ACIC 8-K
AMERICAN COASTAL INSURANCE Corp (ACIC)
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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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 6, 2025, American Coastal Insurance Corporation (the Company, we, our) issued a press release relating to our earnings for the second quarter ended June 30, 2025 (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 6, 2025. 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 |
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Earnings release issued by the Company on August 6, 2025 |
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Earnings presentation issued by the Company on August 6, 2025 |
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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 6, 2025 |
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, 2025
Company to Host Quarterly Conference Call at 5:00 P.M. ET on August 6, 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, FL - August 6, 2025: 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, 2025.
($ 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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2025 |
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2024 |
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Change |
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2025 |
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2024 |
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Change |
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Gross premiums written |
$ |
228,346 |
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$ |
229,449 |
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(0.5 |
)% |
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$ |
426,198 |
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$ |
414,050 |
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2.9 |
% |
Gross premiums earned |
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165,460 |
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155,450 |
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6.4 |
% |
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327,561 |
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315,720 |
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3.8 |
% |
Net premiums earned |
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78,443 |
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63,381 |
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23.8 |
% |
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146,715 |
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126,012 |
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16.4 |
% |
Total revenue |
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86,467 |
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68,656 |
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25.9 |
% |
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158,669 |
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135,254 |
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17.3 |
% |
Income from continuing operations, net of tax |
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28,037 |
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19,073 |
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47.0 |
% |
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47,748 |
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42,782 |
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11.6 |
% |
Income (loss) from discontinued operations, net of tax |
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(1,595 |
) |
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(19 |
) |
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NM |
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42 |
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(129 |
) |
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NM |
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Consolidated net income |
$ |
26,442 |
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$ |
19,054 |
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38.8 |
% |
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$ |
47,790 |
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$ |
42,653 |
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12.0 |
% |
Net income available to ACIC stockholders per diluted share |
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Continuing Operations |
$ |
0.56 |
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$ |
0.39 |
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43.6 |
% |
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$ |
0.96 |
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$ |
0.87 |
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10.3 |
% |
Discontinued Operations |
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(0.03 |
) |
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— |
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100.0 |
% |
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— |
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— |
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— |
% |
Total |
$ |
0.53 |
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$ |
0.39 |
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35.9 |
% |
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$ |
0.96 |
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$ |
0.87 |
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10.3 |
% |
Reconciliation of net income to core income: |
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Plus: Non-cash amortization of intangible assets and goodwill impairment |
$ |
610 |
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$ |
609 |
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0.2 |
% |
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$ |
1,219 |
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$ |
1,421 |
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(14.2 |
)% |
Less: Income (loss) from discontinued operations, net of tax |
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(1,595 |
) |
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(19 |
) |
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NM |
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42 |
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(129 |
) |
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NM |
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Less: Net realized gains (losses) on investment portfolio |
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— |
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(121 |
) |
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100.0 |
% |
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1,382 |
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(121 |
) |
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NM |
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Less: Unrealized gains (losses) on equity securities |
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2,231 |
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49 |
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NM |
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268 |
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(1 |
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NM |
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Less: Net tax impact (1) |
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(340 |
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143 |
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NM |
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(91 |
) |
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324 |
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NM |
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Core income(2) |
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26,756 |
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19,611 |
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36.4 |
% |
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47,408 |
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44,001 |
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7.7 |
% |
Core income per diluted share (2) |
$ |
0.54 |
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$ |
0.40 |
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35.0 |
% |
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$ |
0.96 |
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$ |
0.90 |
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6.7 |
% |
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Book value per share |
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$ |
6.00 |
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$ |
4.63 |
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29.6 |
% |
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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 Chief Executive Officer, B. Bradford Martz:
“I’m pleased that our team delivered another strong quarter, achieving year-over-year growth in both total revenue and underwriting profit. We continue to gain market share in the commercial residential segment, highlighting the strength of our competitive positioning and disciplined execution. We are committed to delivering value to our shareholders and believe these results, combined with our recent credit rating upgrades from Kroll Bond Rating Agency, reflect a very positive outlook for American Coastal.”
