Open the filing on EDGARPalomar Holdings, Inc. Reports Fourth Quarter & Full Year 2025 Results
LA JOLLA, Calif. (February 11, 2026) - Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or “Company”) reported net income of $56.2 million, or $2.06 per diluted share, for the fourth quarter of 2025 compared to net income of $35.0 million, or $1.29 per diluted share, for the fourth quarter of 2024. Adjusted net income was $61.1 million, or $2.24 per diluted share, for the fourth quarter of 2025 as compared to $41.3 million, or $1.52 per diluted share, for the fourth quarter of 2024.
Fourth Quarter 2025 Highlights
Gross written premiums increased by 31.8% to $492.6 million compared to $373.7 million in the fourth quarter of 2024
Net income increased 60.6% to $56.2 million compared to $35.0 million in the fourth quarter of 2024
Adjusted net income increased 48.0% to $61.1 million compared to $41.3 million in the fourth quarter of 2024
Total loss ratio of 30.4% compared to 25.7% in the fourth quarter of 2024
Catastrophe loss ratio of -0.9% compared to 5.6% in the fourth quarter of 2024
Combined ratio of 76.8% compared to 75.9% in the fourth quarter of 2024
Adjusted combined ratio of 73.4% compared to 71.7%, in the fourth quarter of 2024
Annualized return on equity of 24.7% compared to 19.5% in the fourth quarter of 2024
Annualized adjusted return on equity of 26.9% compared to 23.1% in the fourth quarter of 2024
Full Year 2025 Highlights
Gross written premiums increased by 31.5% to $2.0 billion compared to $1.5 billion in 2024
Net income increased 67.6% to $197.1 million compared to $117.6 million in 2024
Adjusted net incomeincreased 61.9% to $216.1 million compared to $133.5 million in 2024
Total loss ratio of 28.5% compared to 26.4% in 2024
Catastrophe loss ratio of -0.1% compared to 5.5% in 2024
Combined ratio of 76.9% compared to 78.1% in 2024
Adjusted combined ratio of 72.7% compared to 73.7% in 2024
Return on equity of 23.6% compared to 19.6% in 2024
Adjusted return on equity of 25.9% compared to 22.2% in 2024
(1) See discussion of “Non-GAAP and Key Performance Indicators” below.
Mac Armstrong, Chairman and Chief Executive Officer, commented, “Our strong fourth quarter results provided a superb culmination to what was an exceptional 2025. The quarter was highlighted by record adjusted net income, strong top and bottom-line growth as gross written premium grew 32% and adjusted net income increased 48% across our unique and diverse portfolio. Our specialty product suite is purpose-built to navigate any market cycle and generate strong, consistent returns. The fourth quarter further demonstrated this capability as we generated an adjusted combined ratio of 73% and a 27% adjusted return on equity.”
Mr. Armstrong continued, “The accomplishments of the 2025 were myriad and not limited to strong financial performance. Noteworthy accomplishments include the successful acquisitions of Advanced Ag Protection and The Gray Casualty and Surety Company and the addition of numerous exceptional leaders across the organization. These investments should sustain our long-term profitable growth trajectory and our Palomar 2X strategic imperative.”
Underwriting Results
Gross written premiums increased 31.8% to $492.6 million compared to $373.7 million in the fourth quarter of 2024, while net earned premiums increased 61.1% compared to the prior year’s fourth quarter.
Losses and loss adjustment expenses for the fourth quarter were $70.9 million, comprised of $72.9 million of attritional losses and $2.1 million of favorable development on catastrophe losses. The loss ratio for the quarter was 30.4%, comprised of an attritional loss ratio of 31.3% and a catastrophe loss ratio of -0.9% compared to a loss ratio of 25.7% during the same period last year comprised of an attritional loss ratio of 20.1% and a catastrophe loss ratio of 5.6%. Additionally, our fourth quarter results include $2.8 million of favorable prior year development primarily from our short tail Inland Marine and Other Property business.
Underwriting income for the fourth quarter was $54.4 million resulting in a combined ratio of 76.8% compared to underwriting income of $34.9 million resulting in a combined ratio of 75.9% during the same period last year. The Company’s adjusted underwriting income was $62.3 million, an increase of 51.8%, resulting in an adjusted combined ratio of 73.4% in the fourth quarter compared to adjusted underwriting incomeof $41.0 million and an adjusted combined ratio of 71.7% during the same period last year. The Company’s adjusted combined ratio excluding catastrophe losses was 74.2% compared to 66.1% during the same period last year.
