LA JOLLA, Calif., Feb. 12, 2025 (GLOBE NEWSWIRE) -- Palomar Holdings, Inc. (NASDAQ:PLMR) ("Palomar" or "Company") reported net income of $35.0 million, or $1.29 per diluted share, for the fourth quarter of 2024 compared to net income of $25.9 million, or $1.02 per diluted share, for the fourth quarter of 2023. Adjusted net income⁽¹⁾ was $41.3 million, or $1.52 per diluted share, for the fourth quarter of 2024 as compared to $28.0 million, or $1.11 per diluted share, for the fourth quarter of 2023.

Fourth Quarter 2024 Highlights

Gross written premiums increased by 23.3% to $373.7 million compared to $303.2 million in the fourth quarter of 2023
Net income increased 35.0% to $35.0 million compared to $25.9 million in the fourth quarter of 2023
Adjusted net income⁽¹⁾ increased 47.5% to $41.3 million compared to $28.0 million in the fourth quarter of 2023
Total loss ratio of 25.7% compared to 19.1% in the fourth quarter of 2023
Combined ratio of 75.9% compared to 74.2% in the fourth quarter of 2023
Adjusted combined ratio⁽¹⁾ of 71.7% compared to 68.8%, in the fourth quarter of 2023
Annualized return on equity of 19.5% compared to 23.2% in the fourth quarter of 2023
Annualized adjusted return on equity⁽¹⁾ of 23.1% compared to 25.1% in the fourth quarter of 2023

Full Year 2024 Highlights

Gross written premiums increased by 35.1% to $1.5 billion compared to $1.1 billion in 2023
Net income increased 48.4% to $117.6 million compared to $79.2 million in 2023
Adjusted net income⁽¹⁾ increased 42.8% to $133.5 million compared to $93.5 million in 2023
Total loss ratio of 26.4% compared to 21.0% in 2023
Combined ratio of 78.1% compared to 76.6% in 2023
Adjusted combined ratio⁽¹⁾ of 73.7% compared to 71.2% in 2023
Return on equity of 19.6% compared to 18.5% in 2023
Adjusted return on equity⁽¹⁾ of 22.2% compared to 21.9% in 2023

(1) See discussion of "Non-GAAP and Key Performance Indicators" below.

Mac Armstrong, Chairman and Chief Executive Officer, commented, "Palomar's stellar 2024 was capped off by an exceptional fourth quarter. During the quarter, we generated gross written premiums growth of 23%, 39% when excluding run-off business from our results, adjusted net income growth of 48%, inclusive of $8.1 million of catastrophe losses, and, importantly, an adjusted return on equity of 23%. When looking at the full year we not only generated record gross written premiums and adjusted net income, but we grew our top and bottom-line 35% and 43%, respectively. Additionally, throughout 2024 we made significant investments across the organization that we believe will sustain our earnings base and profitable growth trajectory." 

Mr. Armstrong continued, "Beyond the strong financial results of the fourth quarter and 2024, Palomar's accomplishments were several and notable, highlighted by our AM Best upgrade and the acquisition of First Indemnity of America, our surety operation. Furthermore, we accomplished a Palomar 2X fundamental strategic objective by doubling our adjusted underwriting income for the 2021 period in a three-year timeframe. We are energized by our prospects to continue this profitable growth in 2025 and thereafter." 

Underwriting Results

Gross written premiums increased 23.3% to $373.7 million compared to $303.2 million in the fourth quarter of 2023, additionally net earned premiums increased 54.6% compared to the prior year's fourth quarter.

Losses and loss adjustment expenses for the fourth quarter were $37.2 million, comprised of $29.1 million of attritional losses and $8.1 million of catastrophe losses primarily related to Hurricane Milton. The loss ratio for the quarter was 25.7%, comprised of an attritional loss ratio of 20.1% and a catastrophe loss ratio of 5.6%, compared to a loss ratio of 19.1% during the same period last year, all comprised of attritional losses.

