Palomar Holdings, Inc. Reports Second Quarter 2025 Results

LA JOLLA, Calif., Aug. 04, 2025 (GLOBE NEWSWIRE) -- Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or “Company”) reported net income of $46.5 million, or $1.68 per diluted share, for the second quarter of 2025 compared to net income of $25.7 million, or $1.00 per diluted share, for the second quarter of 2024. Adjusted net income(1) was $48.5 million, or $1.76 per diluted share, for the second quarter of 2025 as compared to $32.0 million, or $1.25 per diluted share, for the second quarter of 2024. Second Quarter 2025 Highlights Gross written premiums increased by 28.8% to $496.3 million compared to $385.2 million in the second quarter of 2024Net income of $46.5 million compared to $25.7 million in the second quarter of 2024Adjusted net income(1) increased 51.8% to $48.5 million compared to $32.0 million in the second quarter of 2024Total loss ratio of 25.7% compared to 24.9% in the second quarter of 2024Catastrophe loss ratio(1) of 0.0% compared to 2.8% in the second quarter of 2024Combined ratio of 78.8% compared to 79.1% in the second quarter of 2024Adjusted combined ratio(1) of 73.1% compared to 73.1%, in the second quarter of 2024Adjusted combined ratio excluding catastrophe losses(1) of 73.1% compared to 70.3%, in the second quarter of 2024Annualized return on equity of 22.7% compared to 19.9% in the second quarter of 2024Annualized adjusted return on equity(1) of 23.7% compared to 24.7% in the second quarter of 2024 (1) See discussion of “Non-GAAP and Key Performance Indicators” below. Mac Armstrong, Chairman and Chief Executive Officer, commented, “Our second quarter results highlight the sustained execution of our Palomar 2X strategic imperative. We achieved strong top and bottom-line growth in the quarter as gross written premium grew 29% across our diverse portfolio and adjusted net income increased 52%. This strong growth underscores the strength of our product set and the efficacy of our balanced book of property and casualty and residential and commercial products. Our financial metrics were equally stout as we generated an adjusted combined ratio of 73%, and a 24% adjusted return on equity.” Mr. Armstrong continued, “Beyond our financial performance, we remain focused on achieving our 2025 strategic imperatives. Notably, the successful execution of our June 1 reinsurance program at an adjusted rate decrease of approximately 10% year-over-year should help drive consistent earnings the remainder of 2025 and into 2026. We continue to make investments across our organization, that enhance the talent and operational scale of our business and ultimately strengthen the near-term and long-term prospects of Palomar.” Underwriting Results Gross written premiums increased 28.8% to $496.3 million compared to $385.2 million in the second quarter of 2024, while net earned premiums increased 47.2% compared to the prior year’s second quarter. Losses and loss adjustment expenses for the second quarter were $46.2 million, all attritional losses. The loss ratio for the quarter was 25.7%, comprised of an attritional loss ratio of 25.7% and a catastrophe loss ratio(1) of 0.0% compared to a loss ratio of 24.9% during the same period last year comprised of an attritional loss ratio of 22.1% and a catastrophe loss ratio(1) of 2.8%. Additionally, our second quarter results include $6.5 million of favorable prior year development primarily from our short tail Inland Marine and Other Property business. Underwriting income(1) for the second quarter was $38.3 million resulting in a combined ratio of 78.8% compared to underwriting income of $25.6 million resulting in a combined ratio of 79.1% during the same period last year. The Company’s adjusted underwriting income(1) was $48.4 million resulting in an adjusted combined ratio(1) of 73.1% in the second quarter compared to adjusted underwriting income(1) of $32.9 million and an adjusted combined ratio(1) of 73.1% during the same period last year. The Company’s adjusted combined ratio excluding catastrophe losses(1) was 73.1% compared to 70.3% during the same period last year. Investment ResultsNet investment income increased by 68.0% to $13.4 million compared to $8.0 