Conifer Holdings, Inc. (Nasdaq: CNFR) (“Conifer”
or the “Company”) today announced results for the fourth quarter
and year ended December 31, 2022.
Fourth Quarter 2022 Financial Highlights
(compared to the prior year period)
- Gross written premium increased
4.6% to $34.5 million
- Net earned premiums decreased 11.3%
to $23.2 million
- Expense ratio was 37.2% (420bps
improvement from Q4 2021)
- Net income of $2.1 million, or
$0.17 per share, based on 12.2 million weighted average shares
outstanding
Year End 2022 Financial Highlights
(compared to the prior year period)
- Gross written premium increased
4.5% to $138.0 million
- Net earned premium decreased 2.1%
to $96.7 million
- Expense ratio down 400bps to
38.4%
Management Comments James
Petcoff, Executive Chairman and Co-CEO, commented, “Following the
execution of a Loss Portfolio Transfer Agreement specific to
accident years 2019 and prior, plus continued additional
investments to bolster our general reserves, we are better
positioned than ever to address the legacy reserve drag that had
been hampering our financial results. Our refined focus on our best
performing specialty verticals, in combination with our moves to
strengthen overall reserves, should lead to near term and
sustainable profitability.”
2022 Fourth Quarter Financial Results
Overview
|
At and for
theThree Months Ended December 31, |
|
At and
forthe Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
(dollars in
thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
$ |
34,549 |
|
|
$ |
33,037 |
|
|
4.6 |
% |
|
$ |
138,019 |
|
|
$ |
132,095 |
|
|
4.5 |
% |
Net written
premiums |
|
22,252 |
|
|
|
22,345 |
|
|
-0.4 |
% |
|
|
91,232 |
|
|
|
101,429 |
|
|
-10.1 |
% |
Net earned
premiums |
|
23,222 |
|
|
|
26,188 |
|
|
-11.3 |
% |
|
|
96,711 |
|
|
|
98,802 |
|
|
-2.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
1,112 |
|
|
|
419 |
|
|
165.4 |
% |
|
|
3,043 |
|
|
|
1,968 |
|
|
54.6 |
% |
Net realized
investment gains (losses) |
|
- |
|
|
|
(1,005 |
) |
|
** |
|
|
(1,505 |
) |
|
|
2,878 |
|
|
** |
Change in
fair value of equity investments |
|
(43 |
) |
|
|
1,214 |
|
|
** |
|
|
403 |
|
|
|
(2,020 |
) |
|
** |
Gain from
VSRM Transaction |
|
8,810 |
|
|
|
- |
|
|
** |
|
|
8,810 |
|
|
|
- |
|
|
** |
Other gains
(losses) |
|
(1 |
) |
|
|
(24 |
) |
|
** |
|
|
59 |
|
|
|
11,664 |
|
|
** |
Loss
portfolio transfer (loss) |
|
(5,400 |
) |
|
|
- |
|
|
** |
|
|
(5,400 |
) |
|
|
- |
|
|
** |
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
2,111 |
|
|
|
(801 |
) |
|
** |
|
|
(10,681 |
) |
|
|
(1,094 |
) |
|
** |
Net income (loss) per share, diluted |
$ |
0.17 |
|
|
$ |
(0.08 |
) |
|
|
|
$ |
(1.00 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
operating income (loss)* |
|
(1,255 |
) |
|
|
(986 |
) |
|
** |
|
|
(13,048 |
) |
|
|
(13,616 |
) |
|
** |
Adjusted operating income (loss) per share, diluted* |
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
|
** |
|
$ |
(1.22 |
) |
|
$ |
(1.40 |
) |
|
** |
|
|
|
|
|
|
|
|
|
|
|
|
Book value
per common share outstanding |
$ |
1.55 |
|
|
$ |
4.17 |
|
|
|
|
$ |
1.55 |
|
|
$ |
4.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding, basic and diluted |
|
12,215,479 |
|
|
|
9,707,203 |
|
|
|
|
|
10,692,090 |
|
|
|
9,691,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
ratios: |
|
|
|
|
|
|
|
|
|
|
|
Loss ratio (1) |
|
105.2 |
% |
|
|
62.5 |
% |
|
|
|
|
83.9 |
% |
|
|
70.5 |
% |
|
|
Expense ratio (2) |
|
37.2 |
% |
|
|
41.4 |
% |
|
|
|
|
38.4 |
% |
|
|
42.4 |
% |
|
|
Combined ratio (3) |
|
142.4 |
% |
|
|
103.9 |
% |
|
|
|
|
122.3 |
% |
|
|
112.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The "Definitions of
Non-GAAP Measures" section of this release defines and reconciles
data that are not based on generally accepted accounting
principles. |
** Percentage is not
meaningful |
(1) The loss ratio is
the ratio, expressed as a percentage, of net losses and loss
adjustment expenses to net earned premiums and other income from
underwriting operations. |
(2) The expense ratio
is the ratio, expressed as a percentage, of policy acquisition
costs and other underwriting expenses to net earned premiums and
other income from underwriting operations. |
(3) The combined ratio
is the sum of the loss ratio and the expense ratio. A combined
ratio under 100% indicates an underwriting profit. A combined ratio
over 100% indicates an underwriting loss. |
|
|
|
|
|
|
|
|
|
|
|
|
2022 Fourth Quarter
PremiumsGross Written PremiumsGross written premiums
increased 4.6% in the fourth quarter of 2022 to $34.5 million,
compared to $33.0 million in the prior year period. The overall
premium increase was achieved through a combination of rate
increases and continued emphasis on growth in specialty lines,
specifically in the Company’s small business programs, $23.2
million in the quarter, up 6% from Q4 2021. Further supporting this
increase, the Company saw continued growth in personal lines,
driven by its low-value dwelling line of business.
