Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 08, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39754 | |
Entity Registrant Name | Doma Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-1956909 | |
Entity Address, Address Line One | 101 Mission Street | |
Entity Address, Address Line Two | Suite 740 | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94105 | |
City Area Code | 650 | |
Local Phone Number | 419-3827 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 322,574,242 | |
Entity Central Index Key | 0001722438 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Class A common stock, par value $0.0001 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | DOMA | |
Security Exchange Name | NYSE | |
Warrants, each whole warrant exercisable for one share at an exercise price of $11.50 per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | |
Trading Symbol | DOMA.WS | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 411,669 | $ 111,893 |
Restricted cash | 2,021 | 129 |
Fixed maturities | ||
Held-to-maturity debt securities, at amortized cost | 74,872 | 65,406 |
Available-for-sale debt securities, at fair value (amortized cost $7,139 at December 31, 2020) | 0 | 8,057 |
Equity securities, at fair value (cost $2,000 at December 31, 2020) | 0 | 2,119 |
Mortgage loans | 2,920 | 2,980 |
Other invested assets | 306 | 0 |
Total Investments | 78,098 | 78,562 |
Receivables (net of provision for doubtful accounts of $571 at September 30, 2021 and $492 at December 31, 2020) | 14,485 | 15,244 |
Prepaid expenses, deposits and other assets | 22,161 | 7,365 |
Fixed assets (net of accumulated depreciation of $17,283 at September 30, 2021 and $15,065 at December 31, 2020) | 35,243 | 21,661 |
Title plants | 13,952 | 14,008 |
Goodwill | 111,487 | 111,487 |
Trade names (net of accumulated amortization of $3,187 at December 31, 2020) | 0 | 2,684 |
Total assets | 689,116 | 363,033 |
Liabilities and stockholders’ equity | ||
Accounts payable | 6,651 | 6,626 |
Accrued expenses and other liabilities | 50,187 | 33,044 |
Senior secured credit agreement, net of debt issuance costs and original issue discount | 138,684 | 0 |
Loan from a related party | 0 | 65,532 |
Liability for loss and loss adjustment expenses | 78,671 | 69,800 |
Warrant liabilities | 24,440 | 0 |
Sponsor Covered Shares liability | 8,610 | 0 |
Total liabilities | 307,243 | 175,002 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, 0.0001 par value; 2,000,000,000 shares authorized at September 30, 2021; 321,544,052 and 62,832,307 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 33 | 1 |
Additional paid-in capital | 530,290 | 266,464 |
Accumulated deficit | (148,450) | (79,123) |
Accumulated other comprehensive income | 0 | 686 |
Total stockholders’ equity | 381,873 | 188,031 |
Total liabilities and stockholders’ equity | 689,116 | 363,033 |
Preferred Stock Series A | ||
Stockholders’ equity: | ||
Preferred stock | 0 | 1 |
Preferred Stock Series A-1 | ||
Stockholders’ equity: | ||
Preferred stock | 0 | 1 |
Preferred Stock Series A-2 | ||
Stockholders’ equity: | ||
Preferred stock | 0 | 0 |
Preferred Stock Series B | ||
Stockholders’ equity: | ||
Preferred stock | 0 | 0 |
Preferred Stock Series C | ||
Stockholders’ equity: | ||
Preferred stock | $ 0 | $ 1 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Available-for-sale debt securities, amortized cost | $ 7,139 | |
Equity securities, fair value | $ 0 | 2,000 |
Provision for doubtful accounts | 571 | 492 |
Accumulated depreciation | $ 17,283 | 15,065 |
Accumulated amortization | $ 3,187 | |
Preferred stock, par value (in usd per share) | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 100,000,000 | |
Preferred stock, shares issued (in shares) | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | |
Common stock, shares issued (in shares) | 321,544,052 | 62,832,307 |
Common stock, shares outstanding (in shares) | 321,544,052 | 62,832,307 |
Preferred Stock Series A | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 0 | |
Preferred stock, shares issued (in shares) | 0 | 43,737,586 |
Preferred stock, shares outstanding (in shares) | 0 | 43,737,586 |
Preferred Stock Series A-1 | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 0 | |
Preferred stock, shares issued (in shares) | 0 | 48,913,906 |
Preferred stock, shares outstanding (in shares) | 0 | 48,913,906 |
Preferred Stock Series A-2 | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 0 | |
Preferred stock, shares issued (in shares) | 0 | 14,003,187 |
Preferred stock, shares outstanding (in shares) | 0 | 14,003,187 |
Preferred Stock Series B | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 0 | |
Preferred stock, shares issued (in shares) | 0 | 15,838,828 |
Preferred stock, shares outstanding (in shares) | 0 | 15,838,828 |
Preferred Stock Series C | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 0 | |
Preferred stock, shares issued (in shares) | 0 | 60,665,631 |
Preferred stock, shares outstanding (in shares) | 0 | 60,665,631 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Revenues: | |||||
Net premiums written | [1] | $ 141,491 | $ 103,587 | $ 358,754 | $ 246,738 |
Escrow, other title-related fees and other | 20,452 | 16,742 | 59,092 | 43,298 | |
Investment, dividend and other income | 639 | 743 | 2,518 | 2,268 | |
Total revenues | 162,582 | 121,072 | 420,364 | 292,304 | |
Expenses: | |||||
Premiums retained by Third-Party Agents | [2] | 91,596 | 67,024 | 227,115 | 156,132 |
Title examination expense | 5,289 | 4,624 | 15,643 | 11,811 | |
Provision for claims | 6,685 | 5,242 | 16,741 | 10,065 | |
Personnel costs | 62,410 | 36,197 | 159,829 | 104,652 | |
Other operating expenses | 21,693 | 10,210 | 53,038 | 31,136 | |
Total operating expenses | 187,673 | 123,297 | 472,366 | 313,796 | |
Loss from operations | (25,091) | (2,225) | (52,002) | (21,492) | |
Other (expense) income: | |||||
Change in fair value of Warrant and Sponsor Covered Shares liabilities | (4,478) | 0 | (4,478) | 0 | |
Interest expense | (4,531) | (1,193) | (12,341) | (4,428) | |
Loss before income taxes | (34,100) | (3,418) | (68,821) | (25,920) | |
Income tax expense | (170) | (204) | (506) | (620) | |
Net loss | $ (34,270) | $ (3,622) | $ (69,327) | $ (26,540) | |
Earnings per share: | |||||
Net loss per share attributable to shareholders - basic (in usd per share) | $ (0.14) | $ (0.06) | $ (0.54) | $ (0.43) | |
Net loss per share attributable to shareholders - diluted (in usd per share) | $ (0.14) | $ (0.06) | $ (0.54) | $ (0.43) | |
Weighted average shares outstanding common stock - basic (in shares) | 245,003,754 | 64,060,987 | 128,105,954 | 62,255,035 | |
Weighted average shares outstanding common stock - diluted (in shares) | 245,003,754 | 64,060,987 | 128,105,954 | 62,255,035 | |
[1] | Net premiums written includes revenues from a related party of $30.3 million and $22.9 million during the three months ended September 30, 2021 and 2020, respectively. Net premiums written includes revenues from a related party of $81.9 million and $64.2 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). | ||||
[2] | Premiums retained by Third-Party Agents includes expenses associated with a related party of $24.8 million and $18.4 million during the three months ended September 30, 2021 and 2020, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $66.6 million and $51.9 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Net premiums written | [1] | $ 141,491 | $ 103,587 | $ 358,754 | $ 246,738 |
Premiums retained by agents | [2] | 91,596 | 67,024 | 227,115 | 156,132 |
Lennar | Affiliated Entity | |||||
Net premiums written | 30,300 | 22,900 | 81,900 | 64,200 | |
Premiums retained by agents | $ 24,800 | $ 18,400 | $ 66,600 | $ 51,900 | |
[1] | Net premiums written includes revenues from a related party of $30.3 million and $22.9 million during the three months ended September 30, 2021 and 2020, respectively. Net premiums written includes revenues from a related party of $81.9 million and $64.2 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). | ||||
[2] | Premiums retained by Third-Party Agents includes expenses associated with a related party of $24.8 million and $18.4 million during the three months ended September 30, 2021 and 2020, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $66.6 million and $51.9 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (34,270) | $ (3,622) | $ (69,327) | $ (26,540) |
Other comprehensive income, net of tax: | ||||
Unrealized gain (loss) on available-for-sale debt securities, net of tax | 0 | 443 | (179) | (53) |
Reclassification adjustment for realized gain on sale of available-for-sale debt securities, net of tax | 0 | 0 | (507) | 0 |
Comprehensive loss | $ (34,270) | $ (3,179) | $ (70,013) | $ (26,593) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Previously Reported | Revision of Prior Period, Adjustment | Common Stock | Preferred StockPreferred Stock Series A | Preferred StockPreferred Stock Series APreviously Reported | Preferred StockPreferred Stock Series ARevision of Prior Period, Adjustment | Preferred StockPreferred Stock Series A-1 | Preferred StockPreferred Stock Series A-1Previously Reported | Preferred StockPreferred Stock Series A-1Revision of Prior Period, Adjustment | Preferred StockPreferred Stock Series A-2 | Preferred StockPreferred Stock Series A-2Previously Reported | Preferred StockPreferred Stock Series A-2Revision of Prior Period, Adjustment | Preferred StockPreferred Stock Series B | Preferred StockPreferred Stock Series BPreviously Reported | Preferred StockPreferred Stock Series BRevision of Prior Period, Adjustment | Preferred StockPreferred Stock Series C | Preferred StockPreferred Stock Series CPreviously Reported | Preferred StockPreferred Stock Series CRevision of Prior Period, Adjustment | Common Stock | Common StockPreviously Reported | Common StockRevision of Prior Period, Adjustment | Common StockCommon Stock | Additional paid-in capital | Additional paid-in capitalPreviously Reported | Additional paid-in capitalCommon Stock | Accumulated deficit | Accumulated deficitPreviously Reported | Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss)Previously Reported |
Beginning balance (in shares) at Dec. 31, 2019 | 43,737,586 | 7,295,759 | 36,441,827 | 48,913,906 | 8,159,208 | 40,754,698 | 14,003,187 | 2,335,837 | 11,667,350 | 15,838,828 | 2,642,036 | 13,196,792 | 25,599,456 | 4,270,182 | 21,329,274 | 62,191,701 | 10,374,044 | 51,817,657 | ||||||||||||
Beginning balance at Dec. 31, 2019 | $ 149,345 | $ 149,345 | $ 0 | $ 1 | $ 1 | $ 1 | $ 1 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1 | $ 1 | $ 192,852 | $ 192,852 | $ (44,020) | $ (44,020) | $ 510 | $ 510 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||
Issuance of Series C preferred stock, net of financing costs (in shares) | 35,066,175 | |||||||||||||||||||||||||||||
Issuance of Series C preferred stock, net of financing costs | 70,702 | $ 1 | 70,701 | |||||||||||||||||||||||||||
Exercise of stock options (in shares) | 378,214 | |||||||||||||||||||||||||||||
Exercise of stock options | 24 | 24 | ||||||||||||||||||||||||||||
Stock based compensation expense | 308 | 308 | ||||||||||||||||||||||||||||
Net loss | (16,586) | (16,586) | ||||||||||||||||||||||||||||
Other comprehensive loss | 9 | 9 | ||||||||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 62,569,915 | ||||||||||||||||||||||||
Ending balance at Mar. 31, 2020 | 203,802 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 263,885 | (60,606) | 519 | ||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 43,737,586 | 7,295,759 | 36,441,827 | 48,913,906 | 8,159,208 | 40,754,698 | 14,003,187 | 2,335,837 | 11,667,350 | 15,838,828 | 2,642,036 | 13,196,792 | 25,599,456 | 4,270,182 | 21,329,274 | 62,191,701 | 10,374,044 | 51,817,657 | ||||||||||||
Beginning balance at Dec. 31, 2019 | 149,345 | 149,345 | 0 | $ 1 | $ 1 | $ 1 | $ 1 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1 | $ 1 | 192,852 | 192,852 | (44,020) | (44,020) | 510 | 510 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||
Net loss | (26,540) | |||||||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 62,206,658 | ||||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | 194,415 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 264,514 | (70,560) | 457 | ||||||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 62,569,915 | ||||||||||||||||||||||||
Beginning balance at Mar. 31, 2020 | 203,802 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 263,885 | (60,606) | 519 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||
Exercise of stock options (in shares) | (590,309) | |||||||||||||||||||||||||||||
Exercise of stock options | 27 | 27 | ||||||||||||||||||||||||||||
Stock based compensation expense | 282 | 282 | ||||||||||||||||||||||||||||
Net loss | (6,332) | (6,332) | ||||||||||||||||||||||||||||
Other comprehensive loss | (505) | (505) | ||||||||||||||||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 61,979,606 | ||||||||||||||||||||||||
Ending balance at Jun. 30, 2020 | 197,274 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 264,194 | (66,938) | 14 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||
Legal costs associated with the issuance of Series C (in shares) | 11,696 | |||||||||||||||||||||||||||||
Costs associated with issuance of stock | (50) | (50) | ||||||||||||||||||||||||||||
Exercise of stock options (in shares) | 215,356 | |||||||||||||||||||||||||||||
Exercise of stock options | 15 | 15 | ||||||||||||||||||||||||||||
Stock based compensation expense | 355 | 355 | ||||||||||||||||||||||||||||
Net loss | (3,622) | (3,622) | ||||||||||||||||||||||||||||
Other comprehensive loss | 443 | 443 | ||||||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 62,206,658 | ||||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | 194,415 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 264,514 | (70,560) | 457 | ||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 43,737,586 | 7,295,759 | 36,441,827 | 48,913,906 | 8,159,208 | 40,754,698 | 14,003,187 | 2,335,837 | 11,667,350 | 15,838,828 | 2,642,036 | 13,196,792 | 60,665,631 | 10,119,484 | 50,546,147 | 62,832,307 | 10,480,902 | 52,351,405 | ||||||||||||
Beginning balance at Dec. 31, 2020 | 188,031 | 188,031 | 0 | $ 1 | $ 1 | $ 1 | $ 1 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1 | $ 1 | $ 1 | $ 1 | 266,464 | 266,464 | (79,123) | (79,123) | 686 | 686 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||
Exercise of stock options (in shares) | 2,637,441 | |||||||||||||||||||||||||||||
Exercise of stock options | 1,267 | 1,267 | ||||||||||||||||||||||||||||
Stock based compensation expense | 2,289 | 2,289 | ||||||||||||||||||||||||||||
Original issue discount on senior secured credit agreement | 18,519 | 18,519 | ||||||||||||||||||||||||||||
Net loss | (11,758) | (11,758) | ||||||||||||||||||||||||||||
Other comprehensive loss | (686) | (686) | ||||||||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 65,469,748 | ||||||||||||||||||||||||
Ending balance at Mar. 31, 2021 | 197,662 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 288,539 | (90,881) | 0 | ||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 43,737,586 | 7,295,759 | 36,441,827 | 48,913,906 | 8,159,208 | 40,754,698 | 14,003,187 | 2,335,837 | 11,667,350 | 15,838,828 | 2,642,036 | 13,196,792 | 60,665,631 | 10,119,484 | 50,546,147 | 62,832,307 | 10,480,902 | 52,351,405 | ||||||||||||
Beginning balance at Dec. 31, 2020 | $ 188,031 | $ 188,031 | $ 0 | $ 1 | $ 1 | $ 1 | $ 1 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1 | $ 1 | $ 1 | $ 1 | 266,464 | $ 266,464 | (79,123) | $ (79,123) | 686 | $ 686 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||
Exercise of stock options (in shares) | 4,004,764 | |||||||||||||||||||||||||||||
Net loss | $ (69,327) | |||||||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | 0 | 0 | 321,544,052 | ||||||||||||||||||||||||
Ending balance at Sep. 30, 2021 | 381,873 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 530,290 | (148,450) | 0 | ||||||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 65,469,748 | ||||||||||||||||||||||||
Beginning balance at Mar. 31, 2021 | 197,662 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 288,539 | (90,881) | 0 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||
Exercise of stock options (in shares) | 535,551 | |||||||||||||||||||||||||||||
Exercise of stock options | 109 | 109 | ||||||||||||||||||||||||||||
Stock based compensation expense | 2,967 | 2,967 | ||||||||||||||||||||||||||||
Exercise of stock warrants (in shares) | 28,870,387 | |||||||||||||||||||||||||||||
Exercise of stock warrants | 187 | 187 | ||||||||||||||||||||||||||||
Net loss | (23,299) | (23,299) | ||||||||||||||||||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 43,737,586 | 77,784,293 | 14,003,187 | 15,838,828 | 60,665,631 | 66,005,299 | ||||||||||||||||||||||||
Ending balance at Jun. 30, 2021 | 177,626 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 291,802 | (114,180) | 0 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||
Costs associated with issuance of stock | (54,217) | (54,217) | ||||||||||||||||||||||||||||
Exercise of stock options (in shares) | 82,230 | |||||||||||||||||||||||||||||
Exercise of stock options | 38 | 38 | ||||||||||||||||||||||||||||
Stock based compensation expense | 3,191 | 3,191 | ||||||||||||||||||||||||||||
Net loss | (34,270) | (34,270) | ||||||||||||||||||||||||||||
Conversion of stock (in shares) | (43,737,586) | (77,784,293) | (14,003,187) | (15,838,828) | (60,665,631) | 212,029,525 | (1,227,451) | |||||||||||||||||||||||
Conversion of stock | 22 | $ 30,080 | $ (1) | $ (1) | $ (1) | $ 21 | 4 | $ 30,080 | ||||||||||||||||||||||
Issuance of common stock in connection with Business Combination and PIPE Investment (in shares) | 44,654,449 | |||||||||||||||||||||||||||||
Issuance of common stock in connection with Business Combination and PIPE Investment | 259,397 | $ 5 | 259,392 | |||||||||||||||||||||||||||
Par value change for Old Doma Common Stock | 6 | $ 6 | ||||||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | 0 | 0 | 321,544,052 | ||||||||||||||||||||||||
Ending balance at Sep. 30, 2021 | $ 381,873 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | $ 530,290 | $ (148,450) | $ 0 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flow from operating activities: | ||