million in the prior year’s second quarter. The increase was primarily due to higher yields on invested assets and a higher average balance of investments held during the three months ended June 30, 2025 due to cash generated from operations and proceeds from the August 2024 public offering. The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 4.13 years at June 30, 2025. Cash and invested assets totaled $1.3 billion at June 30, 2025. During the second quarter, the Company recorded $8.3 million net realized and unrealized gains related to its investment portfolio as compared to net realized and unrealized gains of an immaterial amount during the same period last year. Tax RateThe effective tax rate for the three months ended June 30, 2025 was 22.3% compared to 22.9% for the three months ended June 30, 2024. For the current quarter, the Company’s income tax rate differed from the statutory rate due primarily to non-deductible executive compensation expense offset by the tax impact of the permanent component of employee stock options. Stockholders’ Equity and ReturnsStockholders’ equity was $847.2 million at June 30, 2025, compared to $532.6 million at June 30, 2024. For the three months ended June 30, 2025, the Company’s annualized return on equity was 22.7% compared to 19.9% for the same period in the prior year while adjusted return on equity(1) was 23.7% compared to 24.7% for the same period in the prior year. Share Repurchase ProgramThe Company’s Board of Directors approved a share repurchase program effective July 31, 2025. The program authorizes the repurchase by the Company of up to $150 million of its outstanding shares of common stock over the period ending on July 31, 2027. Under the share repurchase program, shares may be repurchased from time to time in the open market or negotiated transactions at prevailing market rates, or by other means in accordance with federal securities laws. There is no guarantee as to the exact number or value of shares that will be repurchased by the Company, and the Company may discontinue repurchases at any time that management determines additional repurchases are not warranted. The timing and amount of share repurchases under the share repurchase program will depend on several factors, including the Company's stock price performance, ongoing capital planning considerations, general market conditions and applicable legal requirements. Full Year 2025 OutlookFor the full year 2025, the Company expects to achieve adjusted net income of $198 million to $208 million, an increase from the previously announced range of $195 million to $205 million. This range includes an estimate of $8 million to $12 million of catastrophe losses for the remainder of the year. Conference CallAs previously announced, Palomar will host a conference call Tuesday, August 5, 2025, to discuss its second quarter 2025 results at 12:00 p.m. (Eastern Time). The conference call can be accessed live by dialing 1-877-423-9813 or for international callers, 1-201-689-8573, and requesting to be joined to the Palomar Second Quarter 2025 Earnings Conference Call. A replay will be available starting at 4:00 p.m. (Eastern Time) on August 5, 2025, and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the replay is 13754413. The replay will be available until 11:59 p.m. (Eastern Time) on August 12, 2025. Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at http://ir.palomarspecialty.com/. The online replay will remain available for a limited time beginning immediately following the call. About Palomar Holdings, Inc.Palomar Holdings, Inc. is the holding company of subsidiaries Palomar Specialty Insurance Company (“PSIC”), Palomar Specialty Reinsurance Company Bermuda Ltd. (“PSRE”), Palomar Insurance Agency, Inc., Palomar Excess and Surplus Insurance Company (“PESIC”), Palomar Underwriters Exchange Organization, Inc. (“PUEO”), First Indemnity of America Insurance Co. (“FIA”), and Palomar Crop Insurance Services, Inc. (“PCIS”). Palomar’s consolidated results also include Laulima Exchange (“Laulima”), a variable interest entity for which the Company is the primary beneficiary. Palomar is an innovative specialty insurer serving residential and commercial clients