Exhibit 99.2
 
Additional Financial Information for Q3 2020
 
 
Definitions and Non-GAAP Measures
 
Direct written premiums represent the total premiums charged on policies issued by the Company during the respective fiscal period. Net premiums written are direct written premiums less premiums ceded to reinsurers. Net premiums earned, the GAAP measure most comparable to direct written premiums and net premiums written, are net premiums written that are pro-rata earned during the fiscal period presented. All of the Company’s policies are written for a twelve-month period. Management uses direct written premiums and net premiums written, along with other measures, to gauge the Company’s performance and evaluate results.
 
Core direct written premiums - represents the total premiums charged on policies issued by the Company during the respective fiscal period from its business located in New York.
 
Expansion direct written premiums - represents the total premiums charged on policies issued by the Company during the respective fiscal period from its business located in other states (i.e., outside New York).
 
Net operating income (loss) - is net income (loss) exclusive of realized investment gains (losses), net of tax. Net income (loss) is the GAAP measure most closely comparable to net operating income (loss).
 
Management uses net operating income (loss) along with other measures to gauge the Company’s performance and evaluate results, which can be skewed when including realized investment gains (losses), and may vary significantly between periods. Net operating income (loss) is provided as supplemental information, not as a substitute for net income (loss) and does not reflect the Company’s overall profitability.
 
Operating return on average common equity - is net operating income (loss) divided by average common equity. Return on average common equity is the GAAP measure most closely comparable to operating return on average common equity.
 
Management uses net operating income (loss) and operating return on average common equity, along with other measures, to gauge the Company’s performance and evaluate results, which can be skewed when including realized investment gains (losses), which may vary significantly between periods. Net operating income (loss) and operating return on average common equity are provided as supplemental information, are not a substitute for net income (loss) or return on average common equity and do not reflect the Company’s overall profitability or return on average common equity.
 
Underlying net loss ratio - is a non-GAAP ratio, which is computed as the difference between GAAP net loss ratio and the effect of catastrophes and prior year loss development on the net loss ratio.
 
Underlying net loss ratio excluding Commercial Lines - is a non-GAAP ratio, which is computed as the difference between GAAP net loss ratio and the loss ratio that relates to commercial lines, catastrophes, and prior year loss development.
 
Net loss ratio excluding commercial lines - is a non-GAAP ratio, which is computed as the difference between GAAP net loss ratio and the loss ratio that relates to commercial lines.
 
Net loss ratio excluding commercial lines in run-off and catastrophes - is a non-GAAP ratio, which is computed as the difference between GAAP net loss ratio and the loss ratio that relates to commercial lines in run-off and catastrophes.
 
Net combined ratio excluding effect of catastrophes and prior year loss development - is a non-GAAP ratio, which is computed as the difference between GAAP net combined ratio and the effect of catastrophes and prior year loss development on the net combined ratio.
 
 
 
 
Net combined ratio excluding effect of catastrophes - is a non-GAAP ratio, which is computed as the difference between GAAP net combined ratio and the effect of catastrophes on the net combined ratio.
 
We believe that these ratios are useful to investors and they are used by management to reveal the trends in our business that may be obscured by catastrophe losses and prior year loss development, as well as the loss ratio that relates to commercial lines which is in run off. Catastrophe losses cause our loss ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the net loss ratio and net combined ratio. Prior year loss development can cause our loss ratio to vary significantly between periods and separating this information allows us to better compare the results for the current accident period over time. Due to our decision in July 2019 to no longer underwrite commercial lines, excluding the loss ratio related to such line of business allows us to compare our loss ratio with regard to our ongoing lines of business. We believe these measures are useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance. We also provide them to facilitate a comparison to our outlook on the underlying net loss ratio excluding commercial lines and net combined ratio excluding the effect of catastrophes and prior year loss development. The most directly comparable GAAP measures are the net loss ratio and net combined ratio. The underlying net loss ratio excluding commercial lines, net loss ratio excluding commercial lines and net combined ratio excluding the effect of catastrophes and prior year loss development should not be considered a substitute for the net loss ratio and net combined ratio and do not reflect the Company’s net loss ratio and net combined ratio.
 
Book value per share exclusive of catastrophes – is a non-GAAP ratio which is computed as the difference between GAAP book value per share and the effect of catastrophes on book value per share.
 
______________________________________________________________________________________________________
 
Book Value Per Share
 
The Company’s book value per share at September 30, 2020 was $8.40, an increase of 4.1% compared to $8.04 at September 30, 2019.
 
