Financial Performance - Net income for Q3 2025 was $51.5 million, or $1.87 per diluted share, compared to $30.5 million, or $1.15 per diluted share, in Q3 2024[2] - Adjusted net income increased 70% to $55.2 million, or $2.01 per diluted share, from $32.4 million, or $1.23 per diluted share, in Q3 2024[4] - Net income for Q3 2025 was $51,455, up 68.7% from $30,497 in Q3 2024[36] - Total underwriting revenue for Q3 2025 increased to $226,595, a 66.2% rise from $136,361 in Q3 2024[36] - The company’s net comprehensive income for the nine months ended September 30, 2025, was $163.658 million, compared to $96.460 million in the same period of 2024, reflecting a 69.7% increase[42] - Adjusted net income for the nine months ended September 30, 2025, was $155,003, representing a 68.1% increase from $92,219 in 2024[37] Premiums and Revenue - Gross written premiums rose 43.9% to $597.2 million compared to $415.0 million in Q3 2024[5] - Gross written premiums for Q3 2025 reached $597,171, a 43.9% increase from $414,977 in Q3 2024[36] - Net written premiums for Q3 2025 were $275,244, reflecting a 72.3% growth compared to $159,710 in Q3 2024[36] - For the nine months ended September 30, 2025, gross written premiums totaled $1,535,623, a 31.4% increase from $1,168,239 in the same period of 2024[37] - The company reported total revenues of $244.660 million for Q3 2025, a 64.6% increase from $148.503 million in Q3 2024[42] Ratios and Returns - The total loss ratio for Q3 2025 was 32.3%, up from 29.7% in Q3 2024, with a catastrophe loss ratio of 0.8% compared to 9.5% in the prior year[9] - The combined ratio improved to 78.1% from 80.5% in Q3 2024, while the adjusted combined ratio was 74.8% compared to 77.1% in the same period last year[7] - Annualized return on equity was 23.9%, up from 19.7% in Q3 2024, with an annualized adjusted return on equity of 25.6% compared to 21.0% in the prior year[12] - Annualized adjusted return on equity for Q3 2025 was 25.6%, compared to 21.0% in Q3 2024[48] - Adjusted combined ratio for the nine months ended September 30, 2025, is 78.1%, compared to 80.5% for the same period in 2024[49] Investments and Assets - Net investment income increased by 54.9% to $14.6 million from $9.4 million in Q3 2024, driven by higher yields on invested assets[8] - Total assets as of September 30, 2025, were $2,943,546, an increase from $2,262,220 as of December 31, 2024[39] - Stockholders' equity increased to $878.1 million at September 30, 2025, from $703.3 million at the same date in 2024[12] - Tangible stockholders' equity as of September 30, 2025, is $815,572,000, an increase from $715,788,000 as of December 31, 2024[50] Expenses and Losses - The company’s total expenses for Q3 2025 were $177.521 million, compared to $110.000 million in Q3 2024, an increase of 61.0%[42] - Total losses and loss adjustment expenses for Q3 2025 were $72,812,000, an increase of 80.6% from $40,315,000 in Q3 2024[45] - Catastrophe losses decreased significantly by 85.3% to $1,900,000 in Q3 2025 from $12,924,000 in Q3 2024[45] - The company incurred catastrophe losses of $1,900,000 for the three months ended September 30, 2025, down from $12,924,000 in 2024[50] Acquisitions - The company announced the acquisition of The Gray Casualty and Surety Company during the quarter, aiming to drive long-term profitable growth[4]