Investment Results
Net investment income increased by 41.3% to $16.0 million compared to $11.3 million in the prior year’s fourth quarter. The increase was primarily due to higher yields on invested assets and a higher average balance of investments held during the three months ended December 31, 2025 due to cash generated from operations. The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 3.81 years at December 31, 2025. Cash and invested assets totaled $1.5 billion at December 31, 2025. During the fourth quarter, the Company recorded $2.4 million net realized and unrealized gains related to its investment portfolio as compared to net realized and unrealized losses of $1.2 million during the same period last year.
Tax Rate
The effective tax rate for the three months ended December 31, 2025 was 22.7% compared to 22.2% for the three months ended December 31, 2024. For the current quarter, the Company’s income tax rate differed from the statutory rate due primarily to non-deductible executive compensation expense offset by the tax impact of the permanent component of employee stock options.
Stockholders’ Equity and Returns
Stockholders’ equity was $942.7 million at December 31, 2025, compared to $729.0 million at December 31, 2024. For the three months ended December 31, 2025, the Company’s annualized return on equity was 24.7% compared to 19.5% for the same period in the prior year while adjusted return on equity was 26.9% compared to 23.1% for the same period in the prior year. During the current quarter, the Company did not repurchase any shares of its common stock. As of December 31, 2025, approximately $112.7 million remains available for future repurchases under the previously announced $150 million share repurchase authorization.
Full Year 2026 Outlook
For the full year 2026, the Company expects to achieve adjusted net income of $260 million to $275 million. This includes an estimate of $8 million to $12 million of catastrophe losses for the year.
Conference Call
As previously announced, Palomar will host a conference call Thursday, February 12, 2026, to discuss its fourth quarter 2025 results at 12:00 p.m. (Eastern Time). The conference call can be accessed live by dialing 1-877-423-9813 or for international callers, 1-201-689-8573, and requesting to be joined to the Palomar Fourth Quarter 2025 Earnings Conference Call. A replay will be available starting at 4:00 p.m. (Eastern Time) on February 12, 2026, and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the replay is 13758018. The replay will be available until 11:59 p.m. (Eastern Time) on February 19, 2026.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at http://ir.palomarspecialty.com/. The online replay will remain available for a limited time beginning immediately following the call.
About Palomar Holdings, Inc.
Palomar Holdings, Inc. is the holding company of subsidiaries Palomar Specialty Insurance Company (“PSIC”), Palomar Specialty Reinsurance Company Bermuda Ltd. (“PSRE”), Palomar Insurance Agency, Inc., Palomar Excess and Surplus Insurance Company (“PESIC”), Palomar Underwriters Exchange Organization, Inc. (“PUEO”), First Indemnity of America Insurance Co. (“FIA”), Palomar Crop Insurance Services, Inc. (“PCIS”), and Palomar Casualty and Surety Company (“PCSC”), formerly known as The Gray Casualty & Surety Company. Palomar’s consolidated results also include Laulima Exchange (“Laulima”), a variable interest entity for which the Company is the primary beneficiary. Palomar is an innovative specialty insurer serving residential and commercial clients in five product categories: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. Palomar’s insurance subsidiaries, PSIC, PSRE, PESIC, and FIA have a financial strength rating of “A” (Excellent) from A.M. Best and PCSC has a financial strength rating of “A-” (Excellent) from A.M. Best.
To learn more, visit PLMR.com.
Non-GAAP and Key Performance Indicators
Palomar discusses certain key performance indicators, described below, which provide useful information about the Company’s business and the operational factors underlying the Company’s financial performance.
Underwriting revenue is a non-GAAP financial measure defined as total revenue, excluding net investment income and net realized and unrealized gains and losses on investments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of total revenue calculated in accordance with GAAP to underwriting revenue.
Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments, and interest expense. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to underwriting income.
Adjusted net income is a non-GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. Palomar calculates the tax impact only on adjustments which would be included in calculating the Company’s income tax expense using the estimated tax rate at which the company received a deduction for these adjustments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income calculated in accordance with GAAP to adjusted net income.
Annualized Return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.
Annualized adjusted return on equity is a non-GAAP financial measure defined as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of return on equity calculated using unadjusted GAAP numbers to adjusted return on equity.
Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses, to net earned premiums.
Expense ratio, expressed as a percentage, is the ratio of acquisition and other underwriting expenses, net of commission and other income to net earned premiums.