Net loss | $ (69,327) | $ (26,540) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Interest expense - paid in kind | 6,353 | 5,085 |
Depreciation and amortization | 7,705 | 3,236 |
Stock-based compensation expense | 8,447 | 945 |
Amortization of debt issuance costs and original issue discount | 1,429 | 0 |
Provision for doubtful accounts | 562 | 304 |
Deferred income taxes | 377 | 535 |
Realized gain on debt securities | (908) | (141) |
Net unrealized loss on equity securities | 119 | 10 |
Gain on disposal of fixed assets and title plants | (11) | (281) |
Accretion of discounts on held-to-maturity securities | 901 | 369 |
Change in fair value of Warrant and Sponsor Covered Shares liabilities | 4,478 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | (284) | (261) |
Prepaid expenses, deposits and other assets | (14,799) | (6,166) |
Accounts payable | (274) | 2,658 |
Accrued expenses and other liabilities | 13,813 | 472 |
Liability for loss and loss adjustments expenses | 8,872 | 3,374 |
Net cash used in operating activities | (32,547) | (16,401) |
Cash flow from investing activities: | ||
Proceeds from sales, calls and maturities of investments: Held-to-maturity | 23,514 | 15,394 |
Proceeds from sales, calls and maturities of investments: Available-for-sale | 7,817 | 18 |
Proceeds from sales of investments: Equity securities | 2,000 | 0 |
Proceeds from sales and principal repayments of investments: Mortgage loans | 60 | 378 |
Purchases of investments: Held-to-maturity | (33,650) | (57,624) |
Purchases of investments: Equity securities | 0 | (1,000) |
Proceeds from sales of fixed assets | 306 | 246 |
Purchases of fixed assets | (18,842) | (12,670) |
Proceeds from sale of title plants and dividends from title plants | 482 | 1,349 |
Net cash used in investing activities | (18,313) | (53,909) |
Cash flow from financing activities: | ||
Proceeds from issuance of Series C preferred stock, net of financing costs | 0 | 70,701 |
Proceeds from issuance of senior secured credit agreement | 150,000 | 0 |
Payments on loan from a related party | (65,532) | (28,092) |
Debt issuance costs | (579) | 0 |
Exercise of stock warrants | 48 | 0 |
Exercise of stock options | 1,690 | 92 |
Redemptions of redeemable common and preferred stock | (294,856) | 0 |
Net proceeds from Business Combination and PIPE Investment | 624,952 | 0 |
Payment of costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment | (63,195) | 0 |
Net cash provided by financing activities | 352,528 | 42,701 |
Net change in cash and cash equivalents and restricted cash | 301,668 | (27,609) |
Cash and cash equivalents and restricted cash at the beginning period | 112,022 | 141,668 |
Cash and cash equivalents and restricted cash at the end of period | 413,690 | 114,059 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 5,347 | 1 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Unrealized loss on available-for-sale debt securities | (179) | (53) |
Issuance of penny warrants related to the senior secured credit agreement | (18,519) | 0 |
Warrant liabilities recognized in conjunction with the Business Combination | 19,240 | 0 |
Net liabilities assumed in the Business Combination | $ 9,517 | $ 0 |
Organization and business opera
Organization and business operations | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and business operations | Organization and business operations On July 28, 2021 (the “Closing Date”), Capitol Investment Corp. V (“Capitol”) consummated a business combination (the “Business Combination”) with Doma Holdings, Inc., a Delaware corporation (“Old Doma”), pursuant to the agreement and plan of merger, dated March 2, 2021, by and among Capitol, Capitol V Merger Sub, Inc., a wholly owned subsidiary of Capitol (“Merger Sub”), and Old Doma (as amended on March 18, 2021, the “Agreement”). In connection with the closing of the Business Combination, Old Doma changed its name to States Title Holding, Inc. (“States Title”), Capitol changed its name to Doma Holdings, Inc. (“Doma”) and Old Doma became a wholly owned subsidiary of Doma. Doma continues the existing business operations of Old Doma as a publicly traded company. See Note 3 for additional information on the Business Combination. Unless the context otherwise requires, references herein to “company,” “Company,” “Doma,” “we,” “us,” “our” and similar terms refer to Doma Holdings, Inc. (f/k/a Capitol Investment Corp. V) and its consolidated subsidiaries. References to “Capitol” refer to our legal predecessor company prior to the consummation of the Business Combination. References to “Old Doma” refer to Old Doma prior to the Business Combination and to States Title, the wholly owned subsidiary of Doma, upon the consummation of the Business Combination. Headquartered in San Francisco, California, Doma is a real estate technology company that is architecting the future of real estate transactions. Using machine intelligence and our proprietary technology solutions, we are creating a vastly more simple, efficient, and affordable real estate closing experience for current and prospective homeowners, lenders, title agents and real estate professionals. We are licensed to underwrite title insurance in 39 states and the District of Columbia. Old Doma was initially formed as a wholly-owned subsidiary of States Title Inc. (“Legacy States Title”) to combine the operations of Legacy States Title and the retail agency and title insurance underwriting business (the “Acquired Business”) of North American Title Group, LLC (“NATG”), a subsidiary of Lennar Corporation (“Lennar”). We completed the acquisition of the Acquired Business on January 7, 2019, which we refer hereinafter as the “North American Title Acquisition.” Old Doma survived the North American Title Acquisition as the parent company and now wholly owns the businesses operated by Legacy States Title and the Acquired Business. We conduct our operations through two reportable segments, (1) Distribution and (2) Underwriting. See further discussion in Note 7 for additional information regarding segment information. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Basis of presentation The accompanying condensed consolidated balance sheet as of September 30, 2021 and the condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, and condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of September 30, 2021 and its results of operations, including its comprehensive income, and stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and cash flows for the nine months ended September 30, 2021 and 2020. All adjustments are of a normal recurring nature. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2021. These unaudited interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements and related notes. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from the estimates made by management. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. Significant items subject to such estimates and assumptions include, but are not limited to, reserves for incurred but not reported claims, the useful lives of property and equipment, accrued net premiums written from Third-Party Agent (as defined in Item 2) referrals and the valuations of stock-based compensation arrangements and the Sponsor Covered Shares liability (as defined below). Title plants Title plants are carried at cost, with costs incurred to maintain, update and operate title plants expensed as incurred. Because properly maintained title plants have indefinite lives and do not diminish in value with the passage of time, no provision has been made for depreciation or amortization. The Company analyzes the title plants for impairment when events or circumstances indicate that the carrying amount may not be recoverable. This analysis includes, but is not limited to, the effects of obsolescence, duplication, demand and other economic factors. There were no impairments of title plants for the three or nine months ended September 30, 2021 and 2020. In February 2020, we sold a title plant for a total sale price of $3.2 million, including a realized gain of $0.2 million. Reinsurance The Company utilizes excess of loss and quota share reinsurance programs to limit its maximum loss exposure by reinsuring certain risks with other insurers. The Company has two reinsurance treaties: the Excess of Loss Treaty and the Quota Share Treaty. Under the Excess of Loss Treaty, we cede liability over $15.0 million on all files. Excess of loss reinsurance coverage protects the Company from a large loss from a single loss occurrence. The Excess of Loss Treaty provides for ceding liability above the retention of $15.0 million for all policies up to a liability cap of $500.0 million. Under the Quota Share Treaty, during the period from January 1, 2021 to February 23, 2021 the Company ceded 100% of its instant underwriting policies. Effective February 24, 2021, the Company cedes 25% of the written premium on our instantly underwritten policies. During the three and nine months ended September 30, 2020, the Company ceded 100% of its instant underwriting policies. Payments and recoveries on reinsured losses for the Company’s title insurance business were immaterial during the three and nine month periods ended September 30, 2021 and 2020. Income taxes Our effective tax rate for the nine months ended September 30, 2021 and 2020 was (1)% and (2)%, respectively, as a result of our recording a full valuation allowance against the deferred tax assets. In determining the realizability of the net U.S. federal and state deferred tax assets, we consider numerous factors including historical profitability, estimated future taxable income, prudent and feasible tax planning strategies, and the industry in which we operate. As of December 31, 2020, the Company carried a valuation allowance against deferred tax assets as management believes it is more likely than not that the benefit of the net deferred tax assets covered by that valuation allowance will not be realized. A net deferred tax liability has been recorded as of September 30, 2021 and December 31, 2020 o f $1.2 million and $1.0 million, respectively, and is included in accrued expenses and other liabilities within the accompanying condensed consolidated balance sheets. Management reassesses the realization of the deferred tax assets each reporting period. The Company has approximatel y $0.2 million of pre-2018 federal net operating losses subject to expiration beginning in 2036. The remainder of the federal net operating losses have no expiration. The Company’s state net operating losses are subject to various expirations, beginning in 2030. The Company’s 2017 through 2019 tax years remain open to federal and state tax examinations. The Company believes that as of September 30, 2021 it had no material uncertain tax positions. Interest and penalties related to unrecognized tax expenses (benefits) are recognized in income tax expense, when applicable. There were no material liabilities for interest and penalties accrued as of September 30, 2021. Public Warrants and Private Placement Warrants As a result of the Business Combination, the Company assumed the Public Warrants (as defined in Note 3) and the Private Placement Warrants (as defined in Note 3) (collectively, the “Warrants”) as of the Closing Date. The Warrants meet the definition of derivatives as contemplated in Accounting Standards Codification (“ASC”) 815. As such, the Warrants were recorded as liabilities on the balance sheet at fair value upon the consummation of the Business Combination, with subsequent changes in their respective fair values recognized in the condensed consolidated statement of operations at each reporting period. Sponsor Covered Shares and Seller Earnout Shares Immediately after the Closing Date, certain common stock held by the Sponsor (as defined in Note 3) became subject to vesting, contingent upon the price of Doma’s common stock, par value $0.0001 (“Doma common stock”) exceeding certain thresholds (the “Sponsor Covered Shares”). The Sponsor Covered Shares are accounted for as a derivative due to the settlement adjustments upon change in control transactions that are not deemed to be indexed to Doma common stock. As such, the Sponsor Covered Shares were recorded as liabilities on the balance sheet at fair value upon the consummation of the Business Combination, with subsequent changes in their respective fair values recognized in the condensed consolidated statement of operations at each reporting period. Also following the Closing Date, equity holders of Old Doma prior to the Business Combination (the “Sellers”) have the right to receive an additional number of shares contingent on the price of Doma common stock. The Seller Earnout Shares (as defined in Note 3) are treated as an equity classified contract because all settlement scenarios, including those under fundamental change events, are indexed to Doma common stock (see Note 3 for additional information). Share counts of Doma common stock provided in this Quarterly Report exclude both the Sponsor Covered Shares and the Seller Earnout Shares. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions and our investment portfolio. The Company has not experienced losses on the cash accounts and management believes the Company is not exposed to significant risks on such accounts. Additionally, we manage the exposure to credit risk in our portfolio by investing in high quality securities and diversifying our holdings. Our investment portfolio is comprised of corporate debt, certificates of deposit, mortgages, U.S. government agency obligations and U.S. Treasuries. Coronavirus outbreak The COVID-19 global pandemic has caused national and global economic and financial market disruptions. On the onset of the pandemic, the Company braced and anticipated uncertain disruption to our business. Our results from operations for the three and nine months ended September 30, 2021, show that the Company’s performance from operations was not adversely impacted in a material manner. The Company continues to monitor and react to business disruptions caused by the pandemic but we cannot predict with certainty the duration of the pandemic or its impact on the Company’s financial condition and results of operations, as well as business operations and workforce. Emerging Growth Company and Smaller Reporting Company Subsequent to the Business Combination described in Note 3, the Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Additionally, subsequent to the Business Combination described in Note 3, the Company is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. Recently issued and adopted accounting pronouncements No new accounting policies were recently issued and adopted in the three or nine months ended September 30, 2021. Recently issued but not adopted accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The amendments in this and the related ASUs introduce broad changes to accounting for credit impairment of financial instruments. The primary updates include the introduction of a new current expected credit loss (”CECL”) model that is based on expected rather than incurred losses and amendments to the accounting for impairment of held-to-maturity securities and available-for-sale securities. The amendments in this update are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company currently expects to adopt Topic 326 under the private company transition guidance beginning January 1, 2022. The Company is currently evaluating the impact the adoption of Topic 326 will have on the Company’s financial statements, however management currently believes that the adoption will not have a significant impact on the Company's financial position and results of operations. We have not early adopted this standard. In February 2016, the FASB issued ASU 2016-02, Leases (”ASU 2016-02”), which provides guidance for accounting for leases. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. The amendments in this update |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2021 | |
Reverse Recapitalization [Abstract] | |