Underwriting income⁽¹⁾ for the fourth quarter was $34.9 million resulting in a combined ratio of 75.9% compared to underwriting income of $24.2 million resulting in a combined ratio of 74.2% during the same period last year. The Company's adjusted underwriting income⁽¹⁾ was $41.0 million resulting in an adjusted combined ratio⁽¹⁾ of 71.7% in the fourth quarter compared to adjusted underwriting income⁽¹⁾of $29.3 million and an adjusted combined ratio⁽¹⁾ of 68.8% during the same period last year.

Investment Results

Net investment income increased by 61.3% to $11.3 million compared to $7.0 million in the prior year's fourth 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 December 31, 2024 due to cash generated from operations and proceeds from our August 2024 stock offering. The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 4.04 years at December 31, 2024. Cash and invested assets totaled $1.1 billion at December 31, 2024. During the fourth quarter, the Company recorded net realized and unrealized losses of $1.2 million related to its investment portfolio as compared to net realized and unrealized gains of $3.0 million in last year's fourth quarter.

Tax Rate

The effective tax rate for the three months ended December 31, 2024 was 22.2% compared to 22.6% for the three months ended December 31, 2023. For the current quarter, the Company's income tax rate differed from the statutory rate due primarily to the non-deductible executive compensation expense, offset by the permanent component of employee stock option exercises.

Stockholders' Equity and Returns

Stockholders' equity was $729.0 million at December 31, 2024, compared to $471.3 million at December 31, 2023. For the three months ended December 31, 2024, the Company's annualized return on equity was 19.5% compared to 23.2% for the same period in the prior year while adjusted return on equity⁽¹⁾ was 23.1% compared to 25.1% for the same period in the prior year.

Full Year 2025 Outlook

For the full year 2025, the Company expects to achieve adjusted net income of $180 million to $192 million. This includes an estimate of $8 million to $12 million of catastrophe losses for the year.

Conference Call

As previously announced, Palomar will host a conference call Thursday, February 13, 2025, to discuss its fourth quarter 2024 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 Fourth Quarter 2024 Earnings Conference Call. A replay will be available starting at 4:00 p.m. (Eastern Time) on February 13, 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 13743970. The replay will be available until 11:59 p.m. (Eastern Time) on February 20, 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. ("PIA"), Palomar Excess and Surplus Insurance Company ("PESIC"), Palomar Underwriters Exchange Organization, Inc ("PUEO"), Palomar Crop Insurance Services, Inc, and First Indemnity of America Insurance Company (acquired 1/1/2025). Palomar's consolidated results also include Laulima Reciprocal Exchange, 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, Palomar Specialty Insurance Company, Palomar Specialty Reinsurance Company Bermuda Ltd., and Palomar Excess and Surplus Insurance Company, have a financial strength rating of "A" (Excellent) from A.M. Best.

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. The Company calculates the tax impact only on adjustments which would be included in calculating its 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 Statement

Palomar 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.

Contact

Media Inquiries

Lindsay Conner

1-551-206-6217

lconner@plmr.com

Investor Relations

Jamie Lillis

1-203-428-3223

investors@plmr.com

Source: Palomar Holdings, Inc.

Summary of Operating Results:

The following tables summarize the Company's results for the three months and year ended December 31, 2024 and 2023:

	Three Months Ended
	December 31,
	2024			2023			Change			% Change
	($ in thousands, except per share data)
Gross written premiums	$	373,723		$	303,152		$	70,571			23.3	%
Ceded written premiums		(204,492	)		(188,742	)		(15,750	)		8.3	%
Net written premiums		169,231			114,410			54,821			47.9	%
Net earned premiums		144,890			93,748			51,142			54.6	%
Commission and other income		750			1,586			(836	)		(52.7	)%
Total underwriting revenue ⁽¹⁾		145,640			95,334			50,306			52.8	%
Losses and loss adjustment expenses		37,176			17,896			19,280			107.7	%
Acquisition expenses, net of ceding commissions and fronting fees		40,585			29,005			11,580			39.9	%
Other underwriting expenses		32,947			24,210			8,737			36.1	%
Underwriting income ⁽¹⁾		34,932			24,223			10,709			44.2	%
Interest expense		(87	)		(824	)		737			(89.4	)%
Net investment income		11,318			7,015			4,303			61.3	%
Net realized and unrealized (losses) gains on investments		(1,201	)		3,044			(4,245	)		(139.5	)%
Income before income taxes		44,962			33,458			11,504			34.4	%
Income tax expense		9,997			7,564			2,433			32.2	%
Net income	$	34,965		$	25,894		$	9,071			35.0	%
Adjustments:
Net realized and unrealized losses (gains) on investments		1,201			(3,044	)		4,245			(139.5	)%
Expenses associated with transactions		922			478			444			92.9	%
Stock-based compensation expense		4,779			4,176			603			14.4	%
Amortization of intangibles		389			389			—			—	%
Tax impact		(964	)		103			(1,067	)		NM
Adjusted net income ⁽¹⁾	$	41,292		$	27,996		$	13,296			47.5	%
Key Financial and Operating Metrics
Annualized return on equity		19.5	%		23.2	%
Annualized adjusted return on equity ⁽¹⁾		23.1	%		25.1	%
Loss ratio		25.7	%		19.1	%
Expense ratio		50.2	%		55.1	%
Combined ratio		75.9	%		74.2	%
Adjusted combined ratio ⁽¹⁾		71.7	%		68.8	%
Diluted earnings per share	$	1.29		$	1.02
Diluted adjusted earnings per share ⁽¹⁾	$	1.52		$	1.11
Catastrophe losses	$	8,122		$	10
Catastrophe loss ratio ⁽¹⁾		5.6	%		—	%
Adjusted combined ratio excluding catastrophe losses ⁽¹⁾		66.1	%		68.8	%
Adjusted underwriting income ⁽¹⁾	$	41,022		$	29,266		$	11,756			40.2	%
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.


	Year Ended
	December 31,
	2024			2023			Change			% Change
	($ in thousands, except per share data)
Gross written premiums	$	1,541,962		$	1,141,558		$	400,404			35.1	%
Ceded written premiums		(897,111	)		(731,531	)		(165,580	)		22.6	%
Net written premiums		644,851			410,027			234,824			57.3	%
Net earned premiums		510,687			345,913			164,774			47.6	%
Commission and other income		2,784			3,367			(583	)		(17.3	)%
Total underwriting revenue ⁽¹⁾		513,471			349,280			164,191			47.0	%
Losses and loss adjustment expenses		134,759			72,592			62,167			85.6	%
Acquisition expenses, net of ceding commissions and fronting fees		149,657			107,745			41,912			38.9	%
Other underwriting expenses		117,113			88,172			28,941			32.8	%
Underwriting income ⁽¹⁾		111,942			80,771			31,171			38.6	%
Interest expense		(1,138	)		(3,775	)		2,637			(69.9	)%
Net investment income		35,824			23,705			12,119			51.1	%
Net realized and unrealized gains on investments		4,568			2,941			1,627			55.3	%
Income before income taxes		151,196			103,642			47,554			45.9	%
Income tax expense		33,623			24,441			9,182			37.6	%
Net income	$	117,573		$	79,201		$	38,372			48.4	%
Adjustments:
Net realized and unrealized gains on investments		(4,568	)		(2,941	)		(1,627	)		55.3	%
Expenses associated with transactions		1,479			706			773			109.5	%
Stock-based compensation expense		16,685			14,913			1,772			11.9	%
Amortization of intangibles		1,558			1,481			77			5.2	%
Expenses associated with catastrophe bond		2,483			1,640			843			51.4	%
Tax impact		(1,699	)		(1,480	)		(219	)		14.8	%
Adjusted net income ⁽¹⁾	$	133,511		$	93,520		$	39,991			42.8	%
Key Financial and Operating Metrics
Annualized return on equity		19.6	%		18.5	%
Annualized adjusted return on equity ⁽¹⁾		22.2	%		21.9	%
Loss ratio		26.4	%		21.0	%
Expense ratio		51.7	%		55.7	%
Combined ratio		78.1	%		76.6	%
Adjusted combined ratio ⁽¹⁾		73.7	%		71.2	%
Diluted earnings per share	$	4.48		$	3.13
Diluted adjusted earnings per share ⁽¹⁾	$	5.09		$	3.69
Catastrophe losses	$	27,846		$	3,442
Catastrophe loss ratio ⁽¹⁾		5.5	%		1.0	%
Adjusted combined ratio excluding catastrophe losses ⁽¹⁾		68.3	%		70.2	%
Adjusted underwriting income ⁽¹⁾	$	134,147		$	99,511		$	34,636			34.8	%