Core Insights - Palomar Holdings, Inc. reported a significant increase in net income for Q3 2025, reaching $51.5 million or $1.87 per diluted share, compared to $30.5 million or $1.15 per diluted share in Q3 2024, marking a 68.7% increase [1][8] - Adjusted net income also saw a substantial rise of 70% to $55.2 million or $2.01 per diluted share, up from $32.4 million or $1.23 per diluted share in the same quarter last year [1][8] - The company achieved record gross written premiums of $597.2 million, a 43.9% increase from $415.0 million in Q3 2024, indicating strong growth in its insurance portfolio [4][8] Financial Performance - Gross written premiums increased by 43.9% to $597.2 million compared to $415.0 million in Q3 2024 [4][8] - Net earned premiums rose by 66.0% to $225.1 million from $135.6 million in the prior year [4][8] - The total loss ratio for the quarter was 32.3%, up from 29.7% in Q3 2024, while the catastrophe loss ratio significantly decreased to 0.8% from 9.5% [5][8] - The combined ratio improved to 78.1% from 80.5% year-over-year, indicating better underwriting performance [6][8] Underwriting and Investment Results - Underwriting income for Q3 was $49.2 million, with an adjusted underwriting income of $56.7 million, reflecting an adjusted combined ratio of 74.8% compared to 77.1% in the previous year [6][8] - Net investment income increased by 54.9% to $14.6 million, driven by higher yields on invested assets [7][8] - The company recorded $3.5 million in net realized and unrealized gains on investments, compared to $2.7 million in the same period last year [9][8] Strategic Initiatives - The company is focused on its "Palomar 2X" strategic imperatives, with notable growth in its crop insurance segment and the recent acquisition of The Gray Casualty and Surety Company [3][8] - Investments in Crop and Surety are expected to drive long-term profitable growth and enhance portfolio differentiation [3][8] Stockholder Equity and Returns - Stockholders' equity increased to $878.1 million as of September 30, 2025, compared to $703.3 million a year earlier [11][8] - The annualized return on equity was reported at 23.9%, up from 19.7% in Q3 2024, while the annualized adjusted return on equity reached 25.6%, compared to 21.0% in the prior year [11][8] Full Year Outlook - For the full year 2025, the company expects adjusted net income to be in the range of $210 million to $215 million, an increase from the previously announced range of $198 million to $208 million [12][8]

Core Insights - Palomar Holdings, Inc. is a specialty insurance company focused on property and casualty insurance products, with a quarterly earnings release scheduled for November 6, 2025, where an EPS of $1.58 and revenue of approximately $210.65 million are expected [1][5] Financial Performance - The upcoming earnings release is anticipated to show an increase in earnings compared to the previous year, with Wall Street's consensus estimate suggesting quarterly earnings of $1.60 per share [3] - The company's financial metrics include a P/E ratio of approximately 20.12, a price-to-sales ratio of about 4.58, and an enterprise value to sales ratio of around 4.46, indicating the market's valuation of its earnings and revenue [4][5] Strategic Developments - Palomar has announced a definitive agreement to acquire The Gray Casualty & Surety Company for $300 million in cash, with the acquisition expected to close in the first half of 2026, pending regulatory approvals [2][5] - This acquisition aligns with Palomar's growth strategy, as stated by the company's Chairman and CEO, Mac Armstrong [2]

Core Insights - AM Best has commented that the Credit Ratings of Palomar Holdings, Inc. and its member companies remain unchanged following the announcement of Palomar's acquisition of The Gray Casualty & Surety Company, expected to close in the first half of 2026 [1][12] Credit Ratings - Palomar has a Long-Term Issuer Credit Rating of "bbb†(Good), while its subsidiaries, PSIC, PESIC, and Palomar Re, have a Financial Strength Rating of A (Excellent) and Long-Term ICRs of "aâ€(Excellent) with a stable outlook [2] - FIA has an FSR of A- (Excellent) and a Long-Term ICR of "a-†(Excellent) with a positive outlook [2] - Gray has an FSR of A- (Excellent) and a Long-Term ICR of "a-†(Excellent), which have been placed under review with positive implications following the acquisition announcement [3] Acquisition Details - Post-acquisition, Gray will operate independently under new management and is expected to benefit from synergies with Palomar [4] - The acquisition will be funded through cash on hand and a bank loan, with expected financial leverage having a neutral impact on the ratings [4] Business Operations - Palomar writes various risks, with earthquake coverage being a significant part of its portfolio, alongside inland marine/other property, casualty, fronting, and crop businesses [5] - The group consistently reports profitable results due to diligent underwriting strategies and is expanding into the surety space, particularly through the acquisition of Gray, which has a larger footprint in the contract surety segment across the U.S. [5]