Combined ratio is defined as the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.
Adjusted combined ratio is a non-GAAP financial measure defined as the sum of the loss ratio and the expense ratio calculated excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio.
Diluted adjusted earnings per share is a non-GAAP financial measure defined as adjusted net income divided by the weighted-average common shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of diluted earnings per share calculated in accordance with GAAP to diluted adjusted earnings per share.
Catastrophe loss ratio is a non-GAAP financial measure defined as the ratio of catastrophe losses to net earned premiums. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of loss ratio calculated using unadjusted GAAP numbers to catastrophe loss ratio.
Adjusted combined ratio excluding catastrophe losses is a non-GAAP financial measure defined as adjusted combined ratio excluding the impact of catastrophe losses. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio excluding catastrophe losses.
Adjusted underwriting income is a non-GAAP financial measure defined as underwriting income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to adjusted underwriting income.
Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity less goodwill and intangible assets. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of stockholders’ equity calculated in accordance with GAAP to tangible stockholders’ equity.
Safe Harbor Statement
Forward-looking statements notice
Palomar cautions you that statements contained in this press release may regard matters that are not historical facts but are forward-looking statements. These statements are based on the company’s current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by Palomar that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business. The forward-looking statements are typically, but not always, identified through use of the words “believe,” “expect,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected results or delays in development and regulatory review, regulatory approval requirements, the frequency and severity of adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
The following tables summarize the Company’s results for the three months and year ended December 31, 2025 and 2024:
| Three Months Ended | | |
|---|
| December 31, | | |
|---|
| 2025 | 2024 | Change | % Change |
|---|
| (in thousands, except per share data) |
|---|
| Gross written premiums | $492,629 | $373,723 | $118,906 | 31.8% |
| Ceded written premiums | (245,059) | (204,492) | (40,567) | 19.8% |
| Net written premiums | 247,570 | 169,231 | 78,339 | 46.3% |
| Net earned premiums | 233,460 | 144,890 | 88,570 | 61.1% |
| Commission and other income | 1,541 | 750 | 791 | 105.5% |
| Total underwriting revenue | 235,001 | 145,640 | 89,361 | 61.4% |
| Losses and loss adjustment expenses | 70,856 | 37,176 | 33,680 | 90.6% |
| Acquisition expenses, net of ceding commissions and fronting fees | 62,867 | 40,585 | 22,282 | 54.9% |
| Other underwriting expenses | 46,894 | 32,947 | 13,947 | 42.3% |
| Underwriting income | 54,384 | 34,932 | 19,452 | 55.7% |
| Interest expense | (87) | (87) | - | NM |
| Net investment income | 15,991 | 11,318 | 4,673 | 41.3% |
| Net realized and unrealized gains (losses) on investments | 2,370 | (1,201) | 3,571 | (297.3)% |
| Income before income taxes | 72,658 | 44,962 | 27,696 | 61.6% |
| Income tax expense | 16,493 | 9,997 | 6,496 | 65.0% |
| Net income | $56,165 | $34,965 | $21,200 | 60.6% |
| Adjustments: | | | | |
| Net realized and unrealized (gains) losses on investments | (2,370) | 1,201 | (3,571) | (297.3)% |
| Expenses associated with transactions | 1,075 | 922 | 153 | 16.6% |
| Stock-based compensation expense | 5,543 | 4,779 | 764 | 16.0% |
| Amortization of intangibles | 1,284 | 389 | 895 | 230.1% |
| Tax impact | (581) | (964) | 383 | (39.7)% |
| Adjusted net income | $61,116 | $41,292 | $19,824 | 48.0% |
| Key Financial and Operating Metrics | | | | |
| Annualized return on equity | 24.7% | 19.5% | | |
| Annualized adjusted return on equity | 26.9% | 23.1% | | |
| Loss ratio | 30.4% | 25.7% | | |
| Expense ratio | 46.4% | 50.2% | | |
| Combined ratio | 76.8% | 75.9% | | |
| Adjusted combined ratio | 73.4% | 71.7% | | |
| Diluted earnings per share | $2.06 | $1.29 | | |
| Diluted adjusted earnings per share | $2.24 | $1.52 | | |
| Catastrophe losses | $(2,063) | $8,122 | | |
| Catastrophe loss ratio | -0.9% | 5.6% | | |
| Adjusted combined ratio excluding catastrophe losses | 74.2% | 66.1% | | |
| Adjusted underwriting income | $62,286 | $41,022 | $21,264 | 51.8% |
| NM - not meaningful | | | | |
(1) - Indicates Non-GAAP financial measure - see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.