 
 
30-Sep-20
 
 
30-Jun-20
 
 
31-Mar-20
 
 
31-Dec-19
 
 
c30-Sep-19
 
Book Value Per Share
 $8.37 
 $8.40 
 $7.13 
 $8.17 
 $8.04 
 
    
    
    
    
    
% Increase from specified period to 9/30/20
    
  -0.4%
  17.4%
  2.4%
  4.1%
 
 
 
 
The table below reconciles direct written premiums and net written premiums to net premiums earned for the periods presented:
 
 
 
 For the Three Months Ended  
 
 
 For the Nine Months Ended  
 
 
 
 September 30,
 
 
 September 30,
 
 
 
2020
 
 
2019
 
 
$ Change
 
 
% Change
 
 
2020
 
 
2019
 
 
$ Change
 
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(000’s except percentages)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct and Net Written Premiums Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct written premiums
 $45,742 
 $46,023 
 $(281)
  (0.6)%
 $125,090 
 $128,333 
 $(3,243)
  (2.5)%
Assumed written premiums
  - 
  1 
  (1)
  -%
  - 
  1 
  (1)
  -%
Ceded written premiums
  (15,748)
  (5,586)
  (10,162)
  (181.9)%
  (43,814)
  (20,914)
  (22,900)
  (109.5)%
 
    
    
    
    
    
    
    
    
Net written premiums
  29,994 
  40,438 
  (10,444)
  (25.8)%
  81,276 
  107,420 
  (26,144)
  (24.3)%
Change in unearned premiums
  (2,473)
  (6,218)
  3,745 
  60.2%
  (176)
  (12,403)
  12,227 
  98.6%
 
    
    
    
    
    
    
    
    
Net premiums earned
 $27,521 
 $34,220 
 $(6,699)
  (19.6)%
 $81,100 
 $95,017 
 $(13,917)
  (14.6)%
 
 
The table below details the breakdown of direct written premiums between Core direct written premiums and Expansion direct written premiums for the periods presented:
 
 
 
 For the Three Months Ended  
 
 
 For the Nine Months Ended
 
 
 
 September 30,          
 
 
 September 30,        
 
 
 
2020
 
 
2019
 
 
$ Change
 
 
% Change
 
 
2020
 
 
2019
 
 
$ Change
 
 
% Change
 
(000’s except percentages)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core and Expansion Direct Written Premiums Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core direct written premiums
 $36,545 
 $38,652 
 $(2,107)
  (5.5)%
 $100,797 
 $111,433 
 $(10,636)
  (9.5)%
Expansion direct written premiums
  9,197 
  7,371 
  1,826 
  24.8%
  24,293 
  16,900 
  7,393 
  43.7%
Direct written premiums
 $45,742 
 $46,023 
 $(281)
  (0.6)%
 $125,090 
 $128,333 
 $(3,243)
  (2.5)%
 
 
 
 
The following table reconciles net operating income (loss) to net income (loss) and operating return on average common equity to return on average common equity for the periods indicated:
 
 
 
 Three Months Ended
 
 
 Three Months Ended
 
 
 Nine Months Ended
 
 
 Nine Months Ended
 
 
 
September 30, 2020    
 
 
September 30, 2019    
 
 
September 30, 2020    
 
 
September 30, 2019    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Amount
 
 
Diluted loss per common share
 
 
 Amount
 
 
Diluted loss per common share
 
 
 Amount
 
 
Diluted loss per common share
 
 
 Amount
 
 
Diluted loss per common share
 
 (000’s except per common share amounts and percentages)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Net Operating Loss and Diluted Loss per Common Share Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 $(1,228)
 $(0.12)
 $(1,725)
 $(0.16)
 $(2,064)
 $(0.19)
 $(7,421)
 $(0.69)
 
    
    
    
    
    
    
    
    
Net realized (gain) loss on investments
  (2,108)
    
  (998)
    
  1,639 
    
  (3,712)
    
Less tax (expense) benefit on net realized (gain) loss
  (443)
    
  (210)
    
  344 
    
  (780)
    
 
    
    
    
    
    
    
    
    
Net realized (gain) loss on investments, net of taxes
  (1,665)
 $(0.16)
  (788)
 $(0.07)
  1,295 
 $0.12 
  (2,932)
 $(0.27)
 
    
    
    
    
    
    
    
    
Net operating loss
 $(2,893)
 $(0.27)
 $(2,513)
 $(0.23)
 $(769)
 $(0.07)
 $(10,353)
 $(0.96)
 
    
    
    
    
