FALSE000140152100014015212024-11-062024-11-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 6, 2024

American Coastal Insurance Corporation
(Exact name of registrant as specified in its charter)
Delaware001-3576175-3241967
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
570 Carillon Parkway, Suite 10033716
Saint Petersburg,FL
(Address of principal executive offices)(Zip Code)
(727)633-0851
(Registrant's telephone number, including area code)
800 2nd Avenue S. St. Petersburg, Florida 33701
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common stock, $0.0001 par value per shareACICNasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02. Results of Operations and Financial Condition

On November 6, 2024, American Coastal Insurance Corporation (the Company, we, our) issued a press release relating to our earnings for the third quarter ended September 30, 2024 (the Earnings Release). We have attached a copy of the Earnings Release as Exhibit 99.1.

Item 7.01: Regulation FD Disclosure.
The executive officers of the Company intend to use the materials filed herewith, in whole or in part, in one or more meetings with investors and analysts, beginning on November 6, 2024. A copy of the Earnings presentation is attached hereto as Exhibit 99.2.

The information furnished under this Item 2.02 and 7.01, including Exhibit 99.1 and Exhibit 99.2 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.

Item 9.01. Financial Statements and Exhibits
Exhibit
No.		 Description
     
Earnings release issued by the Company on November 6, 2024
Earnings presentation issued by the Company on November 6, 2024
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized.
    
  AMERICAN COASTAL INSURANCE CORPORATION
November 6, 2024
By:/s/ B. Bradford Martz
  B. Bradford Martz, President



Exhibit 99.1
a1a.jpg
FOR IMMEDIATE RELEASE
AMERICAN COASTAL INSURANCE CORPORATION REPORTS FINANCIAL RESULTS
FOR ITS THIRD QUARTER ENDED SEPTEMBER 30, 2024

Company to Host Quarterly Conference Call at 5:00 P.M. ET on November 6, 2024 and Announces their 2024 Virtual Investor Day at 11:00 A.M. ET on December 4, 2024
The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations.
 
St. Petersburg, FL - November 6, 2024: American Coastal Insurance Corporation (Nasdaq: ACIC) ("ACIC" or the "Company"), a property and casualty insurance holding company, today reported its financial results for the third quarter ended September 30, 2024.
($ in thousands, except for per share data)Three Months EndedNine Months Ended
September 30,September 30,
20242023Change20242023Change
Gross premiums written$93,016 $93,986 (1.0)%$507,066 $507,449 (0.1)%
Gross premiums earned$160,178 $157,777 1.5 %$475,898 $445,589 6.8 %
Net premiums earned$74,486 $50,264 48.2 %$200,498 $212,919 (5.8)%
Total revenue$82,136 $52,532 56.4 %$217,390 $213,149 2.0 %
Income from continuing operations, net of tax$27,669 $15,015 84.3 %$70,451 $67,824 3.9 %
Income (loss) from discontinued operations, net of tax$450 $(4,447)110.1 %$321 $227,803 NM
Consolidated net income$28,119 $10,568 166.1 %$70,772 $295,627 (76.1)%
Net income available to ACIC stockholders per diluted share
Continuing Operations$0.56 $0.34 64.7 %$1.43 $1.54 (7.1)%
Discontinued Operations$0.01 $(0.10)110.0 %0.01 5.19 (99.8)%
Total$0.57 $0.24 137.5 %$1.44 $6.73 (78.6)%
Reconciliation of net income to core income:
Plus: Non-cash amortization of intangible assets and goodwill impairment$610 $812 (24.9)%$2,031 $2,436 (16.6)%
Less: Income (loss) from discontinued operations, net of tax$450 $(4,447)110.1 %$321 $227,803 NM
Less: Net realized gains (losses) on investment portfolio$(3)$4 NM$(124)$(6,787)98.2 %
Less: Unrealized gains on equity securities$1,543 $177 NM$1,542 $792 NM
Less: Net tax impact (1)
$(195)$133 NM$129 $1,771 (92.7)%
Core income(2)
$26,934 $15,513 73.6 %$70,935 $74,484 (4.8)%
Core income per diluted share (2)
$0.54 $0.35 54.3 %$1.44 $1.70 (15.3)%
Book value per share$5.38 $2.78 93.5 %
NM = Not Meaningful
(1) In order to reconcile net income to the core income measures, the Company included the tax impact of all adjustments using the 21% federal corporate tax rate.
(2) Core income and core income per diluted share, both of which are measures that are not based on GAAP, are reconciled above to net income and net income per diluted share, respectively, the most directly comparable GAAP measures. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.




1
Exhibit 99.1
Comments from Chief Executive Officer, Dan Peed:

“Foremost, American Coastal is committed to helping and responding to those who were impacted by Hurricanes Debby, Helene and Milton. Having so many associates impacted by the storms, we understand the requirement for, and expectation of, exceptional customer service. Two of American Coastal’s core values are collaboration and resiliency, and I am proud that our associates embody these values in the wake of devastating storms that impacted so many.