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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2025 |
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2024 |
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2025 |
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2024 |
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Income from continuing operations, net of tax |
$ |
28,037 |
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$ |
19,073 |
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$ |
47,748 |
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$ |
42,782 |
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Return on equity based on GAAP income from continuing operations, net of tax (1) |
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43.6 |
% |
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45.6 |
% |
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37.1 |
% |
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51.1 |
% |
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Income (loss) from discontinued operations, net of tax |
$ |
(1,595 |
) |
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$ |
(19 |
) |
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$ |
42 |
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$ |
(129 |
) |
Return on equity based on GAAP income (loss) from discontinued operations, net of tax (1) |
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(2.5 |
)% |
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— |
% |
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— |
% |
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(0.2 |
)% |
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Consolidated net income |
$ |
26,442 |
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$ |
19,054 |
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$ |
47,790 |
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$ |
42,653 |
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Return on equity based on GAAP net income (1) |
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41.1 |
% |
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45.6 |
% |
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37.1 |
% |
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51.0 |
% |
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Core income |
$ |
26,756 |
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$ |
19,611 |
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$ |
47,408 |
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$ |
44,001 |
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Core return on equity (1)(2) |
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41.6 |
% |
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46.9 |
% |
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36.8 |
% |
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52.6 |
% |
(1) Return on equity for the three and six months ended June 30, 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.
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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2025 |
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2024 |
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Change |
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2025 |
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2024 |
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Change |
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Consolidated |
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Loss ratio, net(1) |
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19.8 |
% |
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24.1 |
% |
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(4.3 |
) |
pts |
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18.4 |
% |
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22.0 |
% |
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(3.6 |
) |
pts |
Expense ratio, net(2) |
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40.8 |
% |
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40.8 |
% |
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|
— |
|
pts |
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44.3 |
% |
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37.1 |
% |
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7.2 |
|
pts |
Combined ratio (CR)(3) |
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60.6 |
% |
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64.9 |
% |
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(4.3 |
) |
pts |
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62.7 |
% |
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59.1 |
% |
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3.6 |
|
pts |
Effect of current year catastrophe losses on CR |
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— |
% |
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— |
% |
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— |
|
pts |
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— |
% |
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0.2 |
% |
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(0.2 |
) |
pts |
Effect of prior year favorable development on CR |
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(1.6 |
)% |
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(1.5 |
)% |
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(0.1 |
) |
pts |
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(2.4 |
)% |
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(0.8 |
)% |
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(1.6 |
) |
pts |
Underlying combined ratio(4) |
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62.2 |
% |
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66.4 |
% |
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(4.2 |
) |
pts |
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65.0 |
% |
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59.7 |
% |
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5.3 |
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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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2025 |
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2024 |
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Change |
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2025 |
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2024 |
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Change |
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Net loss and LAE |
$ |
15,540 |
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$ |
15,277 |
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$ |
263 |
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$ |
26,929 |
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$ |
27,751 |
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$ |
(822 |
) |
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% of Gross earned premiums |
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9.4 |
% |
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9.8 |
% |
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(0.4 |
) |
pts |
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8.2 |
% |
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8.8 |
% |
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(0.6 |
) |
pts |
% of Net earned premiums |