Condensed Consolidated Balance sheets

Palomar Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) (in thousands, except shares and par value data)

	December 31, 2024			December 31, 2023
Assets
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $973,330 in 2024; $675,130 in 2023)	$	939,046		$	643,799
Equity securities, at fair value (cost: $32,987 in 2024; $43,003 in 2023)		40,529			43,160
Equity method investment		2,277			2,617
Other investments		5,863			—
Total investments		987,715			689,576
Cash and cash equivalents		80,438			51,546
Restricted cash		101			306
Accrued investment income		8,440			5,282
Premium receivable		305,724			261,972
Deferred policy acquisition costs, net of ceding commissions and fronting fees		94,881			60,990
Reinsurance recoverable on paid losses and loss adjustment expenses		47,076			32,172
Reinsurance recoverable on unpaid losses and loss adjustment expenses		348,083			244,622
Ceded unearned premiums		276,237			265,808
Prepaid expenses and other assets		91,086			72,941
Deferred tax assets, net		8,768			10,119
Property and equipment, net		429			373
Goodwill and intangible assets, net		13,242			12,315
Total assets	$	2,262,220		$	1,708,022
Liabilities and stockholders' equity
Liabilities:
Accounts payable and other accrued liabilities	$	70,079		$	42,376
Reserve for losses and loss adjustment expenses		503,382			342,275
Unearned premiums		741,692			597,103
Ceded premium payable		190,168			181,742
Funds held under reinsurance treaty		27,869			13,419
Income taxes payable		—			7,255
Borrowings from credit agreements		—			52,600
Total liabilities		1,533,190			1,236,770
Stockholders' equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2024 and December 31, 2023, 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023		—			—
Common stock, $0.0001 par value, 500,000,000 shares authorized, 26,529,402 and 24,772,987 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively		3			3
Additional paid-in capital		493,656			350,597
Accumulated other comprehensive loss		(26,845	)		(23,991	)
Retained earnings		262,216			144,643
Total stockholders' equity		729,030			471,252
Total liabilities and stockholders' equity	$	2,262,220		$	1,708,022

Condensed Consolidated Income Statement

Palomar Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Income and Comprehensive Income (loss) (Unaudited) (in thousands, except shares and per share data)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
Revenues:
Gross written premiums	$	373,723		$	303,152		$	1,541,962		$	1,141,558
Ceded written premiums		(204,492	)		(188,742	)		(897,111	)		(731,531	)
Net written premiums		169,231			114,410			644,851			410,027
Change in unearned premiums		(24,341	)		(20,662	)		(134,164	)		(64,114	)
Net earned premiums		144,890			93,748			510,687			345,913
Net investment income		11,318			7,015			35,824			23,705
Net realized and unrealized (losses) gains on investments		(1,201	)		3,044			4,568			2,941
Commission and other income		750			1,586			2,784			3,367
Total revenues		155,757			105,393			553,863			375,926
Expenses:
Losses and loss adjustment expenses		37,176			17,896			134,759			72,592
Acquisition expenses, net of ceding commissions and fronting fees		40,585			29,005			149,657			107,745
Other underwriting expenses		32,947			24,210			117,113			88,172
Interest expense		87			824			1,138			3,775
Total expenses		110,795			71,935			402,667			272,284
Income before income taxes		44,962			33,458			151,196			103,642
Income tax expense		9,997			7,564			33,623			24,441
Net income	$	34,965		$	25,894		$	117,573		$	79,201
Other comprehensive income, net:
Net unrealized (losses) gains on securities available for sale		(16,707	)		19,229			(2,854	)		12,524
Net comprehensive income	$	18,258		$	45,123		$	114,719		$	91,725
Per Share Data:
Basic earnings per share	$	1.32		$	1.05		$	4.61		$	3.19
Diluted earnings per share	$	1.29		$	1.02		$	4.48		$	3.13