| Year Ended | | |
|---|
| December 31, | | |
|---|
| 2025 | 2024 | Change | % Change |
|---|
| (in thousands, except per share data) |
|---|
| Gross written premiums | $2,028,252 | $1,541,962 | $486,290 | 31.5% |
| Ceded written premiums | (1,064,230) | (897,111) | (167,119) | 18.6% |
| Net written premiums | 964,022 | 644,851 | 319,171 | 49.5% |
| Net earned premiums | 802,635 | 510,687 | 291,948 | 57.2% |
| Commission and other income | 5,496 | 2,784 | 2,712 | 97.4% |
| Total underwriting revenue | 808,131 | 513,471 | 294,660 | 57.4% |
| Losses and loss adjustment expenses | 228,594 | 134,759 | 93,835 | 69.6% |
| Acquisition expenses, net of ceding commissions and fronting fees | 217,133 | 149,657 | 67,476 | 45.1% |
| Other underwriting expenses | 176,458 | 117,113 | 59,345 | 50.7% |
| Underwriting income | 185,946 | 111,942 | 74,004 | 66.1% |
| Interest expense | (392) | (1,138) | 746 | (65.6)% |
| Net investment income | 56,005 | 35,824 | 20,181 | 56.3% |
| Net realized and unrealized gains on investments | 11,831 | 4,568 | 7,263 | 159.0% |
| Income before income taxes | 253,390 | 151,196 | 102,194 | 67.6% |
| Income tax expense | 56,320 | 33,623 | 22,697 | 67.5% |
| Net income | $197,070 | $117,573 | $79,497 | 67.6% |
| Adjustments: | | | | |
| Net realized and unrealized gains on investments | (11,831) | (4,568) | (7,263) | 159.0% |
| Expenses associated with transactions | 4,644 | 1,479 | 3,165 | 214.0% |
| Stock-based compensation expense | 21,014 | 16,685 | 4,329 | 25.9% |
| Amortization of intangibles | 4,683 | 1,558 | 3,125 | 200.6% |
| Expenses associated with catastrophe bond | 2,660 | 2,483 | 177 | 7.1% |
| Tax impact | (2,124) | (1,699) | (425) | 25.0% |
| Adjusted net income | $216,116 | $133,511 | $82,605 | 61.9% |
| Key Financial and Operating Metrics | | | | |
| Annualized return on equity | 23.6% | 19.6% | | |
| Annualized adjusted return on equity | 25.9% | 22.2% | | |
| Loss ratio | 28.5% | 26.4% | | |
| Expense ratio | 48.4% | 51.7% | | |
| Combined ratio | 76.9% | 78.1% | | |
| Adjusted combined ratio | 72.7% | 73.7% | | |
| Diluted earnings per share | $7.17 | $4.48 | | |
| Diluted adjusted earnings per share | $7.86 | $5.09 | | |
| Catastrophe losses | $(728) | $27,846 | | |
| Catastrophe loss ratio | -0.1% | 5.5% | | |
| Adjusted combined ratio excluding catastrophe losses | 72.8% | 68.3% | | |
| Adjusted underwriting income | $218,947 | $134,147 | $84,800 | 63.2% |
| NM - not meaningful | | | | |
(1) - Indicates Non-GAAP financial measure - see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.