    
    
    
    
Weighted average diluted shares outstanding
  10,673,077 
    
  10,779,641 
    
  10,737,853 
    
  10,769,817 
    
 
    
    
    
    
    
    
    
    
Operating Return on Average Common Equity (Annualized) Reconciliation:
    
    
    
    
    
    
    
    
 
    
    
    
    
    
    
    
    
Net loss
 $(1,228)
    
 $(1,725)
    
 $(2,064)
    
 $(7,421)
    
Average common equity
 $89,467 
    
 $87,203 
    
 $88,768 
    
 $87,701 
    
Return on average common equity (annualized)
  -5.5%
    
  -7.9%
    
  -3.1%
    
  -11.3%
    
 
    
    
    
    
    
    
    
    
Net realized (gain) loss on investments, net of taxes
 $(1,665)
    
 $(788)
    
 $1,295 
    
 $(2,932)
    
Average common equity
 $89,467 
    
 $87,203 
    
 $88,768 
    
 $87,701 
    
Effect of net realized (gain) loss on investments, net of taxes, on return on average common equity (annualized)
  -7.4%
    
  -3.6%
    
  1.9%
    
  -4.5%
    
 
    
    
    
    
    
    
    
    
Net operating loss
 $(2,893)
    
 $(2,513)
    
 $(769)
    
 $(10,353)
    
Average common equity
 $89,467 
    
 $87,203 
    
 $88,768 
    
 $87,701 
    
 
    
    
    
    
    
    
    
    
Operating return on average common equity (annualized)
  -12.9%
    
  -11.5%
    
  -1.2%
    
  -15.7%
    
 
 
 
 
The following table reconciles the underlying net loss ratio excluding commercial lines to the net loss ratio for the periods presented:
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,
 
 
 September 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2020
 
 
2019
 
 
Change
 
 
2020
 
 
2019
 
 
Change
 
 Underlying Net Loss Ratio Excluding Commercial lines Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Net loss and loss adjustment expenses ("Net loss")
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Underlying Net Loss Excluding Commercial lines
 $11,597 
 $15,653 
 $(4,056)
  -25.9%
 $36,928 
 $44,069 
 $(7,141)
  -16.2%
Commercial lines net loss
  (44)
  8,023 
  (8,067)
  -100.5%
  2,863 
  18,459 
  (15,596)
  -84.5%
Catastrophe losses excluding commercial lines
  8,665 
  492 
  8,173 
  1661.2%
  10,375 
  6,783 
  3,592 
  53.0%
Prior year loss development excluding commercial lines
  (100)
  613 
  (713)
  -116.3%
  (849)
  2,277 
  (3,126)
  -137.3%
Net loss
 $20,118 
 $24,781 
 $(4,663)
  -18.8%
 $49,317 
 $71,588 
 $(22,271)
  -31.1%
 
    
    
    
    
    
    
    
    
Net premiums earned
    
    
    
    
    
    
    
    
Net premiums earned excluding commercial lines
  27,285 
  30,475 
  (3,190)
  -10.5%
  78,387 
  83,981 
  (5,594)
  -6.7%
Commercial lines net premiums earned
  236 
  3,745 
  (3,509)
  -93.7%
  2,712 
  11,036 
  (8,324)
  -75.4%
Net premiums earned
 $27,521 
 $34,220 
 $(6,699)
  -19.6%
 $81,099 
 $95,017 
 $(13,918)
  -14.6%
 
    
    
    
    
    
    
    
    
Underlying net loss ratio excluding commercial lines
  42.5%
  51.4%
  (8.9)
  
  pts
 
  47.1%
  52.5%
  (5.4)
  
  pts
 
 
    
    
    
    
    
    
    
    
Net loss ratio
  73.1%
  72.4%
  0.7 
  
  pts
 
  60.8%
  75.3%
  (14.5)
  
  pts
 
 
 
 
 
 
The following table reconciles the net loss ratio excluding commercial lines in run-off and catastrophe losses to the net loss ratio for the periods presented:
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,        
 
 
 September 30,        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2020
 
 
2019
 
 
Change    
 
 
2020
 
 
2019
 
 
Change    
 
Net Loss Ratio Excluding Commercial Lines in Run-off and Catastrophe Losses Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss and loss adjustment expenses ("Net loss")
    
    
    
    
    
    
    
