Business Wire | Aug 4, 2021 04:15PM EDT

Tiptree Reports Second Quarter and Six-Month 2021 Results

Aug. 04, 2021

NEW YORK--(BUSINESS WIRE)--Aug. 04, 2021--Tiptree Inc. (NASDAQ:TIPT) ("Tiptree" or the "Company"), a holding company that combines specialty insurance operations with investment management, today announced its financial results for the three and six months ended June 30, 2021.

"Our second-quarter performance was a continuation of positive trends we have experienced over the past year," said Tiptree Executive Chairman, Michael Barnes. "Fortegra had an extremely strong first half with premium and equivalents growth of 51% while maintaining best-in-class profitability. We continue to believe in the strength of the platform and its ability to produce growth and returns in excess of its peers over the long-term."

Barnes added, "Our mortgage business had another excellent quarter as the rate environment and home price appreciation continue to be tailwinds. Our shipping business also showed positive results for the quarter based on persistent favorable market conditions, particularly in the dry-bulk sector. Overall, we believe Tiptree is well positioned for the second half of 2021 and going forward."

($ in thousands, Three Months Ended Juneexcept per share 30, Six Months Ended June 30, information)

GAAP: 2021 2020 2021 2020

Total revenues $ 299,687 $ 199,194 $ 594,375 $ 328,865

Net income (loss)attributable to common $ 7,969 $ 3,816 $ 36,550 $ (56,191) stockholders

Diluted earnings per $ 0.22 $ 0.10 $ 1.05 $ (1.64) share

Cash dividends paid $ 0.04 $ 0.04 $ 0.08 $ 0.08 per common share

Return on average 9.0 % 5.1 % 20.4 % (29.6) % equity



Non-GAAP: ^(1)

Adjusted net income $ 13,125 $ 10,526 $ 26,280 $ 17,433

Adjusted return on 13.1 % 12.2 % 13.5 % 9.2 % average equity

Book value per share $ 11.59 $ 9.97 $ 11.59 $ 9.97

____________________________

(1) For information relating to Adjusted net income, Adjusted return on average equity and book value per share, including a reconciliation to GAAP financials, see "-Non-GAAP Reconciliations" below.

Earnings Conference Call

Tiptree will host a conference call on Thursday, August 5, 2021 at 9:00 a.m. Eastern Time to discuss its second quarter 2021 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company's website, located at www.tiptreeinc.com.

The conference call will be available via live or archived webcast at http://www.investors.tiptreeinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. To participate in the telephone conference call, please dial 1-877-407-4018 (domestic) or 1-201-689-8471 (international). Please dial in at least five minutes prior to the start time.

A replay of the call will be available from Thursday, August 5, 2021 at 1:00 p.m. Eastern Time, until midnight Eastern on Thursday, August 12, 2021. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13720336.

Segment Financial Highlights - Second Quarter and Year-to-date 2021

Insurance (Fortegra Group):

* The Fortegra Group crossed a significant milestone with over $2.0 billion in trailing twelve month gross written premiums and premium equivalents (GWPPE), delivering a 23.8% CAGR since 2017.

* GWPPE of $571.5 million in the second quarter, an increase of 79.2% from the prior year period. Year-to-date GWPPE of $1,076.5 million, up 51.3%, driven by robust 49.6% organic growth across all lines of business.

* Total revenues of $252.3 million, up 52.9% compared to second quarter 2020. Year-to-date revenues of $474.8 million, up 54.0%, driven by growth in domestic admitted and surplus insurance lines, as well as continued growth in fee-based warranty programs. Excluding the impact of realized and unrealized gains and losses, revenues increased by 37.5% over the prior year-to-date period.

* The combined ratio for the quarter was 92.1%, consistent with the prior year. The year-to-date 2021 combined ratio was 91.8%, compared to 92.9% in the prior year period. Technology efficiencies contributed to an improved expense ratio, while the underwriting ratio remained stable.

* Income before taxes of $14.7 million, up 4.4% as compared to second quarter 2020. Year-to-date 2021 income before taxes of $36.2 million compared to a loss before taxes of $13.0 million for the prior year period. Annualized return on average equity was 19.4% for year-to-date 2021, as compared to (5.9)% in 2020.

* Adjusted net income for the quarter was $14.1 million, up 56.8% from the prior year period. Adjusted net income year-to-date was $26.9 million, up 51.6%, driven by revenue growth and an improved combined ratio. The adjusted return on average equity was 18.3% for year-to-date 2021, as compared to 12.8% in 2020.