Condensed Consolidated Balance sheets
Palomar Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(in thousands, except shares and par value data)
| December 31, | December 31, |
|---|
| 2025 | 2024 |
|---|
| Assets | | |
| Investments: | | |
| Fixed maturity securities available for sale, at fair value (amortized cost: $1,227,605 in 2025; $973,330 in 2024) | $1,224,187 | $939,046 |
| Equity securities, at fair value (cost: $81,772 in 2025; $32,987 in 2024) | 99,333 | 40,529 |
| Equity method investment | - | 2,277 |
| Other investments | 28,503 | 5,863 |
| Total investments | 1,352,023 | 987,715 |
| Cash and cash equivalents | 106,875 | 80,438 |
| Restricted cash | 17 | 101 |
| Accrued investment income | 11,545 | 8,440 |
| Premiums receivable | 452,908 | 305,724 |
| Deferred policy acquisition costs, net of ceding commissions and fronting fees | 127,718 | 94,881 |
| Reinsurance recoverable on paid losses and loss adjustment expenses | 56,428 | 47,076 |
| Reinsurance recoverable on unpaid losses and loss adjustment expenses | 412,273 | 348,083 |
| Ceded unearned premiums | 355,918 | 276,237 |
| Prepaid expenses and other assets | 110,896 | 91,086 |
| Deferred tax assets, net | 761 | 8,768 |
| Property and equipment, net | 2,551 | 429 |
| Goodwill and intangible assets, net | 61,054 | 13,242 |
| Total assets | $3,050,967 | $2,262,220 |
| Liabilities and stockholders’ equity | | |
| Liabilities: | | |
| Accounts payable and other accrued liabilities | $115,663 | $70,079 |
| Reserve for losses and loss adjustment expenses | 688,231 | 503,382 |
| Unearned premiums | 988,143 | 741,692 |
| Ceded premium payable | 271,413 | 190,168 |
| Funds held under reinsurance treaty | 44,850 | 27,869 |
| Total liabilities | 2,108,300 | 1,533,190 |
| Stockholders’ equity: | | |
| Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2025 and December 31, 2024 | - | - |
| Common stock, $0.0001 par value, 500,000,000 shares authorized, 26,520,417 and 26,529,402 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively | 3 | 3 |
| Additional paid-in capital | 523,168 | 493,656 |
| Accumulated other comprehensive loss | (2,506) | (26,845) |
| Retained earnings | 422,002 | 262,216 |
| Total stockholders’ equity | 942,667 | 729,030 |
| Total liabilities and stockholders’ equity | $3,050,967 | $2,262,220 |
Condensed Consolidated Income Statement
Palomar Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)
(in thousands, except shares and per share data)
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| Revenues: | | | | |
| Gross written premiums | $492,629 | $373,723 | $2,028,252 | $1,541,962 |
| Ceded written premiums | (245,059) | (204,492) | (1,064,230) | (897,111) |
| Net written premiums | 247,570 | 169,231 | 964,022 | 644,851 |
| Change in unearned premiums | (14,110) | (24,341) | (161,387) | (134,164) |
| Net earned premiums | 233,460 | 144,890 | 802,635 | 510,687 |
| Net investment income | 15,991 | 11,318 | 56,005 | 35,824 |
| Net realized and unrealized gains (losses) on investments | 2,370 | (1,201) | 11,831 | 4,568 |
| Commission and other income | 1,541 | 750 | 5,496 | 2,784 |
| Total revenues | 253,362 | 155,757 | 875,967 | 553,863 |
| Expenses: | | | | |
| Losses and loss adjustment expenses | 70,856 | 37,176 | 228,594 | 134,759 |
| Acquisition expenses, net of ceding commissions and fronting fees | 62,867 | 40,585 | 217,133 | 149,657 |
| Other underwriting expenses | 46,894 | 32,947 | 176,458 | 117,113 |
| Interest expense | 87 | 87 | 392 | 1,138 |
| Total expenses | 180,704 | 110,795 | 622,577 | 402,667 |
| Income before income taxes | 72,658 | 44,962 | 253,390 | 151,196 |
| Income tax expense | 16,493 | 9,997 | 56,320 | 33,623 |
| Net income | $56,165 | $34,965 | $197,070 | $117,573 |
| Other comprehensive income, net: | | | | |
| Net unrealized gains (losses) on securities available for sale | 1,586 | (16,707) | 24,339 | (2,854) |
| Net comprehensive income | $57,751 | $18,258 | $221,409 | $114,719 |
