Kingstone Reports Record Profitability and Growth

Raises 2024 and 2025 GuidanceKINGSTON, NY / ACCESSWIRE / November 12, 2024 / Kingstone Companies, Inc. (Nasdaq:KINS) (the "Company" or "Kingstone"), a Northeast regional property and casualty insurance holding company, today announced its financial results for the third quarter ended September 30, 2024. The Company will hold its third quarter 2024 financial results conference call on Wednesday, November 13, 2024, at 8:30 a.m. Eastern Time. With this release, the Company has provided an investor presentation that can be accessed through the Investor Relations/Events & Presentations section of the Company website (www.kingstonecompanies.com).Key Financial and Operational HighlightsQuarter EndedNine Months Ended($ in thousands, except per share data)September 30,September 30,20242023Change20242023% ChangeDirect premiums written1 - Core Business2$64,170$46,02639.4%$162,063$129,66525.0%Net combined ratio72.0%110.2%(38.2) pts80.7%110.7%(30.0) ptsNet Income/(Loss)$6,978$(3,538)NM$12,920$(9,114)NMNet Income/(Loss) per share - basic$0.61$(0.33)NM$1.16$(0.85)NMReturn on equity - annualized55.6%(48.3%)103.8 pts36.6%(38.8%)75.3 ptsManagement CommentaryMeryl Golden, Chief Executive Officer of Kingstone Companies, Inc., stated, "In the third quarter of 2024, we delivered the highest level of income since Kingstone Insurance Company was acquired by Kingstone Companies in 2009, coupled with record-breaking premiums written. The simultaneous achievement of these milestones is remarkable, driven in large part by the strength of our team, as well as the favorable market conditions that emerged just months ago. The timing could not have been more advantageous for Kingstone.Core business direct premiums written increased by 39% and 25% during the quarter and year-to-date, respectively. Our objective has always been, and will continue to be, profitable growth. We are managing our new business growth in a deliberate and strategic manner to ensure that we maintain our strong profitability.Our net combined ratio improved by 38.2 percentage points to 72.0% compared to the third quarter of the prior year, primarily driven by lower frequency and severity of claims due to risk selection in our Select product, the reduction in our non-core business and our disciplined underwriting approach. Contributing further to our profitability, severe weather conditions within our footprint were limited, adding only 1.7% to our loss ratio, which was more than offset by favorable prior year reserve development of 1.9%. Our expense ratio was 33%, representing an increase of 1.3 percentage points from the prior year's third quarter, primarily driven by higher bonus and contingent commission for our talented employees and producers, based on the strong underwriting performance we achieved.Ms. Golden concluded, "With most of the year behind us and strong visibility into the fourth quarter, we are raising both our full-year 2024 and 2025 guidance. We have successfully executed our strategy and delivered meaningful, sustainable value for our shareholders. Moving forward, our priority remains maximizing value for our shareholders and ensuring the long-term success of the company.Guidance (see "Disclaimer and Forward-Looking Statements" below)For 2024, the Company's current full year expectations are calculated based on anticipated net premiums earned of approximately $128million, and are as follows:Guidance Metrics2024 - Current2024 - PreviousCore Business2 direct premiums written growth25% to 35%25% to 35%Combined ratio79% to 83%84% to 88%Net income per share - basic*$1.40 to $1.70$1.00 to $1.30Return on equity32% to 36%26% to 34%For 2025, the Company's full year expectations are calculated based on anticipated net premiums earned of approximately $165 million, and are as follows:Guidance Metrics2025 - Current2025 - PreviousCore Business2 direct premiums written growth15% to 25%15% to 25%Combined ratio82% to 86%85% to 89%Net income per share - basic*$1.60 to $2.00$1.20 to $1.60Return on equity24% to 32%22% to 30%*Previous guidance was presented on a diluted shares basis, while current guidance is presented on a basic share basis.Consolidated Financial