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19.8 |
% |
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24.1 |
% |
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(4.3 |
) |
pts |
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18.4 |
% |
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22.0 |
% |
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(3.6 |
) |
pts |
Less: |
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Current year catastrophe losses |
$ |
— |
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$ |
(8 |
) |
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$ |
8 |
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$ |
— |
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$ |
203 |
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$ |
(203 |
) |
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Prior year reserve favorable development |
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(1,275 |
) |
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(968 |
) |
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(307 |
) |
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(3,469 |
) |
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(1,022 |
) |
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(2,447 |
) |
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Underlying loss and LAE (1) |
$ |
16,815 |
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$ |
16,253 |
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$ |
562 |
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$ |
30,398 |
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$ |
28,570 |
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$ |
1,828 |
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% of Gross earned premiums |
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10.2 |
% |
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|
10.5 |
% |
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(0.3 |
) |
pts |
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|
9.3 |
% |
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|
9.0 |
% |
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|
0.3 |
|
pts |
% of Net earned premiums |
|
21.4 |
% |
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|
25.6 |
% |
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(4.2 |
) |
pts |
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|
20.7 |
% |
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|
22.7 |
% |
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|
(2.0 |
) |
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, |
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Six Months Ended June 30, |
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2025 |
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2024 |
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Change |
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2025 |
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2024 |
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|
Change |
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Policy acquisition costs |
$ |
24,257 |
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$ |
13,939 |
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$ |
10,318 |
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$ |
47,723 |
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$ |
23,534 |
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$ |
24,189 |
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General and administrative |
|
7,778 |
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|
11,938 |
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|
(4,160 |
) |
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|
17,284 |
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|
23,190 |
|
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|
(5,906 |
) |
|
Total operating expenses |
$ |
32,035 |
|
|
$ |
25,877 |
|
|
$ |
6,158 |
|
|
|
$ |
65,007 |
|
|
$ |
46,724 |
|
|
$ |
18,283 |
|
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% of Gross earned premiums |
|
19.4 |
% |
|
|
16.6 |
% |
|
|
2.8 |
|
pts |
|
|
19.8 |
% |
|
|
14.8 |
% |
|
|
5.0 |
|
pts |
% of Net earned premiums |
|
40.8 |
% |
|
|
40.8 |
% |
|
|
0.0 |
|
pts |
|
|
44.3 |
% |
|
|
37.1 |
% |
|
|
7.2 |
|
pts |
3
Exhibit 99.1
Quarter to Date Financial Results
Net income for the second quarter ended June 30, 2025 was $26.4 million, or $0.53 per diluted share, compared to net income of $19.1 million, or $0.39 per diluted share, for the second quarter ended June 30, 2024. Drivers of net income during the second quarter of 2025 included increased gross premiums earned and decreased ceded premiums earned, driving an overall increase in revenues. This increase in revenue was offset by increased policy acquisition costs quarter-over-quarter, partially offset by decreased general and administrative expenses. During the second quarter of 2025, the Company's net loss attributable to discontinued operations was $1.6 million, compared to a net loss of $19 thousand attributable to discontinued operations during the second quarter of 2024.
The Company's total gross written premium decreased by $1.1 million, or 0.5%, to $228.3 million for the second quarter ended June 30, 2025, from $229.4 million for the second quarter ended June 30, 2024. The breakdown of the quarter-over-quarter changes in both direct written and assumed premiums are shown in the table below.
($ in thousands) |
Three Months Ended June 30, |
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|
2025 |
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2024 |
|
|
Change $ |
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|
Change % |
|
||||
Direct Written and Assumed Premium |
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|
||||
Direct premium |
$ |
228,373 |
|
|
$ |
229,449 |
|
|
$ |
(1,076 |
) |
|
|
(0.5 |
)% |
Assumed premium (1) |
|
(27 |
) |
|
|
— |
|
|
|
(27 |
) |
|
|
(100.0 |
)% |
Total commercial property gross written premium |
$ |
228,346 |
|
|
$ |
229,449 |
|
|
$ |
(1,103 |
) |
|
|
(0.5 |
)% |
(1) Assumed premium written for 2025 primarily included commercial property business assumed from unaffiliated insurers that was subsequently cancelled.
Loss and LAE increased by $263,000, or 1.7%, to $15.5 million for the second quarter ended June 30, 2025, from $15.3 million for the second quarter ended June 30, 2024. Loss and LAE expense as a percentage of net earned premiums decreased 4.3 points to 19.8% for the second quarter ended June 30, 2025, compared to 24.1% for the second quarter ended June 30, 2024. Excluding catastrophe losses and reserve development, the Company's gross underlying loss and LAE ratio for the second quarter ended June 30, 2025, would have been 10.2%, a decrease of 0.3 points from 10.5% for the second quarter ended June 30, 2024.
Policy acquisition costs increased by $10.4 million, or 74.8%, to $24.3 million for the second quarter ended June 30, 2025, from $13.9 million for the second quarter ended June 30, 2024, primarily due to a decrease in ceding commission income as the result of the Company's decrease in quota share reinsurance coverage from 40% to 20%, effective June 1, 2024 and from 20% to 15%, effective June 1, 2025. External management fees also increased as a result of a one percent increase in the management fee and profit share accrual agreed to in our contract renewal with AmRisc, LLC.