Business Combination | Business Combination As described in Note 1, on March 2, 2021, Old Doma entered into the Agreement with Capitol, a blank check company incorporated in the State of Delaware and formed for the purpose of effecting a merger. Pursuant to the Agreement, a newly formed subsidiary of Capitol was merged with and into Old Doma, and the Business Combination was completed on July 28, 2021. The Business Combination was accounted for as a reverse recapitalization and Capitol was treated as the acquired company for financial statement reporting purposes. Old Doma was deemed the predecessor for financial reporting purposes and Doma was deemed the successor SEC registrant, meaning that Old Doma’s financial statements for periods prior to the consummation of the Business Combination are disclosed in the financial statements included within this Quarterly Report and will be disclosed in Doma’s future periodic reports. No goodwill or other intangible assets were recorded, in accordance with GAAP. At the Closing Date, Doma received gross cash consideration of $345.0 million as a result of the reverse recapitalization from Capitol’s trust account, which was then reduced by the redemption of Class A common stock of $294.9 million. In addition, existing Old Doma stockholders and option holders received cash payments from the settlement of the net proceeds of the Business Combination totaling $20.1 million. In connection with the Business Combination, Capitol entered into subscription agreements with certain investors, whereby Doma issued 30,000,000 shares of common stock at $10.00 per share for an aggregate purchase price of $300.0 million (“PIPE Investment”), which closed simultaneously with the consummation of the Business Combination. Upon the Closing Date, holders of Old Doma common stock, par value $0.0001 per share (“Old Doma Common Stock”) received shares of Doma common stock in an amount determined by the exchange ratio of approximately 5.994933 to 1 (the “Exchange Ratio”), which was based on the implied price per share prior to the Business Combination established within the Agreement. Reported shares and earnings per share available to holders of Old Doma’s Common Stock, prior to the Business Combination, have been retroactively restated as shares reflecting the Exchange Ratio. Applicable share activity within the statement of changes in stockholder’s equity were also retroactively converted to Doma common stock at the Exchange Ratio. Old Doma recorded the net assets acquired from Capitol. The total estimated transaction costs directly attributable to the Business Combination are approximately $67.0 million, of which $63.2 million have been paid, consisting of advisory, legal, share registration and other professional fees. $12.1 million of these fees represent underwriter fees incurred by Capitol prior to the Business Combination related to their initial public offering. Immediately after giving effect to the Business Combination and the PIPE Investment, there were 321,461,822 shares of common stock outstanding, which excludes the 1,325,664 of Sponsor Covered Shares. The Company is authorized to issue 2,000,000,000 shares of common stock having a par value of $0.0001 per share. Additionally, the Company is authorized to issue 100,000,000 shares of preferred stock having a par value of $0.0001 per share. As of September 30, 2021, there were 321,544,052 and 0 shares of common stock and preferred stock issued and outstanding, respectively, which excludes the 1,325,664 of Sponsor Covered Shares. On December 4, 2020, Capitol consummated its initial public offering, which included the issuance of 11,500,000 redeemable warrants (the “Public Warrants”). Simultaneously with the closing of the initial public offering, Capitol completed the private sale of 5,833,333 warrants (the “Private Placement Warrants”). These Warrants remain outstanding following the Business Combination and each whole warrant entitles the holder to purchase one share of Doma common stock at a price of $11.50 (see Note 16 for additional information). Immediately after the Closing Date, 20% of the aggregate of Doma common stock held by certain investors (collectively, the “Sponsor”) became subject to vesting, contingent upon the price of Doma common stock exceeding certain thresholds. The Sponsor Covered Shares will vest in two tranches: (i) one-half of such shares shall vest if the last reported sale price of the common stock equals or exceeds $15.00 for any 20 trading days within any 30-day trading period ending on or before the tenth anniversary of the Closing Date, and (ii) one-half of such shares shall vest if the last reported sale price of the common stock equals or exceeds $17.50 for any 20 trading days within any 30-day trading period ending on or before the tenth anniversary of the Closing Date. The Sponsor is also entitled to the Sponsor Covered Shares if a covered strategic transaction or change in control, as defined by the sponsor support agreement dated as of March 2, 2021 (the “Sponsor Support Agreement”) by and among the sponsors named thereto, Capitol and Old Doma, occurs prior to the ten Also following the Closing Date, the Sellers have the contingent right to receive up to an additional number of shares equal to 5% of the sum of (i) the aggregate number of outstanding shares of Doma common stock (including restricted common stock, but excluding Sponsor Covered Shares), plus (ii) the maximum number of shares underlying Doma options that are vested and the maximum number of shares underlying warrants to purchase shares of Doma common stock issued as replacement warrants for Old Doma warrants, in each case of these clauses (i) and (ii), as of immediately following the Closing Date (“Seller Earnout Shares”). The Seller Earnout Shares are contingently issuable to the Sellers in two tranches: (i) one-half of such shares shall be issued if the last reported sale price of the common stock equals or exceeds $15.00 for any 20 trading days within any 30-day trading period ending on or before the fifth anniversary of the Closing Date, and (ii) one-half of such shares shall be issued if the last reported sale price of the common stock equals or exceeds $17.50 for any 20 trading days within any 30-day trading period ending on or before the fifth anniversary of the Closing Date. Since none of the conditions of the Seller Earnout Shares were met as of September 30, 2021, no related shares are included in the Company’s condensed consolidated statements of changes in stockholders’ equity as of September 30, 2021 or for purposes of calculating earnings per share. |
Investments and fair value meas
Investments and fair value measurements | 9 Months Ended |
Sep. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
Investments and fair value measurements | Investments and fair value measurements Held-to-maturity debt securities The cost basis, fair values and gross unrealized gains and losses of our held-to-maturity debt securities are as follows: September 30, 2021 December 31, 2020 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities (1) $ 69,670 $ 766 $ (43) $ 70,393 $ 57,651 $ 994 $ (53) $ 58,592 U.S. Treasury securities 4,965 3 (1) 4,967 7,519 54 — 7,573 Certificates of deposit 237 — — 237 236 — — 236 Total $ 74,872 $ 769 $ (44) $ 75,597 $ 65,406 $ 1,048 $ (53) $ 66,401 _______________ (1) Includes both U.S. and foreign corporate debt securities. The cost basis of held-to-maturity debt securities includes an adjustment for the amortization of premium or discount since the date of purchase. Held-to-maturity debt securities valued at approximately $4.6 million and $5.1 million were on deposit with various governmental authorities at September 30, 2021 and December 31, 2020, respectively, as required by law. The change in net unrealized gains and losses on held-to-maturity debt securities for the nine months ended September 30, 2021 and 2020 was $(0.3) million and $0.7 million, respectively. The following table reflects the composition of net realized gains or losses and corresponding proceeds for the sales of the securities for each of the periods shown below: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Realized gains (losses): Held-to-maturity debt securities: Gains $ — $ — $ 65 $ 15 Losses — — (11) — Net $ — $ — $ 54 $ 15 Proceeds from sales $ — $ — $ 3,048 $ 1,504 Net realized gains on disposition of held-to-maturity debt securities are computed using the specific identification method and are included in the condensed consolidated statements of operations. The following table presents certain information regarding contractual maturities of our held-to-maturity debt securities: Maturity September 30, 2021 Amortized Cost % of Total Fair Value % of Total One year or less $ 24,951 33 % $ 25,103 33 % After one year through five years $ 49,921 67 % $ 50,494 67 % Total $ 74,872 100 % $ 75,597 100 % There were no held-to-maturity debt securities with contractual maturities after five years. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Net unrealized losses on held-to-maturity debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows: September 30, 2021 December 31, 2020 Corporate debt securities U.S. Treasury securities Certificate of deposits Total Corporate debt securities U.S. Treasury securities Certificate of deposits Total Less than 12 months Fair value $ 5,934 $ 1,676 $ — $ 7,610 $ 8,464 $ 5,181 $ — $ 13,645 Unrealized losses $ (38) $ (1) $ — $ (39) $ (53) $ — $ — $ (53) Greater than 12 months Fair value $ 151 $ — $ — $ 151 $ — $ — $ — $ — Unrealized losses $ (5) $ — $ — $ (5) $ — $ — $ — $ — Total Fair value $ 6,085 $ 1,676 $ — $ 7,761 $ 8,464 $ 5,181 $ — $ 13,645 Unrealized losses $ (43) $ (1) $ — $ (44) $ (53) $ — $ — $ (53) We believe that any unrealized losses on our held-to-maturity debt securities at September 30, 2021 are temporary based upon our current analysis of the issuers of the securities that we hold and current market conditions. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature. Available-for-sale debt securities The cost basis, fair values and gross unrealized gains and losses of our available-for-sale debt securities are as follows: December 31, 2020 Cost Basis Unrealized Gains Unrealized Losses Fair Value Corporate debt securities (1) $ 7,139 $ 918 $ — $ 8,057 Total $ 7,139 $ 918 $ — $ 8,057 _________________ (1) Includes both U.S. and foreign corporate debt securities. The cost basis of available-for-sale debt securities includes an adjustment for the amortization of premium or discount since the date of purchase. The change in net unrealized gains on available-for-sale debt securities for the nine months ended September 30, 2021 and 2020 wa s $(0.9) million and $(0.1) million, r espectively. The Company disposed all available-for-sale debt securities in the three months ended March 31, 2021 and therefore had no unrealized gain or loss as of September 30, 2021 and no change in net unrealized gains on available-for-sale debt securities for the three months ended September 30, 2021. The change in net unrealized gains on available-for sale debt securities for the three months ended September 30, 2020 was $0.6 million . Any unrealized holding gains or losses on available-for-sale debt securities as of December 31, 2020 are reported as accumulated other comprehensive gain or loss, which is a separate component of stockholders’ equity, net of tax, until realized. The following table reflects the composition of net realized gains or losses and corresponding proceeds for the sales of the securities: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Realized gains (losses): Available-for-sale debt securities: Gains $ — $ — $ 768 $ — Losses — — (90) — Net $ — $ — $ 678 $ — Proceeds from sales $ — $ — $ 7,817 $ — Net realized gains on disposition of available-for-sale debt securities are computed using the specific identification method and are included in the condensed consolidated statements of operations. Equity securities The cost and estimated fair value of equity securities are as follows: September 30, 2021 December 31, 2020 Cost Estimated Fair Value Cost Estimated Fair Value Preferred stocks $ — $ — $ 2,000 $ 2,119 Total $ — $ — $ 2,000 $ 2,119 The Company disposed of all equity securities in the three months ended March 31, 2021. Mortgage loans The mortgage loan portfolio as of September 30, 2021 is comprised entirely of residential mortgage loans. During the nine months ended September 30, 2021, the Company did not purchase any new mortgage loans. Mortgage loans, which include original contractual terms to maturity of thirty years, are not categorized by contractual maturity as borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties. The cost and estimated fair value of mortgage loans are as follows: September 30, 2021 December 31, 2020 Cost Estimated Fair Value Cost Estimated Fair Value Mortgage loans $ 2,920 $ 2,920 $ 2,980 $ 2,980 Total $ 2,920 $ 2,920 $ 2,980 $ 2,980 Investment income Investment income from securities, inclusive of realized gains (losses), consists of the following: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Available-for-sale debt securities $ — $ 102 $ 773 $ 306 Held-to-maturity debt securities 543 465 1,507 987 Equity investments — 166 (89) 56 Mortgage loans 45 46 136 149 Other — 4 61 157 Total $ 588 $ 783 $ 2,388 $ 1,655 Accrued interest receivable Accrued interest receivable from investments is included in receivables, net on the condensed consolidated balance sheets. The following table reflects the composition of accrued interest receivable for investments: September 30, 2021 December 31, 2020 Corporate debt securities $ 568 $ 641 U.S. Treasury securities 38 45 Accrued interest receivable on investment securities $ 606 $ 686 Mortgage loans 21 43 Accrued interest receivable on investments $ 627 $ 729 Fair value measurement ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure financial assets or liabilities at fair value. The observability of inputs is impacted by a number of factors, including the type of asset or liability, characteristics specific to the asset or liability, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are as follows: Level 1 Quoted prices (unadjusted) in active markets for identical asset or liability at the measurement date are used. Level 2 Pricing inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Pricing inputs are unobservable and include situations where there is little, if any, market activity for the asset or liability. The inputs used in determination of fair value require significant judgment and estimation. When fair value inputs fall within different levels of the fair value hierarchy, the level in the fair value hierarchy within which the asset or liability is categorized in its entirety is determined based on the lowest level input that is significant to the asset or liability. Assessing the significance of a particular input to the valuation of an asset or liability in its entirety requires judgment and considers factors specific to the asset or liability. The categorization of an asset or liability within the hierarchy is based upon the pricing transparency of the asset or liability and does not necessarily correspond to the perceived risk of that asset or liability. The Company’s assets in the following table are presented at amortized cost on the accompanying condensed consolidated balance sheets. The following table summarizes the Company’s assets measured at fair value: Assets Corporate debt securities U.S. Treasury securities Mortgage loans Preferred stocks Certificate of deposits Total September 30, 2021 Level 1 $ — $ 4,967 $ — $ — $ — $ 4,967 Level 2 70,393 — — — 237 70,630 Level 3 — — 2,920 — — 2,920 Total $ 70,393 $ 4,967 $ 2,920 $ — $ 237 $ 78,517 December 31, 2020 Level 1 $ — $ 7,573 $ — $ 2,119 $ — $ 9,692 Level 2 66,649 — — — 236 66,885 Level 3 — — 2,980 — — 2,980 Total $ 66,649 $ 7,573 $ 2,980 $ 2,119 $ 236 $ 79,557 The Company classifies U.S. Treasury bonds and preferred stocks within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. Corporate debt securities and certificates of deposit are classified within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security which may not be actively traded. The Company classifies mortgage loans as Level 3 due to the reliance on significant unobservable valuation inputs. The Company’s liabilities in the following table are presented at fair value on the accompanying condensed consolidated balance sheets. The following table summarizes the Company’s liabilities measured at fair value: Liabilities Public Warrants Private Placement Warrants Sponsor Covered Shares Total September 30, 2021 Level 1 $ 16,215 $ — $ — $ 16,215 Level 2 — 8,225 — 8,225 Level 3 — — 8,610 8,610 Total $ 16,215 $ 8,225 $ 8,610 $ 33,050 December 31, 2020 Level 1 $ — $ — $ — $ — Level 2 — — — — Level 3 — — — — Total $ — $ — $ — $ — The Company considers the Public Warrants to be Level 1 liabilities due to the use of an observable market quote in an active market under the ticker DOMA.WS. For the Private Placement Warrants, the Company considers the fair value of each Private Placement Warrant to be equivalent to that of each Public Warrant, with an immaterial adjustment for short-term marketability restrictions. As such, the Private Placement Warrants are classified as Level 2. The fair value of the Sponsor Covered Shares was determined using a Monte Carlo simulation valuation model using a distribution of potential stock price outcomes on a daily basis over the 10-year vesting period. The unobservable significant inputs to the valuation model were as follows: September 30, Current stock price $ 7.40 Expected volatility 55.2 % Risk-free interest rate 1.50 % Expected term 9.83 years Expected dividend yield — % Annual change in control probability 2.0 % The changes for Level 3 items measured at fair value on a recurring basis using significant unobservable inputs are as follows: Sponsor Covered Shares Fair value as of June 30, 2021 $ — Sponsor Covered Shares assumed in Business Combination 9,332 Change in fair value of Sponsor Covered Shares (722) Fair value as of September 30, 2021 $ 8,610 There were no transfers of assets or liabilities between Level 1 and Level 2 during the three or nine months ended September 30, 2021 and the year ended December 31, 2020. There were no transfers involving Level 3 assets or liabilities during the three or nine months ended September 30, 2021 and the year ended December 31, 2020. |
Revenue recognition
Revenue recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | Revenue recognition Disaggregation of revenue Our revenue consists of: Three months ended Nine months ended 2021 2020 2021 2020 Revenue Stream Statement of Operations Classification Segment Total Revenue Revenue from insurance contracts: Direct Agents title insurance premiums Net premiums written Underwriting $ 32,944 $ 23,146 $ 88,797 $ 59,399 Direct Agents title insurance premiums Net premiums written Elimination (96) — (976) — Third-Party Agents title insurance premiums Net premiums written Underwriting 108,643 80,441 270,933 187,339 Total revenue from insurance contracts $ 141,491 $ 103,587 $ 358,754 $ 246,738 Revenue from contracts with customers: Escrow fees Escrow, title-related and other fees Distribution $ 16,190 $ 11,456 $ 45,325 $ 29,331 Other title-related fees and income Escrow, title-related and other fees Distribution 31,383 24,638 86,181 63,712 Other title-related fees and income Escrow, title-related and other fees Underwriting 823 490 2,621 1,088 Other title-related fees and income Escrow, title-related and other fees Elimination (1) (27,944) (19,842) (75,035) (50,833) Total revenue from contracts with customers $ 20,452 $ 16,742 $ 59,092 $ 43,298 Other revenue: Interest and investment income (2) Investment, dividend and other income Distribution 68 33 155 304 Interest and investment income (2) Investment, dividend and other income Underwriting 493 659 1,483 1,513 Realized gains and losses, net Investment, dividend and other income Distribution (21) (73) (25) 310 Realized gains and losses, net Investment, dividend and other income Underwriting 99 124 905 141 Total other revenues $ 639 $ 743 $ 2,518 $ 2,268 Total revenues $ 162,582 $ 121,072 $ 420,364 $ 292,304 _________________ (1) Premiums retained by Direct Agents are recognized as income to the Distribution segment, and expense to the Underwriting segment. Upon consolidation, the impact of these internal segment transactions is eliminated. See Note 7. Segment information for additional breakdown. (2) Interest and investment income consists primarily of interest payments received on held-to-maturity debt securities, available-for-sale debt securities and mortgage loans. |
