Company: TIPT
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0001393726-25-000055
Chunk: 70

Company: TIPTREE INC.
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 8
Chunk 70
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Return on Average Equity

Return on average equity was 17.7% for the three months ended March 31, 2025, as compared to 22.3% for the three months ended March 31, 2024, with the decrease driven by slower revenue growth, partially offset by improvement of the combined ratio. 

Adjusted Net Income and Adjusted Return on Average Equity - Non-GAAP

For the three months ended March 31, 2025, adjusted net income and adjusted return on average equity were $40.5 million and 25.0%, respectively, as compared to $34.1 million and 28.3%, respectively, for the three months ended March 31, 2024. The improvement of adjusted net income was driven by the growth in revenues and consistent combined ratio, in addition to improvements in net investment income.

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Tiptree Capital

Tiptree Capital consists of our Mortgage segment, which includes the operating results of Reliance, our mortgage business, and Tiptree Capital - Other, which consists of our other non-insurance operating businesses and investments. 

Mortgage

Through our Mortgage operating subsidiary, Reliance, we originate, sell, securitize and service one-to-four-family, residential mortgage loans, comprised of conforming mortgage loans, Federal Housing Administration (“FHA”), Veterans Administration (“VA”), United States Department of Agriculture (“USDA”), and to a lesser extent, non-agency jumbo prime.

We are an approved seller/servicer for Fannie Mae and Freddie Mac. We are also an approved issuer and servicer for Ginnie Mae. We originate residential mortgage loans through our retail distribution channel (directly to consumers) in 39 states and the District of Columbia as of March 31, 2025.

Components of our Results of Operations

Revenues

Net Realized and Unrealized Gains (Losses) include gains on sale of mortgage loans and the fair value adjustment in mortgage servicing rights. Gains on the sale of mortgage loans represent the difference between the selling price and carrying value of loans sold and are recognized upon settlement. Such gains also include the changes in fair value of loans held for sale and loan-related hedges and derivatives. We transfer the risk of loss or default to the loan purchaser, however, in some cases we are required to indemnify purchasers for losses related to non-compliance with borrowers’ creditworthiness and collateral requirements. Because of this, we recognize gains on sale net of required indemnification and premium