in five product categories: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. Palomar’s insurance subsidiaries, PSIC, PSRE, and PESIC, have a financial strength rating of “A” (Excellent) from A.M. Best. FIA carries an “A-” (Stable) rating from A.M. Best. To learn more, visit PLMR.com. Non-GAAP and Key Performance Indicators Palomar discusses certain key performance indicators, described below, which provide useful information about the Company’s business and the operational factors underlying the Company’s financial performance. Underwriting revenue is a non-GAAP financial measure defined as total revenue, excluding net investment income and net realized and unrealized gains and losses on investments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of total revenue calculated in accordance with GAAP to underwriting revenue. Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments, and interest expense. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to underwriting income. Adjusted net income is a non-GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. Palomar calculates the tax impact only on adjustments which would be included in calculating the Company’s income tax expense using the estimated tax rate at which the company received a deduction for these adjustments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income calculated in accordance with GAAP to adjusted net income. Annualized Return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. Annualized adjusted return on equity is a non-GAAP financial measure defined as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of return on equity calculated using unadjusted GAAP numbers to adjusted return on equity. Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses, to net earned premiums. Expense ratio, expressed as a percentage, is the ratio of acquisition and other underwriting expenses, net of commission and other income to net earned premiums. Combined ratio is defined as the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss. Adjusted combined ratio is a non-GAAP financial measure defined as the sum of the loss ratio and the expense ratio calculated excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio. Diluted adjusted earnings per share is a non-GAAP financial measure defined as adjusted net income divided by the weighted-average common shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of diluted earnings per share calculated in accordance with GAAP to diluted adjusted earnings per share. Catastrophe loss ratio is a non-GAAP financial measure defined as the ratio of catastrophe losses to net earned premiums. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of loss ratio calculated using unadjusted GAAP numbers to catastrophe loss ratio. Adjusted combined ratio excluding catastrophe losses is a non-GAAP financial measure defined as adjusted combined ratio excluding the impact of catastrophe losses. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio excluding catastrophe losses. Adjusted underwriting income is a non-GAAP financial measure defined as underwriting income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to adjusted underwriting income. Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity less goodwill and intangible assets. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of stockholders’ equity calculated in accordance with GAAP to tangible stockholders’ equity. Safe Harbor StatementPalomar cautions you that statements contained in this press release may regard matters that are not historical facts but are forward-looking statements. These statements are based on the company’s current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by Palomar that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business. The forward-looking statements are typically, but not always, identified through use of the words “believe,” “expect,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected results or delays in development and regulatory review, regulatory approval requirements, the frequency and severity of adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. ContactMedia Inquiries Lindsay Conner 1-551-206-6217 lconner@plmr.com Investor