* The combination of unearned premiums and deferred revenues on the balance sheet of $1,441.1 million grew by $408.5 million, or 39.6%, from June 30, 2020 to June 30, 2021 as a result of Fortegra's growth in GWPPE.

Mortgage:

* Income before taxes of $5.8 million compared to $7.4 million second quarter 2020. Year-to-date income before taxes of $18.9 million, as compared to $6.3 million in the prior year.

* Adjusted net income of $11.5 million, an increase of $3.9 million from second quarter 2020. The increase was driven by growth in volumes and margins resulting from reduced interest rates and home price appreciation. Adjusted return on average equity was 34.3%.

Results by Segment

We classify our business into two reportable segments, Insurance and Mortgage, with the remainder of our operations aggregated into Tiptree Capital - Other. Corporate activities include holding company interest expense, corporate employee compensation and benefits, and other expenses, including, but not limited to, public company expenses. The following table present summary financial data for the three and six months ended June 30, 2021 and 2020.

($ in thousands) Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

Revenues:

Insurance $ 252,255 $ 164,954 $ 474,818 $ 308,294

Mortgage 25,272 28,812 59,766 45,032

Tiptree Capital - other 22,160 5,428 59,791 (24,461)

Corporate - - - -

Total revenues $ 299,687 $ 199,194 $ 594,375 $ 328,865



Income (loss) before taxes:

Insurance $ 14,704 $ 14,088 $ 36,232 $ (13,029)

Mortgage 5,775 7,405 18,852 6,315

Tiptree Capital - other 2,620 (9,188) 17,614 (54,429)

Corporate (11,624) (7,871) (21,831) (16,174)

Total income (loss) before $ 11,475 $ 4,434 $ 50,867 $ (77,317) taxes



Non-GAAP - Adjusted net income:

Insurance $ 14,091 $ 8,988 $ 26,867 $ 17,724

Mortgage 4,059 7,427 11,524 7,623

Tiptree Capital - other 2,064 (221) 2,631 3,070

Corporate (7,089) (5,668) (14,742) (10,984)

Total adjusted net income^ $ 13,125 $ 10,526 $ 26,280 $ 17,433 (1)

(1)

For further information relating to the Company's Adjusted net income, including a reconciliation to GAAP income (loss) before taxes, see "-Non-GAAP Reconciliations."

The table below provides a break down between net realized and unrealized gains and losses from Invesque and other securities which impacted our consolidated results on a pre-tax basis. Many of our investments are carried at fair value and marked to market through unrealized gains and losses. As a result, we expect our earnings relating to these investments to be relatively volatile between periods. Our fixed income securities are primarily marked to market through AOCI in stockholders' equity and do not impact net realized and unrealized gains and losses until they are sold.

For further information relating to the Company's Adjusted net income,(1) including a reconciliation to GAAP income (loss) before taxes, see "-Non-GAAP Reconciliations."

The table below provides a break down between net realized and unrealized gains and losses from Invesque and other securities which impacted our consolidated results on a pre-tax basis. Many of our investments are carried at fair value and marked to market through unrealized gains and losses. As a result, we expect our earnings relating to these investments to be relatively volatile between periods. Our fixed income securities are primarily marked to market through AOCI in stockholders' equity and do not impact net realized and unrealized gains and losses until they are sold.

($ in thousands) Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Net realized andunrealized gains (losses)^ $ 3,397 $ 6,211 $ 13,612 $ (18,580) (1)

Net realized andunrealized gains (losses) $ 169 $ (11,891) $ 16,812 $ (70,604) - Invesque

(1) Excludes Invesque andMortgage realized andunrealized gains andlosses.

Non-GAAP

Management uses Adjusted net income and book value per share as measurements of operating performance. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and comparison among companies. Management uses Adjusted net income and adjusted return on average equity as part of its capital allocation process and to assess comparative returns on invested capital. Adjusted net income represents income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, stock-based compensation, net realized and unrealized gains (losses), and intangibles amortization associated with purchase accounting. Adjusted net income and Adjusted return on average equity are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income. See "Non-GAAP Reconciliations" for a reconciliation of these measures to their GAAP equivalents.

About Tiptree

Tiptree Inc. (NASDAQ: TIPT) is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Our principal operating business, Fortegra, is a specialty insurance underwriter and service provider, which focuses on niche business lines and fee-oriented services. We also allocate capital to a diverse group of businesses and investments that we refer to as Tiptree Capital. For more information, please visit www.tiptreeinc.com.