Weighted-average common shares outstanding:
Basic		26,491,939			24,747,347			25,520,343			24,822,004
Diluted		27,206,225			25,272,149			26,223,842			25,327,091

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 December 31,
	2024					2023
	($ in thousands)
			% of						% of						%
	Amount		GWP			Amount			GWP			Change			Change
Product (1)
Earthquake	$	146,757		39.3	%	$	122,087			40.3	%	$	24,670			20.2	%
Inland Marine and other Property		85,396		22.9	%		63,039			20.8	%		22,357			35.5	%
Casualty		68,484		18.3	%		32,323			10.7	%		36,161			111.9	%
Fronting		57,418		15.4	%		85,708			28.3	%		(28,290	)		(33.0	)%
Crop		15,668		4.2	%		(5	)		(0.0	)%		15,673			NM
Total Gross Written Premiums	$	373,723		100.0	%	$	303,152			100.0	%	$	70,571			23.3	%

NM- Not meaningful

	Year Ended December 31,
	2024					2023
	($ in thousands)
			% of					% of						%
	Amount		GWP			Amount		GWP			Change			Change
Product (1)
Earthquake	$	522,864		33.9	%	$	436,896		38.3	%	$	85,968			19.7	%
Inland Marine and Other Property		334,079		21.7	%		250,023		21.9	%		84,056			33.6	%
Fronting		333,188		21.6	%		352,141		30.8	%		(18,953	)		(5.4	)%
Casualty		235,592		15.3	%		90,388		7.9	%		145,204			160.6	%
Crop		116,239		7.5	%		12,110		1.1	%		104,129			859.9	%
Total Gross Written Premiums	$	1,541,962		100.0	%	$	1,141,558		100.0	%	$	400,404			35.1	%

(1) - Beginning in 2024, the Company has updated the categorization of its products to align with management's current strategy and view of the business. Prior year amounts have been reclassified for comparability purposes. The recategorization is for presentation purposes only and does not impact overall gross written premiums.

	Three Months Ended December 31,										Year Ended December 31,
	2024					2023					2024					2023
	($ in thousands)										($ in thousands)
			% of					% of					% of					% of
	Amount		GWP			Amount		GWP			Amount		GWP			Amount		GWP
State
California	$	157,786		42.2	%	$	165,342		54.5	%	$	668,635		43.4	%	$	600,791		52.6	%
Texas		28,002		7.5	%		22,740		7.5	%		124,416		8.1	%		95,517		8.4	%
Hawaii		18,636		5.0	%		11,562		3.8	%		72,558		4.7	%		47,388		4.2	%
Washington		16,007		4.3	%		14,124		4.7	%		57,900		3.8	%		49,494		4.3	%
New York		14,756		3.9	%		6,775		2.2	%		38,919		2.5	%		18,424		1.6	%
Florida		8,855		2.4	%		11,286		3.7	%		67,008		4.3	%		47,595		4.2	%
Oregon		8,298		2.2	%		6,307		2.1	%		29,550		1.9	%		23,220		2.0	%
Illinois		7,176		1.9	%		6,697		2.2	%		20,901		1.4	%		22,340		2.0	%
Other		114,207		30.6	%		58,319		19.2	%		462,075		30.0	%		236,789		20.7	%
Total Gross Written Premiums	$	373,723		100.0	%	$	303,152		100.0	%	$	1,541,962		100.0	%	$	1,141,558		100.0	%

