ST. PETERSBURG, Fla., April 24, 2025 (GLOBE NEWSWIRE) -- American Coastal Insurance Corporation (Nasdaq Ticker: ACIC) (“the Company”, “American Coastal” or “ACIC”) the insurance holding company of American Coastal Insurance Company (“AmCoastal”), announced today that it expects to release its financial results for the first quarter ended March 31, 2025, on Thursday, May 8, 2025, after the close of the market, and will conduct its quarterly conference call at 5:00 p.m. ET. The conference call will include li ...

Core Points - American Coastal Insurance Corporation has completed the sale of Interboro Insurance Company to Forza Insurance Holdings for approximately $26.4 million in cash based on GAAP estimated equity as of the closing date [2][3] - The sale marks a strategic transformation for American Coastal, allowing the company to focus entirely on underwriting commercial residential property insurance, enhancing its market leadership and shareholder value [3] Financial Details - The cash received from Forza is approximately $26.4 million, with a reconciliation of the purchase price expected within 30 days based on finalized GAAP equity as of April 1, 2025 [2] Company Background - American Coastal Insurance Corporation is the holding company for American Coastal Insurance Company, which specializes in insuring condominium and homeowner association properties in Florida [5] - The company has a partnership with AmRisc Group for the distribution of condominium association properties and has received a Financial Stability Rating of "A, Exceptional" from Demotech, along with an "A-" insurance financial strength rating from Kroll [5]

Financial Performance - The combined ratio, a measure of underwriting profitability, indicates an underwriting profit when it is under 100%[33] - As of December 31, 2024, the total number of policies in-force is 23,060, a slight increase from 22,848 in 2023[39] - The total TIV (Total Insured Value) of all policies in-force as of December 31, 2024, is $72,390,599, up from $69,595,880 in 2023[41] - The company has remediated material weaknesses in internal control over financial reporting as of December 31, 2024[96][97] - The company’s financial results are subject to fluctuations due to unpredictable weather conditions and catastrophic events, which could exceed loss reserves[86][91] - A downgrade in financial strength ratings could adversely impact business volume and access to additional financing, with significant losses potentially leading to a need for equity capital[145] Risk Management - AmCoastal's RBC (Risk-Based Capital) ratio is 1,470%, while IIC's RBC ratio is 461%, both exceeding minimum requirements as of December 31, 2024[52] - The company’s insurance operations are exposed to risks from catastrophic events, particularly hurricanes, which could significantly impact financial results[83][84] - The company is highly dependent on its information technology systems, and any unplanned shutdown or failure could impair its ability to process policies and claims in a timely manner[98] - The company has experienced threats to its data systems, including malware and unauthorized access, which could lead to significant reputational damage and financial losses[99] - The company faces intense competition in the property and casualty insurance market, which may limit its ability to retain existing business or write new business at adequate rates[114] - The inability to obtain reinsurance on acceptable terms could increase loss exposure and limit underwriting capabilities, adversely affecting financial condition[126] - Counterparty risk related to reinsurance claims could materially affect business results and cash flow[127] - Accurate pricing of risks is critical; failure in loss limitation methods could adversely impact financial results[129] - Increased litigation and expanded coverage issues may contribute to higher litigation costs and loss exposure under policies[141] - The company may face increased litigation costs and inadequate loss reserves due to emerging claims and coverage issues, which could materially affect operating results and cash flows[144] Corporate Governance and Diversity - The diversity statistics show that 28.6% of executive officers are female, a decrease of 8.6 percentage points from December 31, 2023[74] - The company has committed to adding at least two new directors to improve overall diversity at the Board level[71] - The company’s management team includes three members from underrepresented groups, reflecting its commitment to ESG goals[74] Operational Strategy - The company has made substantial investments in new technology to gain a competitive advantage in underwriting and claims handling[44] - The company distributes personal lines policies through approximately 400 independent agencies as of December 31, 2024[34] - The company has focused on building relationships with independent agents to enhance policyholder satisfaction and business profitability[35] - The company is no longer writing policies in Texas as of May 31, 2022, impacting its geographic distribution[39] - The company relies on approximately 400 independent agencies for marketing its homeowners' insurance product, which limits direct solicitation of existing policyholders[90] Regulatory Environment - The insurance industry is heavily regulated, with potential for further restrictive regulations that may reduce profitability and limit growth[119] - Compliance with evolving privacy and cybersecurity laws, such as the NYDFS regulations, may impose significant costs and operational restrictions on the company[101] - The SEC has adopted new cybersecurity disclosure rules that require public companies to enhance their disclosures regarding cybersecurity risk management, which could impact the company's operations[102] - Changes in state regulations could limit the company's ability to manage risk and adjust pricing, potentially leading to increased losses[116] - Compliance with state insurance regulations is complex and varies by state, posing risks to operational and financial conditions[121] - The federal government's role in insurance regulation is limited, but potential future federal regulations could negatively impact business opportunities[122] - The company may face significant compliance costs due to changes in insurance laws or regulations, which could adversely affect operations and growth prospects[125] Financial Structure - The company's Senior Notes impose restrictions on its financial operations, and failure to comply could result in an event of default, adversely affecting liquidity[113] - The ability of the company's subsidiaries to pay dividends is limited by state insurance regulations, which could adversely affect holding company liquidity and its ability to meet obligations[151] - The company currently does not pay ordinary quarterly dividends, and future payments may be constrained by its holding company structure and regulatory restrictions[149] - The substantial ownership of common stock by R. Daniel Peed allows him to exert significant control over the company, which may conflict with the interests of other stockholders[154] Investment and Asset Management - The company has a portfolio monitoring process for fixed income securities, and any credit losses will be recorded in earnings if the present value of expected cash flows is less than the amortized cost[284] - Goodwill is tested for impairment at least annually, and impairment occurs when the carrying value exceeds the fair value of the reporting segment[288] - There were no related party transactions for the years ended December 31, 2024, 2023, and 2022[290] Community Engagement - In 2024, the company made donations totaling $150,000 for local disaster relief due to Hurricanes Helene and Milton[69] - The company is committed to achieving net-zero carbon emissions by 2030, although further analysis and strategy are necessary[67]

