Tiptree Inc.

Greetings and welcome to TipTree, Inc. first quarter 2022 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 this conference over to your host, Ms. Sandra Bell, Chief Financial Officer. Thank you, ma'am. You may begin your presentation.

Good morning, and welcome to our first quarter 2022 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 identified 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 and welcome to our earnings call. In the first quarter, our operating businesses continued to produce excellent returns with revenues increasing 10% to $325 million and adjusted net income improving 17% to $15 million. Protegra posted another great quarter, with premiums and equivalents of $601 million, 26% growth from the prior year, led by strength in the admitted and ENS insurance lines. The business continues to experience hard markets for its specialty ENS lines, which contributed to the record quarterly adjusted net income of $21 million and return on equity of 28%. In early April, Protegra also added a bolt-on acquisition in the UK for just over $15 million of net cash consideration, further establishing its footprint in the European auto warranty sector. The Warburg regulatory approval process remains on track, and we expect to close within the second quarter. We anticipate using investment proceeds for additional growth capital in Protegra specialty lines and to repay Tiptree's corporate debt facility. Like many of our peers, our investments experienced negative mark-to-market for the quarter, both within our insurance investment portfolio and on our Invesc shares. We are likely to experience such volatility from quarter to quarter on publicly traded bonds and stocks, and therefore, we tend to look at performance over a much longer time horizon. Our fixed income portfolio remains conservatively positioned with a AA plus rating and a 2.5 year weighted average duration. We feel confident that the majority of the unrealized losses from this quarter will be recovered over the coming years as bonds mature. As the portfolio grows and we reinvest maturing securities, the rising interest rate environment, as we observed in the first quarter, could be a meaningful driver of income over time. As of the end of the quarter, our investment portfolio stood at nearly $900 million. Despite this quarter's unrealized marks, Invesc, our largest publicly traded equity position, continues to execute on its strategic initiatives to streamline its portfolio of senior care properties. It recently announced three separate sales totaling $75 million that will allow the company to continue to reduce its overall debt profile. We are confident that over time, we will realize the value of this investment. In our marine business, we had an active quarter with both dry bulk and tanker investments producing solid returns. Given the elevated pricing levels for dry bulk tonnage, we signed a definitive agreement to sell one of our three vessels for $21.5 million, representing a 50% gain to first quarter carrying value. We also took advantage of an opportunity to repay debt on our tankers at a 10% discount level to the outstanding principal balance. As we look forward, we believe there will be additional sale and purchase opportunities within the shipping sector. Finally, our mortgage business produced positive returns in the first quarter, driven by mortgage servicing fees and value appreciation on our MSR asset. While volumes and margins have compressed in the beginning of 2022, over the past two years, the business has grown retained earnings substantially and we now hold an MSR asset worth approximately $38 million on our balance sheet. In summary, we were pleased with our operating businesses for the first quarter of 2022 and believe there is a clear path for growth in future periods. With that, I'll pass it to Sandra, who will take you through the financial results in more detail.