Forward-Looking Statements

This release contains "forward-looking statements" which involve risks, uncertainties and contingencies, many of which are beyond the Company's control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "estimate," "expect," "intend," "may," "might," "plan," "project," "should," "target," "will," or similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the Company's plans, objectives, expectations for our businesses and intentions. The forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to those described in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K, and as described in the Company's other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of this release. The factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statements.

Tiptree Inc.

Condensed Consolidated Balance Sheets

($ in thousands, except share data)

As of

June 30, December 31, 2021 2020

Assets:

Investments:

Available for sale securities, at fair value, net $ 447,300 $ 377,133 of allowance for credit losses

Loans, at fair value 97,405 90,732

Equity securities 204,539 123,838

Other investments 206,188 219,701

Total investments 955,432 811,404

Cash and cash equivalents 141,661 136,920

Restricted cash 36,275 58,355

Notes and accounts receivable, net 394,348 370,452

Reinsurance receivables 762,751 728,009

Deferred acquisition costs 306,622 229,430

Goodwill 179,236 179,236

Intangible assets, net 130,429 138,215

Other assets 164,455 162,034

Assets held for sale 140,348 181,705

Total assets $ 3,211,557 $ 2,995,760



Liabilities and Stockholders' Equity

Liabilities:

Debt, net $ 381,871 $ 366,246

Unearned premiums 968,580 860,690

Policy liabilities and unpaid claims 285,640 233,438

Deferred revenue 472,610 399,211

Reinsurance payable 230,590 224,660

Other liabilities and accrued expenses 333,935 362,865

Liabilities held for sale 133,282 175,112

Total liabilities $ 2,806,508 $ 2,622,222



Stockholders' Equity:

Preferred stock: $0.001 par value, 100,000,000 $ - $ - shares authorized, none issued or outstanding

Common stock: $0.001 par value, 200,000,000shares authorized, 33,395,395 and 32,682,462 33 33 shares issued and outstanding, respectively

Additional paid-in capital 314,983 315,014

Accumulated other comprehensive income (loss), 2,689 5,674 net of tax

Retained earnings 69,313 35,423

Total Tiptree Inc. stockholders' equity 387,018 356,144

Non-controlling interests 18,031 17,394

Total stockholders' equity 405,049 373,538

Total liabilities and stockholders' equity $ 3,211,557 $ 2,995,760

Tiptree Inc.

Condensed Consolidated Statements of Operations

($ in thousands, except share data)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Revenues:

Earned premiums, net

$

176,958

$

107,255

$

323,877

$

228,576

Service and administrative fees

63,700

42,865

121,750

86,589

Ceding commissions

3,080

4,535

6,105

11,060

Net investment income

3,234

2,292

6,001

5,780

Net realized and unrealized gains (losses)

36,092

30,110

105,463

(32,331)

Other revenue

16,623

12,137

31,179

29,191

Total revenues

299,687

199,194

594,375

328,865

Expenses:

Policy and contract benefits

89,193

49,147

156,367

110,023

Commission expense

99,543

67,903

188,188

138,304

Employee compensation and benefits

45,693

40,678

98,617

79,179

Interest expense

8,981

7,646

18,233

15,197

Depreciation and amortization

6,208

4,371

12,142

8,234

Other expenses

38,594

25,015

69,961

55,245

Total expenses

288,212

194,760

543,508

406,182

Income (loss) before taxes

11,475

4,434

50,867

(77,317)

Less: provision (benefit) for income taxes

2,427

(5)

11,179

(21,186)

Net income (loss)

9,048

4,439

39,688

(56,131)

Less: net income (loss) attributable to non-controlling interests

1,079

623

3,138

60

Net income (loss) attributable to common stockholders

$

7,969

$

3,816

$

36,550

$

(56,191)

Net income (loss) per common share:

Basic earnings per share

$

0.24

$

0.11

$

1.10

$

(1.64)

Diluted earnings per share

$

0.22

$

0.10

$

1.05

$

(1.64)

Weighted average number of common shares:

Basic

32,898,769

33,984,195

32,661,195

34,269,096

Diluted

33,567,897

33,984,195

34,842,812

34,269,096

Dividends declared per common share

$

0.04

$

0.04

$

0.08

$

0.08

Tiptree Inc.Non-GAAP Reconciliations (Unaudited)

Non-GAAP Financial Measures - Adjusted net income and Adjusted return on average equity

The Company defines Adjusted net income as income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses) and intangibles amortization associated with purchase accounting. We use adjusted net income as an internal operating performance measure in the management of business as part of our capital allocation process. We believe adjusted net income provides useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies. Adjusted net income should not be viewed as a substitute for income before taxes calculated in accordance with GAAP, and other companies may define adjusted net income differently.