Core Viewpoint - American Coastal Insurance (ACIC) reported quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.16 per share, and down from $0.39 per share a year ago, indicating a -25% earnings surprise [1] - The company posted revenues of $79.27 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.13% and up from $58.21 million year-over-year [2] Group 1 - The company has surpassed consensus EPS estimates three times over the last four quarters [2] - American Coastal shares have lost about 5% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The current consensus EPS estimate for the coming quarter is $0.45 on revenues of $78.94 million, and for the current fiscal year, it is $1.50 on revenues of $336.59 million [7] Group 2 - The estimate revisions trend for American Coastal is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The Zacks Industry Rank for Insurance - Property and Casualty is currently in the top 17% of over 250 Zacks industries, suggesting a favorable outlook for the industry [8] - Heritage Insurance, another company in the same industry, is expected to report quarterly earnings of $0.52 per share, reflecting a year-over-year change of -54.8% [9]

Financial Data and Key Metrics Changes - American Coastal Insurance Corporation reported a net income of $4.9 million for Q4 2024, with core income decreasing by $12 million year-over-year to $6 million due to a 20.53% tax retention from Hurricane Milton [18][19] - Gross premium earned increased by $3.6 million to $162.7 million, while the combined ratio was 91.9%, with Hurricane Milton contributing 27.8% to this ratio [19][20] - The full-year 2024 pre-tax income was approximately $102 million, up nearly 6% year-over-year, despite incurring $23 million more in net catastrophe losses [14][15] Business Line Data and Key Metrics Changes - The company successfully launched a new apartment program in Florida, writing 19 new apartment risks totaling approximately $2.3 million in premium [8] - New business growth and better-than-expected renewal account retention contributed to a sequential quarter-over-quarter increase in policy count [10] - The company aims for a modest target of about $20 million in premium from the apartment book for 2025, with potential for growth in subsequent years [35] Market Data and Key Metrics Changes - Rates are continuing to decrease due to favorable trends in loss and reinsurance costs, with average account renewal pricing down between 5% and 10% year-over-year [30] - The company has received hundreds of high-quality submissions from distribution partners, indicating a strong market interest [9] Company Strategy and Development Direction - American Coastal is focused on maintaining underwriting profit as the primary objective for all new business, emphasizing the importance of risk selection [9][56] - The company has enhanced its reinsurance protections, including a new three-year catastrophe bond upsized from $100 million to $200 million, which includes a cascading feature for multiple hurricane events [11][12] - The strategic goal is to achieve a combined ratio of 65 before catastrophe losses, maintaining profitability despite pricing changes [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the successful absorption of Hurricane Milton's losses within a single quarter's profit [7][15] - The company projects a net income range of $70 million to $90 million for 2025, supported by strong liquidity and capitalization [23] - Management noted that while the California fires may impact the global reinsurance market, they do not expect significant effects on American Coastal [60][62] Other Important Information - Stockholders' equity increased by 39.6% to $235.7 million, reflecting strong underwriting results and a $24 million dividend paid to shareholders [22] - The company received regulatory approval to complete the sale of Interboro, which will add approximately $22 million in cash to the holding company [24] Q&A Session Summary Question: Can you provide an update on pricing and how it is evolving? - Management indicated that pricing is changing due to expectations of future loss and reinsurance costs, with a positive outlook for the Florida marketplace [28][30] Question: What is the aspirational target for the apartment book? - The company aims for a target of $20 million in premium for the apartment book in 2025, with potential for growth in the following years [35] Question: What changes are expected in the reinsurance structure for the upcoming renewal? - Management is actively working on the reinsurance structure and aims to keep a modest retention that can be absorbed within a typical quarter's earnings [37][40] Question: What implications do the recent California fires have for American Coastal? - Management believes the impact will be minimal, although it may affect capacity in the global reinsurance market [60][62] Question: Can you elaborate on the new coverage that has become available? - The new CAT bond provides superior coverage with a cascading feature for multiple events, offering more protection than in previous years [65]