Our performance this quarter reflects these core values and the strength of our underwriting discipline and the focus on protecting American Coastal from outsized exposure. We continue reporting increased returns on equity and combined ratios lower than 60%. For the third quarter, our total revenue was $82.1 million, a 56% increase year-over-year.”


Return on Equity and Core Return on Equity

The calculations of the Company's return on equity and core return on equity are shown below.
($ in thousands)Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Income from continuing operations, net of tax$27,669 $15,015 $70,451 $67,824 
Return on equity based on GAAP income from continuing operations, net of tax (1)
55.3 %177.9 %46.9 %267.9 %
Income (loss) from discontinued operations, net of tax$450 $(4,447)$321$227,803
Return on equity based on GAAP income (loss) from discontinued operations, net of tax (1)
0.9 %(52.7)%0.2 %NM
Consolidated net income$28,119 $10,568 $70,772$295,627
Return on equity based on GAAP net income (1)
56.2 %125.2 %47.1 %NM
Core income$26,934$15,513 $70,935$74,484
Core return on equity (1)(2)
53.8 %183.8 %47.3 %294.2 %
(1) Return on equity for the three and nine months ended September 30, 2024 and 2023 is calculated on an annualized basis by dividing the net income or core income for the period by the average stockholders' equity for the trailing twelve months.
(2) Core return on equity, a measure that is not based on GAAP, is calculated based on core income, which is reconciled on the first page of this press release to net income, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below.


2
Exhibit 99.1
Combined Ratio and Underlying Ratio

The calculations of the Company's combined ratio and underlying combined ratio on a consolidated basis and attributable to Interboro Insurance Company ("IIC"), now captured within discontinued operations, are shown below.
($ in thousands)Three Months EndedNine Months Ended
September 30,September 30,
20242023Change20242023Change
Consolidated
Loss ratio, net(1)
15.8 %19.5 %(3.7) pts19.7 %18.8 %0.9  pts
Expense ratio, net(2)
41.9 %43.2 %(1.3) pts38.9 %42.4 %(3.5) pts
Combined ratio (CR)(3)
57.7 %62.7 %(5.0) pts58.6 %61.2 %(2.6) pts
Effect of current year catastrophe losses on CR6.6 %9.7 %(3.1) pts2.6 %6.2 %(3.6) pts
Effect of prior year favorable development on CR(1.8)%(6.2)%4.4  pts(1.2)%(5.2)%4.0  pts
Underlying combined ratio(4)
52.9 %59.2 %(6.3) pts57.2 %60.2 %(3.0) pts
IIC
Loss ratio, net(1)
63.5 %71.1 %(7.6) pts70.4 %83.1 %(12.7) pts
Expense ratio, net(2)
35.8 %51.1 %(15.3) pts42.2 %56.6 %(14.4) pts
Combined ratio (CR)(3)
99.3 %122.2 %(22.9) pts112.6 %139.7 %(27.1) pts
Effect of current year catastrophe losses on CR4.7 %17.2 %(12.5) pts5.3 %13.5 %(8.2) pts
Effect of prior year favorable development on CR(6.0)%(4.4)%(1.6) pts(4.7)%(3.4)%(1.3) pts
Underlying combined ratio(4)
100.6 %109.4 %(8.8) pts112.0 %129.6 %(17.6) pts
(1) Loss ratio, net is calculated as losses and loss adjustment expenses ("LAE"), net of losses ceded to reinsurers, relative to net premiums earned.
(2) Expense ratio, net is calculated as the sum of all operating expenses, less interest expense relative to net premiums earned.
(3) Combined ratio is the sum of the loss ratio, net and expense ratio, net.
(4) Underlying combined ratio, a measure that is not based on GAAP, is reconciled above to the combined ratio, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.






























3
Exhibit 99.1
Combined Ratio Analysis

The calculations of the Company's loss ratios and underlying loss ratios are shown below.
($ in thousands)Three Months EndedNine Months Ended
September 30,September 30,
20242023Change20242023Change
Loss and LAE$11,774 $9,822 $1,952 $39,525 $39,968 $(443)
% of Gross earned premiums7.4 %6.2 %1.2  pts8.3 %9.0 %(0.7) pts
% of Net earned premiums15.8 %19.5 %(3.7) pts19.7 %18.8 %0.9  pts
Less:
Current year catastrophe losses$4,953 $4,891 $62 $5,156 $13,189 $(8,033)
Prior year reserve favorable development(1,357)(3,105)1,748 (2,379)(11,212)8,833 
Underlying loss and LAE (1)
$8,178 $8,036 $142 $36,748 $37,991 $(1,243)
% of Gross earned premiums5.1 %5.1 %—  pts7.7 %8.5 %(0.8) pts
% of Net earned premiums11.0 %16.0 %(5.0) pts18.3 %17.8 %0.5  pts
(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.