We define Adjusted return on average equity as Adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholder's equity during the period. We use Adjusted return on average equity as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted return on average equity should not be viewed as a substitute for return on average equity calculated in accordance with GAAP, and other companies may define adjusted return on average equity differently.

Tiptree Inc.

CondensedConsolidatedStatements ofOperations

($ in thousands,except share data)

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Revenues:

Earned premiums, net $ 176,958 $ 107,255 $ 323,877 $ 228,576

Service and 63,700 42,865 121,750 86,589 administrative fees

Ceding commissions 3,080 4,535 6,105 11,060

Net investment income 3,234 2,292 6,001 5,780

Net realized andunrealized gains 36,092 30,110 105,463 (32,331) (losses)

Other revenue 16,623 12,137 31,179 29,191

Total revenues 299,687 199,194 594,375 328,865

Expenses:

Policy and contract 89,193 49,147 156,367 110,023 benefits

Commission expense 99,543 67,903 188,188 138,304

Employee compensation 45,693 40,678 98,617 79,179 and benefits

Interest expense 8,981 7,646 18,233 15,197

Depreciation and 6,208 4,371 12,142 8,234 amortization

Other expenses 38,594 25,015 69,961 55,245

Total expenses 288,212 194,760 543,508 406,182

Income (loss) before 11,475 4,434 50,867 (77,317) taxes

Less: provision(benefit) for income 2,427 (5) 11,179 (21,186) taxes

Net income (loss) 9,048 4,439 39,688 (56,131)

Less: net income(loss) attributable 1,079 623 3,138 60 to non-controllinginterests

Net income (loss)attributable to $ 7,969 $ 3,816 $ 36,550 $ (56,191) common stockholders



Net income (loss) per common share:

Basic earnings per $ 0.24 $ 0.11 $ 1.10 $ (1.64) share

Diluted earnings per $ 0.22 $ 0.10 $ 1.05 $ (1.64) share



Weighted averagenumber of common shares:

Basic 32,898,769 33,984,195 32,661,195 34,269,096

Diluted 33,567,897 33,984,195 34,842,812 34,269,096



Dividends declared $ 0.04 $ 0.04 $ 0.08 $ 0.08 per common share

Tiptree Inc.Non-GAAP Reconciliations (Unaudited)

Non-GAAP Financial Measures - Adjusted net income and Adjusted return on average equity

The Company defines Adjusted net income as income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses) and intangibles amortization associated with purchase accounting. We use adjusted net income as an internal operating performance measure in the management of business as part of our capital allocation process. We believe adjusted net income provides useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies. Adjusted net income should not be viewed as a substitute for income before taxes calculated in accordance with GAAP, and other companies may define adjusted net income differently.

We define Adjusted return on average equity as Adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholder's equity during the period. We use Adjusted return on average equity as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted return on average equity should not be viewed as a substitute for return on average equity calculated in accordance with GAAP, and other companies may define adjusted return on average equity differently.

Three Months Ended June 30, 2021

Tiptree Capital

($ in Insurance Mortgage Other Corporate Totalthousands)

Income (loss) $ 14,704 $ 5,775 $ 2,620 $ (11,624) $ 11,475 before taxes

Less: Incometax (benefit) (3,334) (1,366) (34) 2,307 (2,427) expense

Less: Netrealized andunrealized (2,808) (600) (142) - (3,550) gains(losses)^(1)

Plus:Intangibles 3,835 - - - 3,835 amortization(2)

Plus:Stock-based 500 166 4 479 1,149 compensationexpense

Plus:Non-recurring 1,834 - 281 2,171 4,286 expenses

Plus:Non-cash fair - - (695) - (695) valueadjustments

Less: Tax on (640) 84 30 (422) (948) adjustments

Adjusted net $ 14,091 $ 4,059 $ 2,064 $ (7,089) $ 13,125 income



Adjusted net $ 14,091 $ 4,059 $ 2,064 $ (7,089) $ 13,125 income

Averagestockholders' $ 281,041 $ 72,364 $ 121,129 $ (73,310) $ 401,223 equity

Adjustedreturn on 20.1 % 22.4 % 6.8 % NM% 13.1 %averageequity

Three Months Ended June 30, 2020

Tiptree Capital

($ in thousands)

