Palomar Holdings Reports Strong Q2 Adjusted EPS, Initiates Dividend & New Buyback Amidst Underwriting Ratio Increase
PLMR sits 32% above its 52-week low of $100.81.
Summary
Palomar Holdings reported strong Q2 2026 adjusted diluted EPS of $2.36, exceeding consensus, driven by significant premium growth and the Gray Surety acquisition, alongside the declaration of its first cash dividend and a new $200 million share repurchase program, despite a notable increase in its combined ratio.
Key Events · Earnings and Guidance · PLMR
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Q2 2026 Adjusted EPS Beat
Reported adjusted diluted EPS of $2.36 for Q2 2026, a 34.1% increase year-over-year, surpassing the $2.18 consensus estimate previously reported by Reuters.
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Strong Premium Growth
Gross written premiums increased 27.0% to $630.5 million in Q2 2026 and 34.3% to $1.26 billion for H1 2026. Net earned premiums grew 59.5% to $287.0 million in Q2 2026 and 59.4% to $548.4 million for H1 2026.
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Deterioration in Underwriting Efficiency
The combined ratio increased to 83.3% in Q2 2026 (from 78.8% YoY) and the adjusted combined ratio rose to 76.7% (from 73.1% YoY), primarily due to a higher loss ratio of 34.5% (vs 25.7% YoY).
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New Share Repurchase Program & First Cash Dividend
The Board approved a new $200 million share repurchase program, replacing the previous $150 million program. Additionally, the company declared its first cash dividend of $0.45 per share, payable September 2, 2026.
Analysis · PLMR · Finance
This quarterly report provides a comprehensive update on Palomar Holdings' financial performance, highlighting robust premium growth and an adjusted EPS beat for Q2 2026. The company's gross written premiums surged by 27.0% year-over-year, and net earned premiums increased by 59.5%, demonstrating strong top-line expansion. Key positive developments include the board's approval of a new $200 million share repurchase program and the declaration of the company's first cash dividend of $0.45 per share, signaling a commitment to shareholder returns. However, the report also reveals a deterioration in underwriting efficiency, with the combined ratio increasing to 83.3% from 78.8% in the prior year, primarily due to a higher loss ratio. Additionally, the company recognized $6.2 million in pre-tax net losses from commodity-based derivative instruments in Q2 2026. The $314 million Gray Surety acquisition, completed in January 2026 and funded by a new $450 million credit facility, significantly expanded the company's surety platform but also contributed to a net loss for the acquired entity in the first half of the year. Investors will weigh the strong growth and capital return initiatives against the decline in underwriting profitability and increased debt.
At the time of this filing, PLMR was trading at $133.00 on NASDAQ in the Finance sector, with a market capitalization of approximately $3.6B. The 52-week trading range was $100.81 to $147.62. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.