| Per Share Data: | | | | |
| Basic earnings per share | $2.12 | $1.32 | $7.40 | $4.61 |
| Diluted earnings per share | $2.06 | $1.29 | $7.17 | $4.48 |
| Weighted-average common shares outstanding: | | | | |
| Basic | 26,508,803 | 26,491,939 | 26,639,733 | 25,520,343 |
| Diluted | 27,321,828 | 27,206,225 | 27,485,250 | 26,223,842 |
Underwriting Segment Data
The Company has a single reportable segment and offers specialty insurance products. Gross written premiums (“GWP”) by product, location and company are presented below:
| Three Months Ended December 31, | | |
|---|
| 2025 | 2024 | | |
|---|
| ($ in thousands) | | |
|---|
| | % of | | % of | | % |
|---|
| Amount | GWP | Amount | GWP | Change | Change |
|---|
| Product | | | | | | |
| Casualty | $150,477 | 30.6% | $68,484 | 18.3% | $81,993 | 119.7% |
| Earthquake | 143,516 | 29.1% | 146,757 | 39.3% | (3,241) | (2.2)% |
| Inland Marine and Other Property | 110,722 | 22.5% | 85,396 | 22.9% | 25,326 | 29.7% |
| Fronting | 47,808 | 9.7% | 57,418 | 15.4% | (9,610) | (16.7)% |
| Crop | 40,106 | 8.1% | 15,668 | 4.2% | 24,438 | 156.0% |
| Total gross written premiums | $492,629 | 100.0% | $373,723 | 100.0% | $118,906 | 31.8% |
| Year Ended December 31, | | |
|---|
| 2025 | 2024 | | |
|---|
| ($ in thousands) | | |
|---|
| | % of | | % of | | % |
|---|
| Amount | GWP | Amount | GWP | Change | Change |
|---|
| Product | | | | | | |
| Earthquake | $571,392 | 28.2% | $522,864 | 33.9% | $48,528 | 9.3% |
| Casualty | 542,949 | 26.8% | 235,592 | 15.3% | 307,357 | 130.5% |
| Inland Marine and Other Property | 446,184 | 22.0% | 334,079 | 21.7% | 112,105 | 33.6% |
| Crop | 247,547 | 12.2% | 116,239 | 7.5% | 131,308 | 113.0% |
| Fronting | 220,180 | 10.8% | 333,188 | 21.6% | (113,008) | (33.9)% |
| Total gross written premiums | $2,028,252 | 100.0% | $1,541,962 | 100.0% | $486,290 | 31.5% |
| Three Months Ended December 31, | Year Ended December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| | % of | | % of | | % of | | % of |
|---|
| Amount | GWP | Amount | GWP | Amount | GWP | Amount | GWP |
|---|
| State | | | | | | | | |
| California | $154,123 | 31.3% | $157,786 | 42.2% | $626,399 | 30.9% | $668,635 | 43.4% |
| Texas | 41,331 | 8.4% | 28,002 | 7.5% | 160,639 | 7.9% | 124,416 | 8.1% |
| Florida | 30,373 | 6.2% | 8,855 | 2.4% | 96,764 | 4.8% | 67,008 | 4.3% |
| Hawaii | 21,278 | 4.3% | 18,636 | 5.0% | 92,585 | 4.6% | 72,558 | 4.7% |
| Washington | 19,772 | 4.0% | 16,007 | 4.3% | 70,188 | 3.5% | 57,900 | 3.8% |
| New York | 16,879 | 3.4% | 14,756 | 3.9% | 68,119 | 3.3% | 38,919 | 2.5% |
| Illinois | 14,858 | 3.0% | 7,176 | 1.9% | 54,406 | 2.7% | 20,901 | 1.4% |
| Oklahoma | 12,962 | 2.6% | 4,605 | 1.2% | 29,497 | 1.4% | 15,655 | 1.0% |
| Other | 181,053 | 36.8% | 117,900 | 31.6% | 829,655 | 40.9% | 475,970 | 30.8% |
| Total Gross Written Premiums | $492,629 | 100.0% | $373,723 | 100.0% | $2,028,252 | 100.0% | $1,541,962 | 100.0% |
| Three Months Ended December 31, | Year Ended December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| | % of | | % of | | % of | | % of |
|---|
| Amount | GWP | Amount | GWP | Amount | GWP | Amount | GWP |
|---|
| Subsidiary | | | | | | | | |
| PESIC | $255,923 | 52.0% | $188,496 | 50.4% | $936,971 | 46.2% | $661,404 | 42.9% |
| PSIC | 214,823 | 43.6% | 170,275 | 45.6% | 995,901 | 49.1% | 823,263 | 53.4% |
| Laulima | 17,753 | 3.6% | 14,952 | 4.0% | 76,727 | 3.8% | 57,295 | 3.7% |
| FIA | 4,130 | 0.8% | - | - % | 18,653 | 0.9% | - | - % |
| Total Gross Written Premiums | $492,629 | 100.0% | $373,723 | 100.0% | $2,028,252 | 100.0% | $1,541,962 | 100.0% |
Gross and net earned premiums
The table below shows the amount of premiums the Company earned on a gross and net basis and the Company’s net earned premiums as a percentage of gross earned premiums for each period presented:
| Three Months Ended | | | Year Ended | | |
|---|
| December 31, | | % | December 31, | | % |
|---|