Insurance

Mortgage

Other

Corporate

Total

Income (loss) before taxes

$

14,088

$

7,405

$

(9,188)

$

(7,871)

$

4,434

Less: Income tax (benefit) expense

(2,785)

(1,746)

2,059

2,477

5

Less: Net realized and unrealized gains (losses)(1)

(5,635)

1,471

9,841

-

5,677

Plus: Intangibles amortization (2)

2,534

-

-

-

2,534

Plus: Stock-based compensation expense

492

896

7

657

2,052

Plus: Non-recurring expenses

44

-

-

41

85

Plus: Non-cash fair value adjustments

-

-

(871)

-

(871)

Less: Tax on adjustments

250

(599)

(2,069)

(972)

(3,390)

Adjusted net income

$

8,988

$

7,427

$

(221)

$

(5,668)

$

10,526

Adjusted net income

$

8,988

$

7,427

$

(221)

$

(5,668)

$

10,526

Average stockholders' equity

$

279,013

$

36,646

$

119,506

$

(89,402)

$

345,763

Adjusted return on average equity

12.9

%

81.1

%

(0.7)

%

NM%

12.2

%

Three Months Ended June 30, 2020

Tiptree Capital

($ in Insurance Mortgage Other Corporate Totalthousands)

Income (loss) $ 14,088 $ 7,405 $ (9,188) $ (7,871) $ 4,434 before taxes

Less: Incometax (benefit) (2,785) (1,746) 2,059 2,477 5 expense

Less: Netrealized andunrealized (5,635) 1,471 9,841 - 5,677 gains(losses)^(1)

Plus:Intangibles 2,534 - - - 2,534 amortization(2)

Plus:Stock-based 492 896 7 657 2,052 compensationexpense

Plus:Non-recurring 44 - - 41 85 expenses

Plus:Non-cash fair - - (871) - (871) valueadjustments

Less: Tax on 250 (599) (2,069) (972) (3,390) adjustments

Adjusted net $ 8,988 $ 7,427 $ (221) $ (5,668) $ 10,526 income



Adjusted net $ 8,988 $ 7,427 $ (221) $ (5,668) $ 10,526 income

Averagestockholders' $ 279,013 $ 36,646 $ 119,506 $ (89,402) $ 345,763 equity

Adjustedreturn on 12.9 % 81.1 % (0.7) % NM% 12.2 %averageequity

Notes

(1)

Results for the three months ended June 30, 2021 included $16 of incentive fees paid with respect to specific unrealized and realized gains that are added-back to Adjusted net income.

(2)

Specifically associated with acquisition purchase accounting. See Note (3) Acquisitions.

Notes

Results for the three months ended June 30, 2021 included $16 of incentive(1) fees paid with respect to specific unrealized and realized gains that are added-back to Adjusted net income.

(2) Specifically associated with acquisition purchase accounting. See Note (3) Acquisitions.

Six Months Ended June 30, 2021

Tiptree Capital

($ in thousands)

Insurance

Mortgage

Other

Corporate

Total

Income (loss) before taxes

$

36,232

$

18,852

$

17,614

$

(21,831)

$

50,867

Less: Income tax (benefit) expense

(7,763)

(4,462)

(2,941)

3,987

(11,179)

Less: Net realized and unrealized gains (losses)(1)

(12,432)

(4,020)

(13,908)

-

(30,360)

Plus: Intangibles amortization (2)

7,669

-

-

-

7,669

Plus: Stock-based compensation expense

872

331

12

999

2,214

Plus: Non-recurring expenses

2,104

-

281

2,171

4,556

Plus: Non-cash fair value adjustments

-

-

(1,352)

-

(1,352)

Less: Tax on adjustments

185

823

2,925

(68)

3,865

Adjusted net income

$

26,867

$

11,524

$

2,631

$

(14,742)

$

26,280

Adjusted net income

$

26,867

$

11,524

$

2,631

$

(14,742)

$

26,280

Average stockholders' equity

$

292,865

$

67,292

$

113,430

$

(84,295)

$

389,292

Adjusted return on average equity

18.3

%

34.3

%

4.6

%

NM

%

13.5

%

Six Months Ended June 30, 2021

Tiptree Capital

($ in Insurance Mortgage Other Corporate Totalthousands)

