
| Income (loss) from discontinued operations, net of tax | 1,637 | (110 | ) | NM | |||||||
| Consolidated net income | $ | 21,348 | $ | 23,599 | (9.5 | ) | |||||
| Net income available to ACIC stockholders per diluted share | |||||||||||
| Continuing Operations | $ | 0.40 | $ | 0.48 | (16.7 | ) | % | ||||
| Discontinued Operations | 0.03 | - | 100.0 | % | |||||||
| Total | $ | 0.43 | $ | 0.48 | (10.4 | ) | % | ||||
| Reconciliation of net income to core income: | |||||||||||
| Plus: Non-cash amortization of intangible assets | $ | 609 | $ | 812 | (25.0 | ) | % | ||||
| Less: Income (loss) from discontinued operations, net of tax | 1,637 | (110 | ) | NM | |||||||
| Less: Net realized gains on investment portfolio | 1,382 | - | 100.0 | % | |||||||
| Less: Unrealized losses on equity securities | (1,963 | ) | (50 | ) | NM | ||||||
| Less: Net tax impact(1) | 250 | 181 | 38.1 | ||||||||
| Core income(2) | 20,651 | 24,390 | (15.3 | ) | |||||||
| Core income per diluted share(2) | $ | 0.42 | $ | 0.50 | (16.0 | ) | % | ||||
| Book value per share | $ | 5.40 | $ | 4.27 | 26.5 | % | |||||
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.
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(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.
Comments from Chief Executive Officer, B. Bradford Martz:
"We achieved our target combined ratio of 65% and delivered a return on equity over 30% in the first quarter of 2025. Strong account retention and selective new business production combined with our strategy to retain more of our business resulted in net premiums earned increasing 9% and net loss and loss adjustment expenses decreasing slightly compared to the same period last year. The Company remains focused on disciplined underwriting to support sustainable profitability and value creation for our shareholders throughout the cycle.”
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 | ||||||
| March 31, | |||||||
| 2025 | 2024 | ||||||
| Income from continuing operations, net of tax | $ | 19,711 | $ | 23,709 | |||
| Return on equity based on GAAP income from continuing operations, net of tax(1) | 32.7 | % | 68.0 | % | |||
| Income (loss) from discontinued operations, net of tax | $ | 1,637 | $ | (110 | ) | ||
| Return on equity based on GAAP income (loss) from discontinued operations, net of tax(1) | 2.7 | % | (0.3 | )% | |||
| Consolidated net income | $ | 21,348 | $ | 23,599 | |||
| Return on equity based on GAAP net income(1) | 35.4 | % | 67.7 | % | |||
| Core income | $ | 20,651 | $ | 24,390 | |||
| Core return on equity(1)(2) | 34.2 | % | 70.0 | % | |||
(1) Return on equity for the three months ended March 31, 2025 and 2024 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.
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 | ||||||||
| March 31, | |||||||||
| 2025 | 2024 | Change | |||||||
| Consolidated | |||||||||
| Loss ratio, net(1) | 16.7 | % | 19.9 | % | (3.2 | ) | pts | ||
| Expense ratio, net(2) | 48.3 | % | 33.3 | % | 15.0 | pts | |||
| Combined ratio (CR)(3) | 65.0 | % | 53.2 | % | 11.8 | pts | |||
| Effect of current year catastrophe losses on CR | - | % | 0.3 | % | (0.3 | ) | pts | ||
| Effect of prior year (favorable) unfavorable development on CR | (3.2 | )% | - | % | (3.2 | ) | pts | ||
| Underlying combined ratio(4) | 68.2 | % | 52.9 | % | 15.3 | 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.
| ($ in thousands) | Three Months Ended | |||||||||||
| March 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Loss and LAE | $ | 11,389 | $ | 12,474 | $ | (1,085 | ) | |||||
| % of Gross earned premiums | 7.0 | % | 7.8 | % | (0.8 | ) | pts | |||||
| % of Net earned premiums | 16.7 | % | 19.9 | % | (3.2 | ) | pts | |||||
| Less: | ||||||||||||
| Current year catastrophe losses | $ | - | $ | 211 | $ | (211 | ) | |||||
| Prior year reserve (favorable) unfavorable development | (2,194 | ) | 24 | (2,218 | ) | |||||||
| Underlying loss and LAE(1) | $ | 13,583 | $ | 12,239 | $ | 1,344 | ||||||
| % of Gross earned premiums | 8.4 | % | 7.6 | % | 0.8 | pts | ||||||
| % of Net earned premiums | 19.9 | % | 19.6 | % | 0.3 | pts | ||||||
(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.
The calculations of the Company's expense ratios are shown below.
| ($ in thousands) | Three Months Ended | ||||||||||
| March 31, | |||||||||||
| 2025 | 2024 | Change | |||||||||
| Policy acquisition costs |
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