Tiptree Inc. · NASDAQ:TIPT
Tiptree — Tiptree Financial — Q2 2015 Earnings Presentation
30 slides from Tiptree's earnings presentation, Aug 13, 2015
Slide 1: Investor Presentation – Second Quarter 2015
INVESTOR PRESENTATION– SECOND QUARTER 2015 August 2015 Financial information as of June 30, 2015 NASDAQ: TIPT
Slide 2: Disclaimer
DISCLAIMER 1 LIMITATIONS ON THE USE OF INFORMATION This presentation has been prepared by Tiptree Financial Inc. (“Tiptree Financial”) and Tiptree Operating Company, LLC (the “Company”) solely for informational purposes, and not for the purpose of updating any information or forecast with respect to
Slide 3: Overview: Key Highlights
OVERVIEW Key Highlights
Slide 4: Tiptree Financial Inc. – Second Quarter Key Highlights
TIPTREE FINANCIAL INC. – SECOND QUARTER KEY HIGHLIGHTS 3 Tiptree Financial Inc. Insurance and Insurance Services Specialty Finance Real Estate Asset Management Corporate and Other • Sold PFG effective June 30, 2015 for a total of $150.1 million ($142.8 million in initial proceeds and $7.3 million to
Slide 5: Second Quarter and First Half Highlights – Consolidated
SECOND QUARTER AND FIRST HALF HIGHLIGHTS – CONSOLIDATED 4 Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (unaudited, $000 except per share data) Tiptree Operating Company GAAP Net Income $19,794 $4,022 $17,775 $7,624 Adjusted EBITDA a $32,225 $11,368 $45,245 $21,949 Adjust
Slide 6: Opportunities for Growth: Tiptree Operating Company and Tiptree Financial
OPPORTUNITIES FOR GROWTH Tiptree Operating Company and Tiptree Financial
Slide 7: Improving US Economic Fundamentals Drive Growth Trajectory for Tiptree
The US economy has stabilized and has been showing signs of improving growth fundamentals. US consumer confidence index is up year over year. Based on public statements by Fed officials, we believe the Fed will raise interest rates later this year. It is anticipated that rates will only increase
Slide 8: Opportunities for Growth: Insurance and Insurance Services
OPPORTUNITIES FOR GROWTH Insurance and Insurance Services
Slide 9: Insurance and Insurance Services: PFG Sale and Fortegra
Sold Philadelphia Financial Group, Inc. (“PFG”) on June 30, 2015. GAAP after tax gain of $16.3 million. Initial cash proceeds of $142.8 million, with $7.3 million to be paid over two years. $25 million of initial proceeds repaid amounts outstanding under the Fortress Credit Agreement. Acqui
Slide 10: Insurance and Insurance Services – Growth Opportunity Drivers
Consumer confidence and improving jobs outlook has supported growth in the demand for consumer credit. Trends in bank regulation have driven the growth to non-bank providers for lower wage earners. Credit life insurance products support these consumers’ access to credit. Provides steady grow
Slide 11: Opportunities for Growth: Specialty Finance
OPPORTUNITIES FOR GROWTH Specialty Finance
Slide 12: Specialty Finance
Siena Lending Group (“Siena”) Improvement in the US economy driving small and mid-size businesses to borrow and invest. Industry trends supported Siena loan balance growth of 43% and improved earnings profile. Luxury Mortgage Corporation (“Luxury”) Primarily a retail purchase focused jumbo
Slide 13: Opportunities for Growth: Real Estate
OPPORTUNITIES FOR GROWTH Real estate
Slide 14: Real Estate
REAL ESTATE 13 • Care’s real estate investments are focused on senior housing and are benefiting from the long term demographic trend of an aging population in the US. • Favorable supply and demand characteristics in senior housing are expected to continue. • The industry’s ability to add supply is
Slide 15: Opportunities for Growth: Asset Management and Principal Investments
OPPORTUNITIES FOR GROWTH Asset Management and Principal Investments
Slide 16: Asset Management and Principal Investments – Opportunities for Growth
Growth in assets under management (“AUM”) will benefit from a growing demand for business credit. Demand for business credit has generally improved with the improvement in the economy and a growing confidence in and willingness to invest. As of June 30, 2015, Telos had $1.91 billion of AUM pri
Slide 17: Financial Results: Three and Six Months Ended June 30, 2015
FINANCIAL RESULTS Three and Six Months Ended June 30, 2015
Slide 18: Second Quarter and First Half Highlights – Consolidated