General and administrative expenses decreased by $4.1 million, or 34.5%, to $7.8 million for the second quarter ended June 30, 2025, from $11.9 million for the second quarter ended June 30, 2024, driven by a non-recurring employee retention tax credit refund submitted to the Internal Revenue Service in 2022 and received during the second quarter of 2025. This non-recurring refund was previously disclosed in our Quarterly Report on Form 10-Q, filed on May 8, 2025, as a gain contingency. In addition, external spending for professional and consulting services decreased quarter-over-quarter.
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 2025 and 2024 were as follows:
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
||
Non-at-Risk |
|
(0.3 |
)% |
|
|
(0.2 |
)% |
Quota Share |
|
(15.1 |
)% |
|
|
(26.4 |
)% |
All Other |
|
(37.2 |
)% |
|
|
(32.7 |
)% |
Total Ceding Ratio |
|
(52.6 |
)% |
|
|
(59.3 |
)% |
Ceded premiums earned related to the Company's catastrophe excess of loss contracts increased year-over-year, driven by a decrease in quota share reinsurance coverage from 40% to 20% effective June 1, 2024, and a further decrease to 15% effective June 1, 2025. As a result of the decreased quota share percentage and also exposure growth, the Company purchased additional excess-of-loss coverage in 2025. These decreases in quota share reinsurance coverage lowered the Company's overall ceding ratio, as replacement excess of loss coverage was more cost effective than the higher quota share coverage.
Investment Portfolio Highlights
The Company's cash, restricted cash and investment holdings increased from $540.8 million at December 31, 2024, to $726.2 million at June 30, 2025. This increase was driven by cash flows from operations. The Company's cash and investment holdings consist of investments in U.S. government and agency securities, corporate debt, mutual funds and investment grade money market instruments. Fixed maturities represented approximately 78.0 % of total investments at June 30, 2025, compared to 82.3 % of total investments at December 31, 2024. The Company's fixed maturity investments had a modified duration of 2.2 years at June 30, 2025 and December 31, 2024.
5
Exhibit 99.1
Book Value Analysis
Book value per common share increased 22.6% from $4.89 at December 31, 2024, to $6.00 at June 30, 2025. Underlying book value per common share increased 18.9% from $5.21 at December 31, 2024, to $6.20 at June 30, 2025. An increase in the Company's retained earnings as a result of net income for the first half of 2025 drove the increase in the Company's book value per share. As shown in the table below, removing the effect of Accumulated Other Comprehensive Income ("AOCI"), caused by capital market conditions, increases the Company's book value per common share at June 30, 2025.
($ in thousands, except for share and per share data) |
|
|
|
|
|
|
||
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Book Value per Share |
|
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
|
||
Common stockholders' equity |
|
$ |
292,300 |
|
|
$ |
235,660 |
|
Denominator: |
|
|
|
|
|
|
||
Total Shares Outstanding |
|
|
48,746,722 |
|
|
|
48,204,962 |
|
Book Value Per Common Share |
|
$ |
6.00 |
|
|
$ |
4.89 |
|
|
|
|
|
|
|
|
||
Book Value per Share, Excluding the Impact of AOCI |
|
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
|
||
Common stockholders' equity |
|
$ |
292,300 |
|
|
$ |
235,660 |
|
Less: Accumulated other comprehensive loss |
|
|
(9,794 |
) |
|
|
(15,666 |
) |
Stockholders' Equity, excluding AOCI |
|
$ |
302,094 |
|
|
$ |
251,326 |
|
Denominator: |
|
|
|
|
|
|
||
Total Shares Outstanding |
|
|
48,746,722 |
|
|
|
48,204,962 |
|
Underlying Book Value Per Common Share(1) |
|
$ |
6.20 |
|
|
$ |
5.21 |
|
(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 6, 2025 - 5:00 P.M. ET
Participant Dial-In: (United States): 877-445-9755
(International): 201-493-6744
Webcast: To listen to the live webcast, please go to https://investors.amcoastal.com and click on the conference call link at the top of the page or go to: https://event.webcasts.com/starthere.jsp?ei=1727195&tp_key=9825ec9393
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/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, and Apartments in the state of Florida. American Coastal Insurance Company has an exclusive partnership for distribution of Condominium Association properties in the state of Florida with AmRisc Group (amriscgroup.com), one of the largest Managing General Agents in the country specializing in hurricane-exposed properties. American Coastal Insurance Company has earned a Financial Stability Rating of “A”, "Exceptional" from Demotech, and maintains an “A-” insurance financial strength rating with a Positive outlook by Kroll. ACIC maintains a ‘BBB-’ issuer rating with a Positive outlook by Kroll.