	Three Months Ended December 31,										Year Ended December 31,
	2024					2023					2024					2023
	($ in thousands)										($ in thousands)
			% of					% of					% of					% of
	Amount		GWP			Amount		GWP			Amount		GWP			Amount		GWP
Subsidiary
PSIC	$	170,275		45.6	%	$	156,590		51.7	%	$	823,263		53.4	%	$	653,809		57.3	%
PESIC		188,496		50.4	%		146,562		48.3	%		661,404		42.9	%		487,749		42.7	%
Laulima		14,952		4.0	%		—		—	%		57,295		3.7	%		—		—	%
Total Gross Written Premiums	$	373,723		100.0	%	$	303,152		100.0	%	$	1,541,962		100.0	%	$	1,141,558		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												Year Ended
	December 31,												December 31,
	2024			2023			Change			% Change			2024			2023			Change			% Change
	($ in thousands)												($ in thousands)
Gross earned premiums	$	371,654		$	276,502		$	95,152			34.4	%	$	1,397,369		$	1,015,722		$	381,647			37.6	%
Ceded earned premiums		(226,764	)		(182,754	)		(44,010	)		24.1	%		(886,682	)		(669,809	)		(216,873	)		32.4	%
Net earned premiums	$	144,890		$	93,748		$	51,142			54.6	%	$	510,687		$	345,913		$	164,774			47.6	%

Net earned premium ratio		39.0	%		33.9	%								36.5	%		34.1	%

Loss detail

	Three Months Ended											Year Ended
	December 31,											December 31,
	2024			2023			Change		% Change			2024			2023			Change		% Change
	($ in thousands)											($ in thousands)
Catastrophe losses	$	8,122		$	10		$	8,112		NM		$	27,846		$	3,442		$	24,404		NM
Non-catastrophe losses		29,054			17,886			11,168		62.4	%		106,913			69,150			37,763		54.6	%
Total losses and loss adjustment expenses	$	37,176		$	17,896		$	19,280		107.7	%	$	134,759		$	72,592		$	62,167		85.6	%

Catastrophe loss ratio		5.6	%		0.0	%							5.5	%		1.0	%
Non-catastrophe loss ratio		20.1	%		19.1	%							20.9	%		20.0	%
Total loss ratio		25.7	%		19.1	%							26.4	%		21.0	%
NM-Not meaningful

The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses:

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Reserve for losses and LAE net of reinsurance recoverables at beginning of period	$	137,274		$	92,178		$	97,653		$	77,520
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year		37,575			19,409			137,798			70,363
Prior years		(399	)		(1,513	)		(3,039	)		2,229
Total incurred		37,176			17,896			134,759			72,592
Deduct: Loss and LAE payments, net of reinsurance, related to:
Current year		15,675			5,417			43,582			19,631
Prior years		3,476			7,004			33,531			32,828
Total payments		19,151			12,421			77,113			52,459
Reserve for losses and LAE net of reinsurance recoverables at end of period		155,299			97,653			155,299			97,653
Add: Reinsurance recoverables on unpaid losses and LAE at end of period		348,083			244,622			348,083			244,622
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period	$	503,382		$	342,275		$	503,382		$	342,275

Reconciliation of Non-GAAP Financial Measures

For the three months and year ended December 31, 2024 and 2023, the Non-GAAP financial measures discussed above reconcile to their most comparable GAAP measures as follows:

Underwriting revenue

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Total revenue	$	155,757		$	105,393		$	553,863		$	375,926
Net investment income		(11,318	)		(7,015	)		(35,824	)		(23,705	)
Net realized and unrealized (gains) losses on investments		1,201			(3,044	)		(4,568	)		(2,941	)
Underwriting revenue	$	145,640		$	95,334		$	513,471		$	349,280

Underwriting income and adjusted underwriting income

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Income before income taxes	$	44,962		$	33,458		$	151,196		$	103,642
Net investment income		(11,318	)		(7,015	)		(35,824	)		(23,705	)
Net realized and unrealized losses (gains) on investments		1,201			(3,044	)		(4,568	)		(2,941	)
Interest expense		87			824			1,138			3,775
Underwriting income	$	34,932		$	24,223		$	111,942		$	80,771
Expenses associated with transactions		922			478			1,479			706
Stock-based compensation expense		4,779			4,176			16,685			14,913
Amortization of intangibles		389			389			1,558			1,481
Expenses associated with catastrophe bond		—			—			2,483			1,640
Adjusted underwriting income	$	41,022		$	29,266		$	134,147		$	99,511