    
Net Loss Ratio Excluding Commercial Lines in Run-off and Catastrophe Losses
 $11,497 
 $16,312 
 $(4,815)
  -29.5%
 $36,079 
 $46,182 
 $(10,103)
  -21.9%
Commercial lines net loss
  (44)
  8,023 
  (8,067)
  -100.5%
  2,863 
  18,459 
  (15,596)
  -84.5%
Catastrophe losses
  8,665 
  446 
  8,219 
  1842.8%
  10,375 
  6,947 
  3,428 
  49.3%
Net loss
 $20,118 
 $24,781 
 $(4,663)
  -18.8%
 $49,317 
 $71,588 
 $(22,271)
  -31.1%
 
    
    
    
    
    
    
    
    
Net premiums earned
    
    
    
    
    
    
    
    
Net premiums earned excluding commercial lines in run-off
  27,285 
  30,475 
  (3,190)
  -10.5%
  78,387 
  83,981 
  (5,594)
  -6.7%
Commercial lines net premiums earned
  236 
  3,745 
  (3,509)
  -93.7%
  2,712 
  11,036 
  (8,324)
  -75.4%
Net premiums earned
 $27,521 
 $34,220 
 $(6,699)
  -19.6%
 $81,099 
 $95,017 
 $(13,918)
  -14.6%
 
    
    
    
    
    
    
    
    
Net Loss Ratio Excluding Commercial Lines in Run-off and Catastrophe Losses
  42.1%
  53.5%
  (11.4)
  
  pts
 
  46.0%
  55.0%
  (9.0)
  
  pts
 
 
    
    
    
    
    
    
    
    
Net loss ratio
  73.1%
  72.4%
  0.7 
  
  pts
 
  60.8%
  75.3%
  (14.5)
  
  pts
 
 
 
 
 
 
The following table reconciles the net loss ratio excluding commercial lines to the net loss ratio for the periods presented:
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,        
 
 
 September 30,        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2020
 
 
2019
 
 
Change    
 
 
2020
 
 
2019
 
 
Change    
 
Net Loss Ratio Excluding Commercial Lines Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss and loss adjustment expenses ("Net loss")
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Loss Excluding Commercial Lines
 $20,162 
 $16,758 
 $3,404 
  20.3%
 $46,454 
 $53,129 
 $(6,675)
  -12.6%
Commercial lines net loss
  (44)
  8,023 
  (8,067)
  -100.5%
  2,863 
  18,459 
  (15,596)
  -84.5%
Net loss
 $20,118 
 $24,781 
 $(4,663)
  -18.8%
 $49,317 
 $71,588 
 $(22,271)
  -31.1%
 
    
    
    
    
    
    
    
    
Net premiums earned
    
    
    
    
    
    
    
    
Net premiums earned excluding commercial lines
  27,285 
  30,475 
  (3,190)
  -10.5%
  78,387 
  83,981 
  (5,594)
  -6.7%
Commercial lines net premiums earned
  236 
  3,745 
  (3,509)
  -93.7%
  2,712 
  11,036 
  (8,324)
  -75.4%
Net premiums earned
 $27,521 
 $34,220 
 $(6,699)
  -19.6%
 $81,099 
 $95,017 
 $(13,918)
  -14.6%
 
    
    
    
    
    
    
    
    
Net loss ratio excluding commercial lines
  73.9%
  55.0%
  18.9 
  
  pts
 
  59.3%
  63.3%
  (4.0)
  
  pts
 
 
    
    
    
    
    
    
    
    
Net loss ratio
  73.1%
  72.4%
  0.7 
  
  pts
 
  60.8%
  75.3%
  (14.5)
  
  pts
 
 
 
 
 
The following table reconciles the net combined ratio excluding catastrophes and prior year loss development to the net combined ratio for the periods presented:
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,          
 
 
 September 30,        
 
 
 
2020
 
 
2019
 
 
Percentage Point Change
 
 
2020
 
 
2019
 
 
Percentage Point Change
 
Net Combined Ratio Excluding Catastrophes and Prior Year Development Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Combined Ratio Excluding Catastrophes and Prior Year Development
  80.8%
  93.7%
  (12.9)
 pts
  87.2%
  94.0%
  (6.8)
 pts
 
    
    
    
 
    
    
    
 
Effect of catastrophe losses and prior year developmen t
    
    
    
 
    
    
    
