Kingstone(US:KINS)2020-05-11 21:18Financial Performance - Total revenues for Q1 2020 were $26,623,594, a decrease of 23.7% from $34,898,548 in Q1 2019[14] - Net premiums earned decreased to $26,941,450, down 9.0% from $29,595,889 in the same period last year[14] - The net loss for Q1 2020 was $5,444,203, compared to a net loss of $7,335,190 in Q1 2019, representing a 25.7% improvement[14] - The company reported a net loss of $4,119,005 in Q1 2020, an improvement from a net loss of $6,217,208 in Q1 2019[197] - Net loss for the three months ended March 31, 2020, was $5,443,000, a decrease of $1,892,000 or 25.8% from a net loss of $7,335,000 in 2019[1] Assets and Liabilities - Total assets decreased to $292,534,255 as of March 31, 2020, down from $321,202,812 at December 31, 2019, a decline of 8.9%[12] - Total liabilities decreased to $215,671,536, down 7.4% from $232,981,231 at the end of 2019[12] - Stockholders' equity decreased to $76,862,719, a decline of 12.8% from $88,221,581 at December 31, 2019[12] Investment Performance - The company experienced net unrealized gains of $6,121,608 on equity investments for the three months ended March 31, 2020, compared to net unrealized losses of $1,767,835 in the prior year[19]. - The estimated fair value of the company's other investments, specifically hedge funds, was $1.99 billion as of March 31, 2020, with gross unrealized losses of $11.86 million[36] - The total estimated fair value of equity securities is $18,368,893, with gross unrealized losses of $(4,206,256) representing 18.7% of the total cost of $22,430,037[203] Premiums and Underwriting - Kingstone's direct written premiums for the three months ended March 31, 2020, were predominantly from New York, accounting for 82.7% of total premiums, down from 91.4% in the same period of 2019[21]. - Direct written premiums for the three months ended March 31, 2020 totaled $34.366 million, an increase from $30.036 million in the same period of 2019[151] - Net written premiums decreased by $7,170,000 or 23.6% to $23,191,000 in the three months ended March 31, 2020, compared to $30,361,000 in 2019[165] Losses and Expenses - Loss and loss adjustment expenses for Q1 2020 were $16,385,821, down 43.7% from $29,134,224 in Q1 2019[14] - The total gross liability for loss and LAE reserves was reported at $77,851,000[74] - The cumulative paid loss and allocated loss adjustment expenses, net of reinsurance, totaled $221,729,000[72] Reinsurance - The company entered into a quota share reinsurance treaty effective December 15, 2019, covering 25% of personal lines business[75] - The risk retained on initial $1,000,000 of losses under the quota share treaty is $750,000, with total reinsurance coverage per occurrence at $9,250,000[76] - Provisional ceding commissions earned increased to $3,720,360 for the three months ended March 31, 2020, compared to $1,317,751 in the same period of 2019, representing a growth of approximately 182%[83] Tax and Deferred Assets - The net deferred income tax asset increased from $311,052 as of December 31, 2019, to $1,347,699 as of March 31, 2020, reflecting a significant improvement in tax position[102] - Total deferred tax assets decreased from $7,618,003 as of December 31, 2019, to $5,542,787 as of March 31, 2020, a reduction of about 27.3%[102] Stockholder Information - The company paid dividends of $675,960 in Q1 2020, a decrease from $1,075,962 in Q1 2019, reflecting a 37.2% reduction in dividend payouts[19]. - The Company granted 74,523 stock options during the three months ended March 31, 2020, with a weighted average exercise price of $7.96 per share[94] Operational Changes - The company has placed a moratorium on new commercial lines and commercial umbrella submissions due to poor performance, which represented approximately 6.3% of net premiums earned for Q1 2020[143] - The company is evaluating the impact of ASU 2016-13 on its financial statements, which will be effective on January 1, 2023, focusing on credit loss measurement[27]