RelationsJamie Lillis1-203-428-3223investors@plmr.comSource: Palomar Holdings, Inc. Summary of Operating Results: The following tables summarize the Company’s results for the three and six months ended June 30, 2025 and 2024: Three Months Ended June 30, 2025 2024 Change % Change ($ in thousands, except per share data)Gross written premiums$496,288 $385,184 $111,104 28.8%Ceded written premiums (266,506) (209,181) (57,325) 27.4%Net written premiums 229,782 176,003 53,779 30.6%Net earned premiums 179,958 122,285 57,673 47.2%Commission and other income 1,677 792 885 111.7%Total underwriting revenue (1) 181,635 123,077 58,558 47.6%Losses and loss adjustment expenses 46,183 30,431 15,752 51.8%Acquisition expenses, net of ceding commissions and fronting fees 51,637 35,806 15,831 44.2%Other underwriting expenses 45,525 31,233 14,292 45.8%Underwriting income (1) 38,290 25,607 12,683 49.5%Interest expense (86) (225) 139 (61.8)%Net investment income 13,370 7,960 5,410 68.0%Net realized and unrealized gains on investments 8,306 32 8,274 NM Income before income taxes 59,880 33,374 26,506 79.4%Income tax expense 13,352 7,645 5,707 74.7%Net income$46,528 $25,729 $20,799 80.8%Adjustments: Net realized and unrealized gains on investments (8,306) (32) (8,274) NM Expenses associated with transactions 754 472 282 59.7%Stock-based compensation expense 5,347 3,968 1,379 34.8%Amortization of intangibles 1,346 389 957 246.0%Expenses associated with catastrophe bond 2,661 2,483 178 7.2%Tax impact 202 (1,029) 1,231 (119.6)%Adjusted net income (1)$48,532 $31,980 $16,552 51.8%Key Financial and Operating Metrics Annualized return on equity 22.7% 19.9% Annualized adjusted return on equity (1) 23.7% 24.7% Loss ratio 25.7% 24.9% Expense ratio 53.1% 54.2% Combined ratio 78.8% 79.1% Adjusted combined ratio (1) 73.1% 73.1% Diluted earnings per share$1.68 $1.00 Diluted adjusted earnings per share (1)$1.76 $1.25 Catastrophe losses$(22) $3,441 Catastrophe loss ratio (1) 0% 2.8% Adjusted combined ratio excluding catastrophe losses (1) 73.1% 70.3% Adjusted underwriting income (1)$48,398 $32,919 $15,479 47.0%NM - not meaningful (1) - Indicates Non-GAAP financial measure - see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP. Six Months Ended June 30, 2025 2024 Change % Change ($ in thousands, except per share data)Gross written premiums$938,452 $753,262 $185,190 24.6%Ceded written premiums (497,251) (437,352) (59,899) 13.7%Net written premiums 441,201 315,910 125,291 39.7%Net earned premiums 344,029 230,151 113,878 49.5%Commission and other income 2,507 1,320 1,187 89.9%Total underwriting revenue (1) 346,536 231,471 115,065 49.7%Losses and loss adjustment expenses 84,927 57,268 27,659 48.3%Acquisition expenses, net of ceding commissions and fronting fees 97,996 67,604 30,392 45.0%Other underwriting expenses 81,258 56,036 25,222 45.0%Underwriting income (1) 82,355 50,563 31,792 62.9%Interest expense (171) (965) 794 (82.3)%Net investment income 25,441 15,098 10,343 68.5%Net realized and unrealized gains on investments 5,968 3,034 2,934 96.7%Income before income taxes 113,593 67,730 45,863 67.7%Income tax expense 24,143 15,619 8,524 54.6%Net income$89,450 $52,111 $37,339 71.7%Adjustments: Net realized and unrealized gains on investments (5,968) (3,034) (2,934) 96.7%Expenses associated with transactions 2,841 472 2,369 NM Stock-based compensation expense 10,092 7,789 2,303 29.6%Amortization of intangibles 2,054 779 1,275 163.7%Expenses associated with catastrophe bond 2,661 2,483 178 7.2%Tax impact (1,293) (825) (468) 56.7%Adjusted net income (1)$99,837 $59,775 $40,062 67.0%Key Financial and Operating Metrics Annualized return on equity 22.7% 20.8% Annualized adjusted return on equity (1) 25.3% 23.8% Loss ratio 24.7% 24.9% Expense ratio 51.4% 53.1% Combined ratio 76.1% 78.0% Adjusted combined ratio (1) 70.9% 73.0% Diluted earnings per share$3.24 $2.04 Diluted adjusted earnings per share (1)$3.62 $2.34 Catastrophe losses$(565) $6,800 Catastrophe loss ratio (1) (0.2)% 3.0% Adjusted combined ratio excluding catastrophe losses (1) 71.1% 70.1% Adjusted underwriting income (1)$100,003 $62,086 $37,917 61.1%NM - not meaningful (1) - Indicates Non-GAAP financial measure - see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP. Condensed