| 2025 | 2024 | Change | Change | 2025 | 2024 | Change | Change |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Gross earned premiums | $483,861 | $371,654 | $112,207 | 30.2% | $1,787,184 | $1,397,369 | $389,815 | 27.9% |
| Ceded earned premiums | (250,401) | (226,764) | (23,637) | 10.4% | (984,549) | (886,682) | (97,867) | 11.0% |
| Net earned premiums | $233,460 | $144,890 | $88,570 | 61.1% | $802,635 | $510,687 | $291,948 | 57.2% |
| Net earned premium ratio | 48.2% | 39.0% | | | 44.9% | 36.5% | | |
Loss detail
| Three Months Ended | | | Year Ended | | |
|---|
| December 31, | | | December 31, | | |
|---|
| 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Catastrophe losses | $(2,063) | $8,122 | $(10,185) | (125.4)% | $(728) | $27,846 | $(28,574) | (102.6)% |
| Non-catastrophe losses | 72,919 | 29,054 | 43,865 | 151.0% | 229,322 | 106,913 | 122,409 | 114.5% |
| Total losses and loss adjustment expenses | $70,856 | $37,176 | $33,680 | 90.6% | $228,594 | $134,759 | $93,835 | 69.6% |
| Catastrophe loss ratio | -0.9% | 5.6% | | | -0.1% | 5.5% | | |
| Non-catastrophe loss ratio | 31.3% | 20.1% | | | 28.6% | 20.9% | | |
| Total loss ratio | 30.4% | 25.7% | | | 28.5% | 26.4% | | |
The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses:
| Three Months Ended December 31, | Year Ended December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Reserve for losses and LAE net of reinsurance recoverables at beginning of period | $243,713 | $137,274 | $155,299 | $97,653 |
| Add: Balance acquired from FIA | - | - | 6,788 | - |
| Add: Incurred losses and LAE, net of reinsurance, related to: | | | | |
| Current year | 73,646 | 37,575 | 248,365 | 137,798 |
| Prior years | (2,790) | (399) | (19,771) | (3,039) |
| Total incurred | 70,856 | 37,176 | 228,594 | 134,759 |
| Deduct: Loss and LAE payments, net of reinsurance, related to: | | | | |
| Current year | 37,586 | 15,675 | 75,913 | 43,582 |
| Prior years | 1,025 | 3,476 | 38,810 | 33,531 |
| Total payments | 38,611 | 19,151 | 114,723 | 77,113 |
| Reserve for losses and LAE net of reinsurance recoverables at end of period | 275,958 | 155,299 | 275,958 | 155,299 |
| Add: Reinsurance recoverables on unpaid losses and LAE at end of period | 412,273 | 348,083 | 412,273 | 348,083 |
| Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period | $688,231 | $503,382 | $688,231 | $503,382 |
(1) - Represents amounts recognized in Reserve for losses and LAE net of reinsurance recoverables upon acquisition of FIA on 1/1/2025, in accordance with ASC 805, Business Combinations.
Reconciliation of Non-GAAP Financial Measures
For the three months and year ended December 31, 2025 and 2024, the Non-GAAP financial measures discussed above reconcile to their most comparable GAAP measures as follows:
Underwriting revenue
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Total revenue | $253,362 | $155,757 | $875,967 | $553,863 |
| Net investment income | (15,991) | (11,318) | (56,005) | (35,824) |
| Net realized and unrealized (gains) losses on investments | (2,370) | 1,201 | (11,831) | (4,568) |
| Underwriting revenue | $235,001 | $145,640 | $808,131 | $513,471 |
Underwriting income and adjusted underwriting income
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Income before income taxes | $72,658 | $44,962 | $253,390 | $151,196 |
| Net investment income | (15,991) | (11,318) | (56,005) | (35,824) |
| Net realized and unrealized (gains) losses on investments | (2,370) | 1,201 | (11,831) | (4,568) |
| Interest expense | 87 | 87 | 392 | 1,138 |
| Underwriting income | $54,384 | $34,932 | $185,946 | $111,942 |
| Expenses associated with transactions | 1,075 | 922 | 4,644 | 1,479 |
| Stock-based compensation expense | 5,543 | 4,779 | 21,014 | 16,685 |
| Amortization of intangibles | 1,284 | 389 | 4,683 | 1,558 |
| Expenses associated with catastrophe bond | - | - | 2,660 | 2,483 |
| Adjusted underwriting income | $62,286 | $41,022 | $218,947 | $134,147 |