 
Catastrophe losses
  31.5%
  1.3%
  30.2 
 pts
  12.8%
  7.3%
  5.5 
 pts
Prior year development
  -0.4%
  14.8%
  (15.2)
 pts
  -0.3%
  11.8%
  (12.1)
 pts
Effect of catastrophe losses and prior year development on net loss and loss adjustment expenses
  31.1%
  16.1%
  15.0 
 pts
  12.5%
  19.1%
  (6.6)
 pts
Net underwriting expense ratio
  0.0%
  0.0%
  - 
 pts
  0.0%
  0.0%
  - 
 pts
Total effect of catastrophe losses and prior year development
  31.1%
  16.1%
  15.0 
 pts
  12.5%
  19.1%
  (6.6)
 pts
 
    
    
    
 
    
    
    
 
Net combined ratio
  111.9%
  109.8%
  2.1 
 pts
  99.7%
  113.1%
  (13.4)
 pts
 
The following table reconciles the net combined ratio excluding catastrophes to the net combined ratio for the periods presented:
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,          
 
 
 September 30,        
 
 
 
2020
 
 
2019
 
 
Percentage Point Change
 
 
2020
 
 
2019
 
 
Percentage Point Change
 
Net Combined Ratio Excluding Catastrophes Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Combined Ratio Excluding Catastrophes
  80.4%
  108.5%
  (28.1)
 pts
  86.9%
  105.8%
  (18.9)
 pts
 
    
    
    
 
    
    
    
 
Catastrophe losses
  31.5%
  1.3%
  30.2 
 pts
  12.8%
  7.3%
  5.5 
 pts
 
    
    
    
 
    
    
    
 
Net combined ratio
  111.9%
  109.8%
  2.1 
 pts
  99.7%
  113.1%
  (13.4)
 pts
 
 
 
 
The following table reconciles net operating income and diluted operating earnings per share exclusive of catastrophe and prior year loss development financial impact to net operating loss and diluted operating loss per share for the periods presented:
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,        
 
 
 September 30,        
 
 
 
2020    
 
 
2019    
 
 
2020    
 
 
2019    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Amount
 
 
 Diluted (loss) earnings per common share
 
 
  Amount
 
 
 Diluted (loss) earnings per common share
 
 
 Amount
 
 
 Diluted (loss) earnings per common share
 
 
 Amount
 
 
 Diluted (loss) earnings per common share
 
(000’s except per common share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating and Diluted Operating Earnings per Share Exclusive of Catastrophes and Prior Year Loss Development Financial Impact:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating loss
 $(2,893)
 $(0.27)
 $(2,513)
 $(0.23)
 $(769)
 $(0.07)
 $(10,353)
 $(0.96)
 
    
    
    
    
    
    
    
    
Catastrophe and prior year loss development financial impact
    
    
    
    
    
    
    
    
Ceding commission revenue
  - 
    
  - 
    
  - 
    
  - 
    
Total expenses
  8,559 
    
  5,515 
    
  10,095 
    
  18,133 
    
Income from operations before taxes
  8,559 
    
  5,515 
    
  10,095 
    
  18,133 
    
Income tax expense
  1,797 
    
  1,158 
    
  2,120 
    
  3,808 
    
Total catastrophe and prior year loss development financial impact
  6,762 
 $0.63 
  4,357 
 $0.40 
  7,975 
 $0.74 
  14,325 
 $1.33 
 
    
    
    
    
    
    
    
    
Net operating income exclusive of catastrophes and prior year loss development financial impact
 $3,869 
 $0.36 
 $1,844 
 $0.17 
 $7,206 
 $0.67 
 $3,972 
 $0.37 
 
    
    
    
    
    
    
    
    
Weighted average diluted shares outstanding
  10,673,077 
    
  10,779,641 
    
  10,737,853 
    
  10,769,817 
    
 
 
 
 
The following table reconciles net operating income (loss) and diluted operating earnings (loss) per share exclusive of catastrophe losses to net operating income (loss) and diluted operating earnings (loss) per share for the periods presented:
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,        
 
 
 September 30,        
 
 
 
2020    
 
 
2019    
 
 
2020    
 
 
2019    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Amount
 
 
 Diluted (loss) earnings per common share
 
 
 Amount
 
 
 Diluted loss per common share
 
 
  Amount
 
 
 Diluted (loss) earnings per common share
 
 
 Amount
 
 
 Diluted loss per common share
 
(000’s except per common share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating and Diluted Operating Earnings per Share Exclusive of Catastrophe Losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating loss
 $(2,893)
 $(0.27)
 $(2,513)
 $(0.23)
 $(769)
 $(0.07)
 $(10,353)
 $(0.96)
Catastrophe losses
  8,665 
 $0.81 
  446 
 $0.04 
  10,375 
 $0.97 
  6,947 
 $0.65 
 
    
    
    
    
    
    