Consolidated Balance sheets Palomar Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) (in thousands, except shares and par value data) June 30, December 31, 2025 2024 (Unaudited) Assets Investments: Fixed maturity securities available for sale, at fair value (amortized cost: $1,130,737 in 2025; $973,330 in 2024)$1,113,366 $939,046 Equity securities, at fair value (cost: $38,486 in 2025; $32,987 in 2024) 49,222 40,529 Equity method investment — 2,277 Other investments 12,405 5,863 Total investments 1,174,993 987,715 Cash and cash equivalents 81,297 80,438 Restricted cash 18 101 Accrued investment income 10,180 8,440 Premiums receivable 490,240 305,724 Deferred policy acquisition costs, net of ceding commissions and fronting fees 116,356 94,881 Reinsurance recoverable on paid losses and loss adjustment expenses 37,397 47,076 Reinsurance recoverable on unpaid losses and loss adjustment expenses 399,471 348,083 Ceded unearned premiums 332,970 276,237 Prepaid expenses and other assets 120,740 91,086 Deferred tax assets, net 3,063 8,768 Property and equipment, net 2,929 429 Goodwill and intangible assets, net 62,837 13,242 Total assets$2,832,491 $2,262,220 Liabilities and stockholders’ equity Liabilities: Accounts payable and other accrued liabilities$153,760 $70,079 Reserve for losses and loss adjustment expenses 598,656 503,382 Unearned premiums 900,987 741,692 Ceded premium payable 293,967 190,168 Funds held under reinsurance treaty 37,914 27,869 Income taxes payable 10 — Total liabilities 1,985,294 1,533,190 Stockholders’ equity: Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024 — — Common stock, $0.0001 par value, 500,000,000 shares authorized, 26,777,198 and 26,529,402 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 3 3 Additional paid-in capital 509,161 493,656 Accumulated other comprehensive loss (13,633) (26,845)Retained earnings 351,666 262,216 Total stockholders’ equity 847,197 729,030 Total liabilities and stockholders’ equity$2,832,491 $2,262,220 Condensed Consolidated Income Statement Palomar Holdings, Inc. and SubsidiariesCondensed Consolidated Statements of Income and Comprehensive Income (Unaudited)(in thousands, except shares and per share data) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024Revenues: Gross written premiums$496,288 $385,184 $938,452 $753,262 Ceded written premiums (266,506) (209,181) (497,251) (437,352)Net written premiums 229,782 176,003 441,201 315,910 Change in unearned premiums (49,824) (53,718) (97,172) (85,759)Net earned premiums 179,958 122,285 344,029 230,151 Net investment income 13,370 7,960 25,441 15,098 Net realized and unrealized gains on investments 8,306 32 5,968 3,034 Commission and other income 1,677 792 2,507 1,320 Total revenues 203,311 131,069 377,945 249,603 Expenses: Losses and loss adjustment expenses 46,183 30,431 84,927 57,268 Acquisition expenses, net of ceding commissions and fronting fees 51,637 35,806 97,996 67,604 Other underwriting expenses 45,525 31,233 81,258 56,036 Interest expense 86 225 171 965 Total expenses 143,431 97,695 264,352 181,873 Income before income taxes 59,880 33,374 113,593 67,730 Income tax expense 13,352 7,645 24,143 15,619 Net income$46,528 $25,729 $89,450 $52,111 Other comprehensive income, net: Net unrealized gains (losses) on securities available for sale 3,009 (1,550) 13,213 (4,064)Net comprehensive income$49,537 $24,179 $102,663 $48,047 Per Share Data: Basic earnings per share$1.74 $1.03 $3.35 $2.09 Diluted earnings per share$1.68 $1.00 $3.24 $2.04 Weighted-average common shares outstanding: Basic 26,756,095 24,946,987 26,707,371 24,904,677 Diluted 27,628,733 25,617,916 27,568,913 25,554,445 Underwriting Segment Data The Company has a single reportable segment and offers specialty insurance products. Gross written premiums (GWP) by product, location and company are presented below: Three Months Ended June 30, 2025 2024 ($ in thousands) % of % of % Amount GWP Amount GWP Change ChangeProduct Earthquake$147,702 29.8% $135,029 35.1% $12,673 9.4%Casualty 128,222 25.8% 58,605 15.2% 69,617 118.8%Inland Marine and Other Property 120,031 24.2% 93,453 24.3% 26,578 28.4%Fronting 60,869 12.2% 95,896 24.9% (35,027) (36.5)%Crop 39,464 