Adjusted net income
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Net income | $56,165 | $34,965 | $197,070 | $117,573 |
| Adjustments: | | | | |
| Net realized and unrealized (gains) losses on investments | (2,370) | 1,201 | (11,831) | (4,568) |
| Expenses associated with transactions | 1,075 | 922 | 4,644 | 1,479 |
| Stock-based compensation expense | 5,543 | 4,779 | 21,014 | 16,685 |
| Amortization of intangibles | 1,284 | 389 | 4,683 | 1,558 |
| Expenses associated with catastrophe bond | - | - | 2,660 | 2,483 |
| Tax impact | (581) | (964) | (2,124) | (1,699) |
| Adjusted net income | $61,116 | $41,292 | $216,116 | $133,511 |
Annualized adjusted return on equity
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Annualized adjusted net income | $244,464 | $165,168 | $216,116 | $133,511 |
| Average stockholders’ equity | $910,389 | $716,171 | $835,849 | $600,140 |
| Annualized adjusted return on equity | 26.9% | 23.1% | 25.9% | 22.2% |
Adjusted combined ratio
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income | $179,076 | $109,958 | $616,689 | $398,745 |
| Denominator: Net earned premiums | $233,460 | $144,890 | $802,635 | $510,687 |
| Combined ratio | 76.8% | 75.9% | 76.9% | 78.1% |
| Adjustments to numerator: | | | | |
| Expenses associated with transactions | $(1,075) | $(922) | $(4,644) | $(1,479) |
| Stock-based compensation expense | (5,543) | (4,779) | (21,014) | (16,685) |
| Amortization of intangibles | (1,284) | (389) | (4,683) | (1,558) |
| Expenses associated with catastrophe bond | - | - | (2,660) | (2,483) |
| Adjusted combined ratio | 73.4% | 71.7% | 72.7% | 73.7% |
Diluted adjusted earnings per share
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| (in thousands, except per share data) | (in thousands, except per share data) |
|---|
| Adjusted net income | $61,116 | $41,292 | $216,116 | $133,511 |
| Weighted-average common shares outstanding, diluted | 27,321,828 | 27,206,225 | 27,485,250 | 26,223,842 |
| Diluted adjusted earnings per share | $2.24 | $1.52 | $7.86 | $5.09 |
Catastrophe loss ratio
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Numerator: Losses and loss adjustment expenses | $70,856 | $37,176 | $228,594 | $134,759 |
| Denominator: Net earned premiums | $233,460 | $144,890 | $802,635 | $510,687 |
| Loss ratio | 30.4% | 25.7% | 28.5% | 26.4% |
| Numerator: Catastrophe losses | $(2,063) | $8,122 | $(728) | $27,846 |
| Denominator: Net earned premiums | $233,460 | $144,890 | $802,635 | $510,687 |
| Catastrophe loss ratio | -0.9% | 5.6% | -0.1% | 5.5% |
Adjusted combined ratio excluding catastrophe losses
| Three Months Ended | Year Ended |
|---|
| December 31, | December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| ($ in thousands) | ($ in thousands) |
|---|
| Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income | $179,076 | $109,958 | $616,689 | $398,745 |
| Denominator: Net earned premiums | $233,460 | $144,890 | $802,635 | $510,687 |
| Combined ratio | 76.8% | 75.9% | 76.9% | 78.1% |
| Adjustments to numerator: | | | | |
| Expenses associated with transactions | $(1,075) | $(922) | $(4,644) | $(1,479) |
| Stock-based compensation expense | (5,543) | (4,779) | (21,014) | (16,685) |
| Amortization of intangibles | (1,284) | (389) | (4,683) | (1,558) |
| Expenses associated with catastrophe bond | - | - | (2,660) | (2,483) |
| Catastrophe losses | 2,063 | (8,122) | 728 | (27,846) |
| Adjusted combined ratio excluding catastrophe losses | 74.2% | 66.1% | 72.8% | 68.3% |
Tangible Stockholders’ equity
| December 31, | December 31, |
|---|
| 2025 | 2024 |
|---|
| ($ in thousands) |
|---|
| Stockholders’ equity | $942,667 | $729,030 |
| Goodwill and intangible assets | (61,054) | (13,242) |
| Tangible stockholders’ equity | $881,613 | $715,788 |
Contacts
Media Inquiries
Lindsay Conner
1-551-206-6217 lconner@plmr.com
Jamie Lillis
1-203-428-3223 investors@plmr.com
Source: Palomar Holdings, Inc.
Summary of Operating Results: