Palomar Holdings, Inc. Reports Fourth Quarter & Full Year 2025 Results

Core Insights - Palomar Holdings, Inc. reported a significant increase in net income for Q4 2025, reaching $56.2 million, or $2.06 per diluted share, compared to $35.0 million, or $1.29 per diluted share, in Q4 2024, marking a 60.6% increase in net income year-over-year [1][7] - The company achieved an adjusted net income of $61.1 million, or $2.24 per diluted share, for Q4 2025, up from $41.3 million, or $1.52 per diluted share, in Q4 2024, reflecting a 48.0% increase [1][7] - Gross written premiums grew by 31.8% to $492.6 million in Q4 2025, compared to $373.7 million in Q4 2024, while net earned premiums increased by 61.1% [5][7] Fourth Quarter 2025 Highlights - The company reported a record adjusted net income and strong growth in both top and bottom lines, with gross written premiums increasing by 32% and adjusted net income rising by 48% [4] - The adjusted combined ratio for Q4 2025 was 73.4%, compared to 71.7% in Q4 2024, indicating effective underwriting performance [8][7] - The annualized return on equity for Q4 2025 was 24.7%, up from 19.5% in the same period last year [11][7] Full Year 2025 Highlights - For the full year 2025, gross written premiums reached $2.0 billion, a 31.5% increase from $1.5 billion in 2024 [7][34] - Net income for the full year was $197.1 million, a 67.6% increase from $117.6 million in 2024, while adjusted net income rose by 61.9% to $216.1 million [7][34] - The total loss ratio for 2025 was 28.5%, compared to 26.4% in 2024, indicating a slight increase in losses relative to earned premiums [7][34] Underwriting Results - Underwriting income for Q4 2025 was $54.4 million, resulting in a combined ratio of 76.8%, compared to a combined ratio of 75.9% in Q4 2024 [8][7] - The company experienced a loss ratio of 30.4% in Q4 2025, up from 25.7% in Q4 2024, with a catastrophe loss ratio of -0.9% compared to 5.6% in the previous year [6][7] Investment Results - Net investment income increased by 41.3% to $16.0 million in Q4 2025, driven by higher yields on invested assets [9][7] - The company recorded net realized and unrealized gains of $2.4 million in Q4 2025, contrasting with losses of $1.2 million in the same period last year [9][7] Stockholders' Equity and Returns - Stockholders' equity rose to $942.7 million at the end of 2025, compared to $729.0 million at the end of 2024 [11][7] - The company did not repurchase any shares during the quarter, with approximately $112.7 million remaining available for future repurchases under the existing authorization [11][7] Full Year 2026 Outlook - For the full year 2026, the company anticipates achieving adjusted net income between $260 million and $275 million, including an estimate of $8 million to $12 million in catastrophe losses [12][7]