6
Exhibit 99.1
Contact Information: |
Alexander Baty |
Vice President, Finance & Investor Relations, American Coastal Insurance Corp. |
(727) 425-8076 |
|
Karin Daly |
Investor Relations, Vice President, The Equity Group |
(212) 836-9623 |
Definitions of Non-GAAP Measures
The Company believes that investors' understanding of ACIC's performance is enhanced by the Company's disclosure of the following non-GAAP measures. The Company's methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.
Net income (loss) excluding the effects of amortization of intangible assets, income (loss) from discontinued operations, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure that is computed by adding amortization, net of tax, to net income (loss) and subtracting income (loss) from discontinued operations, net of tax, realized gains (losses) on the Company's investment portfolio, net of tax, and unrealized gains (losses) on the Company's equity securities, net of tax, from net income (loss). Amortization expense is related to the amortization of intangible assets acquired, including goodwill, through mergers and, therefore, the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of the Company's operations. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net income (loss). The core income (loss) measure should not be considered a substitute for net income (loss) and does not reflect the overall profitability of the Company's business.
Core return on equity is a non-GAAP ratio calculated using non-GAAP measures. It is calculated by dividing the core income (loss) for the period by the average stockholders’ equity for the trailing twelve months (or one quarter of such average, in the case of quarterly periods). Core income (loss) is an after-tax non-GAAP measure that is calculated by excluding from net income (loss) the effect of income (loss) from discontinued operations, net of tax, non-cash amortization of intangible assets, including goodwill, unrealized gains or losses on the Company's equity security investments and net realized gains or losses on the Company's investment portfolio. In the opinion of the Company’s management, core income (loss), core income (loss) per share and core return on equity are meaningful indicators to investors of the Company's underwriting and operating results, since the excluded items are not necessarily indicative of operating trends. Internally, the Company’s management uses core income (loss), core income (loss) per share and core return on equity to evaluate performance against historical results and establish financial
7
Exhibit 99.1
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
In thousands, except share and per share amounts
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross premiums written |
|
$ |
228,346 |
|
|
$ |
229,449 |
|
|
$ |
426,198 |
|
|
$ |
414,050 |
|
Change in gross unearned premiums |
|
|
(62,886 |
) |
|
|
(73,999 |
) |
|
|
(98,637 |
) |
|
|
(98,330 |
) |
Gross premiums earned |
|
|
165,460 |
|
|
|
155,450 |
|
|
|
327,561 |
|
|
|
315,720 |
|
Ceded premiums earned |
|
|
(87,017 |
) |
|
|
(92,069 |
) |
|
|
(180,846 |
) |
|
|
(189,708 |
) |
Net premiums earned |
|
|
78,443 |
|
|
|
63,381 |
|
|
|
146,715 |
|
|
|
126,012 |
|
Net investment income |
|
|
5,793 |
|
|
|
5,347 |
|
|
|
10,304 |
|
|
|
9,364 |
|
Net realized investment gains (losses) |
|
|
— |
|
|
|
(121 |
) |
|
|
1,382 |
|
|
|
(121 |
) |
Net unrealized gains (losses) on equity securities |
|
|
2,231 |
|
|
|
49 |
|
|
|
268 |
|
|
|
(1 |
) |
Total revenue |
|
|
86,467 |
|
|
|
68,656 |
|
|
|
158,669 |
|
|
|
135,254 |
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Losses and loss adjustment expenses |
|
|
15,540 |
|
|
|
15,277 |
|
|
|
26,929 |
|
|
|
