Company: KNSL
Filing Date: 2025-04-24
Form Type: 10-Q
Source: 0001669162-25-000027
Chunk: 48

Company: Kinsale Capital Group, Inc.
Filing Date: 2025-04-24
Form: 10-Q
Item: Item 1
Chunk 48
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 value of equity securities, after taxes, net realized investment gains and losses, after taxes, and the change in allowance for credit losses on investments, after taxes. We believe the exclusion of these items provides a useful comparison of our underlying business performance from period to period. Net operating earnings and percentages or calculations using net operating earnings (e.g., diluted operating earnings per share and annualized operating return on equity) are non-GAAP financial measures. Net operating earnings should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define net operating earnings differently.

Net income for the three months ended March 31, 2025 and 2024, reconciles to net operating earnings as follows:

Three Months Ended March 31,($ in thousands)20252024Net income$89,227 $98,941 Adjustments:Change in the fair value of equity securities, before taxes(3,038)(18,053)Income tax expense (1)638 3,791 Change in the fair value of equity securities, after taxes(2,400)(14,262)Net realized investment gains, before taxes(537)(3,866)Income tax expense (1)113 812 Net realized investment gains, after taxes(424)(3,054)Change in allowance for credit losses on investments, before taxes20 (10)Income tax (benefit) expense (1)(4)2 Change in allowance for credit losses on investments, after taxes16 (8)Net operating earnings$86,419 $81,617 Operating return on equity:Average stockholders' equity (2)$1,533,268 $1,128,901 Annualized return on equity (3)23.3 %35.1 %Annualized operating return on equity (4)22.5 %28.9 %

(1) Income taxes on adjustments to reconcile net income to net operating earnings use an effective tax rate of 21%.

(2) Average stockholders' equity is computed by adding the total stockholders' equity as of the date indicated to the prior quarter-end or year-end total, as applicable, and dividing by two. 

(3) Annualized return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period.

(4) Annualized operating return on equity is net operating earnings expressed on an annualized basis as a percentage of average beginning and