Liability for loss and loss adj
Liability for loss and loss adjustment expenses | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Liability for loss and loss adjustment expenses | Liability for loss and loss adjustment expenses A summary of the changes in the liability for loss and loss adjustment expenses for the nine months ending September 30, 2021 and 2020 is as follows: September 30, 2021 2020 Balance at the beginning of the year $ 69,800 $ 62,758 Provision for claims related to: Current year $ 23,567 $ 15,761 Prior years (6,826) (5,696) Total provision for claims $ 16,741 $ 10,065 Paid losses related to: Current year $ (2,832) $ (1,636) Prior years (5,038) (5,055) Total paid losses $ (7,870) $ (6,691) Balance at the end of the period $ 78,671 $ 66,132 Provision for claims as a percentage of net written premiums 4.7 % 4.1 % We continually update our liability for loss and loss adjustment expense estimates as new information becomes known, new loss patterns emerge, or as other contributing factors and judgments are considered and incorporated into the analysis. Estimating future title loss payments is difficult because of the complex nature of title claims, the long periods of time over which claims are paid, significantly varying dollar amounts of individual claims, and other factors. For the nine months ended September 30, 2021, the provision for claims reserve release related to prior years of $6.8 million is due to expected loss emergence being lower than prior expectations. Historically, our favorable loss experience has resulted in a decrease in the projection of ultimate loss for past policy years. Most recently, our favorable loss experience resulted in a decrease in the projection of ultimate loss for policy years 2017-2020. For the nine months ended September 30, 2020, the provision for claims reserve release related to prior years of $5.7 million is due to reported loss emergence which was lower than expected. This resulted in a decrease in the projection of ultimate loss primarily for policy years 2017-2019. The actuarial assumptions underlying the Company’s selected ultimate loss estimates place more consideration on title insurance industry benchmarks for more recent policy years. These title insurance benchmarks are based on industry long-term average loss ratios. As the Company’s claims experience matures, we refine those estimates to put more consideration to the Company’s actual claims experience. For the nine months ended September 30, 2021 and 2020, the Company’s actual claims experience reflects lower loss ratios than industry benchmarks from a current positive underwriting cycle and resulted in the favorable development. Current year incurred and paid losses includes current year reported claims as well as estimated future losses on such claims. The liability for loss and loss adjustment expenses of $78.7 million and $69.8 million, as of September 30, 2021 and December 31, 2020, respectively, includes $0.2 and $0.7 million, respectively, of reserves for the settlement of claims which the Company has deemed to be directly related to its escrow or agent related activities. The reserves for the settlement of claims related to escrow or agent related activities are not actuarially determined. |
Segment information
Segment information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment information | Segment information A description of each of our reportable segments is as follows. • Distribution: Our Distribution segment reflects our Direct Agents operations of acquiring customer orders and providing title and escrow services for real estate closing transactions. We acquire customers through our partnerships with realtors, attorneys and non-centralized loan originators via a 94-branch footprint across ten states (“Local”) and our partnerships with national lenders and mortgage originators that maintain centralized lending operations representing our Doma Enterprise accounts (“Doma Enterprise”). • Underwriting: Our Underwriting segment reflects the results of our title insurance underwriting business, including policies referred through our Direct Agents and Third-Party Agents channels. The referring agents typically retain approximately 84% of the policy premiums in exchange for their services. The retention varies by state and agent. We use adjusted gross profit as the primary profitability measure for making decisions regarding ongoing operations. Adjusted gross profit is calculated by subtracting direct costs, such as premiums retained by agents, direct labor, other direct costs, and provision for claims, from total revenue. Our chief operating decision maker evaluates the results of the aforementioned segments on a pre-tax basis. Segment adjusted gross profit excludes certain items which are included in net loss, such as depreciation and amortization, corporate and other expenses, change in the fair value of Warrant and Sponsor Covered Shares liabilities, interest expense, and income tax expense, as these items are not considered by the chief operating decision maker in evaluating the segments’ overall operating performance. Our chief operating decision maker does not review nor consider assets allocated to our segments for the purpose of assessing performance or allocating resources. Accordingly, segments’ assets are not presented. The following table summarizes the operating results of the Company’s reportable segments: Three months ended September 30, 2021 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 141,587 $ (96) $ 141,491 Escrow, other title-related fees and other (1) 47,573 823 (27,944) 20,452 Investment, dividend and other income 47 592 — 639 Total revenue $ 47,620 $ 143,002 $ (28,040) $ 162,582 Premiums retained by agents (2) $ — $ 119,636 $ (28,040) $ 91,596 Direct labor (3) 21,791 2,157 — 23,948 Other direct costs (4) 5,650 4,423 — 10,073 Provision for claims 1,243 5,442 — 6,685 Adjusted gross profit $ 18,936 $ 11,344 $ — $ 30,280 Nine months ended September 30, 2021 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 359,730 $ (976) $ 358,754 Escrow, other title-related fees and other (1) 131,506 2,621 (75,035) 59,092 Investment, dividend and other income 130 2,388 — 2,518 Total revenue $ 131,636 $ 364,739 $ (76,011) $ 420,364 Premiums retained by agents (2) $ — $ 303,126 $ (76,011) $ 227,115 Direct labor (3) 56,884 5,945 — 62,829 Other direct costs (4) 16,846 7,896 — 24,742 Provision for claims 1,777 14,964 — 16,741 Adjusted gross profit $ 56,129 $ 32,808 $ — $ 88,937 Three months ended September 30, 2020 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 103,587 $ — $ 103,587 Escrow, other title-related fees and other (1) 36,094 490 (19,842) 16,742 Investment, dividend and other income (40) 783 — 743 Total revenue $ 36,054 $ 104,860 $ (19,842) $ 121,072 Premiums retained by agents (2) $ — $ 86,866 $ (19,842) $ 67,024 Direct labor (3) 13,185 1,707 — 14,892 Other direct costs (4) 4,711 1,603 — 6,314 Provision for claims 617 4,625 — 5,242 Adjusted gross profit $ 17,541 $ 10,059 $ — $ 27,600 Nine months ended September 30, 2020 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 246,738 $ — $ 246,738 Escrow, other title-related fees and other (1) 93,043 1,088 (50,833) 43,298 Investment, dividend and other income 614 1,654 — 2,268 Total revenue $ 93,657 $ 249,480 $ (50,833) $ 292,304 Premiums retained by agents (2) $ — $ 206,965 $ (50,833) $ 156,132 Direct labor (3) 40,213 4,891 — 45,104 Other direct costs (4) 12,433 3,916 — 16,349 Provision for claims 1,006 9,059 — 10,065 Adjusted gross profit $ 40,005 $ 24,649 $ — $ 64,654 _________________ (1) Includes fee income from closings, escrow, title exams, ceding commission income, as well as premiums retained by Direct Agents. (2) This expense represents a deduction from the net premiums written for the amounts that are retained by Direct Agents and Third-Party Agents as compensation for their efforts to generate premium income for our Underwriting segment. The impact of premiums retained by our Direct Agents and the expense for reinsurance or co-insurance procured on Direct Agents sourced premiums are eliminated in consolidation. (3) Includes all compensation costs, including salaries, bonuses, incentive payments, and benefits, for personnel involved in the direct fulfillment of title and/or escrow services. (4) Includes title examination expense, office supplies, and premium and other taxes. The following table provides a reconciliation of the Company’s total reportable segments’ adjusted gross profit to its total loss before income taxes: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Adjusted gross profit $ 30,280 $ 27,600 $ 88,937 $ 64,654 Depreciation and amortization 1,978 1,221 7,705 3,236 Corporate and other expenses (1) 53,393 28,604 133,234 82,910 Change in fair value of Warrant and Sponsor Covered Shares liabilities 4,478 — 4,478 — Interest expense 4,531 1,193 12,341 4,428 Loss before income taxes $ (34,100) $ (3,418) $ (68,821) $ (25,920) _________________ (1) Includes corporate and other costs not allocated to segments including corporate support function costs, such as legal, finance, human resources, technology support and certain other indirect operating expenses, such as sales and management payroll, and incentive related expenses. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior secured credit agreement On December 31, 2020, Old Doma executed a loan and security agreement with Hudson Structured Capital Management Ltd. (“HSCM”), providing for a $150.0 million senior secured term loan (“Senior Debt”). On January 14, 2021 Old Doma executed a notice of borrowing, committing Old Doma to borrow $150.0 million under the terms and conditions of the Senior Debt. The Senior Debt was funded, by the lenders, which are affiliates of HSCM on January 29, 2021 (“Funding Date”). The Senior Debt matures five years from the Funding Date. Under the agreement, the Senior Debt will bear interest of 11.25% per annum, 5.0% of which will be paid on a current cash basis and the remainder to accrue and be added to the outstanding principal balance. Interest shall be compounded quarterly. If at any time Old Doma (now known as States Title) is in an event of default under the Senior Debt, outstanding amounts shall bear interest at the default interest rate of 15.00%. Upon funding, Old Doma issued penny warrants to affiliates of HSCM equal to 1.35% of Old Doma’s fully diluted shares. The warrants were net exercised on the Closing Date and such affiliates of HSCM received the right to receive approximately 4.2 million shares of Doma common stock. The Senior Debt is secured by a first-priority pledge and security interest in substantially all of the assets (tangible and intangible) of the Company and any of its existing and future domestic subsidiaries (in each case, subject to customary exclusions, including the exclusion of regulated insurance company subsidiaries). The Company is subject to customary affirmative, negative and financial covenants, including, among other things, minimum liquidity of $20.0 million (as of the last day of any month), minimum consolidated annual revenue of $130.0 million, limits on the incurrence of indebtedness, restrictions on asset sales outside the ordinary course of business and material acquisitions, limitations on dividends and other restricted payments. The Company was in compliance with the Senior Debt covenants as of September 30, 2021. The Senior Debt also includes customary events of default for facilities of this type and provides that, if an event of default occurs and is continuing, the Senior Debt will amortize requiring regular payments on a straight-line basis over the subsequent 24-month calendar period, but not to extend beyond the maturity date. Loan from a related party As part of the North American Title Acquisition, Lennar issued Old Doma a note for $87.0 million at January 7, 2019 (the “Loan”). As of December 31, 2020, the Loan had an outstanding balance of $65.5 million. The Loan was |
Stock compensation expense
Stock compensation expense | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock compensation expense | Stock compensation expense The Company issues stock options (incentive stock options (“ISOs”) and non-statutory stock options (“NSOs”) and restricted stock awards (“RSAs”) to employees and key advisors under the Company’s 2019 Equity Incentive Plan, which was approved by the board of directors. Granted stock options do not expire for 10 years and have vesting periods ranging from 7 to 60 months. The holder of one stock option may purchase one share of common stock at the underlying strike price. Stock-based compensation expense for the three months ended September 30, 2021 and 2020 was $3.0 million and $0.4 million, respectively. Stock-based compensation expense for the nine months ended September 30, 2021 and 2020 was $9.0 million and $0.9 million, respectively. Stock options (ISO and NSO) During the nine months ended September 30, 2021, the Company had the following stock option activity (option amounts have been retroactively restated as shares reflecting the Exchange Ratio): Number of Stock Options Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Life (In years) Aggregate Intrinsic Value ($) Outstanding as of December 31, 2020 26,492,158 $ 0.53 8.5 $ 374,808 Granted 4,583,033 0.71 9.25 Exercised (4,004,764) 0.43 7.2 Cancelled or forfeited (786,607) 0.66 8.41 Outstanding as of September 30, 2021 26,283,820 $ 0.58 8.03 $ 179,382 Options exercisable as of September 30, 2021 10,412,664 $ 0.49 7.48 $ 71,902 Restricted stock awards (RSAs) During the nine months ended September 30, 2021, the Company had the following non-vested RSA activity (share amounts have been retroactively restated as shares reflecting the Exchange Ratio): Number of RSAs Average Grant Date Fair Value ($) Non-vested at December 31, 2020 1,551,867 $ 0.52 Granted — — Exercised (613,563) 0.38 Cancelled or Forfeited — — Non-vested at September 30, 2021 938,304 $ 0.61 |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The calculation of the basic and diluted EPS is as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Numerator Net loss attributable to Doma Holdings, Inc. $ (34,270) $ (3,622) $ (69,327) $ (26,540) Denominator Weighted-average common shares – basic and diluted 245,003,754 64,060,987 128,105,954 62,255,035 Net loss per share attributable to Doma Holdings, Inc. shareholders Basic and diluted $ (0.14) $ (0.06) $ (0.54) $ (0.43) As we have reported net loss for each of the periods presented, all potentially dilutive securities are antidilutive. The following potential outstanding shares of common stock w ere excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: As of September 30, 2021 2020 Convertible preferred stock — 183,159,138 Outstanding stock options 26,283,820 27,621,396 Warrants for common stock 18,022,750 28,870,386 Restricted stock units 938,304 2,083,281 Total antidilutive securities 45,244,874 241,734,201 |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions Equity held by Lennar In connection with the North American Title Acquisition, subsidiaries of Lennar were granted equity in the Company. As of September 30, 2021, Lennar, through its subsidiaries, held 25.6% of the Company’s outstanding common stock. Loan from Lennar In connection with the North American Title Acquisition, the Company received a loan from Lennar, which was repaid in full in January 2021 (see Note 8 for additional information). Shared services agreements between the Company and Lennar In connection with the North American Title Acquisition, the Company and Lennar entered into a transition services agreement (“TSA”) that provided for certain shared services provided by Lennar to the Company as it incorporated the Acquired Business into its operations, and also for the sharing of expenses in office locations that would contain both Company and Lennar personnel until such time one entity or the other, depending on the location, established separate office space for its personnel and operations. During the three and nine months ended September 30, 2020, the Company paid Lennar $0.0 and $0.3 million, respectively, in settlement of the TSA services arrangement. Additionally, during the nine months ended September 30, 2021 and 2020, the Company paid Lennar approximately $0.1 million and $0.2 million, respectively, for rent associated with shared spaces. Transactions with Lennar In the routine course of its business, North American Title Insurance Company ("NATIC") underwrites title insurance policies for a subsidiary of Lennar. During the three months ended September 30, 2021 and 2020, the Company recorded revenues of $30.3 million and $22.9 million, respectively, from these transactions, which are included within our Underwriting segment. During the three months ended September 30, 2021 and 2020, the Company recorded premiums retained by Third-Party Agents of $24.8 million and $18.4 million, respectively from these transactions. During the nine months ended September 30, 2021 and 2020, the Company recorded revenues of $81.9 million and $64.2 million, respectively, from these transactions. During the nine months ended September 30, 2021 and 2020, the Company recorded premiums retained by Third-Party Agents of $66.6 million and $51.9 million, respectively from these transactions. As of September 30, 2021 and December 31, 2020, the Company had net receivables related to these transactions of $3.4 million and $4.4 million, respectively. These amounts are included in receivables, net on the Company’s condensed consolidated balance sheets. Consulting agreement |
Commitment and contingencies