27,751 |
|
Policy acquisition costs |
|
|
24,257 |
|
|
|
13,939 |
|
|
|
47,723 |
|
|
|
23,534 |
|
General and administrative expenses |
|
|
7,778 |
|
|
|
11,938 |
|
|
|
17,284 |
|
|
|
23,190 |
|
Interest expense |
|
|
2,719 |
|
|
|
3,426 |
|
|
|
5,436 |
|
|
|
6,145 |
|
Total expenses |
|
|
50,294 |
|
|
|
44,580 |
|
|
|
97,372 |
|
|
|
80,620 |
|
Income before other income |
|
|
36,173 |
|
|
|
24,076 |
|
|
|
61,297 |
|
|
|
54,634 |
|
Other income |
|
|
1,379 |
|
|
|
811 |
|
|
|
2,449 |
|
|
|
1,621 |
|
Income before income taxes |
|
|
37,552 |
|
|
|
24,887 |
|
|
|
63,746 |
|
|
|
56,255 |
|
Provision for income taxes |
|
|
9,515 |
|
|
|
5,814 |
|
|
|
15,998 |
|
|
|
13,473 |
|
Income from continuing operations, net of tax |
|
$ |
28,037 |
|
|
$ |
19,073 |
|
|
$ |
47,748 |
|
|
$ |
42,782 |
|
Income (loss) from discontinued operations, net of tax |
|
|
(1,595 |
) |
|
|
(19 |
) |
|
|
42 |
|
|
|
(129 |
) |
Net income |
|
$ |
26,442 |
|
|
$ |
19,054 |
|
|
$ |
47,790 |
|
|
$ |
42,653 |
|
OTHER COMPREHENSIVE INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in net unrealized gains (losses) on investments |
|
|
3,042 |
|
|
|
73 |
|
|
|
7,254 |
|
|
|
(125 |
) |
Reclassification adjustment for net realized investment losses (gains) |
|
|
— |
|
|
|
121 |
|
|
|
(1,382 |
) |
|
|
121 |
|
Total comprehensive income |
|
$ |
29,484 |
|
|
$ |
19,248 |
|
|
$ |
53,662 |
|
|
$ |
42,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
48,434,446 |
|
|
|
47,821,115 |
|
|
|
48,285,665 |
|
|
|
47,572,236 |
|
Diluted |
|
|
49,636,088 |
|
|
|
49,398,463 |
|
|
|
49,556,882 |
|
|
|
49,162,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings available to ACIC common stockholders per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations |
|
$ |
0.58 |
|
|
$ |
0.40 |
|
|
$ |
0.99 |
|
|
$ |
0.90 |
|
Discontinued operations |
|
|
(0.03 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
0.55 |
|
|
$ |
0.40 |
|
|
$ |
0.99 |
|
|
$ |
0.90 |
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations |
|
$ |
0.56 |
|
|
$ |
0.39 |
|
|
$ |
0.96 |
|
|
$ |
0.87 |
|
Discontinued operations |
|
|
(0.03 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
0.53 |
|
|
$ |
0.39 |
|
|
$ |
0.96 |
|
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared per share |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
10
Exhibit 99.1
Consolidated Balance Sheets
In thousands, except share amounts
|
|
June 30, |
|
|
December 31, |
|
||
ASSETS |
|
|
|
|
|
|
||
Investments, at fair value: |
|
|
|
|
|
|
||
Fixed maturities, available-for-sale |
|
$ |
248,944 |
|
|
$ |
281,001 |
|
Equity securities |
|
|
40,502 |
|
|
|
36,794 |
|
Other investments |
|
|
29,585 |
|
|
|
23,623 |
|
Total investments |
|
$ |
319,031 |
|
|
$ |
341,418 |
|
Cash and cash equivalents |
|
|
315,485 |
|
|
|
137,036 |
|
Restricted cash |
|
|
91,727 |
|
|
|
62,357 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
407,212 |
|
|
$ |
199,393 |
|
Accrued investment income |
|
|
3,347 |
|
|
|
2,964 |
|
Property and equipment, net |
|
|
3,745 |
|
|
|
5,736 |
|
Premiums receivable, net |
|
|
53,504 |
|
|
|
46,564 |
|
Reinsurance recoverable on paid and unpaid losses, net |
|
|
169,622 |
|
|
|
263,419 |
|
Ceded unearned premiums |
|
|
256,772 |
|
|
|
160,893 |
|
Goodwill |
|
|
59,476 |
|
|
|
59,476 |
|
Deferred policy acquisition costs, net |
|
|
58,008 |
|
|
|
40,282 |
|
Intangible assets, net |
|
|
4,689 |
|
|
|
5,908 |
|
Other assets |
|
|
11,459 |
|
|
|
16,816 |
|
Assets held for sale |
|
|
— |
|
|
|
73,243 |
|
Total Assets |
|
$ |
1,346,865 |
|
|
$ |
1,216,112 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
||
Unpaid losses and loss adjustment expenses |
|
$ |
219,242 |
|
|
$ |
322,087 |
|
Unearned premiums |
|
|
383,991 |
|
|
|