ResultsConsolidated Financial ResultsQuarter EndedNine Months Ended($ in thousands, except per share data)September 30,September 30,20242023Change20242023% ChangeDirect premiums written1$66,627$51,99228.1%$169,447$147,23715.1%Net premiums earned$33,407$27,93819.6%$92,531$85,7018.0%Net investment income$1,650$1,44414.3%$4,917$4,43710.8%Net gain/(loss) on investments$827$(824)NM$1,319$598120.6%Underlying loss ratio139.2%70.8%(31.6) pts47.9%69.2%(21.3) ptsNet development of prior year losses(1.9%)0.0%(1.9) pts(1.8%)0.0%(1.8) ptsNet loss ratio excluding the effect of catastrophes137.3%70.8%(33.5) pts46.1%69.2%(23.1) ptsCatastrophe loss ratio11.7%7.7%(6.0) pts2.7%8.5%(5.8) ptsNet loss ratio39.0%78.5%(39.5) pts48.8%77.7%(28.9) ptsNet underwriting expense ratio33.0%31.7%1.3 pts31.9%33.0%(1.1) ptsNet combined ratio72.0%110.2%(38.2) pts80.7%110.7%(30.0) ptsAdjusted EBITDA1$10,433$(1,635)NM$21,212$(5,893)NMNet Income/(Loss)$6,978$(3,538)NM$12,920$(9,114)NMNet Income/(Loss) per share - basic$0.61$(0.33)NM$1.16$(0.85)NMNet Income/(Loss) per share - diluted$0.55$(0.33)NM$1.05$(0.85)NMReturn on equity - annualized55.6%(48.3%)NM36.6%(38.8%)NMOther comprehensive income/(loss)$3,584$(2,226)NM$3,234$(1,161)NMOperating net income/(loss)1$6,325$(2,886)NM$11,878$(9,586)NMOperating net income/(loss) per share - basic1$0.55$(0.27)NM$1.07$(0.89)NMOperating net income/(loss) per share - diluted1$0.50$(0.27)NM$0.97$(0.89)NMOperating return on equity112.6%(9.8%)NM25.2%(30.6%)NMOperating return on equity1 - annualized50.4%(39.4%)NM33.6%(40.8%)NMBook value per share - diluted4.58$2.16112.3%Book value per share - diluted excluding AOCI5.28$3.5548.6%NM = Not MeaningfulCore Business Results (New York Only)The Company refers to its New York policies as its Core Business.Core Business Results (New York Only)Quarter EndedNine Months Ended($ in thousands, except per share data)September 30,September 30,20242023% Change20242023% ChangeDirect premiums written1, 3$64,170$46,02639.4%$162,063$129,66525.0%Net premiums earned$31,407$24,38828.8%$86,468$73,60617.5%Net loss ratio excluding the effect of catastrophes1,336.6%64.7%(28.1) pts44.7%64.4%(19.6) ptsCatastrophe loss ratio1, 31.2%7.4%(6.2) pts1.9%5.4%(3.6) ptsNet loss ratio337.8%72.1%(34.3) pts46.6%69.8%(23.2) ptsNon-Core Business Results (Outside of New York)The Company has been aggressively reducing policy count in the Non-Core Business, subject to regulatory requirements.Non-Core Business Results (Outside of New York)Quarter EndedNine Months Ended($ in thousands, except per share data)September 30,September 30,20242023% Change20242023% ChangeDirect premiums written1, 3$2,457$5,966(58.8%)$7,384$17,572(58.0%)Net premiums earned$2,000$3,550(43.7%)$6,063$12,095(49.9%)Net loss ratio excluding the effect of catastrophes1,347.5%112.5%(65.0) pts65.7%98.5%(32.7) ptsCatastrophe loss ratio1, 310.8%10.3%0.5 pts13.9%27.1%(13.2) ptsNet loss ratio358.2%122.8%(64.5) pts79.6%125.5%(45.9) ptsPremium and Policy Trends($ in thousands)September 30, 2024Sequential ChangeJune 30, 2024Sequential ChangeMarch 31, 2024Sequential ChangeDecember 31, 2023Core Business2Direct premiums written1, 3$64,17025.1&$51,30610.1%$46,587(0.9)%$47,027Policies in force69,3473.6%66,934(0.1)%66,991(0.9)%67,575Non-Core Business2Direct premiums written1,3$2,45712.2%$2,190(20.0)%$2,738(53.7)%$5,911Policies in force5,540(24.2)%7,306(19.5)%9,080(16.1)%10,8231These measures are not based on GAAP and are defined and reconciled below to the most directly comparable GAAP measures. See "Definitions and Non-GAAP Measures".2Kingstone refers to New York business as its "Core" business and business outside of New York as its "Non-Core" business.3Core and Non-Core business direct premiums written, net loss ratio excluding the effect of catastrophes and catastrophe loss ratio are not based on GAAP. Net premiums earned is the most directly comparable GAAP measure to direct premiums written. Net loss ratio is the most directly comparable GAAP measure to net loss ratio excluding the effect of catastrophes and catastrophe loss ratio. The aggregate of Core Business and Non-Core Business direct premiums written, net loss ratios and catastrophe loss ratios is represented by direct premiums written, net loss