Commitment and contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Legal matters The Company is subject to claims and litigation matters in the ordinary course of business. Management does not believe the resolution of any such matters will have a materially adverse effect on the Company’s financial position or results of operations. Commitments and other contingencies The Company leases office space and equipment under non-cancellable lease agreements that expire at various points through 2028. For the three months ended September 30, 2021 and 2020, rental expense under these leases was $2.4 million and $2.4 million, respectively. For the nine months ended September 30, 2021 and 2020, rental expense under these leases was $7.0 million and $7.5 million, respectively. As of September 30, 2021, total future commitments on non-cancelable operating leases with a minimum remaining term in excess of one year are as follows: 2021 $ 2,311 2022 9,059 2023 8,037 2024 6,417 2025 4,724 Thereafter 7,032 Total $ 37,580 The Company also administers escrow deposits as a service to customers, a substantial portion of which are held at third-party financial institutions. Thes e escrow deposits amounted to $511.1 million and $290.9 million a t September 30, 2021 and December 31, 2020, respectively. Such deposits are not reflected on the condensed consolidated balance sheets, but the Company could be contingently liable for them under certain circumstances (for |
Accrued expenses and other liab
Accrued expenses and other liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other liabilities | Accrued expenses and other liabilities Accrued expenses and other liabilities include the following: September 30, December 31, Employee compensation and benefits $ 32,746 $ 23,899 Other 17,441 9,145 Total accrued expenses and other liabilities $ 50,187 $ 33,044 |
Employee benefit plan
Employee benefit plan | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Employee benefit plan | Employee benefit plan The Company sponsors a defined contribution 401(k) plan for its employees (the “Retirement Savings Plan”). The Retirement Savings Plan is a voluntary contributory plan under which employees may elect to defer compensation for federal income tax purposes. All full-time employees age 18+ are eligible to enroll in the plan on their first day of employment. The Co mpany provides an employer match up to 50% of the first 6% of elective contributions. There are no matching contributions in excess of 3% of compensation. Company matching contributions begin upon employee enrollment in the Retirement Savings Plan. For the year ended December 31, 2020, the Company made contributions for the benefit of employees of $0.9 million from January 1, 2020 through May 15, 2020. The Company suspended the employer match effective May 16, 2020 and made no contributions for the benefit of employees to the Retirement Savings Plan for the rest of the year through December 31, 2020. The temporary suspension was due to the COVID-19 pandemic and its potential impact on the business, which was not estimable at the time. On January 1, 2021, the Company reinstated matching contributions to the Retirement Savings Plan, according to the aforementioned terms, rates, and limitations. For the three months ended September 30, 2021, the Company made contributions for the benefit of employees of $0.7 million to the Retirement Savings Plan. For the nine months ended September 30, 2021 and 2020, the Company made contributions for the benefit of employees of $2.0 million and $0.9 million to the Retirement Savings Plan. |
Research and development
Research and development | 9 Months Ended |
Sep. 30, 2021 | |
Research and Development [Abstract] | |
Research and development | Research and developmentFor the three months ended September 30, 2021 and 2020, research and development expenses were $5.4 million and $1.7 million, respectively. The Company also had capitalized internally developed software costs of $5.3 million and $3.1 million in the three months ended September 30, 2021 and 2020, respectively. Inclusive of capitalized internally developed software costs, our research and development spend was $10.7 million and $4.8 million for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, research and development expenses were $10.8 million and $4.5 million, respectively. The Company also had capitalized internally developed software costs of $14.2 million and $8.3 million in the nine months ended September 30, 2021 and 2020, respectively. Inclusive of capitalized internally developed software costs, our research and development spend was $25.0 million and $12.8 million for the nine months ended September 30, 2021 and 2020, respectively. Our research and development costs reflect certain payroll-related costs of employees directly associated with such activities, which are included in personnel costs on the condensed consolidated statements of operations. Capitalized internally developed software and acquired software costs are included in fixed assets, net on the condensed consolidated balance sheets. |
Warrant liabilities
Warrant liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Warrant liabilities | Warrant liabilitiesAs a result of the Business Combination, the Company assumed, as of the Closing Date, Public Warrants to purchase an aggregate of 11,500,000 shares of Doma common stock and Private Placement Warrants to purchase an aggregate of 5,833,333 shares of Doma common stock. Each whole Warrant entitles the holder to purchase one share of common stock at a price of $11.50. The Warrants are exercisable commencing on December 4, 2021, which is one year from the closing of the initial public offering of Capitol; provided, that we have an effective registration statement under the Securities Act covering Doma common stock. Redemption of Public Warrants when the price per share of Doma common stock equals or exceeds $18.00 Once the Public Warrants become exercisable, the Company may call the Public Warrants for redemption: • in whole and not in part; • at a price of $0.01 per Public Warrant; • upon not less than 30 days’ prior written notice of redemption to each Public Warrant holder; and • if, and only if, the last reported sale price of Doma’s common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of common stock and equity-linked securities as described above) for any 20 trading days within a 30-trading day period ending three business days before the Company sends to the notice of redemption to the Public Warrant holders. The Company will not redeem the Public Warrants as described above unless a registration statement under the Securities Act covering the issuance of the shares of common stock issuable upon a cashless exercise of the Public Warrants is then effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the Public Warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. Redemption of Public Warrants when the price per share of Doma common stock equals or exceeds $10.00 Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants: • in whole and not in part; • at $0.10 per Public Warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their Public Warrants prior to redemption and receive a number of shares based on the redemption date and the “fair market value” of common stock except as otherwise described below; • if, and only if, the last reported sale price of common stock equals or exceeds $10.00 per share (as adjusted per stock splits, stock dividends, reorganizations, reclassifications, recapitalizations and the like and for certain issuances of common stock and equity-linked securities as described above) on the trading day prior to the date on which the Company sends the notice of redemption to the Public Warrant holders; and • if, and only if, the last reported sale price of common stock is less than $18.00 per share (as adjusted for stock for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of common stock and equity-linked securities), the Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. Beginning on the date the notice of redemption is given until the Public Warrants are redeemed or exercised, holders may elect to exercise their Public Warrants on a cashless basis. The “fair market value” of Doma common stock will mean the volume-weighted average price of Doma common stock for the ten The Private Placement Warrants are identical to the Public Warrants except that the Private Placement Warrants, (i) subject to limited exceptions, are not redeemable by us, (ii) may be exercised for cash or on a cashless basis and (iii) are entitled to registration rights (including the shares of Doma common stock issuable upon exercise of the Private Placement Warrants), in each case, so long as they are held by the initial purchasers or any of their permitted transferees (as further described in the warrant agreement, dated as of December 1, 2020, between the On September 3, 2021, the Company filed a Registration Statement on Form S-1 (No. 333-258942), as amended, with the SEC (which was declared effective on September 8, 2021), which related to the issuance of an aggregate of up to 17,333,333 shares of common stock issuable upon the exercise of the Warrants. As of September 30, 2021, the aggregate values of the Public and Private Warrants were $16.2 million and $8.2 million, respectively, representing Warrants outstanding to purchase 11,500,000 shares and 5,833,333 shares , respectively, of Doma's common stock. The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the condensed consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of Warrants and Sponsor Covered Shares liabilities |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events The Company filed a Form S-8 registration statement on October 4, 2021. Effective October 5, 2021 the Company’s Board of Directors granted RSAs and performance stock awards (“PSAs”) totaling 10.1 million shares and 3.6 million shares, respectively. The RSAs are subject to time-based vesting, with a majority of the RSAs vesting 25% on the first anniversary of the award date and ratably thereafter for twelve quarters, such that the RSAs will be fully vested on the fourth anniversary of their award date. The PSAs vest on the achievement of certain performance conditions, as established by the Company’s Board of Directors, and are subject to time-based vesting after the performance period. The RSAs and PSAs are measured at fair market value on the date of the grant and stock-based compensation expense is recognized as the shares vest with a corresponding offset credited to additional paid-in-capital. In the preparation of the accompanying condensed consolidated financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements, noting no subsequent events or transactions that require disclosure, aside from those previously discussed. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying condensed consolidated balance sheet as of September 30, 2021 and the condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, and condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of September 30, 2021 and its results of operations, including its comprehensive income, and stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and cash flows for the nine months ended September 30, 2021 and 2020. All adjustments are of a normal recurring nature. The results for the three and nine months ended September 30, 2021 |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from the estimates made by management. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. Significant items subject to such estimates and assumptions include, but are not limited to, reserves for incurred but not reported claims, the useful lives of property and equipment, accrued net premiums written from Third-Party Agent (as defined in Item 2) referrals and the valuations of stock-based compensation arrangements and the Sponsor Covered Shares liability (as defined below). |
Title plants | Title plants Title plants are carried at cost, with costs incurred to maintain, update and operate title plants expensed as incurred. Because properly maintained title plants have indefinite lives and do not diminish in value with the passage of time, no provision has been made for depreciation or amortization. The Company analyzes the title plants for impairment when events or circumstances indicate that the carrying amount may not be recoverable. This analysis includes, but is not limited to, the effects of obsolescence, duplication, demand and other economic factors. |
Reinsurance | Reinsurance The Company utilizes excess of loss and quota share reinsurance programs to limit its maximum loss exposure by reinsuring certain risks with other insurers. The Company has two reinsurance treaties: the Excess of Loss Treaty and the Quota Share Treaty. Under the Excess of Loss Treaty, we cede liability over $15.0 million on all files. Excess of loss reinsurance coverage protects the Company from a large loss from a single loss occurrence. The Excess of Loss Treaty provides for ceding liability above the retention of $15.0 million for all policies up to a liability cap of $500.0 million. Under the Quota Share Treaty, during the period from January 1, 2021 to February 23, 2021 the Company ceded 100% of its instant underwriting policies. Effective February 24, 2021, the Company cedes 25% of the written premium on our instantly underwritten policies. During the three and nine months ended September 30, 2020, the Company ceded 100% of its instant underwriting policies. Payments and recoveries on reinsured losses for the Company’s title insurance business were immaterial during the three and nine month periods ended September 30, 2021 and 2020. |
Income taxes | Income taxes Our effective tax rate for the nine months ended September 30, 2021 and 2020 was (1)% and (2)%, respectively, as a result of our recording a full valuation allowance against the deferred tax assets. In determining the realizability of the net U.S. federal and state deferred tax assets, we consider numerous factors including historical profitability, estimated future taxable income, prudent and feasible tax planning strategies, and the industry in which we operate. As of December 31, 2020, the Company carried a valuation allowance against deferred tax assets as management believes it is more likely than not that the benefit of the net deferred tax assets covered by that valuation allowance will not be realized. A net deferred tax liability has been recorded as of September 30, 2021 and December 31, 2020 o f $1.2 million and $1.0 million, respectively, and is included in accrued expenses and other liabilities within the accompanying condensed consolidated balance sheets. Management reassesses the realization of the deferred tax assets each reporting period. The Company has approximatel y $0.2 million of pre-2018 federal net operating losses |
Public Warrants and Private Placement Warrants and Sponsored Covered Shares and Seller Earnout Shares | Public Warrants and Private Placement Warrants As a result of the Business Combination, the Company assumed the Public Warrants (as defined in Note 3) and the Private Placement Warrants (as defined in Note 3) (collectively, the “Warrants”) as of the Closing Date. The Warrants meet the definition of derivatives as contemplated in Accounting Standards Codification (“ASC”) 815. As such, the Warrants were recorded as liabilities on the balance sheet at fair value upon the consummation of the Business Combination, with subsequent changes in their respective fair values recognized in the condensed consolidated statement of operations at each reporting period. Sponsor Covered Shares and Seller Earnout Shares Immediately after the Closing Date, certain common stock held by the Sponsor (as defined in Note 3) became subject to vesting, contingent upon the price of Doma’s common stock, par value $0.0001 (“Doma common stock”) exceeding certain thresholds (the “Sponsor Covered Shares”). The Sponsor Covered Shares are accounted for as a derivative due to the settlement adjustments upon change in control transactions that are not deemed to be indexed to Doma common stock. As such, the Sponsor Covered Shares were recorded as liabilities on the balance sheet at fair value upon the consummation of the Business Combination, with subsequent changes in their respective fair values recognized in the condensed consolidated statement of operations at each reporting period. Also following the Closing Date, equity holders of Old Doma prior to the Business Combination (the “Sellers”) have the right to receive an additional number of shares contingent on the price of Doma common stock. The Seller Earnout Shares (as defined in Note 3) are treated as an equity classified contract because all settlement scenarios, including those under fundamental change events, are indexed to Doma common stock (see Note 3 for additional information). |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions and our investment portfolio. The Company has not experienced losses on the cash accounts and management believes the Company is not exposed to significant risks on such accounts. Additionally, we manage the exposure to credit risk in our portfolio by investing in high quality securities and diversifying our holdings. Our investment portfolio is comprised of corporate debt, certificates of deposit, mortgages, U.S. government agency obligations and U.S. Treasuries. |
Recently issued and adopted accounting pronouncements and recently issued but not adopted accounting pronouncements | Recently issued and adopted accounting pronouncements No new accounting policies were recently issued and adopted in the three or nine months ended September 30, 2021. Recently issued but not adopted accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The amendments in this and the related ASUs introduce broad changes to accounting for credit impairment of financial instruments. The primary updates include the introduction of a new current expected credit loss (”CECL”) model that is based on expected rather than incurred losses and amendments to the accounting for impairment of held-to-maturity securities and available-for-sale securities. The amendments in this update are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company currently expects to adopt Topic 326 under the private company transition guidance beginning January 1, 2022. The Company is currently evaluating the impact the adoption of Topic 326 will have on the Company’s financial statements, however management currently believes that the adoption will not have a significant impact on the Company's financial position and results of operations. We have not early adopted this standard. In February 2016, the FASB issued ASU 2016-02, Leases (”ASU 2016-02”), which provides guidance for accounting for leases. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. The amendments in this update |
