Tiptree Inc.

Greetings and welcome to TipTree, Inc. Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Sandra Bell, Chief Financial Officer.

Good morning. and welcome to our second quarter 2021 earnings call. We are joined today by our executive chairman, Michael Barnes, and CEO, Jonathan Alani. You can find the slides that accompany this review on our investor relations website. Please note that some of our comments today will contain forward-looking statements based on our current view of our business. and actual future results may differ materially. Please see our most recent SEC filings, which identify the principal risks and uncertainties that could affect future performance. In addition, we will discuss certain adjusted or non-GAAP financial measures, which are described in more detail in this morning's presentation. Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our SEC filings, the appendix to our presentation, and posted on our website. With that, I will turn the call over to Michael.

Thanks, Sandra. Good morning, everyone. Our second quarter performance was a continuation of the positive trends we have experienced over the past year with all businesses contributing. First half revenues of $594 million and net income of $36.6 million were both up substantially from 2020, driven by the particularly strong performance of Ortegra, our specialty insurance business, Reliance, our mortgage business, and gains on investment holdings across the company. After removing the impact of investment gains and losses, first half revenue growth was 35% and adjusted net income of $26 million increased 51% from the prior year, both great results. Our insurance business, the Fortegra Group, continues to deliver on its growth objectives while maintaining focus on underwriting discipline that has contributed to consistent results over the past several years. In the quarter, the team crossed a significant milestone with over $2 billion in trailing 12-month gross written premiums and premium equivalents. That represents an exceptional 23.8% annualized growth rate since 2017. Year-to-date written premiums and equivalents of nearly 1.1 billion were up 51% versus the prior year, driven by robust organic growth across all lines of business. Adjusted net income for the first half was $26.9 million, up 52%, driven by revenue growth and an improved combined ratio. The adjusted return on average equity was 18.3%, up 550 basis points from the first half of 2020. Once again, Fortegra's results demonstrate the attractiveness of combining a market-leading specialty insurer with a capital-light warranty business. As we look forward, we expect this performance to continue, led by a growing top line and consistent combined ratio. Switching to Tiptree Capital, our three primary investments in mortgage origination, senior housing, and maritime transportation all generated positive net income for the quarter, and it is worth noting that Tiptree Capital, on a standalone basis, now has over 195 million of book value. Adjusted net income within Tiptree Capital was 14 million for the first half, up substantially from the prior year, driven by strong performance in our mortgage and shipping operations. The mortgage business had another excellent quarter, as the rate environment and home price appreciation continued to be tailwinds. Volumes were up 7% year over year, while gain on sale margins remain healthy compared to long-term historical averages. We believe the business can continue to deliver strong returns, particularly given the low interest rate environment and steady demand for cash-out refinancings across the country. In addition, we have been adding to our mortgage servicing asset, which serves as a source for higher margin recapture volume and is a potential hedge in a rising rate environment. Our shipping business also generated positive results for the first half based on continuing favorable market conditions, particularly in the dry bulk sector. Overall, we are very pleased with the first half performance and believe TipTree is well positioned for the second half of 2021 and going forward. With that, I'll pass it to Sandra, who will take you through the financial results in more detail.