Group 1 - American Coastal Insurance Corporation held its Q4 2024 earnings conference call on February 27, 2025, at 5:00 PM ET [1] - The call featured key participants including Karin Daly, Vice President of Investor Relations, President and CEO Bradford Martz, and CFO Svetlana Castle [4] - The company provided access to the earnings call broadcast on its website, with a replay available for approximately 30 days [3] Group 2 - The conference call included a question-and-answer session following the formal presentation [1][2] - Forward-looking statements were made during the call, emphasizing that actual results could differ materially from those expressed due to various risks and uncertainties [5]

Core Insights - American Coastal Insurance Corporation reported its financial results for Q4 and the year ended December 31, 2024, highlighting a decrease in net income and challenges faced due to increased losses and expenses [1][17][24]. Financial Performance - Gross premiums written increased by 9.7% to $140.7 million in Q4 2024 from $128.3 million in Q4 2023 [2][18]. - Net income for Q4 2024 was $4.9 million, or $0.10 per diluted share, down from $14.3 million, or $0.31 per diluted share, in Q4 2023 [17][24]. - For the year ended December 31, 2024, net income was $75.7 million, or $1.54 per diluted share, compared to $309.9 million, or $6.98 per diluted share, in 2023 [24][25]. Loss and Expense Analysis - Loss and LAE (Loss Adjustment Expenses) increased by 344.8% to $29.8 million in Q4 2024 from $6.7 million in Q4 2023, with the loss ratio net rising to 40.5% [17][29]. - Policy acquisition costs surged by 102.3% to $26.5 million in Q4 2024, primarily due to changes in reinsurance commission income [21][30]. - General and administrative expenses rose by 17.7% to $11.3 million in Q4 2024, driven by increased overhead costs [22][31]. Combined Ratio and Underlying Metrics - The combined ratio for Q4 2024 was reported at 91.9%, significantly higher than 59.9% in Q4 2023, reflecting the impact of catastrophe losses [10][11]. - The underlying combined ratio, excluding current year catastrophe losses, was 65.9% for Q4 2024, compared to 63.7% in Q4 2023 [10][11]. Investment and Book Value - The company's cash and investment holdings increased from $311.9 million at the end of 2023 to $540.8 million at the end of 2024, indicating strong cash flow from operations [36]. - Book value per share rose by 35.5% from $3.61 at December 31, 2023, to $4.89 at December 31, 2024, driven by retained earnings from net income [37][38].