285,354 |
|
Reinsurance payable on premiums |
|
|
226,856 |
|
|
|
83,130 |
|
Accounts payable and accrued expenses |
|
|
65,355 |
|
|
|
86,140 |
|
Operating lease liability |
|
|
3,248 |
|
|
|
3,323 |
|
Notes payable, net |
|
|
149,187 |
|
|
|
149,020 |
|
Other liabilities |
|
|
6,686 |
|
|
|
1,456 |
|
Liabilities held for sale |
|
|
— |
|
|
|
49,942 |
|
Total Liabilities |
|
$ |
1,054,565 |
|
|
$ |
980,452 |
|
|
|
|
|
|
|
|
||
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; 48,958,805 and 48,417,045 issued, respectively; 48,746,722 and 48,204,962 outstanding, respectively |
|
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
|
439,502 |
|
|
|
436,524 |
|
Treasury shares, at cost: 212,083 shares |
|
|
(431 |
) |
|
|
(431 |
) |
Accumulated other comprehensive loss |
|
|
(9,794 |
) |
|
|
(15,666 |
) |
Retained earnings (deficit) |
|
|
(136,982 |
) |
|
|
(184,772 |
) |
Total Stockholders' Equity |
|
$ |
292,300 |
|
|
$ |
235,660 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
1,346,865 |
|
|
$ |
1,216,112 |
|
11
2nd Quarter 2025 August 6th, 2025 Earnings Presentation
Company Overview ACIC is a specialty underwriter of catastrophe exposed commercial property insurance. American Coastal Insurance Corp. (Nasdaq: ACIC) is the insurance holding company for American Coastal Insurance Company (AmCoastal), a Florida domiciled P&C carrier, and Skyway Underwriters (SKU), a managing general agency, along with other operating affiliates. AmCoastal is a balance sheet underwriter and has the #1 market share of commercial residential property insurance in Florida with roughly 4,400 policies and $657 million of premium in-force. AmCoastal has earned an underwriting profit every year since its inception in 2007. SKU is a fee-based MGA focused on producing and underwriting commercial property insurance without taking any underwriting risk. ACIC as of June 30, 2025 Total Assets: $1.35 billion Total Equity: $292.3 million Annualized Revenue: $317.3 million Employees: 66 Headquarters: St. Petersburg, FL Credit Rating: BBB- (KBRA as of 7/21/25) Specialty Commercial Property Managing General Agency
Executive Summary 2Q-25 Results Non-GAAP Core Income of $26.8m ($0.54) increased $7.2m (+36.4%) from $19.6m ($0.40) y/y due to quota share reduction from 40% to 20% as of June 1, 2024 and further to 15% as of June 1, 2025 and two employer retention tax credits received in 2025 related to 2021 totaling $3.7m. Net premiums earned grew $15.0m (+23.8%) to $78.4m y/y. Our combined ratio of 60.6% decreased from 64.9% last year due to higher net premiums earned and our Non-GAAP underlying combined ratio (which excludes current catastrophe losses and PY development) was 62.2% which decreased from 66.4% in the prior year also due to higher net premiums earned. Both were below our stated target of 65.0%. We experienced no catastrophe losses in the quarter and had $1.3m of favorable prior year reserve development. Stockholders’ equity increased $56.6 million from December 31, 2024, to $292.3m or $6.00 per share and $6.20 per share excluding unrealized losses in accumulated other comprehensive income. Tangible book value per share increased to $4.68 per share. Other Highlights The Florida commercial property market continued to soften during the second quarter with average premiums down ~7% since year-end. The Company completed its Core CAT reinsurance program effective June 1, 2025 with increased protection and a risk-adjusted decrease of -12.4%. ACIC was upgraded to investment grade status (BBB-) by KBRA on 7.21.25, saving approximately $1.5m per year in interest expense. Skyway Underwriters is tracking with its 2025 underwriting goals and production target related to its new Apartment product.