The calculations of the Company's expense ratios are shown below.
($ in thousands)Three Months EndedNine Months Ended
September 30,September 30,
20242023Change20242023Change
Policy acquisition costs$20,942 $13,606 $7,336 $44,476 $62,298 $(17,822)
Operating and underwriting2,115 2,081 34 6,492 6,962 (470)
General and administrative8,174 6,011 2,163 26,987 21,036 5,951 
Total Operating Expenses$31,231 $21,698 $9,533 $77,955 $90,296 $(12,341)
% of Gross earned premiums
19.5 %13.8 %5.7  pts16.4 %20.3 %(3.9) pts
% of Net earned premiums
41.9 %43.2 %(1.3) pts38.9 %42.4 %(3.5) pts
















4
Exhibit 99.1

Quarterly Financial Results
Net income for the third quarter of 2024 was $28.1 million, or $0.57 per diluted share, compared to $10.6 million, or $0.24 per diluted share, for the third quarter of 2023. Of this income, $27.7 million is attributable to continuing operations for the three months ended September 30, 2024, an increase of $12.7 million from net income of $15.0 million for the same period in 2023. Quarter-over-quarter revenues increased, driven by a decrease in ceded premiums earned, an increase in net investment income and unrealized gains on equity securities. This was offset by increased expenses quarter-over-quarter, driven by an increase in policy acquisition costs and general and administrative expenses, as described below. In addition, the Company's provision for income taxes increased as a result of increased income before taxes quarter-over-quarter. The Company's income from discontinued operations, also contributed to this change in net income, increasing $4.9 million quarter-over-quarter, as the deconsolidation of the Company's former subsidiary, United Property and Casualty Insurance Company ("UPC") is not impacting the Company in 2024.

The Company's total gross written premium remained relatively flat, decreasing by $1.0 million, or 1.0%, to $93.0 million for the third quarter of 2024, from $94.0 million for the third quarter of 2023. The breakdown of the quarter-over-quarter changes in both direct written and assumed premiums by state and gross written premium by line of business are shown in the table below.

($ in thousands)Three Months Ended September 30,
20242023Change $Change %
Direct Written and Assumed Premium by State
Florida $93,016 $93,965 $(949)(1.0)%
New York— — — — 
Total direct written premium by state93,016 93,965 (949)(1.0)
Assumed premium— 21 (21)(100.0)
Total gross written premium by state$93,016 $93,986 $(970)(1.0)%
Gross Written Premium by Line of Business
Commercial property$93,016 $93,986 $(970)(1.0)%
Personal property— — — — 
Total gross written premium by line of business$93,016 $93,986 $(970)(1.0)%


Loss and LAE increased by $2.0 million, or 20.4%, to $11.8 million for the third quarter of 2024, from $9.8 million for the third quarter of 2023. Loss and LAE expense as a percentage of net earned premiums decreased 3.7 points to 15.8% for the third quarter of 2024, compared to 19.5% for the third quarter of 2023. Excluding catastrophe losses and reserve development, the Company's gross underlying loss and LAE ratio for the third quarter of 2024 would have been 5.1%, unchanged from the third quarter of 2023.

Policy acquisition costs increased by $7.3 million, or 53.7%, to $20.9 million for the third quarter of 2024, from $13.6 million for the third quarter of 2023, primarily due to a decrease in reinsurance commission income attributable to the change in our quota share reinsurance cession rate from 40% to 20% effective June 1, 2024. This was partially offset by increased management fees attributable to our commercial property premiums.

Operating and underwriting expenses remained unchanged at $2.1 million for both the third quarter of 2024 and the third quarter of 2023.

General and administrative expenses increased by $2.2 million, or 36.7%, to $8.2 million for the third quarter of 2024, from $6.0 million for the third quarter of 2023, driven by increased overhead costs such as amortization of capitalized software and salaries.




5
Exhibit 99.1


IIC Results Highlights

Net income attributable to IIC totaled $450 thousand for the third quarter of 2024 compared to a net loss of $642 thousand for the third quarter of 2023. Drivers of the quarter-over-quarter increase included: an increase in net premiums earned of $1.5 million, driven by an increase in gross premiums earned of $1.3 million, while ceded premiums earned remained relatively flat, decreasing $182 thousand. Expenses also remained relatively flat, with a net increase of $179 thousand, driven by an increase in loss and LAE incurred of $506 thousand, which was driven by current year non-catastrophe losses, offset primarily by a decrease in operating and underwriting expenses of $390 thousand. IIC's remaining expenses remained relatively flat quarter-over-quarter.