Fair value measurement | Fair value measurement ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure financial assets or liabilities at fair value. The observability of inputs is impacted by a number of factors, including the type of asset or liability, characteristics specific to the asset or liability, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are as follows: Level 1 Quoted prices (unadjusted) in active markets for identical asset or liability at the measurement date are used. Level 2 Pricing inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Pricing inputs are unobservable and include situations where there is little, if any, market activity for the asset or liability. The inputs used in determination of fair value require significant judgment and estimation. When fair value inputs fall within different levels of the fair value hierarchy, the level in the fair value hierarchy within which the asset or liability is categorized in its entirety is determined based on the lowest level input that is significant to the asset or liability. Assessing the significance of a particular input to the valuation of an asset or liability in its entirety requires judgment and considers factors specific to the asset or liability. The categorization of an asset or liability within the hierarchy is based upon the pricing transparency of the asset or liability and does not necessarily correspond to the perceived risk of that asset or liability. |
Investments and fair value me_2
Investments and fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
Summary of Held-to-Maturity Debt Securities | The cost basis, fair values and gross unrealized gains and losses of our held-to-maturity debt securities are as follows: September 30, 2021 December 31, 2020 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities (1) $ 69,670 $ 766 $ (43) $ 70,393 $ 57,651 $ 994 $ (53) $ 58,592 U.S. Treasury securities 4,965 3 (1) 4,967 7,519 54 — 7,573 Certificates of deposit 237 — — 237 236 — — 236 Total $ 74,872 $ 769 $ (44) $ 75,597 $ 65,406 $ 1,048 $ (53) $ 66,401 _______________ (1) Includes both U.S. and foreign corporate debt securities. |
Schedule of Realized Gain (Loss) on Held-to-Maturity Debt Securities | The following table reflects the composition of net realized gains or losses and corresponding proceeds for the sales of the securities for each of the periods shown below: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Realized gains (losses): Held-to-maturity debt securities: Gains $ — $ — $ 65 $ 15 Losses — — (11) — Net $ — $ — $ 54 $ 15 Proceeds from sales $ — $ — $ 3,048 $ 1,504 |
Summary of Investments by Maturity Date | The following table presents certain information regarding contractual maturities of our held-to-maturity debt securities: Maturity September 30, 2021 Amortized Cost % of Total Fair Value % of Total One year or less $ 24,951 33 % $ 25,103 33 % After one year through five years $ 49,921 67 % $ 50,494 67 % Total $ 74,872 100 % $ 75,597 100 % |
Schedule of Unrealized Loss on Held-to-Maturity Debt Securities | Net unrealized losses on held-to-maturity debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows: September 30, 2021 December 31, 2020 Corporate debt securities U.S. Treasury securities Certificate of deposits Total Corporate debt securities U.S. Treasury securities Certificate of deposits Total Less than 12 months Fair value $ 5,934 $ 1,676 $ — $ 7,610 $ 8,464 $ 5,181 $ — $ 13,645 Unrealized losses $ (38) $ (1) $ — $ (39) $ (53) $ — $ — $ (53) Greater than 12 months Fair value $ 151 $ — $ — $ 151 $ — $ — $ — $ — Unrealized losses $ (5) $ — $ — $ (5) $ — $ — $ — $ — Total Fair value $ 6,085 $ 1,676 $ — $ 7,761 $ 8,464 $ 5,181 $ — $ 13,645 Unrealized losses $ (43) $ (1) $ — $ (44) $ (53) $ — $ — $ (53) |
Summary of Available-for-Sale Debt Securities | The cost basis, fair values and gross unrealized gains and losses of our available-for-sale debt securities are as follows: December 31, 2020 Cost Basis Unrealized Gains Unrealized Losses Fair Value Corporate debt securities (1) $ 7,139 $ 918 $ — $ 8,057 Total $ 7,139 $ 918 $ — $ 8,057 _________________ (1) Includes both U.S. and foreign corporate debt securities. |
Schedule of Realized Gain (Loss) on Available-for-Sale Debt Securities | The following table reflects the composition of net realized gains or losses and corresponding proceeds for the sales of the securities: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Realized gains (losses): Available-for-sale debt securities: Gains $ — $ — $ 768 $ — Losses — — (90) — Net $ — $ — $ 678 $ — Proceeds from sales $ — $ — $ 7,817 $ — |
Summary of Cost and Estimated Fair Value of Equity Securities | The cost and estimated fair value of equity securities are as follows: September 30, 2021 December 31, 2020 Cost Estimated Fair Value Cost Estimated Fair Value Preferred stocks $ — $ — $ 2,000 $ 2,119 Total $ — $ — $ 2,000 $ 2,119 |
Schedule of Cost and Estimated Fair Value of Mortgage Loans and Accrued Interest Receivable | The cost and estimated fair value of mortgage loans are as follows: September 30, 2021 December 31, 2020 Cost Estimated Fair Value Cost Estimated Fair Value Mortgage loans $ 2,920 $ 2,920 $ 2,980 $ 2,980 Total $ 2,920 $ 2,920 $ 2,980 $ 2,980 Accrued interest receivable from investments is included in receivables, net on the condensed consolidated balance sheets. The following table reflects the composition of accrued interest receivable for investments: September 30, 2021 December 31, 2020 Corporate debt securities $ 568 $ 641 U.S. Treasury securities 38 45 Accrued interest receivable on investment securities $ 606 $ 686 Mortgage loans 21 43 Accrued interest receivable on investments $ 627 $ 729 |
Schedule of Investment Income | Investment income from securities, inclusive of realized gains (losses), consists of the following: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Available-for-sale debt securities $ — $ 102 $ 773 $ 306 Held-to-maturity debt securities 543 465 1,507 987 Equity investments — 166 (89) 56 Mortgage loans 45 46 136 149 Other — 4 61 157 Total $ 588 $ 783 $ 2,388 $ 1,655 |
Summary of Company's Assets Measured at Fair Value | The following table summarizes the Company’s assets measured at fair value: Assets Corporate debt securities U.S. Treasury securities Mortgage loans Preferred stocks Certificate of deposits Total September 30, 2021 Level 1 $ — $ 4,967 $ — $ — $ — $ 4,967 Level 2 70,393 — — — 237 70,630 Level 3 — — 2,920 — — 2,920 Total $ 70,393 $ 4,967 $ 2,920 $ — $ 237 $ 78,517 December 31, 2020 Level 1 $ — $ 7,573 $ — $ 2,119 $ — $ 9,692 Level 2 66,649 — — — 236 66,885 Level 3 — — 2,980 — — 2,980 Total $ 66,649 $ 7,573 $ 2,980 $ 2,119 $ 236 $ 79,557 |
Summary of Company's Liabilities Measured at Fair Value | The Company’s liabilities in the following table are presented at fair value on the accompanying condensed consolidated balance sheets. The following table summarizes the Company’s liabilities measured at fair value: Liabilities Public Warrants Private Placement Warrants Sponsor Covered Shares Total September 30, 2021 Level 1 $ 16,215 $ — $ — $ 16,215 Level 2 — 8,225 — 8,225 Level 3 — — 8,610 8,610 Total $ 16,215 $ 8,225 $ 8,610 $ 33,050 December 31, 2020 Level 1 $ — $ — $ — $ — Level 2 — — — — Level 3 — — — — Total $ — $ — $ — $ — |
Summary of the Fair Values of the Sponsor Earnout Shares Using a Monte Carlo Simulation Valuation Model | The fair value of the Sponsor Covered Shares was determined using a Monte Carlo simulation valuation model using a distribution of potential stock price outcomes on a daily basis over the 10-year vesting period. The unobservable significant inputs to the valuation model were as follows: September 30, Current stock price $ 7.40 Expected volatility 55.2 % Risk-free interest rate 1.50 % Expected term 9.83 years Expected dividend yield — % Annual change in control probability 2.0 % |
Summary of Changes for Level 3 Items Measured at Fair Value | The changes for Level 3 items measured at fair value on a recurring basis using significant unobservable inputs are as follows: Sponsor Covered Shares Fair value as of June 30, 2021 $ — Sponsor Covered Shares assumed in Business Combination 9,332 Change in fair value of Sponsor Covered Shares (722) Fair value as of September 30, 2021 $ 8,610 |
Revenue recognition (Tables)
Revenue recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue | Our revenue consists of: Three months ended Nine months ended 2021 2020 2021 2020 Revenue Stream Statement of Operations Classification Segment Total Revenue Revenue from insurance contracts: Direct Agents title insurance premiums Net premiums written Underwriting $ 32,944 $ 23,146 $ 88,797 $ 59,399 Direct Agents title insurance premiums Net premiums written Elimination (96) — (976) — Third-Party Agents title insurance premiums Net premiums written Underwriting 108,643 80,441 270,933 187,339 Total revenue from insurance contracts $ 141,491 $ 103,587 $ 358,754 $ 246,738 Revenue from contracts with customers: Escrow fees Escrow, title-related and other fees Distribution $ 16,190 $ 11,456 $ 45,325 $ 29,331 Other title-related fees and income Escrow, title-related and other fees Distribution 31,383 24,638 86,181 63,712 Other title-related fees and income Escrow, title-related and other fees Underwriting 823 490 2,621 1,088 Other title-related fees and income Escrow, title-related and other fees Elimination (1) (27,944) (19,842) (75,035) (50,833) Total revenue from contracts with customers $ 20,452 $ 16,742 $ 59,092 $ 43,298 Other revenue: Interest and investment income (2) Investment, dividend and other income Distribution 68 33 155 304 Interest and investment income (2) Investment, dividend and other income Underwriting 493 659 1,483 1,513 Realized gains and losses, net Investment, dividend and other income Distribution (21) (73) (25) 310 Realized gains and losses, net Investment, dividend and other income Underwriting 99 124 905 141 Total other revenues $ 639 $ 743 $ 2,518 $ 2,268 Total revenues $ 162,582 $ 121,072 $ 420,364 $ 292,304 _________________ (1) Premiums retained by Direct Agents are recognized as income to the Distribution segment, and expense to the Underwriting segment. Upon consolidation, the impact of these internal segment transactions is eliminated. See Note 7. Segment information for additional breakdown. (2) Interest and investment income consists primarily of interest payments received on held-to-maturity debt securities, available-for-sale debt securities and mortgage loans. |
Liability for loss and loss a_2
Liability for loss and loss adjustment expenses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Summary of Liability for Loss and Loss Adjustment Expenses | A summary of the changes in the liability for loss and loss adjustment expenses for the nine months ending September 30, 2021 and 2020 is as follows: September 30, 2021 2020 Balance at the beginning of the year $ 69,800 $ 62,758 Provision for claims related to: Current year $ 23,567 $ 15,761 Prior years (6,826) (5,696) Total provision for claims $ 16,741 $ 10,065 Paid losses related to: Current year $ (2,832) $ (1,636) Prior years (5,038) (5,055) Total paid losses $ (7,870) $ (6,691) Balance at the end of the period $ 78,671 $ 66,132 Provision for claims as a percentage of net written premiums 4.7 % 4.1 % |
Segment information (Tables)
Segment information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Operating Results of the Company's Reportable Segments | The following table summarizes the operating results of the Company’s reportable segments: Three months ended September 30, 2021 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 141,587 $ (96) $ 141,491 Escrow, other title-related fees and other (1) 47,573 823 (27,944) 20,452 Investment, dividend and other income 47 592 — 639 Total revenue $ 47,620 $ 143,002 $ (28,040) $ 162,582 Premiums retained by agents (2) $ — $ 119,636 $ (28,040) $ 91,596 Direct labor (3) 21,791 2,157 — 23,948 Other direct costs (4) 5,650 4,423 — 10,073 Provision for claims 1,243 5,442 — 6,685 Adjusted gross profit $ 18,936 $ 11,344 $ — $ 30,280 Nine months ended September 30, 2021 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 359,730 $ (976) $ 358,754 Escrow, other title-related fees and other (1) 131,506 2,621 (75,035) 59,092 Investment, dividend and other income 130 2,388 — 2,518 Total revenue $ 131,636 $ 364,739 $ (76,011) $ 420,364 Premiums retained by agents (2) $ — $ 303,126 $ (76,011) $ 227,115 Direct labor (3) 56,884 5,945 — 62,829 Other direct costs (4) 16,846 7,896 — 24,742 Provision for claims 1,777 14,964 — 16,741 Adjusted gross profit $ 56,129 $ 32,808 $ — $ 88,937 Three months ended September 30, 2020 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 103,587 $ — $ 103,587 Escrow, other title-related fees and other (1) 36,094 490 (19,842) 16,742 Investment, dividend and other income (40) 783 — 743 Total revenue $ 36,054 $ 104,860 $ (19,842) $ 121,072 Premiums retained by agents (2) $ — $ 86,866 $ (19,842) $ 67,024 Direct labor (3) 13,185 1,707 — 14,892 Other direct costs (4) 4,711 1,603 — 6,314 Provision for claims 617 4,625 — 5,242 Adjusted gross profit $ 17,541 $ 10,059 $ — $ 27,600 Nine months ended September 30, 2020 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 246,738 $ — $ 246,738 Escrow, other title-related fees and other (1) 93,043 1,088 (50,833) 43,298 Investment, dividend and other income 614 1,654 — 2,268 Total revenue $ 93,657 $ 249,480 $ (50,833) $ 292,304 Premiums retained by agents (2) $ — $ 206,965 $ (50,833) $ 156,132 Direct labor (3) 40,213 4,891 — 45,104 Other direct costs (4) 12,433 3,916 — 16,349 Provision for claims 1,006 9,059 — 10,065 Adjusted gross profit $ 40,005 $ 24,649 $ — $ 64,654 _________________ (1) Includes fee income from closings, escrow, title exams, ceding commission income, as well as premiums retained by Direct Agents. (2) This expense represents a deduction from the net premiums written for the amounts that are retained by Direct Agents and Third-Party Agents as compensation for their efforts to generate premium income for our Underwriting segment. The impact of premiums retained by our Direct Agents and the expense for reinsurance or co-insurance procured on Direct Agents sourced premiums are eliminated in consolidation. (3) Includes all compensation costs, including salaries, bonuses, incentive payments, and benefits, for personnel involved in the direct fulfillment of title and/or escrow services. (4) Includes title examination expense, office supplies, and premium and other taxes. |
Reconciliation of Company's Total Reportable Segments' Adjusted Gross Profit to Total Loss Before Income Taxes | The following table provides a reconciliation of the Company’s total reportable segments’ adjusted gross profit to its total loss before income taxes: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Adjusted gross profit $ 30,280 $ 27,600 $ 88,937 $ 64,654 Depreciation and amortization 1,978 1,221 7,705 3,236 Corporate and other expenses (1) 53,393 28,604 133,234 82,910 Change in fair value of Warrant and Sponsor Covered Shares liabilities 4,478 — 4,478 — Interest expense 4,531 1,193 12,341 4,428 Loss before income taxes $ (34,100) $ (3,418) $ (68,821) $ (25,920) _________________ (1) Includes corporate and other costs not allocated to segments including corporate support function costs, such as legal, finance, human resources, technology support and certain other indirect operating expenses, such as sales and management payroll, and incentive related expenses. |
Stock compensation expense (Tab
Stock compensation expense (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | During the nine months ended September 30, 2021, the Company had the following stock option activity (option amounts have been retroactively restated as shares reflecting the Exchange Ratio): Number of Stock Options Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Life (In years) Aggregate Intrinsic Value ($) Outstanding as of December 31, 2020 26,492,158 $ 0.53 8.5 $ 374,808 Granted 4,583,033 0.71 9.25 Exercised (4,004,764) 0.43 7.2 Cancelled or forfeited (786,607) 0.66 8.41 Outstanding as of September 30, 2021 26,283,820 $ 0.58 8.03 $ 179,382 Options exercisable as of September 30, 2021 10,412,664 $ 0.49 7.48 $ 71,902 |
Summary of Nonvested Restricted Stock Awards | During the nine months ended September 30, 2021, the Company had the following non-vested RSA activity (share amounts have been retroactively restated as shares reflecting the Exchange Ratio): Number of RSAs Average Grant Date Fair Value ($) Non-vested at December 31, 2020 1,551,867 $ 0.52 Granted — — Exercised (613,563) 0.38 Cancelled or Forfeited — — Non-vested at September 30, 2021 938,304 $ 0.61 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The calculation of the basic and diluted EPS is as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Numerator Net loss attributable to Doma Holdings, Inc. $ (34,270) $ (3,622) $ (69,327) $ (26,540) Denominator Weighted-average common shares – basic and diluted 245,003,754 64,060,987 128,105,954 62,255,035 Net loss per share attributable to Doma Holdings, Inc. shareholders Basic and diluted $ (0.14) $ (0.06) $ (0.54) $ (0.43) |
Schedule of Antidilutive Securities Excluded from Computation | The following potential outstanding shares of common stock w ere excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: As of September 30, 2021 2020 Convertible preferred stock — 183,159,138 Outstanding stock options 26,283,820 27,621,396 Warrants for common stock 18,022,750 28,870,386 Restricted stock units 938,304 2,083,281 Total antidilutive securities 45,244,874 241,734,201 |
Commitment and contingencies (T
Commitment and contingencies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Operating Lease Payments | As of September 30, 2021, total future commitments on non-cancelable operating leases with a minimum remaining term in excess of one year are as follows: 2021 $ 2,311 2022 9,059 2023 8,037 2024 6,417 2025 4,724 Thereafter 7,032 Total $ 37,580 |
Accrued expenses and other li_2
Accrued expenses and other liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities include the following: September 30, December 31, Employee compensation and benefits $ 32,746 $ 23,899 Other 17,441 9,145 Total accrued expenses and other liabilities $ 50,187 $ 33,044 |