Core Viewpoint - BCP has announced the sale of The Gray Casualty & Surety Company to Palomar Holdings, marking a significant transaction in the surety bond market for midsized and emerging contractors [1][2]. Group 1: Transaction Details - The transaction has received approval from the boards of directors of both Gray Surety and Palomar and is expected to close in the first half of 2026, pending regulatory approvals and customary closing conditions [2]. - J.P. Morgan is serving as the exclusive financial advisor for Gray Surety, while Evercore is advising Palomar on the transaction [4]. Group 2: Company Background - Gray Surety specializes in contract bonds for midsized and emerging contractors across the United States and is licensed in all 50 states, operating through 13 regional offices [3][7]. - Since BCP's investment in 2021, Gray Surety has experienced significant growth, maintaining a loss ratio below the industry average and achieving annual double-digit growth [7]. Group 3: Strategic Implications - The partnership with Palomar is expected to provide Gray Surety with enhanced financial strength, scale, and strategic support, allowing for expanded reach and improved relationships with agency partners [4]. - The transaction reflects the successful positioning of Gray Surety for long-term success, as noted by BCP's partner Jeff Koonce [4].

Core Viewpoint - Palomar Holdings, Inc. has announced a definitive agreement to acquire The Gray Casualty & Surety Company for a total consideration of $300 million in cash, enhancing its position in the surety market [1][3] Company Overview - Palomar Holdings, Inc. operates as a holding company for various subsidiaries, providing innovative specialty insurance across five product categories, including Earthquake and Casualty [5] - The Gray Casualty & Surety Company specializes in contract surety bonds for midsized and emerging contractors in the U.S., licensed in all 50 states and operating through thirteen regional offices [2][6] Transaction Details - The acquisition is expected to close in the first half of 2026, pending regulatory approvals and customary closing conditions [1] - The transaction has been approved by the boards of directors of both Palomar and Gray Surety [1] Strategic Implications - The acquisition is anticipated to significantly enhance Palomar's surety franchise, complementing its existing operations and market position [3] - Gray Surety's management team, known for its entrepreneurial culture and disciplined underwriting, is expected to contribute to Palomar's strategic growth initiatives [3][6] Financial Performance - Gray Surety has demonstrated sustained annual double-digit growth while maintaining a loss ratio below the industry average, indicating strong operational performance [6]

Core Insights - Alger Weatherbie Specialized Growth Fund's third-quarter 2025 investor letter indicates that equity markets continued to rise, with the S&P 500 Index increasing by 8.12% [1] - The fund's Class A shares underperformed compared to the Russell 2500 Growth Index during the same period [1] Company Overview - Palomar Holdings, Inc. (NASDAQ:PLMR) is identified as a specialty insurance company with a market capitalization of $3.02 billion, focusing on property and casualty coverage for risks like earthquakes, hurricanes, and floods [2][3] - The company primarily serves residential and commercial clients in the United States and generates revenue through underwriting specialized insurance policies and collecting premiums [3] Performance Metrics - Palomar Holdings, Inc. experienced a one-month return of -3.42% but saw a 20.86% increase in share value over the last 52 weeks, closing at $112.76 per share on October 28, 2025 [2] - The company's combined ratio, which reflects incurred losses and expenses as a percentage of earned premiums, was higher than analyst estimates, indicating margin pressure due to elevated expenses and a shift in premium mix [3] Market Position and Sentiment - Despite strong second-quarter earnings and raised full-year earnings guidance, investor concerns about underwriting quality negatively impacted Palomar's stock performance during the quarter [3] - The number of hedge funds holding Palomar Holdings increased from 25 to 28 in the second quarter, suggesting growing interest, although the company is not among the top 30 most popular stocks among hedge funds [4]