Reinsurance Costs as a Percentage of Gross Earned Premium

Reinsurance costs as a percentage of gross earned premium in the third quarter of 2024 and 2023 were as follows:
20242023
Non-at-Risk(0.5)%(0.2)%
Quota Share(16.2)%(31.5)%
All Other(36.8)%(36.4)%
Total Ceding Ratio(53.5)%(68.1)%

Ceded premiums earned related to the Company's catastrophe excess of loss contracts remained relatively flat quarter-over-quarter. The Company's utilization of quota share reinsurance coverage resulted in less excess of loss coverage needed for the 2023-2024 catastrophe year; however, the cost savings associated with this reduction in necessary coverage were offset by rate increases on catastrophe excess of loss coverage for the same period. This utilization of quota share reinsurance coverage increased the Company's ceding ratio overall during 2023. Effective June 1, 2024, the Company decreased its quota share reinsurance coverage from 40% to 20%, lowering the Company's quota share ceding ratio and overall ceding ratio.

Reinsurance costs as a percentage of gross earned premium in the third quarter of 2024 and 2023 for IIC, captured within discontinued operations, were as follows:
IIC
20242023
Non-at-Risk(2.5)%(2.8)%
Quota Share— %— %
All Other(21.9)%(27.9)%
Total Ceding Ratio(24.4)%(30.7)%


Investment Portfolio Highlights

The Company's cash, restricted cash and investment holdings increased from $311.9 million at December 31, 2023 to $571.1 million at September 30, 2024. This increase is driven by positive cash flows from operations. The Company's cash and investment holdings consist of investments in U.S. government and agency securities, corporate debt and investment grade money market instruments. Fixed maturities represented approximately 84.2% of total investments at September 30, 2024 compared to 89.4% of total investments at December 31, 2023. The Company's fixed maturity investments had a modified duration of 2.3 years at September 30, 2024, compared to 3.4 years at December 31, 2023.






6
Exhibit 99.1

Book Value Analysis

Book value per common share increased 49.0% from $3.61 at December 31, 2023, to $5.38 at September 30, 2024. Underlying book value per common share increased 41.8% from $3.97 at December 31, 2023 to $5.63 at September 30, 2024. An increase in the Company's retained earnings as a result of net income in the first nine months of 2024, drove the increase in the Company's book value per share. As shown in the table below, removing the effect of Accumulated Other Comprehensive Income ("AOCI"), caused by capital market conditions, increases the Company's book value per common share at September 30, 2024.
($ in thousands, except for share and per share data)September 30, 2024December 31, 2023
Book Value per Share
Numerator:
Common stockholders' equity$259,582 $168,765 
Denominator:
Total Shares Outstanding48,204,962 46,777,006 
Book Value Per Common Share$5.38 $3.61 
Book Value per Share, Excluding the Impact of AOCI
Numerator:
Common stockholders' equity$259,582 $168,765 
Less: Accumulated other comprehensive loss(11,617)(17,137)
Stockholders' Equity, excluding AOCI$271,199 $185,902 
Denominator:
Total Shares Outstanding48,204,962 46,777,006 
Underlying Book Value Per Common Share(1)
$5.63 $3.97 
(1) Underlying book value per common share is a non-GAAP financial measure and is reconciled above to book value per common share, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below.
7
Exhibit 99.1

Conference Call Details

Date and Time:    November 6, 2024 - 5:00 P.M. ET

Participant Dial-In:    (United States): 877-445-9755
    (International): 201-493-6744

Webcast:    To listen to the live webcast, please go to https://investors.amcoastal.com and click on the conference call link at the top of the page or go to: https://event.webcasts.com/starthere.jsp?ei=1692077&tp_key=987914f3a40

An archive of the webcast will be available for a limited period of time thereafter.

Presentation:     The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations.

Virtual Investor Day

American Coastal Insurance Corporation will host its 2024 Investor Day on Wednesday, December 4, 2024 from 11:00 A.M. ET. This will be a virtual video event that investors can access live from American Coastal's investor relations website at https://investors.amcoastal.com. The event will feature presentations from the senior leadership team and will highlight operational developments and strategic initiatives across the business.

Investors are encourage to pre-submit questions for the Q&A portion of the event by emailing the Company's investor relations representative, Karin Daly, Vice President, The Equity Group, at kdaly@equityny.com. There will also be an opportunity to ask live questions via chat during the webcast. A replay of the webcast will be available shortly after the event concludes.

About American Coastal Insurance Corporation

American Coastal Insurance Corporation (amcoastal.com) is the holding company of the insurance carrier, American Coastal Insurance Company, which was founded in 2007 for the purpose of insuring Condominium and Homeowner Association properties, and apartments in the state of Florida. American Coastal Insurance Company has an exclusive partnership for distribution of Condominium Association properties in the state of Florida with AmRisc Group (amriscgroup.com), one of the largest Managing General Agents in the country specializing in hurricane-exposed properties. American Coastal Insurance Company has earned a Financial Stability Rating of “A”, "Exceptional" from Demotech, and maintains an “A-” insurance financial strength rating with a Stable outlook by Kroll. ACIC maintains a ‘BB+’ issuer rating with a Stable outlook by Kroll.

