Tiptree Inc. (NASDAQ:TIPT) Q1 2024 Earnings Call Transcript May 4, 2024
Tiptree Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings, and welcome to the Tiptree Inc. First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Scott McKinney, Chief Financial Officer for Tiptree. Thank you, Scott. You may begin.
Scott McKinney: Good morning, and welcome to our first quarter 2024 earnings call. Joining me today are Michael Barnes, our Executive Chairman; and Jonathan Ilany, CEO. Some of our comments today will contain forward-looking statements, and actual future results may differ materially. Please see our most recent SEC filings, which identify the principal risks and uncertainties that could affect future performance. In today’s call, we will discuss non-GAAP financial metrics, which are described in more detail in our presentation. Reconciliations of these metrics and additional disclosures can be found in our SEC filings, the appendix to our presentation, and on our website. With that, I will turn the call over to Michael.
Michael Barnes: Thank you, Scott, and good morning to everyone. As you may have seen through our earnings release yesterday evening, Tiptree had a great quarter and is off to an excellent start to the year. Revenues increased by 31%, and our collective businesses produced a 19.5% annualized adjusted return on equity. Fortegra continued to deliver with $663 million of gross written premiums and equivalents, while growing adjusted net income by 49% versus the first quarter of 2023. The combined ratio improved to 90%, demonstrating the consistent underwriting performance and continued efficiencies as the business grows. At the end of the quarter, Tiptree and Warburg Pincus contributed just under $40 million of capital to Fortegra to fund future growth.
The pipeline of opportunities remains very attractive, and we plan to continue to support the business in executing its growth plan. Tiptree Capital finished the quarter with $123 million of capital deployed across our mortgage origination and servicing business, our liquid investment portfolio, and cash. At Reliance, the team has been resilient in weathering the impact of higher mortgage rates. In the first quarter, volumes increased modestly compared to 2023. And the income and sustained market value of our retained servicing book led the business to profitability. We maintain a positive outlook for the business, with greater potential for future profit as mortgage rates stabilize. At Tiptree, our focus remains on identifying opportunities that will generate long-term absolute return.
With a strong start to 2024, we are in a good position to sustain our growth and have a positive outlook for the future of the company. With that, I’ll turn the call over to Scott to discuss our financial results.
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