2Q-25 Financial Scorecard The Company is proud to report strong results for the second quarter. 2Q-25 = $0.54 vs. Analyst’s Est. = $0.38 2Q-25 = $6.00 vs. Analyst’s Est. = $5.78 2Q-25 = 60.6% vs. Analyst’s Est. = 71.1% 2Q-25 = 41.6% vs. Analyst’s Est. = 28.2% Core Earnings per Share (CEPS) Book Value per Share (BVPS) Combined Ratio (CR) Core Return on Equity (CROE)
2Q-25 & 1H-25 Summary of Key Results Net & Core Income improved y/y driven by lower reinsurance costs. Combined Ratio was below 65.0% target.
2Q-25 Operating Overview Net Income increased y/y as the impacts of quota share reductions & new business premiums are earned. Our 2024 and 2025 quota share step-downs, combined with new business writings, impacted our net earned premiums positively. This was partially offset by increased operating expense, but created net additional earnings y/y.
Balance Sheet Highlights Liquidity and Book Value surged in 1H-2025 due to strong underwriting results.
Investment Portfolio Overview The Company’s high quality fixed income investments have mitigated the impacts of Q2 market volatility. The Company’s cash position increased as we continue to take advantage of high cash yields and keep a conservative portfolio.
Skyway Underwriters Production Summary 1H-25 Apartments are diversifying our exposure in Florida, but we remain disciplined & selective.
Core CAT Reinsurance Program effective 6.1.25 Note: Return times projected as of 9.30.25 and calculated by blending AIRv10, AIRv11.5, RMSv22, &. RMSv23 LT+DS equally. Occurrence and aggregate limit increased y/y, but exhaustion point 201-year return time decreased slightly due to model changes in both AIR & RMS that increased probable maximum loss (PML) estimates incorporated into our view of risk. Consolidated group retention: 1st event - $29.75m (12.6% of equity at 12/31/24) vs. expiring $20.5m (12.2% of equity at 12/31/23) 2nd event - $18.5m (7.9% of equity at 12/31/24) vs. expiring $13.0m (7.7% of equity at 12/31/23) 3rd Event - $3.75m (1.6% of equity at 12/31/24) vs. expiring $13.0m (7.7% of equity at 12/31/23) Non-loss impacted layers down -10% to -22%, resulting in an overall risk-adjusted cost decrease of approximately -12.4% y/y. External gross CAT quota share reduced from 20% to 15% and internal quota share with our captive (Shoreline Re) increased from 30% to 45%. All incumbent markets renewed in 2025, and we added 7 new markets. Armor Re II bond issuances totaling $400m 2024-2 Bond has full cascading coverage excess of $50m Core Catastrophe Program Highlights Structure Illustration 201YR 100YR 50YR $518.0M $855.1M 130YR $1,027.9M
Cautionary Statements This presentation and the accompanying remarks contain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward looking statements include expectations regarding our diversification, growth opportunities, retention rates, liquidity, investment returns and ability to meet our investment objectives and to manage and mitigate market risk with respect to our investments. These statements are based on current expectations, estimates and projections about the industry and market in which we operate, and management’s current beliefs and assumptions. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "endeavor," "project," "believe," "anticipate," "intend," "could," "would," "estimate" or "continue" or the negative variations thereof, or comparable terminology, are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. The risks and uncertainties include, without limitation: the regulatory, economic and weather conditions in the states in which we operate; the impact of new federal or state regulations that affect the property and casualty insurance market; the cost, variability and availability of reinsurance; assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to attract and retain the services of senior management; the outcome of litigation pending against us, including the terms of any settlements; dependence on investment income and the composition of our investment portfolio and related market risks; our exposure to catastrophic events and severe weather conditions; downgrades in our financial strength ratings; risks and uncertainties relating to our acquisitions, including our ability to successfully integrate the acquired companies; and other risks and uncertainties described in the section entitled "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission (the "SEC"), including our Annual Report in Form 10-K for the year ended December 31, 2024 and 2023. We caution you not to place undue reliance on these forward looking statements, which are valid only as of the date they were made. Except as may be required by applicable law, we undertake no obligation to update or revise any forward-looking statements to reflect new information, the occurrence of unanticipated events, or otherwise. This presentation contains certain non-GAAP financial measures. These measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with GAAP and should not be viewed as a substitute for GAAP measures. See our earnings release, Form 10-K , Form 10-Q and Form 10-Q/A for further information regarding these non-GAAP financial measures.