Organization and business ope_2
Organization and business operations (Details) | 9 Months Ended |
Sep. 30, 2021segmentstate | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states operated in | state | 39 |
Number of reportable segments | segment | 2 |
Summary of significant accoun_3
Summary of significant accounting policies - Title Plants (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Indefinite-lived Intangible Assets [Line Items] | |||||
Proceeds from sale of title plant | $ 482,000 | $ 1,349,000 | |||
Title Plant | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Impairment of title plants | $ 0 | $ 0 | $ 0 | $ 0 | |
Proceeds from sale of title plant | $ 3,200,000 | ||||
Gain on sale of title plant | $ 200,000 |
Summary of significant accoun_4
Summary of significant accounting policies - Reinsurance (Details) $ in Millions | Feb. 24, 2021 | Feb. 23, 2021 | Sep. 30, 2020 | Sep. 30, 2021USD ($)treaty | Sep. 30, 2020 |
Reinsurance Retention Policy [Line Items] | |||||
Number of reinsurance treaties | treaty | 2 | ||||
Excess Of Loss Treaty | |||||
Reinsurance Retention Policy [Line Items] | |||||
Retention limit | $ 15 | ||||
Maximum amount reinsured | $ 500 | ||||
Quota Share Treaty | |||||
Reinsurance Retention Policy [Line Items] | |||||
Reinsured percentage | 25.00% | 100.00% | 100.00% | 100.00% |
Summary of significant accoun_5
Summary of significant accounting policies - Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Effective tax rate | (1.00%) | (2.00%) | |
Operating loss carryforwards, subject to expiration | $ 0.2 | ||
Accrued Liabilities and Other Liabilities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net deferred tax liability | $ 1.2 | $ 1 |
Summary of significant accoun_6
Summary of significant accounting policies - Warrants and Earnout Shares (Details) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Business Combination (Details)
Business Combination (Details) $ / shares in Units, $ in Thousands | Jul. 28, 2021USD ($)tranche$ / sharesshares | Jul. 27, 2021USD ($) | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Sep. 03, 2021shares | Dec. 31, 2020$ / sharesshares | Dec. 04, 2020$ / sharesshares |
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Cash acquired through reverse recapitalization | $ | $ 345,000 | |||||||
Common stock redeemed | $ | 294,900 | |||||||
Proceeds from business combination | $ | $ 20,100 | $ 624,952 | $ 0 | |||||
Number of shares issued in transaction (in shares) | 30,000,000 | |||||||
Sale price per share (in usd per share) | $ / shares | $ 10 | |||||||
Purchase price | $ | $ 300,000 | |||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Recapitalization exchange ratio | 5.994933 | |||||||
Transaction costs | $ | $ 67,000 | |||||||
Payments of transaction costs | $ | $ (63,200) | |||||||
Common stock, shares outstanding (in shares) | 321,461,822 | 321,544,052 | 321,544,052 | 62,832,307 | ||||
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 | ||||||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
Common stock, shares issued (in shares) | 321,544,052 | 321,544,052 | 62,832,307 | |||||
Preferred stock, shares issued (in shares) | 0 | 0 | ||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||||||
Number of warrants (in shares) | 17,333,333 | |||||||
Capitol | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Transaction costs | $ | $ 12,100 | |||||||
Public Warrants | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Number of warrants (in shares) | 11,500,000 | 11,500,000 | 11,500,000 | |||||
Exercise price of warrants (in usd per share) | $ / shares | $ 11.50 | |||||||
Private Placement Warrants | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Number of warrants (in shares) | 5,833,333 | 5,833,333 | 5,833,333 | |||||
Exercise price of warrants (in usd per share) | $ / shares | $ 11.50 | |||||||
Sponsor Covered Shares | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 13,256.64 | |||||||
Percentage of shares subject to vesting | 20.00% | |||||||
Number of vesting tranches | tranche | 2 | |||||||
Period threshold for change in control | 10 years | |||||||
Sponsor Covered Shares | Sale price of common stock equals or exceeds $15 | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Percentage of vesting shares | 50.00% | |||||||
Stock price trigger (in usd per share) | $ / shares | $ 15 | |||||||
Trading days threshold | 20 days | |||||||
Consecutive trading days threshold | 30 days | |||||||
Sponsor Covered Shares | Sale price of common stock equals or exceeds $17.50 | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Percentage of vesting shares | 50.00% | |||||||
Stock price trigger (in usd per share) | $ / shares | $ 17.50 | |||||||
Trading days threshold | 20 days | |||||||
Consecutive trading days threshold | 30 days | |||||||
Earnout Shares | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Number of vesting tranches | tranche | 2 | |||||||
Additional shares receivable | 5.00% | |||||||
Earnout Shares | Sale price of common stock equals or exceeds $15 | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Percentage of vesting shares | 50.00% | |||||||
Stock price trigger (in usd per share) | $ / shares | $ 15 | |||||||
Trading days threshold | 20 days | |||||||
Consecutive trading days threshold | 30 days | |||||||
Earnout Shares | Sale price of common stock equals or exceeds $17.50 | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Percentage of vesting shares | 50.00% | |||||||
Stock price trigger (in usd per share) | $ / shares | $ 17.50 | |||||||
Trading days threshold | 20 days | |||||||
Consecutive trading days threshold | 30 days |
Investments and fair value me_3
Investments and fair value measurements - Summary of Held-to-Maturity Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 74,872 | $ 65,406 |
Unrealized Gains | 769 | 1,048 |
Unrealized Losses | (44) | (53) |
Fair Value | 75,597 | 66,401 |
Corporate debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 69,670 | 57,651 |
Unrealized Gains | 766 | 994 |
Unrealized Losses | (43) | (53) |
Fair Value | 70,393 | 58,592 |
U.S. Treasury securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 4,965 | 7,519 |
Unrealized Gains | 3 | 54 |
Unrealized Losses | (1) | 0 |
Fair Value | 4,967 | 7,573 |
Certificates of deposit | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 237 | 236 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 237 | $ 236 |
Investments and fair value me_4
Investments and fair value measurements - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Investments, All Other Investments [Abstract] | |||||
Debt securities, held-to-maturity, restricted | $ 4,600,000 | $ 4,600,000 | $ 5,100,000 | ||
Change in net unrealized gains (losses) on held-to-maturity debt | (300,000) | $ 700,000 | |||
Change in net unrealized gains on available-for-sale debt securities | 0 | $ 600,000 | (900,000) | $ (100,000) | |
Unrealized Gains | 0 | 0 | 918,000 | ||
Unrealized losses | $ 0 | $ 0 | $ 0 |
Investments and fair value me_5
Investments and fair value measurements - Summary of Realized Gains (Losses) on Held-to-Maturity Debt Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Held-to-maturity debt securities: | ||||
Gains | $ 0 | $ 0 | $ 65 | $ 15 |
Losses | 0 | 0 | (11) | 0 |
Net | 0 | 0 | 54 | 15 |
Proceeds from sales | $ 0 | $ 0 | $ 3,048 | $ 1,504 |
Investments and fair value me_6
Investments and fair value measurements - Summary of Held-to-Maturity Debt Securities Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
One year or less | $ 24,951 | |
After one year through five years | 49,921 | |
Amortized Cost | $ 74,872 | $ 65,406 |
Amortized Cost, Percent of Total | ||
One year or less | 33.00% | |
After one year through five years | 67.00% | |
Total | 100.00% | |
Fair Value | ||
One year or less | $ 25,103 | |
After one year through five years | 50,494 | |
Fair Value | $ 75,597 | $ 66,401 |
Fair Value, Percent of Total | ||
One year or less | 33.00% | |
After one year through five years | 67.00% | |
Total | 100.00% |
Investments and fair value me_7
Investments and fair value measurements - Schedule of Unrealized Loss on Held-to-Maturity Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of Held-to-maturity Securities [Line Items] | ||
HTM, Less than 12 months, Fair value | $ 7,610 | $ 13,645 |
HTM, Less than 12 months, Unrealized losses | (39) | (53) |
HTM, Greater than 12 months, Fair value | 151 | 0 |
HTM, Greater than 12 months, Unrealized losses | (5) | 0 |
HTM, Fair value | 7,761 | 13,645 |
HTM, Unrealized losses | (44) | (53) |
Corporate debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
HTM, Less than 12 months, Fair value | 5,934 | 8,464 |
HTM, Less than 12 months, Unrealized losses | (38) | (53) |
HTM, Greater than 12 months, Fair value | 151 | 0 |
HTM, Greater than 12 months, Unrealized losses | (5) | 0 |
HTM, Fair value | 6,085 | 8,464 |
HTM, Unrealized losses | (43) | (53) |
U.S. Treasury securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
HTM, Less than 12 months, Fair value | 1,676 | 5,181 |
HTM, Less than 12 months, Unrealized losses | (1) | 0 |
HTM, Greater than 12 months, Fair value | 0 | 0 |
HTM, Greater than 12 months, Unrealized losses | 0 | 0 |
HTM, Fair value | 1,676 | 5,181 |
HTM, Unrealized losses | (1) | 0 |
Certificates of deposit | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
HTM, Less than 12 months, Fair value | 0 | 0 |
HTM, Less than 12 months, Unrealized losses | 0 | 0 |
HTM, Greater than 12 months, Fair value | 0 | 0 |
HTM, Greater than 12 months, Unrealized losses | 0 | 0 |
HTM, Fair value | 0 | 0 |
HTM, Unrealized losses | $ 0 | $ 0 |
Investments and fair value me_8
Investments and fair value measurements -Summary of Available-for-Sale Debt Securities (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Cost Basis | $ 7,139,000 | |
Unrealized Gains | $ 0 | 918,000 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 0 | 8,057,000 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost Basis | 7,139,000 | |
Unrealized Gains | 918,000 | |
Unrealized Losses | 0 | |
Fair Value | $ 8,057,000 |
Investments and fair value me_9
Investments and fair value measurements - Summary of Realized Gains (Losses) on Available-for-Sale Debt Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Available-for-sale debt securities: | ||||
Gains | $ 0 | $ 0 | $ 768 | $ 0 |
Losses | 0 | 0 | (90) | 0 |
Net | 0 | 0 | 678 | 0 |
Proceeds from sales | $ 0 | $ 0 | $ 7,817 | $ 0 |
Investments and fair value m_10
Investments and fair value measurements - Summary of Equity Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Cost | $ 0 | $ 2,000 |
Estimated Fair Value | 0 | 2,119 |
Preferred Stock | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Cost | 0 | 2,000 |
Estimated Fair Value | $ 0 | $ 2,119 |
Investments and fair value m_11
Investments and fair value measurements - Summary of Mortgage Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Net Investment Income [Line Items] | ||
Mortgage loans | $ 2,920 | $ 2,980 |
Cost | ||
Net Investment Income [Line Items] | ||
Mortgage loans | 2,920 | 2,980 |
Estimated Fair Value | ||
Net Investment Income [Line Items] | ||
Mortgage loans | $ 2,920 | $ 2,980 |
Investments and fair value m_12
Investments and fair value measurements - Schedule of Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Investment Income [Line Items] | ||||
Interest and investment income | $ 588 | $ 783 | $ 2,388 | $ 1,655 |
Available-for-sale debt securities | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | 0 | 102 | 773 | 306 |
Held-to-maturity debt securities | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | 543 | 465 | 1,507 | 987 |
Equity investments | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | 0 | 166 | (89) | 56 |
Mortgage loans | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | 45 | 46 | 136 | 149 |
Other | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | $ 0 | $ 4 | $ 61 | $ 157 |
Investments and fair value m_13
Investments and fair value measurements - Summary of Accrued Interest (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | $ 627 | $ 729 |
Debt Securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | 606 | 686 |
Corporate debt securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | 568 | 641 |
U.S. Treasury securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | 38 | 45 |
Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | $ 21 | $ 43 |
Investments and fair value m_14
Investments and fair value measurements - Summary of Company's Investments Measured at Fair Value (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 78,517 | $ 79,557 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 70,393 | 66,649 |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 4,967 | 7,573 |
Mortgage loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,920 | 2,980 |
Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 2,119 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 237 | 236 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 4,967 | 9,692 |
Level 1 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 1 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 4,967 | 7,573 |
Level 1 | Mortgage loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 1 | Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 2,119 |
Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 70,630 | 66,885 |
Level 2 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 70,393 | 66,649 |
Level 2 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 2 | Mortgage loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 2 | Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 237 | 236 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 2,920 | 2,980 |
Level 3 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 3 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 3 | Mortgage loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,920 | 2,980 |
Level 3 | Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 3 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Investments and fair value m_15
Investments and fair value measurements - Summary of Company's Liabilities Measured at Fair Value (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 33,050 | $ 0 |
Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 16,215 | 0 |
Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 8,225 | 0 |
Sponsor Covered Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 8,610 | 0 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 16,215 | 0 |
Level 1 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 16,215 | 0 |
Level 1 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 1 | Sponsor Covered Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 8,225 | 0 |
Level 2 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 2 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 8,225 | 0 |
Level 2 | Sponsor Covered Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 8,610 | 0 |
Level 3 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 3 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 3 | Sponsor Covered Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 8,610 | $ 0 |
Investments and fair value m_16
Investments and fair value measurements - Summary of Fair Values of the Sponsor Earnout Shares Using a Monte Carlo Simulation Valuation Model (Details) - Sponsor Covered Shares | Sep. 30, 2021$ / shares |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Share price (in usd per share) | $ 7.40 |
Vesting Period | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 10 |
Expected volatility | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 0.552 |
Risk-free interest rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 0.0150 |
Expected term | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 9.83 |
Expected dividend yield | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 0 |
Annual change in control probability | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 0.020 |
Investments and fair value m_17
Investments and fair value measurements - Changes for Level 3 Items Measured at Fair Value (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2021USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value as of June 30, 2021 | $ 0 |
Sponsor Covered Shares assumed in Business Combination | 9,332 |
Change in fair value of Sponsor Covered Shares | (722) |
Fair value as of September 30, 2021 | $ 8,610 |
Revenue recognition (Details)
Revenue recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | [1] | $ 141,491 | $ 103,587 | $ 358,754 | $ 246,738 |
Escrow, title-related and other fees | 20,452 | 16,742 | 59,092 | 43,298 | |
Total other revenues | 639 | 743 | 2,518 | 2,268 | |
Total revenues | 162,582 | 121,072 | 420,364 | 292,304 | |
Eliminations | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | (96) | 0 | (976) | 0 | |
Escrow, title-related and other fees | (27,944) | (19,842) | (75,035) | (50,833) | |
Total other revenues | 0 | 0 | 0 | 0 | |
Total revenues | (28,040) | (19,842) | (76,011) | (50,833) | |
Underwriting | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 141,587 | 103,587 | 359,730 | 246,738 | |
Escrow, title-related and other fees | 823 | 490 | 2,621 | 1,088 | |
Interest and investment income | 493 | 659 | 1,483 | 1,513 | |
Realized gains and losses, net | 99 | 124 | 905 | 141 | |
Total other revenues | 592 | 783 | 2,388 | 1,654 | |
Total revenues | 143,002 | 104,860 | 364,739 | 249,480 | |
Distribution | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 0 | 0 | 0 | 0 | |
Escrow, title-related and other fees | 47,573 | 36,094 | 131,506 | 93,043 | |
Interest and investment income | 68 | 33 | 155 | 304 | |
Realized gains and losses, net | (21) | (73) | (25) | 310 | |
Total other revenues | 47 | (40) | 130 | 614 | |
Total revenues | 47,620 | 36,054 | 131,636 | 93,657 | |
Direct Agents title insurance premiums | Eliminations | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | (96) | 0 | (976) | 0 | |
Direct Agents title insurance premiums | Underwriting | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 32,944 | 23,146 | 88,797 | 59,399 | |
Third-Party Agents title insurance premiums | Underwriting | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 108,643 | 80,441 | 270,933 | 187,339 | |