8.0% 2,201 0.5% 37,263 NM Total Gross Written Premiums$496,288 100.0% $385,184 100.0% $111,104 28.8% Six Months Ended June 30, 2025 2024 ($ in thousands) % of % of % Amount GWP Amount GWP Change ChangeProduct Earthquake$277,929 29.7% $240,759 32.0% $37,170 15.4%Casualty 238,932 25.5% 110,539 14.7% 128,393 116.2%Inland Marine and Other Property 219,098 23.3% 170,329 22.6% 48,769 28.6%Fronting 114,810 12.2% 190,727 25.3% (75,917) (39.8)%Crop 87,683 9.3% 40,908 5.4% 46,775 114.3%Total Gross Written Premiums$938,452 100.0% $753,262 100.0% $185,190 24.6% Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWPState California$163,814 33.0% $183,396 47.6% $303,536 32.3% $340,614 45.2%Texas 35,708 7.2% 28,600 7.4% 80,699 8.6% 69,396 9.2%Hawaii 24,544 4.9% 18,235 4.7% 44,901 4.8% 30,751 4.1%Florida 23,979 4.8% 29,796 7.7% 42,621 4.5% 43,720 5.8%New York 17,462 3.5% 7,980 2.1% 32,857 3.5% 16,010 2.1%Washington 17,188 3.5% 13,063 3.4% 32,059 3.4% 25,066 3.3%Illinois 13,048 2.7% 4,870 1.3% 18,637 2.0% 8,168 1.1%Minnesota 12,004 2.4% 1,243 0.3% 13,042 1.4% 2,440 0.3%Other 188,541 38.0% 98,001 25.5% 370,100 39.5% 217,097 28.9%Total Gross Written Premiums$496,288 100.0% $385,184 100.0% $938,452 100.0% $753,262 100.0% Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWPSubsidiary PSIC$232,983 46.9% $193,709 50.3% $463,900 49.4% $416,366 55.3%PESIC 237,943 47.9% 177,109 46.0% 428,730 45.7% 313,603 41.6%Laulima 20,134 4.1% 14,366 3.7% 36,171 3.9% 23,293 3.1%FIA 5,228 1.1% — —% 9,651 1.0% — —%Total Gross Written Premiums$496,288 100.0% $385,184 100.0% $938,452 100.0% $753,262 100.0% Gross and net earned premiums The table below shows the amount of premiums the Company earned on a gross and net basis and the Company’s net earned premiums as a percentage of gross earned premiums for each period presented: Three Months Ended Six Months Ended June 30, % June 30, % 2025 2024 Change Change 2025 2024 Change Change ($ in thousands) ($ in thousands)Gross earned premiums$408,764 $326,964 $81,800 25.0% $784,540 $629,835 $154,705 24.6%Ceded earned premiums (228,806) (204,679) (24,127) 11.8% (440,511) (399,684) (40,827) 10.2%Net earned premiums$179,958 $122,285 $57,673 47.2% $344,029 $230,151 $113,878 49.5% Net earned premium ratio 44.0% 37.4% 43.9% 36.5% Loss detail Three Months Ended Six Months Ended June 30, June 30, 2025 2024 Change % Change 2025 2024 Change % Change ($ in thousands) ($ in thousands) Catastrophe losses$(22) $3,441 $(3,463) (100.6)% $(565) $6,800 $(7,365) (108.3)%Non-catastrophe losses 46,205 26,990 19,215 71.2% 85,492 50,468 35,024 69.4%Total losses and loss adjustment expenses$46,183 $30,431 $15,752 51.8% $84,927 $57,268 $27,659 48.3% Catastrophe loss ratio —% 2.8% (0.2)% 3.0% Non-catastrophe loss ratio 25.7% 22.1% 24.9% 21.9% Total loss ratio 25.7% 24.9% 24.7% 24.9% The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (in thousands) (in thousands)Reserve for losses and LAE net of reinsurance recoverables at beginning of period$182,661 $110,163 $155,299 $97,653 Add: Balance acquired from FIA(1) — — $6,788 — Add: Incurred losses and LAE, net of reinsurance, related to: Current year 52,698 33,355 95,757 59,688 Prior years (6,515) (2,924) (10,830) (2,420)Total incurred 46,183 30,431 84,927 57,268 Deduct: Loss and LAE payments, net of reinsurance, related to: Current year 17,659 6,861 22,657 11,756 Prior years 12,000 14,972 25,172 24,404 Total payments 29,659 21,833 47,829 36,160 Reserve for losses and LAE net of reinsurance recoverables at end of period 199,185 118,761 199,185 118,761 Add: Reinsurance recoverables on unpaid losses and LAE at end of period 399,471 347,840 399,471 347,840 Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period$598,656 $466,601 $598,656 $466,601 (1) - Represents amounts recognized in Reserve for losses and LAE net of reinsurance recoverables upon acquisition of FIA on 1/1/2025, in accordance with ASC 805, Business Combinations. Reconciliation of Non-GAAP Financial Measures For the three and six months ended June 30, 2025 and 2024, the Non-GAAP financial measures discussed above reconcile to their most comparable GAAP measures as follows: Underwriting revenue Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands) (in thousands)Total