Financial Performance - Gross premiums written increased by 9.7% year-over-year to $140,739,000 in Q4 2024, while total revenue rose by 54.7% to $79,267,000[4]. - Net premiums earned surged by 49.6% to $73,492,000 in Q4 2024, contributing to a total of $273,990,000 for the year, a 4.6% increase from 2023[4]. - The company reported a consolidated net income of $4,946,000 for Q4 2024, a decrease of 65.4% compared to $14,284,000 in Q4 2023[4]. - Net income for Q4 2024 was $4.9 million, or $0.10 per diluted share, down from $14.3 million, or $0.31 per diluted share in Q4 2023[16]. - Total revenues for the year ended December 31, 2024, reached $296.657 million, an increase of 12.2% from $264.400 million in 2023[51]. - Total comprehensive income for the year ended December 31, 2024, was $79.197 million, down from $322.717 million in 2023, a decrease of 75.7%[51]. Ratios and Efficiency - The combined ratio for Q4 2024 was 91.9%, reflecting a significant increase from 59.9% in Q4 2023, with a full-year combined ratio of 67.5%[6][10]. - The return on equity based on GAAP net income was 8.7% for Q4 2024, down from 81.0% in Q4 2023[8]. - The loss ratio for Q4 2024 was 40.5%, up from 13.7% in Q4 2023, while the expense ratio increased to 51.4% from 46.2%[10]. Expenses - Policy acquisition costs rose by $13.4 million, or 102.3%, to $26.5 million in Q4 2024, primarily due to a decrease in reinsurance commission income[19]. - General and administrative expenses increased by $1.7 million, or 17.7%, to $11.3 million in Q4 2024, driven by higher overhead costs[20]. - General and administrative expenses increased by $7.2 million, or 19.1%, to $44.8 million for the year ended December 31, 2024, driven by increased overhead costs[26]. Assets and Liabilities - Total assets increased to $1,216.112 million as of December 31, 2024, compared to $1,062.378 million in 2023, indicating a growth of 14.5%[53]. - Total liabilities rose to $980.452 million in 2024, up from $893.613 million in 2023, representing an increase of 9.7%[53]. Shareholder Information - Book value per share increased by 35.5% to $4.89 compared to $3.61 in the previous year[4]. - The total shares outstanding increased from 46,777,006 in 2023 to 48,204,962 in 2024, impacting the book value calculations[33]. - The company declared a dividend of $0.50 per share in Q4 2024, consistent with the previous year[51]. Investment and Cash Flow - The company's cash, restricted cash, and investment holdings increased from $311.9 million at December 31, 2023, to $540.8 million at December 31, 2024, driven by positive cash flows from operations[30]. - Fixed maturities represented approximately 82.3% of total investments at December 31, 2024, down from 89.4% at December 31, 2023, indicating a shift in investment strategy[30]. - The company's investment portfolio had a modified duration of 2.2 years at December 31, 2024, compared to 3.4 years at December 31, 2023, reflecting changes in interest rate sensitivity[30]. Operational Developments - The company launched an apartment program in December 2024, receiving hundreds of high-quality submissions, indicating strong demand for its products[7]. - The company plans to reduce its quota share reinsurance coverage from 40% to 20% effective June 1, 2024, which will lower the overall ceding ratio[28]. - The company entered into a Sale Agreement to sell its subsidiary, IIC, to Forza Insurance Holdings, with the transaction expected to close on April 1, 2025[46].

Core Points - American Coastal Insurance Corporation (ACIC) will release its financial results for Q4 and full year 2024 on February 27, 2025, after market close [1] - A conference call will be held at 5:00 p.m. ET on the same day, including live remarks and a Q&A session [2][3] Company Overview - American Coastal Insurance Corporation is the holding company for American Coastal Insurance Company, which was established in 2007 to insure condominium and homeowner association properties in Florida [4] - The company has an exclusive partnership with AmRisc Group for the distribution of condominium association properties in Florida, focusing on hurricane-exposed properties [4] - American Coastal Insurance Company has received a Financial Stability Rating of "A, Exceptional" from Demotech and an "A-" insurance financial strength rating with a Stable outlook from Kroll [4] - ACIC holds a 'BB+' issuer rating with a Stable outlook from Kroll [4]

Group 1: Industry Insights - Property insurance is increasingly in demand in the US due to rising property prices and natural disasters, leading to higher insurance values [1] - The property insurance sector is characterized as one of the riskiest and costliest business ventures [1] Group 2: Market Participation - The logistics sector has been a focus for nearly two decades, with significant involvement in stock investing and macroeconomic analysis for almost a decade [1] - The company has diversified its investments across various industries and market cap sizes, including banking, telecommunications, logistics, and hotels [1] - The company entered the US market in 2020, expanding its investment portfolio to include US banks, hotels, shipping, and logistics companies [1]