Escrow Fees | Distribution | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Escrow, title-related and other fees | 16,190 | 11,456 | 45,325 | 29,331 | |
Other Title Fees | Eliminations | |||||
Disaggregation of Revenue [Line Items] | |||||
Escrow, title-related and other fees | (27,944) | (19,842) | (75,035) | (50,833) | |
Other Title Fees | Underwriting | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Escrow, title-related and other fees | 823 | 490 | 2,621 | 1,088 | |
Other Title Fees | Distribution | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Escrow, title-related and other fees | $ 31,383 | $ 24,638 | $ 86,181 | $ 63,712 | |
[1] | Net premiums written includes revenues from a related party of $30.3 million and $22.9 million during the three months ended September 30, 2021 and 2020, respectively. Net premiums written includes revenues from a related party of $81.9 million and $64.2 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). |
Liability for loss and loss a_3
Liability for loss and loss adjustment expenses - Summary of Liability for Loss and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Balance at the beginning of the year | $ 69,800 | $ 62,758 | ||
Provision for claims related to: | ||||
Current year | 23,567 | 15,761 | ||
Prior years | (6,826) | (5,696) | ||
Total provision for claims | $ 6,685 | $ 5,242 | 16,741 | 10,065 |
Paid losses related to: | ||||
Current year | (2,832) | (1,636) | ||
Prior years | (5,038) | (5,055) | ||
Total paid losses | (7,870) | (6,691) | ||
Balance at the end of the period | $ 78,671 | $ 66,132 | $ 78,671 | $ 66,132 |
Premiums Written, Net | Provision for Incurred Claims Concentration Risk | Liability for Unpaid Claims and Claims Adjustment Expense, Net | ||||
Paid losses related to: | ||||
Concentration risk percent | 4.70% | 4.10% |
Liability for loss and loss a_4
Liability for loss and loss adjustment expenses - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Insurance [Abstract] | ||||
Prior year reserve release | $ 6,826 | $ 5,696 | ||
Liability for loss and loss adjustment expenses | 78,671 | $ 66,132 | $ 69,800 | $ 62,758 |
Reserves for settlement related to escrow or agent activities | $ 200 | $ 700 |
Segment information - Narrative
Segment information - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)branchstate | Dec. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of states operated in | state | 39 | |
Goodwill | $ 111,487 | $ 111,487 |
Distribution | ||
Segment Reporting Information [Line Items] | ||
Number of branches | branch | 94 | |
Number of states operated in | state | 10 | |
Goodwill | $ 88,100 | 88,100 |
Underwriting | ||
Segment Reporting Information [Line Items] | ||
Premium percentage retained | 84.00% | |
Goodwill | $ 23,400 | $ 23,400 |
Segment information - Summary o
Segment information - Summary of Operating Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Segment Reporting Information [Line Items] | |||||
Net premiums written | [1] | $ 141,491 | $ 103,587 | $ 358,754 | $ 246,738 |
Escrow, other title-related fees and other | 20,452 | 16,742 | 59,092 | 43,298 | |
Investment, dividend and other income | 639 | 743 | 2,518 | 2,268 | |
Total revenues | 162,582 | 121,072 | 420,364 | 292,304 | |
Premiums retained by agents | [2] | 91,596 | 67,024 | 227,115 | 156,132 |
Direct labor | 23,948 | 14,892 | 62,829 | 45,104 | |
Other direct costs | 10,073 | 6,314 | 24,742 | 16,349 | |
Provision for claims | 6,685 | 5,242 | 16,741 | 10,065 | |
Adjusted gross profit | 30,280 | 27,600 | 88,937 | 64,654 | |
Operating Segments | Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Net premiums written | 0 | 0 | 0 | 0 | |
Escrow, other title-related fees and other | 47,573 | 36,094 | 131,506 | 93,043 | |
Investment, dividend and other income | 47 | (40) | 130 | 614 | |
Total revenues | 47,620 | 36,054 | 131,636 | 93,657 | |
Premiums retained by agents | 0 | 0 | 0 | 0 | |
Direct labor | 21,791 | 13,185 | 56,884 | 40,213 | |
Other direct costs | 5,650 | 4,711 | 16,846 | 12,433 | |
Provision for claims | 1,243 | 617 | 1,777 | 1,006 | |
Adjusted gross profit | 18,936 | 17,541 | 56,129 | 40,005 | |
Operating Segments | Underwriting | |||||
Segment Reporting Information [Line Items] | |||||
Net premiums written | 141,587 | 103,587 | 359,730 | 246,738 | |
Escrow, other title-related fees and other | 823 | 490 | 2,621 | 1,088 | |
Investment, dividend and other income | 592 | 783 | 2,388 | 1,654 | |
Total revenues | 143,002 | 104,860 | 364,739 | 249,480 | |
Premiums retained by agents | 119,636 | 86,866 | 303,126 | 206,965 | |
Direct labor | 2,157 | 1,707 | 5,945 | 4,891 | |
Other direct costs | 4,423 | 1,603 | 7,896 | 3,916 | |
Provision for claims | 5,442 | 4,625 | 14,964 | 9,059 | |
Adjusted gross profit | 11,344 | 10,059 | 32,808 | 24,649 | |
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net premiums written | (96) | 0 | (976) | 0 | |
Escrow, other title-related fees and other | (27,944) | (19,842) | (75,035) | (50,833) | |
Investment, dividend and other income | 0 | 0 | 0 | 0 | |
Total revenues | (28,040) | (19,842) | (76,011) | (50,833) | |
Premiums retained by agents | (28,040) | (19,842) | (76,011) | (50,833) | |
Direct labor | 0 | 0 | 0 | 0 | |
Other direct costs | 0 | 0 | 0 | 0 | |
Provision for claims | 0 | 0 | 0 | 0 | |
Adjusted gross profit | $ 0 | $ 0 | $ 0 | $ 0 | |
[1] | Net premiums written includes revenues from a related party of $30.3 million and $22.9 million during the three months ended September 30, 2021 and 2020, respectively. Net premiums written includes revenues from a related party of $81.9 million and $64.2 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). | ||||
[2] | Premiums retained by Third-Party Agents includes expenses associated with a related party of $24.8 million and $18.4 million during the three months ended September 30, 2021 and 2020, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $66.6 million and $51.9 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). |
Segment information - Reconcili
Segment information - Reconciliation of Adjusted Gross Profit to Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting [Abstract] | ||||
Adjusted gross profit | $ 30,280 | $ 27,600 | $ 88,937 | $ 64,654 |
Depreciation and amortization | 1,978 | 1,221 | 7,705 | 3,236 |
Other operating expenses | 53,393 | 28,604 | 133,234 | 82,910 |
Change in fair value of Warrant and Sponsor Covered Shares liabilities | 4,478 | 0 | 4,478 | 0 |
Interest expense | 4,531 | 1,193 | 12,341 | 4,428 |
Loss before income taxes | $ (34,100) | $ (3,418) | $ (68,821) | $ (25,920) |
Debt (Details)
Debt (Details) - USD ($) | Jan. 29, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 03, 2021 | Jan. 07, 2019 |
Debt Instrument [Line Items] | |||||
Number of warrants (in shares) | 17,333,333 | ||||
Loan from a related party | $ 65,532,000 | $ 0 | |||
Penny Warrant | |||||
Debt Instrument [Line Items] | |||||
Percentage of shares called by each warrant | 1.35% | ||||
Number of warrants (in shares) | 4,200,000 | ||||
Notes Payable, Related Party | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 87,000,000 | ||||
Senior Debt | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 150,000,000 | ||||
Proceeds from debt | $ 150,000,000 | ||||
Debt instrument, term | 5 years | ||||
Debt instrument, stated interest rate | 11.25% | ||||
Debt instrument, percentage of interest paid in cash | 5.00% | ||||
Debt instrument, debt default interest rate | 15.00% | ||||
Minimum liquidity covenant | $ 20,000,000 | ||||
Minimum consolidated revenue covenant | $ 130,000,000 | ||||
Period for monthly payments | 24 months |
Stock compensation expense - Na
Stock compensation expense - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 3 | $ 0.4 | $ 9 | $ 0.9 |
Outstanding stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
Outstanding stock options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 7 months | |||
Outstanding stock options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 60 months |
Stock compensation expense - Su
Stock compensation expense - Summary of Stock Options (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | |
Number of Stock Options | ||
Beginning balance outstanding (in shares) | shares | 26,492,158 | |
Granted (in shares) | shares | 4,583,033 | |
Exercised (in shares) | shares | (4,004,764) | |
Cancelled or forfeited (in shares) | shares | (786,607) | |
Ending balance outstanding (in shares) | shares | 26,283,820 | 26,492,158 |
Options exercisable, Number of Stock Options (in shares) | shares | 10,412,664 | |
Weighted Average Exercise Price ($) | ||
Beginning balance outstanding (in usd per share) | $ / shares | $ 0.53 | |
Granted (in usd per share) | $ / shares | 0.71 | |
Exercised (in usd per share) | $ / shares | 0.43 | |
Cancelled or forfeited (in usd per share) | $ / shares | 0.66 | |
Ending balance outstanding (in usd per share) | $ / shares | 0.58 | $ 0.53 |
Options exercisable, Weighted Average Exercise Price (in usd per share) | $ / shares | $ 0.49 | |
Stock Option Activity, Additional Disclosures | ||
Outstanding balance, Weighted Average Remaining Contractual Life | 8 years 10 days | 8 years 6 months |
Granted, Weighted Average Remaining Contractual Life | 9 years 3 months | |
Exercised, Weighted Average Remaining Contractual Life | 7 years 2 months 12 days | |
Cancelled or forfeited, Weighted Average Remaining Contractual Life | 8 years 4 months 28 days | |
Options Exercisable, Weighted Average Remaining Contractual Life | 7 years 5 months 23 days | |
Beginning balance outstanding, Aggregate Intrinsic Value | $ | $ 374,808 | |
Ending balance outstanding, Aggregate Intrinsic Value | $ | 179,382 | $ 374,808 |
Options exercisable, Aggregate Intrinsic Value | $ | $ 71,902 |
Stock compensation expense - No
Stock compensation expense - Nonvested Restricted Stock Awards (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of RSAs | |
Beginning balance non-vested (in shares) | shares | 1,551,867 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (613,563) |
Cancelled or Forfeited (in shares) | shares | 0 |
Ending balance non-vested (in shares) | shares | 938,304 |
Average Grant Date Fair Value ($) | |
Beginning balance non-vested (in usd per share) | $ / shares | $ 0.52 |
Granted (in usd per share) | $ / shares | 0 |
Exercised (in usd per share) | $ / shares | 0.38 |
Cancelled or Forfeited (in usd per share) | $ / shares | 0 |
Ending balance non-vested (in usd per share) | $ / shares | $ 0.61 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator | ||||||||
Net loss attributable to Doma Holdings, Inc. | $ (34,270) | $ (23,299) | $ (11,758) | $ (3,622) | $ (6,332) | $ (16,586) | $ (69,327) | $ (26,540) |
Denominator | ||||||||
Weighted-average common shares - basic (in shares) | 245,003,754 | 64,060,987 | 128,105,954 | 62,255,035 | ||||
Weighted-average common shares - diluted (in shares) | 245,003,754 | 64,060,987 | 128,105,954 | 62,255,035 | ||||
Net loss per share attributable to Doma Holdings, Inc. shareholders | ||||||||
Basic (in usd per share) | $ (0.14) | $ (0.06) | $ (0.54) | $ (0.43) | ||||
Diluted (in usd per share) | $ (0.14) | $ (0.06) | $ (0.54) | $ (0.43) |
Earnings per share - Antidiluti
Earnings per share - Antidilutive Securities Excluded from Computation (Details) - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 45,244,874 | 241,734,201 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 0 | 183,159,138 |
Outstanding stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 26,283,820 | 27,621,396 |
Warrants for common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 18,022,750 | 28,870,386 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 938,304 | 2,083,281 |
Related party transactions (Det
Related party transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | ||
Related Party Transaction [Line Items] | ||||||
Net premiums written | [1] | $ 141,491,000 | $ 103,587,000 | $ 358,754,000 | $ 246,738,000 | |
Premiums retained by agents | [2] | 91,596,000 | 67,024,000 | 227,115,000 | 156,132,000 | |
Receivables | $ 14,485,000 | $ 14,485,000 | $ 15,244,000 | |||
Lennar | Doma Holding, Inc | ||||||
Related Party Transaction [Line Items] | ||||||
Equity ownership | 25.60% | 25.60% | ||||
Affiliated Entity | Lennar | ||||||
Related Party Transaction [Line Items] | ||||||
Net premiums written | $ 30,300,000 | 22,900,000 | $ 81,900,000 | 64,200,000 | ||
Premiums retained by agents | 24,800,000 | 18,400,000 | 66,600,000 | 51,900,000 | ||
Receivables | 3,400,000 | 3,400,000 | $ 4,400,000 | |||
Affiliated Entity | Settlement of TSA Services Arrangement | Lennar | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 0 | 300,000 | ||||
Affiliated Entity | Rent associated with shared spaces | Lennar | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 100,000 | 200,000 | ||||
Affiliated Entity | Consulting Agreement | Keystone Strategy, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 300,000 | $ 0 | 300,000 | $ 0 | ||
Accounts payable, related parties | $ 300,000 | $ 300,000 | ||||
[1] | Net premiums written includes revenues from a related party of $30.3 million and $22.9 million during the three months ended September 30, 2021 and 2020, respectively. Net premiums written includes revenues from a related party of $81.9 million and $64.2 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). | |||||
[2] | Premiums retained by Third-Party Agents includes expenses associated with a related party of $24.8 million and $18.4 million during the three months ended September 30, 2021 and 2020, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $66.6 million and $51.9 million during the nine months ended September 30, 2021 and 2020, respectively (see Note 11). |
Commitment and contingencies -
Commitment and contingencies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | |||||
Operating leases, rent expense | $ 2.4 | $ 2.4 | $ 7 | $ 7.5 | |
Escrow Deposit, Contingent Liability | |||||
Loss Contingencies [Line Items] | |||||
Contingent liabilities | $ 511.1 | $ 511.1 | $ 290.9 |
Commitment and contingencies _2
Commitment and contingencies - Schedule of Minimum Operating Lease Payments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2021 | $ 2,311 |
2022 | 9,059 |
2023 | 8,037 |
2024 | 6,417 |
2025 | 4,724 |
Thereafter | 7,032 |
Future minimum lease payments | $ 37,580 |
Accrued expenses and other li_3
Accrued expenses and other liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Employee compensation and benefits | $ 32,746 | $ 23,899 |
Other | 17,441 | 9,145 |
Total accrued expenses and other liabilities | $ 50,187 | $ 33,044 |
Employee benefit plan (Details)
Employee benefit plan (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | May 15, 2020 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |||||
Employer matching contribution percentage | 50.00% | ||||
Employer matching percentage of employee's gross pay | 6.00% | ||||
Maximum annual contributions per employee that receive an employer match, percent | 3.00% | ||||
Defined contributions | $ 700,000 | $ 900,000 | $ 0 | $ 2,000,000 | $ 900,000 |
Research and development (Detai
Research and development (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Research and Development [Abstract] | ||||
Research and development expense | $ 5.4 | $ 1.7 | $ 10.8 | $ 4.5 |
Capitalized internally developed software in period | 5.3 | 3.1 | 14.2 | 8.3 |
Research and development spend | $ 10.7 | $ 4.8 | $ 25 | $ 12.8 |
Warrant liabilities (Details)
Warrant liabilities (Details) $ / shares in Units, $ in Thousands | Jul. 28, 2021$ / shares | Sep. 30, 2021USD ($)shares | Sep. 03, 2021shares | Dec. 31, 2020USD ($) | Dec. 04, 2020$ / sharesshares |
Class of Warrant or Right [Line Items] | |||||
Number of warrants (in shares) | shares | 17,333,333 | ||||
Warrant, term | 1 year | ||||
Warrant liabilities | $ | $ 24,440 | $ 0 | |||
Public Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Number of warrants (in shares) | shares | 11,500,000 | 11,500,000 | |||
Exercise price of warrants (in usd per share) | $ 11.50 | ||||
Redemption period | 30 days | ||||
Fair market value price period | 10 days | ||||
Fair market value, maximum conversion ratio | 0.361 | ||||
Warrant liabilities | $ | $ 16,200 | ||||
Private Placement Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Number of warrants (in shares) | shares | 5,833,333 | 5,833,333 | |||
Exercise price of warrants (in usd per share) | $ 11.50 | ||||
Warrant liabilities | $ | $ 8,200 | ||||
Common stock equals or exceeds $18 | Public Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Stock price redemption threshold (in usd per share) | $ 18 | ||||
Redemption price (in usd per share) | $ 0.01 | ||||
Notice required for redemption of warrants | 30 days | ||||
Trading days threshold for warrant redemption | 20 days | ||||
Consecutive trading days threshold for redemption | 30 days | ||||
Common stock equals or exceeds $10 | Public Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Stock price redemption threshold (in usd per share) | $ 10 | ||||
Redemption price (in usd per share) | $ 0.10 | ||||
Notice required for redemption of warrants | 30 days | ||||
Common stock equals or exceeds $10 | Minimum | Public Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Stock price redemption threshold (in usd per share) | $ 10 | ||||
Common stock equals or exceeds $10 | Maximum | Public Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Stock price redemption threshold (in usd per share) | $ 18 |
Subsequent events (Details)
Subsequent events (Details) - shares | Oct. 05, 2021 | Sep. 30, 2021 |
Restricted Stock | ||
Subsequent Event [Line Items] | ||
Granted (in shares) | 0 | |
Subsequent Event | Restricted Stock | ||
Subsequent Event [Line Items] | ||
Granted (in shares) | 10,100,000 | |
Subsequent Event | Restricted Stock | Anniversary One | ||
Subsequent Event [Line Items] | ||
Vesting percentage | 25.00% | |
Subsequent Event | Restricted Stock | Anniversary Two | ||
Subsequent Event [Line Items] | ||
Vesting percentage | 25.00% | |
Subsequent Event | Restricted Stock | Anniversary Three | ||
Subsequent Event [Line Items] | ||
Vesting percentage | 25.00% | |
Subsequent Event | Restricted Stock | Anniversary Four | ||
Subsequent Event [Line Items] | ||
Vesting percentage | 25.00% | |
Subsequent Event | Performance Shares | ||
Subsequent Event [Line Items] | ||
Granted (in shares) | 3,600,000 |