revenue$203,311 $131,069 $377,945 $249,603 Net investment income (13,370) (7,960) (25,441) (15,098)Net realized and unrealized gains on investments (8,306) (32) (5,968) (3,034)Underwriting revenue$181,635 $123,077 $346,536 $231,471 Underwriting income and adjusted underwriting income Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands) (in thousands) Income before income taxes$59,880 $33,374 $113,593 $67,730 Net investment income (13,370) (7,960) (25,441) (15,098)Net realized and unrealized gains on investments (8,306) (32) (5,968) (3,034)Interest expense 86 225 171 965 Underwriting income$38,290 $25,607 $82,355 $50,563 Expenses associated with transactions 754 472 2,841 472 Stock-based compensation expense 5,347 3,968 10,092 7,789 Amortization of intangibles 1,346 389 2,054 779 Expenses associated with catastrophe bond 2,661 2,483 2,661 2,483 Adjusted underwriting income$48,398 $32,919 $100,003 $62,086 Adjusted net income Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands) (in thousands) Net income$46,528 $25,729 $89,450 $52,111 Adjustments: Net realized and unrealized gains on investments (8,306) (32) (5,968) (3,034)Expenses associated with transactions 754 472 2,841 472 Stock-based compensation expense 5,347 3,968 10,092 7,789 Amortization of intangibles 1,346 389 2,054 779 Expenses associated with catastrophe bond 2,661 2,483 2,661 2,483 Tax impact 202 (1,029) (1,293) (825)Adjusted net income$48,532 $31,980 $99,837 $59,775 Annualized adjusted return on equity Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands) (in thousands) Annualized adjusted net income$194,128 $127,920 $199,674 $119,550 Average stockholders’ equity$819,685 $517,131 $788,975 $501,928 Annualized adjusted return on equity 23.7% 24.7% 25.3% 23.8% Adjusted combined ratio Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands) (in thousands)Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income$141,668 $96,678 $261,674 $179,588 Denominator: Net earned premiums$179,958 $122,285 $344,029 $230,151 Combined ratio 78.8% 79.1% 76.1% 78.0%Adjustments to numerator: Expenses associated with transactions$(754) $(472) $(2,841) $(472)Stock-based compensation expense (5,347) (3,968) (10,092) (7,789)Amortization of intangibles (1,346) (389) (2,054) (779)Expenses associated with catastrophe bond (2,661) (2,483) (2,661) (2,483)Adjusted combined ratio 73.1% 73.1% 70.9% 73.0% Diluted adjusted earnings per share Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands, except per share data) (in thousands, except per share data)Adjusted net income$48,532 $31,980 $99,837 $59,775 Weighted-average common shares outstanding, diluted 27,628,733 25,617,916 27,568,913 25,554,445 Diluted adjusted earnings per share$1.76 $1.25 $3.62 $2.34 Catastrophe loss ratio Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands) (in thousands)Numerator: Losses and loss adjustment expenses$46,183 $30,431 $84,927 $57,268 Denominator: Net earned premiums$179,958 $122,285 $344,029 $230,151 Loss ratio 25.7% 24.9% 24.7% 24.9% Numerator: Catastrophe losses$(22) $3,441 $(565) $6,800 Denominator: Net earned premiums$179,958 $122,285 $344,029 $230,151 Catastrophe loss ratio —% 2.8% (0.2)% 3.0% Adjusted combined ratio excluding catastrophe losses Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands) (in thousands)Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income$141,668 $96,678 $261,674 $179,588 Denominator: Net earned premiums$179,958 $122,285 $344,029 $230,151 Combined ratio 78.8% 79.1% 76.1% 78.0%Adjustments to numerator: Expenses associated with transactions$(754) $(472) $(2,841) $(472)Stock-based compensation expense (5,347) (3,968) (10,092) (7,789)Amortization of intangibles (1,346) (389) (2,054) (779)Expenses associated with catastrophe bond (2,661) (2,483) (2,661) (2,483)Catastrophe losses 22 (3,441) 565 (6,800)Adjusted combined ratio excluding catastrophe losses 73.1% 70.3% 71.1% 70.1% Tangible Stockholders’ equity June 30, December 31, 2025 2024 (in thousands)Stockholders’ equity$847,197 $729,030 Goodwill and intangible assets (62,837) (13,242)Tangible stockholders’ equity$784,360 $715,788

Palomar Holdings, Inc. Reports Second Quarter 2025 Results

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