ratios and catastrophe loss ratio, as set forth under Consolidated Financial Results above. See "Definitions and Non-GAAP Measures".Conference Call DetailsWednesday, November 13, 2024, at 8:30 a.m. Eastern TimeTo participate please dial:U.S. toll free 1-877-423-9820International 1-201-493-6749Participants are asked to dial-in approximately 10 minutes before the conference call is scheduled to begin. The conference call can also be accessed via webcast in the "Investor Relations/Events & Presentations" tab of the Company's website or by clicking here. The webcast will be archived and accessible for approximately 30 days.About Kingstone Companies, Inc.Kingstone is a northeast regional property and casualty insurance holding company whose principal operating subsidiary is Kingstone Insurance Company ("KICO"). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2023 was the 15th largest writer of homeowners insurance in New York. KICO is also licensed in New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine.Investor Relations Contact:Karin DalyVice PresidentThe Equity Group Inc.[email protected]Disclaimer and Forward-Looking StatementsThe guidance provided above is based on information available as of November 12, 2024 and management's review of the anticipated financial results for 2024 and 2025. Such guidance remains subject to change based on management's ongoing review of the Company's 2024 and 2025 results and is a forward-looking statement (see below). Kingstone assumes no obligation to update this guidance. The actual results may be materially different and are affected by the risk factors and uncertainties identified in this press release and in Kingstone's annual and quarterly filings with the Securities and Exchange Commission.This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those included in forward-looking statements due to a variety of factors. For more details on factors that could affect expectations, see Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023.The risks and uncertainties include, without limitation, the following:the risk of significant losses from catastrophes and severe weather events;risks related to the lack of a financial strength rating from A.M. Best;risks related to our indebtedness due on June 30, 2026, including due to the need to comply with certain financial covenants and limitations on the ability of our insurance subsidiary to pay dividends to us;adverse capital, credit and financial market conditions;the unavailability of reinsurance at current levels and prices;the exposure to greater net insurance losses in the event of reduced reliance on reinsurance;the credit risk of our reinsurers;the inability to maintain the requisite amount of risk-based capital needed to grow our business;the effects of climate change on the frequency or severity of weather events and wildfires;risks related to the limited market area of our business;risks related to a concentration of business in a limited number of producers;legislative and regulatory changes, including changes in insurance laws and regulations and their application by our regulators;limitations with regard to our ability to pay dividends;the effects of competition in our market areas;our reliance on certain key personnel;risks related to security breaches or other attacks involving our computer systems or those of our vendors; andour reliance on information technology and information systems.Kingstone undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.Definitions and Non-GAAP MeasuresDirect premiums written represent the total premiums charged on policies issued by the Company during the respective fiscal period.Net premiums written are direct premiums written less premiums ceded to reinsurers. Net premiums earned, the GAAP measure most comparable to direct premiums written and net premiums written, are net premiums written that are pro-rata earned during the fiscal period presented. All of the Company's policies are written for a twelve-month period. Management uses direct premiums written and net premiums written, along with other measures, to gauge the Company's performance and evaluate results. Direct premiums written and net premiums written are