Adjusted net income

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Net income	$	34,965		$	25,894		$	117,573		$	79,201
Adjustments:
Net realized and unrealized losses (gains) on investments		1,201			(3,044	)		(4,568	)		(2,941	)
Expenses associated with transactions		922			478			1,479			706
Stock-based compensation expense		4,779			4,176			16,685			14,913
Amortization of intangibles		389			389			1,558			1,481
Expenses associated with catastrophe bond		—			—			2,483			1,640
Tax impact		(964	)		103			(1,699	)		(1,480	)
Adjusted net income	$	41,292		$	27,996		$	133,511		$	93,520

Annualized adjusted return on equity

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)

Annualized adjusted net income	$	165,168		$	111,984		$	133,511		$	93,520
Average stockholders' equity	$	716,171		$	446,293		$	600,140		$	428,002
Annualized adjusted return on equity		23.1	%		25.1	%		22.2	%		21.9	%

Adjusted combined ratio

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income	$	109,958		$	69,525		$	398,745		$	265,142
Denominator: Net earned premiums	$	144,890		$	93,748		$	510,687		$	345,913
Combined ratio		75.9	%		74.2	%		78.1	%		76.6	%
Adjustments to numerator:
Expenses associated with transactions	$	(922	)	$	(478	)	$	(1,479	)	$	(706	)
Stock-based compensation expense		(4,779	)		(4,176	)		(16,685	)		(14,913	)
Amortization of intangibles		(389	)		(389	)		(1,558	)		(1,481	)
Expenses associated with catastrophe bond		—			—			(2,483	)		(1,640	)
Adjusted combined ratio		71.7	%		68.8	%		73.7	%		71.2	%

Diluted adjusted earnings per share

	Three Months Ended				Year Ended
	December 31,				December 31,
	2024		2023		2024		2023
	(in thousands, except per share data)				(in thousands, except per share data)

Adjusted net income	$	41,292	$	27,996	$	133,511	$	93,520
Weighted-average common shares outstanding, diluted		27,206,225		25,272,149		26,223,842		25,327,091
Diluted adjusted earnings per share	$	1.52	$	1.11	$	5.09	$	3.69

Catastrophe loss ratio

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Numerator: Losses and loss adjustment expenses	$	37,176		$	17,896		$	134,759		$	72,592
Denominator: Net earned premiums	$	144,890		$	93,748		$	510,687		$	345,913
Loss ratio		25.7	%		19.1	%		26.4	%		21.0	%

Numerator: Catastrophe losses	$	8,122		$	10		$	27,846		$	3,442
Denominator: Net earned premiums	$	144,890		$	93,748		$	510,687		$	345,913
Catastrophe loss ratio		5.6	%		0.0	%		5.5	%		1.0	%

Adjusted combined ratio excluding catastrophe losses

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income	$	109,958		$	69,525		$	398,745		$	265,142
Denominator: Net earned premiums	$	144,890		$	93,748		$	510,687		$	345,913
Combined ratio		75.9	%		74.2	%		78.1	%		76.6	%
Adjustments to numerator:
Expenses associated with transactions	$	(922	)	$	(478	)	$	(1,479	)	$	(706	)
Stock-based compensation expense		(4,779	)		(4,176	)		(16,685	)		(14,913	)
Amortization of intangibles		(389	)		(389	)		(1,558	)		(1,481	)
Expenses associated with catastrophe bond		—			—			(2,483	)		(1,640	)
Catastrophe losses		(8,122	)		(10	)		(27,846	)		(3,442	)
Adjusted combined ratio excluding catastrophe losses		66.1	%		68.8	%		68.3	%		70.2	%

Tangible Stockholders' equity

	December 31,			December 31,
	2024			2023
	(in thousands)
Stockholders' equity	$	729,030		$	471,252
Goodwill and intangible assets		(13,242	)		(12,315	)
Tangible stockholders' equity	$	715,788		$	458,937

Palomar Holdings, Inc. Reports Fourth Quarter & Full Year 2024 Results