Core Viewpoint - Palomar Holdings, Inc. is set to release its third quarter 2025 results on November 6, 2025, followed by a conference call on November 7, 2025, to discuss the results [1] Group 1: Earnings Release and Conference Call - The third quarter 2025 results will be announced after market close on November 6, 2025 [1] - A conference call will take place at 12:00 p.m. (Eastern Time) on November 7, 2025, to discuss the earnings [1] - The conference call can be accessed by dialing 1-877-423-9813 for domestic callers and 1-201-689-8573 for international callers [2] Group 2: Replay and Webcast Information - A replay of the conference call will be available starting at 4:00 p.m. (Eastern Time) on November 7, 2025, accessible via specific dialing numbers [2] - The online replay will be available immediately after the call on the investor relations section of the Company's website [3] Group 3: Company Overview - Palomar Holdings, Inc. operates several subsidiaries, including Palomar Specialty Insurance Company and Palomar Specialty Reinsurance Company Bermuda Ltd. [4] - The company provides innovative specialty insurance across five product categories: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop [4] - Palomar's insurance subsidiaries have received strong financial strength ratings from A.M. Best, with PSIC, PSRE, and PESIC rated "A" (Excellent) and FIA rated "A-" (Stable) [4]

Core Insights - Wall Street anticipates a year-over-year increase in earnings for Palomar (PLMR) due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2] - The consensus EPS estimate for Palomar is $1.60 per share, reflecting a 30.1% increase year-over-year, while revenues are expected to reach $226.11 million, up 55.1% from the previous year [3] - The Earnings ESP for Palomar is -0.06%, indicating a bearish outlook from analysts, which complicates predictions of an earnings beat [12] Earnings Estimates and Revisions - The consensus EPS estimate has been revised 0.24% higher in the last 30 days, reflecting a slight positive adjustment from analysts [4] - The Most Accurate Estimate for Palomar is lower than the Zacks Consensus Estimate, suggesting recent bearish sentiment among analysts [12] Earnings Surprise History - Palomar has a history of beating consensus EPS estimates, having done so in the last four quarters, with a notable surprise of +4.76% in the last reported quarter [13][14] Comparison with Industry Peers - Hanover Insurance Group (THG), another player in the insurance sector, is expected to report an EPS of $3.79, indicating a year-over-year change of +24.3%, with revenues projected at $1.66 billion, up 5.2% [18][19] - Hanover Insurance has an Earnings ESP of +2.51% and a Zacks Rank of 3, suggesting a higher likelihood of beating consensus EPS estimates [19][20]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum, aiding investors in selecting securities with high potential for market outperformance [2] Zacks Style Scores Overview - Stocks are rated from A to F based on their value, growth, and momentum characteristics, with A being the highest score indicating better chances of outperforming the market [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - The Value Style Score focuses on identifying undervalued stocks by analyzing financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Style Score evaluates stocks based on projected and historical earnings, sales, and cash flow to identify those with sustainable growth potential [4] Momentum Score - The Momentum Style Score helps investors capitalize on price trends by assessing factors like short-term price changes and monthly earnings estimate shifts [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth forecasts, and promising momentum [6] Zacks Rank Integration - The Zacks Rank utilizes earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.81% since 1988, outperforming the S&P 500 [7] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal return potential [9] Stock Highlight: Palomar Holdings, Inc. (PLMR) - Palomar Holdings, Inc. is rated 3 (Hold) on the Zacks Rank and has a VGM Score of B, indicating a solid position in the market [11] - The company is projected to achieve year-over-year earnings growth of 43.2% for the current fiscal year, supported by a Growth Style Score of B [12] - With a strong Zacks Rank and favorable Style Scores, Palomar is recommended for investors' consideration [13]