    
    
Net operating income (loss) exclusive of catastrophe losses
 $5,772 
 $0.54 
 $(2,067)
 $(0.19)
 $9,606 
 $0.90 
 $(3,406)
 $(0.31)
 
    
    
    
    
    
    
    
    
Weighted average diluted shares outstanding
  10,673,077 
    
  10,779,641 
    
  10,737,853 
    
  10,769,817 
    
 
 
 
 
The following table reconciles book value per exclusive of catastrophes to book value per share for the periods presented:
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,        
 
 
 September 30,        
 
 
 
2020    
 
 
2019    
 
 
2020    
 
 
2019    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Amount
 
 
 Book value per common share out-standing
 
 
 Amount
 
 
 Book value per common share out-standing
 
 
 Amount
 
 
 Book value per common share out-standing
 
 
 Amount
 
 
 Book value per common share out-standing
 
(000’s except per common share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book Value per Share Exclusive of Catastrophes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity
 $89,313 
 $8.37 
 $86,736 
 $8.04 
 $89,313 
 $8.37 
 $86,736 
 $8.04 
 
    
    
    
    
    
    
    
    
Catastrophe losses
  8,665 
    
  446 
    
  10,375 
    
  6,947 
    
Income tax expense
  1,820 
    
  94 
    
  2,179 
    
  1,459 
    
Catastrophe losses, net of income tax
  6,845 
 $0.64 
  352 
 $0.03 
  8,196 
 $0.77 
  5,488 
 $0.51 
 
    
    
    
    
    
    
    
    
Stockholders' equity exclusive of catastrophes
 $96,158 
 $9.01 
 $87,088 
 $8.07 
 $97,509 
 $9.14 
 $92,224 
 $8.55 
 
    
    
    
    
    
    
    
    
Common shares outstanding
  10,675,198 
    
  10,783,572 
    
  10,675,198 
    
  10,783,572 
    
 
 
 
 
The following table summarizes gross and net written premiums, net premiums earned, net loss and loss adjustment expenses and net loss ratio by major product type, which were determined based primarily on similar economic characteristics and risks of loss.
 
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
 
 
 September 30,  
 
 
 September 30,    
 
 
 
 2020
 
 
 2019
 
 
 2020
 
 
 2019
 
 Gross premiums written:
 
 
 
 
 
 
 
 
 
 
 
 
 Personal lines(3)
 $43,640,603 
 $40,996,459 
 $119,598,207 
 $109,143,415 
 Livery physical damage
  2,045,746 
  2,590,434 
  5,466,552 
  8,199,269 
 Other(1)
  62,664 
  401,073 
  192,395 
  535,950 
 Total without commercial lines
  45,749,013 
  43,987,966 
  125,257,154 
  117,878,634 
 Commercial lines (in run-off effective July 2019)(2)
  (6,848)
  2,036,185 
  (167,583)
  10,455,421 
 Total gross premiums written
 $45,742,165 
 $46,024,151 
 $125,089,571 
 $128,334,055 
 
    
    
    
    
 Net premiums written:
    
    
    
    
 Personal lines(3)
 $27,916,850 
 $35,442,970 
 $76,231,996 
 $89,287,063 
 Livery physical damage
  2,045,746 
  2,590,434 
  5,466,552 
  8,199,269 
 Other(1)
  50,626 
  410,317 
  151,784 
  522,596 
 Total without commercial lines
  30,013,222 
  38,443,721 
  81,850,332 
  98,008,928 
 Commercial lines (in run-off effective July 2019)(2)
  (18,271)
  2,004,152 
  (574,228)
  9,411,053 
 Total net premiums written
 $29,994,951 
 $40,447,873 
 $81,276,104 
 $107,419,981 
 
    
    
    
    
 Net premiums earned:
    
    
    
    
 Personal lines(3)
 $25,220,883 
 $27,487,526 
 $71,434,757 
 $75,737,374 
 Livery physical damage
  2,014,458 
  2,712,283 
  6,803,475 
  7,850,822 
 Other(1)
  49,939 
  275,324 
  149,087 
  392,745 
 Total without commercial lines
  27,285,280 
  30,475,133 
  78,387,319 
  83,980,941 
 Commercial lines (in run-off effective July 2019)(2)
  235,801 
  3,744,877 
  2,712,068 
  11,036,237 
 Total net premiums earned
 $27,521,081 
 $34,220,010 
 $81,099,387 
 $95,017,178 
 
    
    
    
    
 Net loss and loss adjustment expenses(4):
    
    
    