SECOND QUARTER AND FIRST HALF HIGHLIGHTS – CONSOLIDATED 17 (a) For an explanation of Adjusted EBITDA and reconciliation to GAAP Net Income, see the Appendix. Key Drivers of Consolidated Results: • Increase of $15.8 million in Net Income in 2Q and $10.2 million for the first half primarily driven by:
Slide 19: Segment Results – Insurance and Insurance Services
SEGMENT RESULTS – INSURANCE AND INSURANCE SERVICES 18 Net income increased from $4.0 million in the first quarter of 2015 to $6.3 million in the second quarter of 2015. The quarter over quarter improvement in revenues, net income and adjusted EBITDA was largely attributable to: Growth in the s
Slide 20: Segment Results – Specialty Finance
SEGMENT RESULTS – SPECIALTY FINANCE 19 • Pre-tax income was $568,000 and $1.0 million for the quarter and first half, respectively. • The increases in Net Income, Revenues and Adjusted EBITDA versus 2014 were driven primarily by: • Increased mortgage originations at Luxury; • Higher balances of aver
Slide 21: Segment Results – Real Estate
SEGMENT RESULTS – REAL ESTATE 20 • Care made significant investments in senior housing properties and joint ventures during 2014 and the first quarter of 2015. • Resulted in higher rental and fee income in the first half of 2015. • This increased revenue was more than offset by additional depreciati
Slide 22: Segment Results – Asset Management
SEGMENT RESULTS – ASSET MANAGEMENT 21 Net Income attributable to Consolidated CLOs is split between two segments – (i) asset management fees in the Asset Management Segment and (ii) distributions and realized and unrealized losses in principal investments, in the form of subordinated notes, includ
Slide 23: Segment Results – Corporate and Other
SEGMENT RESULTS – CORPORATE AND OTHER 22 • Incorporates revenues from the Company’s principal investment activities and expenses include interest expense on the Fortress credit facility, and head office payroll and other expenses. • Pre-tax loss for the second quarter 2015 of $8.8 million and for th
Slide 24: Well Positioned for the Remainder of 2015 and Beyond
WELL POSITIONED FOR THE REMAINDER OF 2015 AND BEYOND 23 • As we move into the second half of 2015, we are well positioned to take advantage of any improvements in the US economy. • Early actions taken in beginning of the second half of the year have yet to contribute to our results. • In Q3, we clos
Slide 25: Appendix
APPENDIX 24
Slide 26: Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA
NON-GAAP FINANCIAL MEASURES - EBITDA AND ADJUSTED EBITDA 25 Reconciliation from the Company’s GAAP net income to Non-GAAP financial measures - EBITDA and Adjusted EBITDA (Unaudited) (in thousands) Three months ended June 30, Six months ended June 30, Year ended December 31, 2015 2014 2015 2014 2014
Slide 27: Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA (cont.)
NON-GAAP FINANCIAL MEASURES - EBITDA AND ADJUSTED EBITDA (CONT.) 26 Notes: (1) The consolidated non-corporate and non-acquisition related interest expense subtracted from Adjusted EBITDA includes interest expense associated with asset-specific debt at subsidiaries in the Specialty Finance, Real Esta
Slide 28: Non-GAAP Financial Measures – Segment EBITDA and Adjusted EBITDA
NON-GAAP FINANCIAL MEASURES - EBITDA AND ADJUSTED EBITDA 27 (unaudited, $ in thousands) Segment EBITDA and ADJUSTED EBITDA - Three months ended June 30, 2015 and June 30, 2014 Insurance and insurance services Specialty finance Real estate Asset management Corporate and other Totals Three months ende
Slide 29: Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA
NON-GAAP FINANCIAL MEASURES - EBITDA AND ADJUSTED EBITDA 28 In addition to the results of operations presented in accordance with GAAP, management uses EBITDA and Adjusted EBITDA on a consolidated basis and for each segment, which are non-GAAP financial measures. We believe that consolidated EBITDA
Slide 30: Tiptree Financial Inc. and the Company – Book Value per Share
TIPTREE FINANCIAL INC. AND THE COMPANY – BOOK VALUE PER SHARE 29 Tiptree Financial’s book value per share was $9.34 as of June 30, 2015 compared with $8.94 as of December 31, 2014. Total stockholders' equity for the Company was $395.3 million as of June 30, 2015, which comprised total stockholders'