Contact Information:
Alexander Baty
Vice President, Finance & Investor Relations, American Coastal Insurance Corp.
investorrelations@amcoastal.com
(727) 425-8076
Karin Daly
Investor Relations, Vice President, The Equity Group
kdaly@equityny.com
(212) 836-9623




8
Exhibit 99.1









Definitions of Non-GAAP Measures

The Company believes that investors' understanding of ACIC's performance is enhanced by the Company's disclosure of the following non-GAAP measures. The Company's methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

Net income (loss) excluding the effects of amortization of intangible assets, income (loss) from discontinued operations, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure that is computed by adding amortization, net of tax, to net income (loss) and subtracting income (loss) from discontinued operations, net of tax, realized gains (losses) on the Company's investment portfolio, net of tax, and unrealized gains (losses) on the Company's equity securities, net of tax, from net income (loss). Amortization expense is related to the amortization of intangible assets acquired, including goodwill, through mergers and, therefore, the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of the Company's operations. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net income (loss). The core income (loss) measure should not be considered a substitute for net income (loss) and does not reflect the overall profitability of the Company's business.

Core return on equity is a non-GAAP ratio calculated using non-GAAP measures. It is calculated by dividing the core income (loss) for the period by the average stockholders’ equity for the trailing twelve months (or one quarter of such average, in the case of quarterly periods). Core income (loss) is an after-tax non-GAAP measure that is calculated by excluding from net income (loss) the effect of income (loss) from discontinued operations, net of tax, non-cash amortization of intangible assets, including goodwill, unrealized gains or losses on the Company's equity security investments and net realized gains or losses on the Company's investment portfolio. In the opinion of the Company’s management, core income (loss), core income (loss) per share and core return on equity are meaningful indicators to investors of the Company's underwriting and operating results, since the excluded items are not necessarily indicative of operating trends. Internally, the Company’s management uses core income (loss), core income (loss) per share and core return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis. The most directly comparable GAAP measure is return on equity. The core return on equity measure should not be considered a substitute for return on equity and does not reflect the overall profitability of the Company's business.

Combined ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying combined ratio) is a non-GAAP measure, that is computed by subtracting the effect of current year catastrophe losses and prior year development from the combined ratio. The Company believes that this ratio is useful to investors, and it is used by management to highlight the trends in the Company's business that may be obscured by current year catastrophe losses and prior year development. Current year catastrophe losses cause the Company's loss trends to vary significantly between periods as a result of their frequency of occurrence and severity and can have a significant impact on the combined ratio. Prior year development is caused by unexpected loss development on historical reserves. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered as a substitute for the combined ratio and does not reflect the overall profitability of the Company's business.

9
Exhibit 99.1
Net loss and LAE excluding the effects of current year catastrophe losses and prior year reserve development (underlying loss and LAE) is a non-GAAP measure that is computed by subtracting the effect of current year catastrophe losses and prior year reserve development from net loss and LAE. The Company uses underlying loss and LAE figures to analyze the Company's loss trends that may be impacted by current year catastrophe losses and prior year development on the Company's reserves. As discussed previously, these two items can have a significant impact on the Company's loss trends in a given period. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net loss and LAE. The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of the Company's business.

Book value per common share, excluding the impact of accumulated other comprehensive loss (underlying book value per common share), is a non-GAAP measure that is computed by dividing common stockholders' equity after excluding accumulated other comprehensive income (loss), by total common shares outstanding plus dilutive potential common shares outstanding. The Company uses the trend in book value per common share, excluding the impact of accumulated other comprehensive income (loss), in conjunction with book value per common share to identify and analyze the change in net worth attributable to management efforts between periods. The Company believes this non-GAAP measure is useful to investors because it eliminates the effect of interest rates that can fluctuate significantly from period to period and are generally driven by economic and financial factors that are not influenced by management. Book value per common share is the most directly comparable GAAP measure. Book value per common share, excluding the impact of accumulated other comprehensive income (loss), should not be considered a substitute for book value per common share and does not reflect the recorded net worth of the Company's business.

Discontinued Operations

On May 9, 2024, the Company entered into the Sale Agreement with Forza Insurance Holdings, LLC ("Forza") in which ACIC will sell and Forza will acquire 100% of the issued and outstanding stock of the Company's subsidiary, IIC. In addition, on February 27, 2023, the Florida Department of Financial Services was appointed as receiver of the Company's former subsidiary, UPC. As such, prior year financial results and Consolidated Balance Sheet components have been reclassified to reflect continuing and discontinued operations appropriately.

Forward-Looking Statements

Statements made in this press release, or on the conference call identified above, and otherwise, that are not historical facts are “forward-looking statements”. The Company believes these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions, or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those expressed in, or implied by, the forward-looking statements. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words such as “may,” “will,” “expect,” "endeavor," "project," “believe,” "plan," “anticipate,” “intend,” “could,” “would,” “estimate” or “continue” or the negative variations thereof or comparable terminology. Factors that could cause actual results to differ materially may be found in the Company's filings with the U.S. Securities and Exchange Commission, in the “Risk Factors” section in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made, and, except as required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements.
10
Exhibit 99.1
Consolidated Statements of Comprehensive Income
In thousands, except share and per share amounts
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
REVENUE:
Gross premiums written$93,016 $93,986 $507,066 $507,449 
Change in gross unearned premiums67,162 63,791 (31,168)(61,860)
Gross premiums earned160,178 157,777 475,898 445,589 
Ceded premiums earned(85,692)(107,513)(275,400)(232,670)
Net premiums earned74,486 50,264 200,498 212,919 
Net investment income 6,110 2,087 15,474 6,225 
Net realized investment gains (losses)(3)4 (124)(6,787)
Net unrealized gains on equity securities1,543 177 1,542 792 
Total revenues$82,136 $52,532 $217,390 $213,149 
EXPENSES:
Losses and loss adjustment expenses11,774 9,822 39,525 39,968 
Policy acquisition costs20,942 13,606 44,476 62,298 
Operating expenses2,115 2,081 6,492 6,962 
General and administrative expenses8,174 6,011 26,987 21,036 
Interest expense3,067 2,718 9,212 8,156 
Total expenses 46,072 34,238 126,692 138,420 
Income before other income36,064 18,294 90,698 74,729 
Other income (loss)453 (237)2,074 1,157 
Income before income taxes36,517 18,057 92,772 75,886 
Provision for income taxes8,848 3,042 22,321 8,062 
Income from continuing operations, net of tax$27,669 $15,015 $70,451 $67,824 
Income (loss) from discontinued operations, net of tax450 (4,447)321 227,803 
Net income$28,119 $10,568 $70,772 $295,627 
OTHER COMPREHENSIVE INCOME:
Change in net unrealized gains (losses) on investments7,529 (2,761)7,404 (698)
Reclassification adjustment for net realized investment losses (gains)3 (2)124 6,806 
Income tax benefit related to items of other comprehensive income (loss)— — — — 
Total comprehensive income$35,651 $7,805 $78,300 $301,735 
Weighted average shares outstanding
Basic48,066,358 43,301,388 47,742,744 43,220,084 
Diluted49,521,246 44,142,693 49,255,071 43,888,665 
Earnings available to ACIC common stockholders per share
Basic
Continuing operations$0.58 $0.34 $1.48 $1.57 
Discontinued operations0.01 (0.10)0.01 5.27 
Total$0.59 $0.24 $1.49 $6.84 
Diluted
Continuing operations$0.56 $0.34 $1.43 $1.54 
Discontinued operations0.01 (0.10)0.01 5.19 
Total$0.57 $0.24 $1.44 $6.73 
Dividends declared per share$— $— $— $— 
11
Exhibit 99.1
Consolidated Balance Sheets
In thousands, except share amounts
September 30, 2024December 31, 2023
ASSETS 
Investments, at fair value:  
Fixed maturities, available-for-sale$278,373 $138,387 
Equity securities25,950 — 
Other investments26,392 16,487 
Total investments$330,715 $154,874 
Cash and cash equivalents183,147 138,930 
Restricted cash57,251 18,070 
Accrued investment income3,359 1,767 
Property and equipment, net7,300 3,658 
Premiums receivable, net18,630 45,924 
Reinsurance recoverable on paid and unpaid losses147,065 340,820 
Ceded unearned premiums199,426 155,301 
Goodwill59,476 59,476 
Deferred policy acquisition costs43,166 21,149 
Intangible assets, net6,518 8,548 
Other assets13,284 36,718 
Assets held for sale74,537 77,143 
Total Assets$1,143,874 $1,062,378 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses$173,322 $347,738 
Unearned premiums307,325 276,157 
Reinsurance payable on premiums122,597 — 
Payments outstanding4,479 706 
Accounts payable and accrued expenses75,525 74,783 
Operating lease liability23 739 
Other liabilities2,960 672 
Notes payable, net148,937 148,688 
Liabilities held for sale49,124 44,130 
Total Liabilities$884,292 $893,613 
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued or outstanding— — 
Common stock, $0.0001 par value; 100,000,000 shares authorized; 48,417,045 and 46,989,089 issued, respectively; 48,204,962 and 46,777,006 outstanding, respectively
5 5 
Additional paid-in capital437,241 423,717 
Treasury shares, at cost; 212,083 shares(431)(431)
Accumulated other comprehensive loss(11,617)(17,137)
Retained earnings (deficit)(165,616)(237,389)
Total Stockholders' Equity$259,582 $168,765 
Total Liabilities and Stockholders' Equity$1,143,874 $1,062,378 
12
3rd Quarter 2024 November 6th, 2024 Earnings Presentation

 
2 Company Overview ACIC is a specialty underwriter of catastrophe exposed property insurance. American Coastal Insurance Corp. (Nasdaq: ACIC) is the insurance holding company for two P&C carriers: American Coastal Insurance Company (AmCoastal) and Interboro Insurance Company (IIC) ¹ along with other operating affiliates. AmCoastal has the #1 market share of commercial residential property insurance (commercial lines) in Florida with roughly 4,000 policies and $646.0 million of premium in-force. IIC’s homeowners & fire insurance products (personal lines) are written exclusively in New York with approximately 18,800 policies and $38.7 million of premium in-force. ¹ ACIC as of September 30, 2024 Total Assets: $1.14 billion Total Equity: $259.6 million Annualized Revenue: $289.9 million Employees: 64 Headquarters: St. Petersburg, FL Credit Rating: BB+ (Kroll) Specialty Commercial Property Specialty Homeowners ¹ ¹ IIC ‘s results are classified as discontinued operations.

 
3 Executive Summary • Q3-24 Results • Non-GAAP Core Income of $26.9m ($0.54) increased $11.4m (+73.6%) from $15.5m ($0.35) y/y on lower ceded earned premiums resulting from the step down of the 40% gross CAT quota share effective 6.1.2023 to 20% effective 6.1.2024. • Net premiums earned grew $24.2m (+48.2%) to $74.5m y/y. • Our combined ratio of 57.7% was better than our 65.0% target and a decrease of 5.0 points from 62.7% in the same period last year. • Current year net catastrophe losses in the quarter were $5.0m before tax (Hurricanes Debby & Helene) and we had $1.4m of favorable prior year reserve development. • Stockholders’ equity attributable to ACIC, increased to $259.6m or $5.38 per share and $5.63 per share excluding unrealized losses in accumulated other comprehensive income. • Other Highlights • We have received 154 claims from Hurricane Milton and expect about 200 claims in total with an estimated ultimate gross loss between $150 - $200 million and a net loss incurred of $20.5m before income tax during the fourth quarter. • Reinstatement premiums are expected to increase ceded premiums earned by approximately $13 million which is amortized over the 8- month period from October 2024 to May 2025. This results in AmCoastal having its full reinsurance tower in place for potential subsequent hurricane events with our net retention now reduced to $10.3 million net of income tax for the next two potential hurricane occurrences. • Completed an assumption from Citizens on October 29, 2024, adding 88 new risks with roughly $9.7m of expiring premium.

 
4 2H-2024 Hurricane Estimates Despite an active hurricane season, ACIC is expected to remain profitable. % of 9.30.24 Hurricane Gross Ceded Net Tax benefit After tax GAAP Equity Debby 1.0$ (0.2)$ 0.8$ (0.2)$ 0.6$ 0.24% Helene 5.0$ (1.0)$ 4.0$ (0.8)$ 3.2$ 1.22% Sub-Total (3Q) 6.0$ (1.2)$ 4.8$ (1.0)$ 3.8$ 1.46% Milton (4Q) 200.0$ (179.5)$ 20.5$ (4.3)$ 16.2$ 6.24% Total 2H-2024 206.0$ (180.7)$ 25.3$ (5.3)$ 20.0$ 7.70% AmCoastal still has over $1.2 billion of catastrophe reinsurance in place for any potential subsequent hurricane events with a lower net retention of $10.3 million after tax (~4% of equity at 9.30.24) per occurrence for 2nd and 3rd event, if incurred.

 
5 3Q-24 Financial Scorecard Key results all compare favorably to Raymond James’ estimates for the current period. 3Q-24 = $0.54 vs. Analyst’s Est. = $0.15 3Q-24 = $5.38 vs. Analyst’s Est. = $4.71 3Q-24 = 57.7% vs. Analyst’s Est. = 89.3% 3Q-24 = 53.8% vs. Analyst’s Est. = 13.5% Core Earnings per Share (CEPS) Book Value per Share (BVPS) Combined Ratio (CR) Core Return on Equity (CROE)

 
6 3Q-24 Summary of Key Results Combined ratio decreased 5.0 points and core income grew $11.4m ($0.19) due to higher net premiums.

 
7 3Q-24 Operating Overview Earnings before income tax improved +101.7% driven by our reduced quota share cession rate. The impact of the quota share step down from 40% to 20% effective June 1, 2024, had a significant impact on ceded premiums earned and operating expense (policy acquisition costs) y/y.

 
8 2024 Full Year & 4Q-24 Guidance We expect to be profitable in the fourth quarter, despite the impact of Hurricane Milton. Estimated range of Net Income from Continuing Operations ¹ Estimated range of Net Premiums Earned ¹ Low High Low High ¹ Estimates include net incurred losses of $16.2 million, net of tax impacts, from Hurricane Milton impacting current year earnings and approximately $5 million of additional ceded premiums earned impacting current year net premiums earned, whereas ACIC did not incur any hurricane losses or reinsurance reinstatement premiums in 2023. FY-24 E 75.0$ - 80.0$ FY-24 E 270.0$ - 280.0$ FY-23 A FY-23 A Y/Y Change (10.2)$ - (5.2)$ Y/Y Change 7.9$ - 17.9$ % Change -11.9% - -6.1% % Change 3.0% - 6.8% 4Q-24 E 4.6$ - 9.6$ 4Q-24 E 69.5$ - 79.5$ 4Q-23 A 4Q-23 A Y/Y Change (10.1)$ - (5.1)$ Y/Y Change 9.9$ - 19.9$ % Change -68.9% - -34.7% % Change 16.6% - 33.3% $85.2 $262.1 $59.6$14.7

 
9 Balance Sheet Highlights Liquidity & Equity have improved significantly since year-end driven by strong underwriting results. Sep 30, Dec. 31, YTD ($ in thousands, except per share amounts) 2024 2023 % Change Selected Balance Sheet Data Cash & investments 630,867$ 311,874$ 102.3% Accumulated other comprehensive income (loss) (11,617)$ (17,137)$ -32.2% Unpaid loss & LAE reserves 194,678$ 347,738$ -44.0% Reinsurance recoverable 147,325$ 340,820$ -56.8% Net Loss & LAE reserves 47,353$ 6,918$ 584.5% Financial debt 148,937$ 148,688$ 0.2% Stockholders' equity attributable to ACIC 259,582$ 168,765$ 53.8% Total capital 408,519$ 317,453$ 28.7% Leverage Ratios Debt-to-total capital 36.5% 46.8% -22.2% Net premiums earned-to-stockholders' equity (annualized) 103.0% 158.4% -35.0% Per Share Data Common shares outstanding 48,204,962 46,777,006 3.1% Book value per common share 5.38$ 3.61$ 49.3% Underlying book value per common share 5.63$ 3.97$ 41.6% Tangible book value per common share 4.00$ 2.14$ 87.2% Underlying tangible book value per common share 4.24$ 2.50$ 69.4%

 
10 Investment Portfolio Overview • Focusing on a resilient and high-quality portfolio considerate of current market conditions and risks. • The Company continues to add to its investment positions in anticipation of future cash yields decreasing.

 
11 Commercial Property Valuation Trends Valuation changes are slowing down as inflationary pressure moderates.

 
12 Cautionary Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include expectations regarding our diversification, growth opportunities, retention rates, liquidity, investment returns and our ability to meet our investment objectives and to manage and mitigate market risk with respect to our investments. These statements are based on current expectations, estimates and projections about the industry and market in which we operate, and management's beliefs and assumptions. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "endeavor," "project," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative variations thereof, or comparable terminology, are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. The risks and uncertainties include, without limitation: the regulatory, economic and weather conditions in the states in which we operate; the impact of new federal or state regulations that affect the property and casualty insurance market; the cost, variability and availability of reinsurance; assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to attract and retain the services of senior management; the outcome of litigation pending against us, including the terms of any settlements; dependence on investment income and the composition of our investment portfolio and related market risks; our exposure to catastrophic events and severe weather conditions; downgrades in our financial strength ratings; risks and uncertainties relating to our acquisitions including our ability to successfully integrate the acquired companies; and other risks and uncertainties described in the section entitled "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission (the "SEC"), including our Annual Report in Form 10-K for the year ended December 31, 2022 and 2023 and our Form 10-Q for the periods ending March 31, 2023 (Form 10-Q/A), June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024, including amendments and recast results. We caution you not to place undue reliance on these forward looking statements, which are valid only as of the date they were made. Except as may be required by applicable law, we undertake no obligation to update or revise any forward-looking statements to reflect new information, the occurrence of unanticipated events, or otherwise. This presentation contains certain non-GAAP financial measures. See our earnings release, Form 10-K , Form 10-Q, and Form 10-Q/A for further information regarding these non-GAAP financial measures.

 
v3.24.3
Cover Page Document
Nov. 06, 2024
Document Information [Line Items]  
Amendment Flag false
Document Type 8-K
Document Period End Date Nov. 06, 2024
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common stock, $0.0001 par value per share
Entity Registrant Name American Coastal Insurance Corporation
Entity Incorporation, State or Country Code DE
Entity File Number 001-35761
Entity Tax Identification Number 75-3241967
Entity Address, Address Line One 570 Carillon Parkway, Suite 100
Entity Address, Postal Zip Code 33716
Entity Address, City or Town Saint Petersburg,
Entity Address, State or Province FL
City Area Code (727)
Local Phone Number 633-0851
Trading Symbol ACIC
Security Exchange Name NASDAQ
Entity Central Index Key 0001401521
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