    
 Personal lines
 $18,657,325 
 $14,389,168 
 $41,810,950 
 $46,666,275 
 Livery physical damage
  648,520 
  1,395,630 
  1,798,210 
  3,816,390 
 Other(1)
  29,104 
  246,811 
  5,465 
  573,376 
 Unallocated loss adjustment expenses
  827,031 
  726,778 
  2,839,359 
  2,072,570 
 Total without commercial lines
  20,161,980 
  16,758,387 
  46,453,984 
  53,128,611 
 Commercial lines (in run-off effective July 2019)(2)
  (44,005)
  8,022,931 
  2,863,443 
  18,459,239 
 Total net loss and loss adjustment expenses
 $20,117,975 
 $24,781,318 
 $49,317,427 
 $71,587,850 
 
    
    
    
    
Net loss ratio(4):
    
    
    
    
Personal lines
  74.0%
  52.3%
  58.5%
  61.6%
Livery physical damage
  32.2%
  51.5%
  26.4%
  48.6%
Other(1)
  58.3%
  89.6%
  3.7%
  146.0%
Total without commercial lines
  73.9%
  55.0%
  59.3%
  63.3%
 
    
    
    
    
 Commercial lines (in run-off effective July 2019)(2)
  -18.7%
  214.2%
  105.6%
  167.3%
 Total
  73.1%
  72.4%
  60.8%
  75.3%
 
1.
“Other” includes, among other things, premiums and loss and loss adjustment expenses from our participation in a mandatory state joint underwriting association and loss and loss adjustment expenses from commercial auto.
2.
In July 2019, the Company decided that it will no longer underwrite Commercial Liability risks. See discussions above regarding the discontinuation of this line of business.
3.
See discussion with regard to “Direct Written Premiums, Net Written Premiums and Net Premiums Earned” in the Company’s Form 8-K Exhibit 99.1 – Press Release dated November 6, 2020 (also available at www.kingstonecompanies.com).
4.
See discussions above with regard to “Net Loss Ratio and Underlying Net Loss Ratio Excluding Commercial Lines”.
 
 
 
 
KINGSTONE COMPANIES, INC. AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
 
 
For the Three Months Ended
 
 
For the Nine Months Ended
 
 
 
September 30,    
 
 
September 30,    
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 Net premiums earned
 $27,521,081 
 $34,220,010 
 $81,099,387 
 $95,017,178 
 Ceding commission revenue
  3,448,774 
  1,029,582 
  10,760,087 
  2,982,960 
 Net investment income
  1,494,086 
  1,856,553 
  4,771,936 
  5,200,034 
 Net gains (losses) on investments
  2,107,876 
  998,162 
  (1,638,674)
  3,712,180 
 Other income
  250,654 
  343,391 
  772,672 
  998,927 
 Total revenues
  34,822,471 
  38,447,698 
  95,765,408 
  107,911,279 
 
    
    
    
    
 Expenses
    
    
    
    
 Loss and loss adjustment expenses
  20,117,975 
  24,781,318 
  49,317,427 
  71,587,850 
 Commission expense
  8,036,298 
  7,722,825 
  23,652,765 
  21,866,420 
 Other underwriting expenses
  6,346,846 
  6,430,734 
  19,434,110 
  17,983,174 
 Other operating expenses
  1,038,453 
  609,924 
  3,364,483 
  2,647,221 
 Depreciation and amortization
  710,181 
  646,201 
  2,070,435 
  1,876,202 
 Interest expense
  456,545 
  456,545 
  1,369,635 
  1,369,635 
 Total expenses
  36,706,298 
  40,647,547 
  99,208,855 
  117,330,502 
 
    
    
    
    
 Loss from operations before income taxes
  (1,883,827)
  (2,199,849)
  (3,443,447)
  (9,419,223)
 Income tax benefit
  (655,971)
  (474,687)
  (1,379,578)
  (1,998,251)
 Net loss
  (1,227,856)
  (1,725,162)
  (2,063,869)
  (7,420,972)
 
    
    
    
    
 Other comprehensive income, net of tax
    
    
    
    
 Gross change in unrealized gains
    
    
    
    
 on available-for-sale-securities
  1,778,478 
  1,323,626 
  5,938,600 
  9,191,817 
 
    
    
    
    
 Reclassification adjustment for (gains) losses
    
    
    
    
 included in net loss
  (606,969)
  46,841 
  (560,696)
  81,636 
 Net change in unrealized gains
  1,171,509 
  1,370,467 
  5,377,904 
  9,273,453 
 Income tax benefit related to items
    
