Kingstone(KINS) - 2024 Q2 - Quarterly Report

Financial Performance - Net premiums earned for Q2 2024 were $30,303,612, an increase from $29,508,196 in Q2 2023, representing a growth of 2.7%[9] - Total revenues for the six months ended June 30, 2024, were $72,267,292, compared to $73,347,751 for the same period in 2023, indicating a decrease of 1.5%[9] - Net income for the six months ended June 30, 2024, was $5,941,616, compared to a net loss of $5,576,727 for the same period in 2023, showing a significant turnaround[9] - Comprehensive income for the quarter was $4,605,349, compared to a loss of $1,408,513 in the previous year[10] - Basic earnings per share increased to $0.41 from a loss of $0.05 year-over-year, while diluted earnings per share rose to $0.37 from a loss of $0.05[10] - Total expenses for the six months ended June 30, 2024, were $64,742,410, a decrease of 19.4% from $80,214,858 in the same period of 2023[9] Assets and Liabilities - Total assets as of June 30, 2024, were $319,777,757, a slight increase from $317,633,210 at December 31, 2023[8] - Total liabilities decreased to $278,974,983 as of June 30, 2024, from $283,129,071 at December 31, 2023, indicating a reduction of 1.5%[8] - The company’s stockholders' equity increased to $40,802,774 as of June 30, 2024, from $34,504,139 at December 31, 2023, reflecting a growth of 18.5%[8] Cash Flow and Investment Income - Cash and cash equivalents increased to $12,170,993 at June 30, 2024, compared to $8,976,998 at December 31, 2023, representing a growth of 35.0%[7] - The company reported a net investment income of $1,764,596 for Q2 2024, up from $1,451,356 in Q2 2023, marking an increase of 18.5%[9] - Net cash flows provided by operating activities increased to $13,214,888 from $(17,009,995) year-over-year[15] Losses and Reserves - Loss and loss adjustment expenses for Q2 2024 were $14,238,308, down from $19,580,702 in Q2 2023, reflecting a reduction of 27.5%[9] - Total incurred losses and LAE for the six months ended June 30, 2024, were $32,097,895, down from $44,620,112 in the same period of 2023, reflecting a decrease of approximately 28%[43] - The net balance of loss and LAE reserves at the end of the period was $87,563,241 for the six months ended June 30, 2024, compared to $87,113,692 for the same period of 2023, showing a marginal increase of 0.5%[44] Reinsurance and Risk Management - The Company has entered into a new 27% quota share reinsurance treaty for its personal lines business, effective January 1, 2024, covering the period until January 1, 2025[60] - The total reinsurance recoverable on unpaid losses as of June 30, 2024, is $29,014,000[59] - The company has a catastrophe loss coverage in excess of quota share coverage amounting to $275,000,000[63] Stockholder Equity and Compensation - The company issued common stock net of offering costs of $103,385, contributing to an increase in total stockholders' equity[14] - Stock-based compensation for the six months ended June 30, 2024, amounted to $429,055, indicating ongoing investment in employee incentives[13] - The 2014 Equity Participation Plan was amended to increase the maximum shares authorized to 1,900,000, with 128,037 shares reserved for grants as of June 30, 2024[84] Debt and Financing - Debt as of June 30, 2024, stands at $25,268,864, slightly up from $25,243,530 at the end of 2023[72] - The Company plans to refinance the 2022 Notes through new equity or debt securities, with approximately $2,716,000 in invested assets and cash available for repayment as of June 30, 2024[79] - The Ordinary Dividend Paying Capacity of KICO was zero as of December 31, 2023, resulting in no mandatory redemption of the 2022 Notes[77] Claims and Reserves Review - The company performed a review of open liability claims on a quarterly basis to assess reserve levels, considering both company and industry trends[45] - The cumulative reported claims by accident year as of June 30, 2024, total 567,809, with 30,054 IBNR reserves[56] - The company regularly reviews and updates its reserves based on the most recent information on reported claims and statistical techniques[48]