provided as supplemental information, not as a substitute for net premiums earned, and do not reflect the Company's net premiums earned.Adjusted EBITDA is net income (loss) exclusive of interest expense, income tax expense (benefit), depreciation and amortization, loss on extinguishment of debt, net gains (losses) on investments, and stock- based compensation. Net income (loss) is the GAAP measure most closely comparable to adjusted EBITDA.Management uses adjusted EBITDA along with other measures to gauge the Company's performance and evaluate results, which can be skewed when including interest expense, income tax expense (benefit), depreciation and amortization, loss on extinguishment of debt, net gains (losses) on investments, and stock-based compensation, and may vary significantly between periods. Adjusted EBITDA is provided as supplemental information, not as a substitute for net income (loss) and does not reflect the Company's overall profitability.Operating net income (loss) and basic operating net income (loss) per share is net income (loss) and basic income (loss) per share exclusive of net gains (losses) on investments, net of tax. Net income (loss) and basic net income (loss) per share are the GAAP measures most closely comparable to operating net income (loss) and basic operating net income (loss) per share.Management uses operating net income (loss) and basic operating net income (loss) per share along with other measures to gauge the Company's performance and evaluate results, which can be skewed when including net gains (losses) on investments and may vary significantly between periods. Operating net income (loss) and basic operating net income (loss) per share are provided as supplemental information, not as a substitute for net income (loss) and basic net income (loss) per share and do not reflect the Company's overall profitability.Operating net income (loss) and diluted operating net income (loss) per share is net income (loss) and diluted income (loss) per share exclusive of net gains (losses) on investments, net of tax. Net income (loss) and diluted net income (loss) per share are the GAAP measures most closely comparable to operating net income (loss) and diluted operating net income (loss) per share.Management uses operating net income (loss) and diluted operating net income (loss) per share along with other measures to gauge the Company's performance and evaluate results, which can be skewed when including net gains (losses) on investments and may vary significantly between periods. Operating net income (loss) and diluted operating net income (loss) per share are provided as supplemental information, not as a substitute for net income (loss) and diluted net income (loss) per share, and do not reflect the Company's overall profitability.Operating return on equity is operating income (loss) divided by average equity. Return on equity is the GAAP measure most closely comparable to operating return on equity.Management uses operating return on equity, along with other measures, to gauge the Company's performance and evaluate results, which can be skewed when including net gains (losses) on investments, which may vary significantly between periods. Operating return on equity is provided as supplemental information, is not a substitute for return on equity and does not reflect the Company's overall return on average common equity.Underlying loss ratio is a non-GAAP ratio, which is computed as the difference between GAAP net loss ratio and the effect of prior year loss reserve development and catastrophe losses.Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in the Company's business that may be obscured by prior year loss reserve development and catastrophe losses. Catastrophe losses cause the Company's loss ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the net loss ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing the Company's underwriting performance. The most directly comparable GAAP measure is the net loss ratio. The underlying loss ratio should not be considered a substitute for the net loss ratio and does not reflect the Company's net loss ratio.Net loss ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between GAAP net loss ratio and the effect of catastrophes on the net loss ratio.Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in the Company's business that may be obscured by catastrophe losses. Catastrophe losses cause the Company's net loss ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the net loss ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing the Company's underwriting performance. The most directly comparable GAAP measure is the net loss ratio. The net loss ratio excluding the effect of catastrophes should not be considered a substitute for the net loss ratio and does not reflect the Company's net loss ratio.The table below reconciles direct premiums written to net premiums earned for the periods presented:For the Three Months EndedFor the Nine Months EndedSeptember 30,September 30,%%20242023Change20242023Change(000's except percentages)Direct Premiums Written Reconciliation:Direct premiums written$66,627$51,99228.1%$169,447$147,23715.1%Ceded written premiums1(46,081)(48,317)(4.6)%(69,381)(75,964)(8.7)%Net premiums written20,5453,675459.0%100,06571,27340.4%Change in unearned premiums12,86224,263(47.0)%(7,535)14,428(152.2)%Net premiums earned$33,407$27,93819.6%$92,531$85,7018.0%(Components may not sum due to rounding)1 Net premiums written balances from prior year periods were reclassified to conform with current year presentation. The reclassification had no effect on the Company's previously reported financial condition, results of operations or cash flows.The following table reconciles net income (loss) to adjusted EBITDA for the periods indicated:For the Three Months EndedFor the Nine Months EndedSeptember 30,September 30,%%20242023Change20242023Change(000's except percentages)Adjusted EBITDA Reconciliation:Net income (loss)$6,978$(3,538)NM$12,920$(9,114)NMInterest expense901989(8.9)%2,8843,005(4.0)%Income tax expense (benefit)2,106(859)NM3,689(2,149)NMDepreciation and amortization619741(16.5)%1,8362,328(21.1)%EBITDA10,604(2,667)NM21,329(5,931)NMLoss on extinguishment of debt297-NM297-NMNet (gain) loss on investments(827)824NM(1,319)(598)120.6%Stock-based compensation35920773.4%90663642.5%Adjusted EBITDA$10,433$(1,635)NM$21,212$(5,893)NM(Components may not sum due to rounding)The following table reconciles net income (loss) to operating net income (loss) and basic net income (loss) per share to basic operating net income (loss) per share for the periods indicated:For the Three Months EndedFor the Nine Months EndedSeptember 30, 2024September 30, 2023September 30, 2024September 30, 2023AmountBasic income per common shareAmountBasic loss per common shareAmountBasic income per common shareAmountBasic loss per common share(000's except per common share amounts and percentages)Operating Net Income (Loss) and Operating Net Income (Loss) per Basic Common Share Reconciliation:Net income (loss)$6,978$0.61$(3,538)$(0.33)$12,920$1.16$(9,114)$(0.85)Net (gain) loss on investments(827)824(1,319)(598)Less tax (expense) benefit on net (gain) loss(174)173(277)(126)Net (gain) loss on investments, net of taxes(653)(0.06)6510.06(1,042)(0.09)(472)(0.04)Operating net income (loss)$6,325$0.55$(2,886)$(0.27)$11,878$1.07$(9,586)$(0.89)Weighted average basic shares outstanding11,404,36010,756,15611,142,04310,754,709(Components may not sum due to rounding)The following table reconciles net income (loss) to operating net income (loss) and diluted net income (loss) per share to diluted operating net income (loss) per share for the periods indicated:For the Three Months EndedFor the Nine Months EndedSeptember 30, 2024September 30, 2023September 30, 2024September 30, 2023AmountDiluted income per common shareAmountDiluted loss per common shareAmountDiluted income per common shareAmountDiluted loss per common share(000's except per common share amounts and percentages)Operating Net Income (Loss) and Operating Net Income (Loss) per Diluted Common Share Reconciliation:Net income (loss)$6,978$0.55$(3,538)$(0.33)$12,920$1.05$(9,114)$(0.85)Net (gain) loss on investments(827)824(1,319)(598)Less tax (expense) benefit on net (gain) loss(174)173(277)(126)Net (gain) loss on investments, net of taxes(653)(0.05)6510.06(1,042)(0.09)(472)(0.04)Operating net income (loss)$6,325$0.50$(2,886)$(0.27)$11,878$0.97$(9,586)$(0.89)Weighted average diluted shares outstanding12,581,12810,756,15612,249,57610,754,709(Components may not sum due to rounding)The following table reconciles net income (loss) to operating net income (loss) and return on equity to operating return on equity for the periods indicated:For the Three Months EndedFor the Nine Months EndedSeptember 30,September 30,%%20242023Change20242023Change(000's except percentages)Operating Net Income (Loss) Reconciliation:Net income (loss)$6,978$(3,538)NM$12,920$(9,114)NMNet (gain) loss on investments(827)824NM(1,319)(598)(120.6%)Less tax (expense) benefit on net (gain) loss(174)173NM(277)(126)(119.8%)Net (gain) loss on investments, net of taxes(653)651NM(1,042)(472)(120.8%)Operating net income (loss)$6,325$(2,886)NM$11,878$(9,586)NMOperating Return on Equity Reconciliation:Net income (loss)$6,978$(3,538)NM$12,920$(9,114)NMAverage equity$50,236$29,30771.4%$47,087$31,34950.2%Return on equity13.9%(12.1%)NM27.4%(29.1%)NMReturn on equity - annualized55.6%(48.3%)NM36.6%(38.8%)NMNet (gain) loss on investments, net of taxes$(653)$651NM$(1,042)$(472)(120.8%)Average equity$50,236$29,30771.4%$47,087$31,34950.2%Effect of net (gain) loss on investments, net of taxes, on return on equity(1.3%)2.2%NM(2.2%)(1.5%)(47.0%)Operating net income (loss)$6,325$(2,886)NM$11,878$(9,586)NMOperating net income (loss) - annualized$25,300$(11,544)NM$15,837$(12,781)NMAverage equity$50,236$29,30771.4%$47,087$31,34950.2%Operating return on equity12.6%(9.8%)NM25.2%(30.6%)NMOperating return on equity - annualized50.4%(39.4%)NM33.6%(40.8%)NM(Components may not sum due to rounding)The following table reconciles the underlying loss ratio, the net loss ratio excluding the effect of catastrophes and the catastrophe loss ratio to the net loss ratio for the periods presented:For the Three Months EndedFor the Nine Months EndedSeptember 30,September 30,20242023Percentage Point Change20242023Percentage Point ChangeLoss Ratio Reconciliation:Underlying Loss Ratio39.2%70.8%(31.6)pts47.9%69.2%(21.3)ptsEffect of prior-year reserve development(1.9%)0.0%(1.9)pts(1.8%)0.0%(1.8)ptsNet loss ratio excluding the effect of catastrophes37.3%70.8%(33.5)pts46.1%69.2%(23.1)ptsEffect of catastrophes1.7%7.7%(6.0)pts2.7%8.5%(5.8)ptsNet loss ratio39.0%78.5%(39.5)pts48.8%77.7%(28.9)pts(Components may not sum due to rounding)KINGSTONE COMPANIES, INC. AND SUBSIDIARIES Condensed Consolidated Balance SheetsSeptember 30,December 31,20242023(unaudited)AssetsFixed-maturity securities, held-to-maturity, at amortized cost (fair value of$6,278,968 at September 30, 2024 and $6,106,148 at December 31, 2023)$7,048,662$7,052,541Fixed-maturity securities, available-for-sale, at fair value (amortized cost of$176,904,251 at September 30, 2024 and $164,460,942 at December 31, 2023)165,458,345148,920,797Equity securities, at fair value (cost of $13,527,554 at September 30, 2024 and$17,986,783 at December 31, 2023)11,280,22814,762,340Other investments4,299,1783,897,150Total investments188,086,413174,632,828Cash and cash equivalents33,760,7988,976,998Premiums receivable, net17,601,41713,604,808Reinsurance receivables, net65,746,82775,593,912Deferred policy acquisition costs21,852,36519,802,564Intangible assets500,000500,000Property and equipment, net9,299,1639,395,697Deferred income taxes, net6,002,83310,551,819Other assets4,144,5854,574,584Total assets$346,994,401$317,633,210LiabilitiesLoss and loss adjustment expense reserves$116,842,451$121,817,862Unearned premiums119,974,779105,621,538Advance premiums5,307,2233,797,590Reinsurance balances payable9,866,55512,837,140Deferred ceding commission revenue10,286,0939,460,865Accounts payable, accrued expenses and other liabilities7,749,9814,350,546Debt, net (current $856,605 and long-term $16,440,982 at September 30, 2024,current $19,580,109 and long-term $5,663,421 at December 31, 2023)17,297,58725,243,530Total liabilities287,324,669283,129,071Commitments and ContingenciesStockholders' EquityPreferred stock, $.01 par value; authorized 2,500,000 shares--Common stock, $.01 par value; authorized 20,000,000 shares; issued 13,818,950 sharesat September 30, 2024 and 12,248,313 shares at December 31, 2023; outstanding12,312,296 