    
    
    
 of other comprehensive income
  (246,017)
  (287,798)
  (1,129,359)
  (1,947,424)
 Other comprehensive income, net of tax
  925,492 
  1,082,669 
  4,248,545 
  7,326,029 
 
    
    
    
    
 Comprehensive (loss) income
 $(302,364)
 $(642,493)
 $2,184,676 
 $(94,943)
 
    
    
    
    
Loss per common share:
    
    
    
    
Basic
 $(0.12)
 $(0.16)
 $(0.19)
 $(0.69)
Diluted
 $(0.12)
 $(0.16)
 $(0.19)
 $(0.69)
 
    
    
    
    
Weighted average common shares outstanding
    
    
    
    
Basic
  10,673,077 
  10,779,641 
  10,737,853 
  10,769,817 
Diluted
  10,673,077 
  10,779,641 
  10,737,853 
  10,769,817 
 
    
    
    
    
Dividends declared and paid per common share
 $0.0400 
 $0.0625 
 $0.1425 
 $0.2625 
 
 
 
 
KINGSTONE COMPANIES, INC. AND SUBSIDIARIES    
Condensed Consolidated Balance Sheets         
 
 
 September 30,
 
 
 December 31,
 
 
 
2020
 
 
2019
 
 
 
 (unaudited)
 
 
 
 
 Assets
 
 
 
 
 
 
  Fixed-maturity securities, held-to-maturity, at amortized cost (fair value of
 
 
 
 
 
 
   $7,899,304 at September 30, 2020 and $4,124,767 at December 31, 2019)
 $7,369,608 
 $3,825,952 
  Fixed-maturity securities, available-for-sale, at fair value (amortized cost of
    
    
   $145,126,859 at September 30, 2020 and $162,202,355 at December 31, 2019)
  156,538,589 
  168,236,181 
   Equity securities, at fair value (cost of $30,300,839 at September 30, 2020 and
    
    
  $22,624,668 at December 31, 2019)
  29,623,267 
  24,661,382 
 Other investments
  2,829,078 
  2,584,913 
 Total investments
  196,360,542 
  199,308,428 
 Cash and cash equivalents
  24,388,103 
  32,391,485 
 Premiums receivable, net
  13,883,708 
  12,706,411 
 Reinsurance receivables, net
  55,529,408 
  40,750,538 
 Deferred policy acquisition costs
  19,916,325 
  20,634,378 
 Intangible assets, net
  500,000 
  500,000 
 Property and equipment, net
  7,788,633 
  7,620,636 
 Deferred income taxes, net
  - 
  311,052 
 Other assets
  8,992,936 
  6,979,884 
 Total assets
 $327,359,655 
 $321,202,812 
 
    
    
 Liabilities
    
    
 Loss and loss adjustment expense reserves
 $84,979,024 
 $80,498,611 
 Unearned premiums
  88,167,636 
  90,383,238 
 Advance premiums
  4,919,256 
  3,191,512 
 Reinsurance balances payable
  10,062,649 
  11,714,724 
 Deferred ceding commission revenue
  7,207,142 
  7,735,398 
 Accounts payable, accrued expenses and other liabilities
  11,134,175 
  9,986,317 
 Deferred income taxes, net
  1,972,782 
  - 
 Long-term debt, net
  29,603,566 
  29,471,431 
 Total liabilities
  238,046,230 
  232,981,231 
 
    
    
 Commitments and Contingencies
    
    
 
    
    
 Stockholders' Equity
    
    
 Preferred stock, $.01 par value; authorized 2,500,000 shares
  - 
  - 
 Common stock, $.01 par value; authorized 20,000,000 shares; issued 11,871,307 shares
    
   at September 30, 2020 and 11,824,889 at December 31, 2019; outstanding
    
    
   10,675,198 shares at September 30, 2020 and 10,797,450 shares at December 31, 2019
  118,713 
  118,248 
  Capital in excess of par
  70,372,799 
  69,133,918 
  Accumulated other comprehensive income
  9,017,415 
  4,768,870 
  Retained earnings
  13,318,838 
  16,913,097 
 
  92,827,765 
  90,934,133 
  Treasury stock, at cost, 1,196,109 shares at September 30, 2020
    
    
  and 1,027,439 shares at December 31, 2019
  (3,514,340)
  (2,712,552)
 Total stockholders' equity
  89,313,425 
  88,221,581 
 
    
    
 Total liabilities and stockholders' equity
 $327,359,655 
 $321,202,812