Income (loss) $ 36,232 $ 18,852 $ 17,614 $ (21,831) $ 50,867 before taxes

Less: Incometax (benefit) (7,763) (4,462) (2,941) 3,987 (11,179) expense

Less: Netrealized andunrealized (12,432) (4,020) (13,908) - (30,360) gains(losses)^(1)

Plus:Intangibles 7,669 - - - 7,669 amortization(2)

Plus:Stock-based 872 331 12 999 2,214 compensationexpense

Plus:Non-recurring 2,104 - 281 2,171 4,556 expenses

Plus:Non-cash fair - - (1,352) - (1,352) valueadjustments

Less: Tax on 185 823 2,925 (68) 3,865 adjustments

Adjusted net $ 26,867 $ 11,524 $ 2,631 $ (14,742) $ 26,280 income



Adjusted net $ 26,867 $ 11,524 $ 2,631 $ (14,742) $ 26,280 income

Averagestockholders' $ 292,865 $ 67,292 $ 113,430 $ (84,295) $ 389,292 equity

Adjustedreturn on 18.3 % 34.3 % 4.6 % NM % 13.5 %averageequity

Six Months Ended June 30, 2020

Tiptree Capital

($ in thousands)

Insurance

Mortgage

Other

Corporate

Total

Income (loss) before taxes

$

(13,029)

$

6,315

$

(54,429)

$

(16,174)

$

(77,317)

Less: Income tax (benefit) expense

4,878

(1,231)

11,731

5,808

21,186

Less: Net realized and unrealized gains (losses)

27,968

2,819

58,396

-

89,183

Plus: Intangibles amortization (2)

4,702

-

-

-

4,702

Plus: Stock-based compensation expense

843

896

158

1,826

3,723

Plus: Non-recurring expenses

2,239

-

-

448

2,685

Plus: Non-cash fair value adjustments

-

-

(520)

-

(520)

Less: Tax on adjustments

(9,877)

(1,176)

(12,266)

(2,890)

(26,209)

Adjusted net income

$

17,724

$

7,623

$

3,070

$

(10,984)

$

17,433

Adjusted net income

$

17,724

$

7,623

$

3,070

$

(10,984)

$

17,433

Average stockholders' equity

277,900

36,934

143,720

(79,252)

379,302

Adjusted return on average equity

12.8

%

41.3

%

4.3

%

NM

%

9.2

%

___________________________

Six Months Ended June 30, 2020

Tiptree Capital

($ in Insurance Mortgage Other Corporate Totalthousands)

Income (loss) $ (13,029) $ 6,315 $ (54,429) $ (16,174) $ (77,317) before taxes

Less: Incometax (benefit) 4,878 (1,231) 11,731 5,808 21,186 expense

Less: Netrealized and 27,968 2,819 58,396 - 89,183 unrealizedgains (losses)

Plus:Intangibles 4,702 - - - 4,702 amortization(2)

Plus:Stock-based 843 896 158 1,826 3,723 compensationexpense

Plus:Non-recurring 2,239 - - 448 2,685 expenses

Plus: Non-cashfair value - - (520) - (520) adjustments

Less: Tax on (9,877) (1,176) (12,266) (2,890) (26,209) adjustments

Adjusted net $ 17,724 $ 7,623 $ 3,070 $ (10,984) $ 17,433 income



Adjusted net $ 17,724 $ 7,623 $ 3,070 $ (10,984) $ 17,433 income

Averagestockholders' 277,900 36,934 143,720 (79,252) 379,302 equity

Adjustedreturn on 12.8 % 41.3 % 4.3 % NM % 9.2 %average equity

___________________________

Notes

Results for the three months ended June 30, 2021 included $64 of incentive(1) fees paid with respect to specific unrealized and realized gains that are added-back to Adjusted net income.

(2) Specifically associated with acquisition purchase accounting. See Note (3) Acquisitions.

Non-GAAP Financial Measures - Book value per share

Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders' equity and total shares outstanding, net of treasury shares.

($ in thousands, except per share information) As of June 30,

2021 2020

Total stockholders' equity $ 405,049 $ 347,189

Less: Non-controlling interests 18,031 11,368

Total stockholders' equity, net of non-controlling $ 387,018 $ 335,821 interests



Total common shares outstanding 33,395 33,676



Book value per share $ 11.59 $ 9.97

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005116/en/

CONTACT: Tiptree Inc. Investor Relations, 212-446-1400 ir@tiptreeinc.com