shares at September 30, 2024 and 10,776,907 shares at December 31, 2023138,190122,483Capital in excess of par84,334,03775,338,010Accumulated other comprehensive loss(9,040,113)(12,274,563)Accumulated deficit(10,194,549)(23,114,310)65,237,56540,071,620Treasury stock, at cost, 1,506,654 shares at September 30, 2024and December 31, 2023(5,567,833)(5,567,481)Total stockholders' equity59,669,73234,504,139Total liabilities and stockholders' equity$346,994,401$317,633,210KINGSTONE COMPANIES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)For the Three Months EndedFor the Nine Months EndedSeptember 30,September 30,2024202320242023RevenuesNet premiums earned$33,407,194$27,938,318$92,530,708$85,701,467Ceding commission revenue4,741,6765,536,32713,870,74816,393,944Net investment income1,649,6731,444,3604,917,1294,437,208Net gains (losses) on investments826,522(824,370)1,319,307597,643Other income146,663142,036401,128454,160Total revenues40,771,72834,236,671113,039,020107,584,422ExpensesLoss and loss adjustment expenses13,027,59721,932,45345,125,49266,552,565Commission expense9,004,2548,210,43025,088,54625,221,374Other underwriting expenses6,894,5906,318,62518,675,72019,873,882Other operating expenses1,241,572441,9632,820,6201,868,011Depreciation and amortization619,056741,0591,835,5032,327,691Interest expense900,583988,6992,884,1813,004,564Total expenses31,687,65238,633,22996,430,062118,848,087Income (loss) from operations before taxes9,084,076(4,396,558)16,608,958(11,263,665)Income tax expense (benefit)2,105,931(858,987)3,689,197(2,149,367)Net income (loss)6,978,145(3,537,571)12,919,761(9,114,298)Other comprehensive income (loss), net of taxGross change in unrealized gains (losses)on available-for-sale-securities4,533,334(2,821,785)4,082,771(1,486,887)Reclassification adjustment for net realizedlosses included in net income (loss)3,9394,18111,46817,201Net change in unrealized gains (losses),on available-for-sale-securities4,537,273(2,817,604)4,094,239(1,469,686)Income tax (expense) benefit related to itemsof other comprehensive income (loss)(952,827)591,697(859,789)308,635Other comprehensive income (loss), net of tax3,584,446(2,225,907)3,234,450(1,161,051)Comprehensive income (loss)$10,562,591$(5,763,478)$16,154,211$(10,275,349)Earnings (loss) per common share:Basic$0.61$(0.33)$1.16$(0.85)Diluted$0.55$(0.33)$1.05$(0.85)Weighted average common shares outstandingBasic11,404,36010,756,15611,142,04310,754,709Diluted12,581,12810,756,15612,249,57610,754,709KINGSTONE COMPANIES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Stockholders' Equity (Unaudited)Three months ended September 30, 2024 and 2023AccumulatedCapitalOtherPreferred StockCommon Stockin ExcessComprehensiveAccumulatedTreasury StockSharesAmountSharesAmountof ParLossDeficitSharesAmountTotalBalance, July 1, 2023--12,227,562$122,275$74,946,685$(14,893,572)$(22,522,691)$1,471,406$(5,567,481)$32,085,216Stock-based compensation----207,123----207,123Net loss------(3,537,571)--(3,537,571)Change in unrealized losses on available-for-sale securities, net of tax-----(2,225,907)---(2,225,907)Balance, September 30, 2023--12,227,562$122,275$75,153,808$(17,119,479)$(26,060,262)$1,471,406$(5,567,481)$26,528,861AccumulatedCapitalOtherPreferred StockCommon Stockin ExcessComprehensiveAccumulatedTreasury StockSharesAmountSharesAmountof ParLossDeficitSharesAmountTotalBalance, July 1, 2024--12,536,129$125,361$76,042,147$(12,624,559)$(17,172,694)$1,471,406$(5,567,481)$40,802,774Stock-based compensation----359,170----359,170Vesting of restricted stock awards--211,3912,114(2,114)-----Shares deducted from restricted stockawards for payment of withholding taxes--(106,687)(1,067)(951,644)----(952,711)Exercise of stock options--37,959380(28)--35,248(352)-Exercise of warrants--60,557606(606)-----Issuance of common stock, net ofoffering costs of $259,285--1,079,60110,7968,887,112----8,897,908Net income------6,978,145--6,978,145Change in unrealized gains on available-for-sale securities, net of tax-----3,584,446---3,584,446Balance, September 30, 2024--13,818,950$138,190$84,334,037$(9,040,113)$(10,194,549)$1,506,654$(5,567,833)$59,669,732SOURCE: Kingstone Companies, Inc.

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