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FGF Nasdaq· FG Financial Group Inc
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FGF Nasdaq· FG Financial Group Inc
Earnings report Q3 2023

FG Financial Group, Inc. Reports Solid Revenue Growth in Q3 2023

Segments of revenue

In the third quarter of 2023, FG Financial Group, Inc. (FGF) generated a total revenue of $11.18 million. The revenue was derived from three main sources: net premiums earned, net investment income, and other income. Net premiums earned amounted to $4.19 million, while net investment income contributed $6.96 million. Additionally, the company generated $24,000 in other income.

Strengths

FGF demonstrated strong revenue growth in the latest quarter. Net premiums earned increased by approximately 4% compared to the same period last year, reaching $4.19 million. This growth can be attributed to the company's effective underwriting and risk management strategies. Furthermore, net investment income showed significant improvement, surging to $6.96 million, representing a substantial increase of approximately 63% compared to the previous year. This growth can be attributed to the company's successful investment portfolio management and favorable market conditions. FGF's management commented that the revenue growth reflects their commitment to delivering value to shareholders and optimizing profitability.

Challenges

While FGF's revenue performance was strong overall, there were some challenges in certain expense categories. Net losses and loss adjustment expenses increased to $2.21 million, representing a rise of approximately 5% compared to the same period last year. This increase may be attributed to higher claim payouts or an increase in the frequency or severity of claims. Additionally, general and administrative expenses rose to $2.34 million, reflecting an increase of approximately 17% compared to the previous year. This increase may be due to higher operating costs or investments in growth initiatives. FGF's management acknowledged the need to closely monitor and manage these expense categories to maintain profitability.

Noteworthy

FGF made a strategic investment of $2.0 million in its first merchant banking project, FG Communities, Inc. This investment aligns with the company's focus on expanding its portfolio of manufactured housing communities. While the impact of this investment on the current quarter's revenue is not explicitly stated, it demonstrates FGF's commitment to diversifying its business and exploring new growth opportunities.

Summary

FG Financial Group, Inc. delivered solid revenue growth in the third quarter of 2023, driven by increases in net premiums earned and net investment income. The company's effective underwriting and investment strategies contributed to these positive results. However, challenges were observed in the form of higher net losses and loss adjustment expenses, as well as increased general and administrative expenses. FGF's management emphasized the importance of closely managing these expenses to maintain profitability. The strategic investment in FG Communities, Inc. showcases FGF's commitment to expanding its business and exploring new avenues for growth. Overall, FGF's revenue performance in the latest quarter reflects its dedication to delivering value to shareholders and optimizing profitability.

Source documents

Form 10-Q  filed on Nov 09, 2023
30 pages scanned

Reference data

Company financials Q3 revenue 4.9M
Analyst estimates Q3 EPS missed by NaN%
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