Net Earned PremiumsNet earned premiums decreased
11.3% to $23.2 million for the fourth quarter of 2022, compared to
$26.2 million for the prior year period. The decrease was due to
the new specific loss reinsurance treaties that were entered into
December 31, 2021 and January 1, 2022, which included 40% ceding
commissions. For the year, net earned premium was down slightly at
2.1%. Despite this decrease, the Company continued to drive
sustained expense ratio improvement through vigilant expense
management.
Commercial Lines Financial and Operational
Review
Commercial
Lines Financial Review |
|
Three Months
Ended December 31, |
|
Year Ended
December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
$ |
28,571 |
|
|
$ |
29,058 |
|
|
-1.7 |
% |
|
$ |
116,868 |
|
|
$ |
117,075 |
|
|
-0.2 |
% |
Net written
premiums |
|
16,862 |
|
|
|
18,622 |
|
|
-9.5 |
% |
|
|
72,318 |
|
|
|
87,307 |
|
|
-17.2 |
% |
Net earned
premiums |
|
18,726 |
|
|
|
22,890 |
|
|
-18.2 |
% |
|
|
80,823 |
|
|
|
87,759 |
|
|
-7.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
ratios: |
|
|
|
|
|
|
|
|
|
|
|
Loss ratio |
|
111.3 |
% |
|
|
66.6 |
% |
|
|
|
|
87.3 |
% |
|
|
72.6 |
% |
|
|
Expense ratio |
|
37.6 |
% |
|
|
41.3 |
% |
|
|
|
|
37.9 |
% |
|
|
42.4 |
% |
|
|
Combined ratio |
|
148.9 |
% |
|
|
107.9 |
% |
|
|
|
|
125.2 |
% |
|
|
115.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution
to combined ratio from net |
|
|
|
|
|
|
|
|
|
|
|
(favorable) adverse prior year development |
|
32.6 |
% |
|
|
16.4 |
% |
|
|
|
|
29.4 |
% |
|
|
21.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accident
year combined ratio (1) |
|
116.3 |
% |
|
|
91.5 |
% |
|
|
|
|
95.8 |
% |
|
|
94.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
excluding Hurricane Ian |
|
94.5 |
% |
|
|
66.6 |
% |
|
|
|
|
83.6 |
% |
|
|
72.6 |
% |
|
|
Expense
ratio excluding Hurricane Ian |
|
34.8 |
% |
|
|
41.3 |
% |
|
|
|
|
37.2 |
% |
|
|
42.4 |
% |
|
|
Combined
ratio excluding Hurricane Ian |
|
129.3 |
% |
|
|
107.9 |
% |
|
|
|
|
120.8 |
% |
|
|
115.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accident
year loss ratio |
|
|
|
|
|
|
|
|
|
|
|
excluding Hurricane Ian |
|
64.4 |
% |
|
|
50.2 |
% |
|
|
|
|
54.7 |
% |
|
|
51.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accident
year combined ratio |
|
|
|
|
|
|
|
|
|
|
|
excluding Hurricane Ian |
|
99.2 |
% |
|
|
91.5 |
% |
|
|
|
|
91.9 |
% |
|
|
94.0 |
% |
|
|
(1) The accident year
combined ratio is the sum of the loss ratio and the expense ratio,
less changes in net ultimate loss estimates from prior accident
year loss reserves. The accident year combined ratio provides
management with an assessment of the specific policy year's
profitability and assists management in their evaluation of product
pricing levels and quality of business written. |
|
|
|
|
|
|
|
|
|
|
|
|
The Company’s commercial lines of business
represented 82.7% of total gross written premium in the fourth
quarter of 2022. Looking forward: the Company has re-underwritten
its book to focus on select key verticals in select specialty
markets where the Company has deep underwriting knowledge and
experience, strong agent relationships, and runway for growth.
Commercial lines gross written premium decreased
1.7% in the fourth quarter of 2022 to $28.6 million, as the Company
began narrowing its focus to write only the most profitable
specialty lines.
The Commercial lines combined ratio was 148.9%
for the three months ended December 31, 2022. The loss ratio was
111.3% in the quarter, due in large part to the impact of Hurricane
Ian, as well as additional reserve bolstering in the period.
Excluding the impact of Hurricane Ian, the loss ratio for the
period drops to 94.5%, and considering the reserve impact in the
quarter, the accident year loss ratio nets down to 64.4%.
The expense ratio was 37.6% for the fourth
quarter of 2022, marking continued improvement from 41.3% during
the prior year period.
The Company booked through the required loss
corridor of the LPT purchased in Q4 2022, such that the Company
expects minimal to no additional anticipated reserve impact for
accident years 2019 and prior.
In the fourth quarter, excluding the impact of
Hurricane Ian, the Commercial lines accident year combined ratio
was 99.2%.
Personal Lines Financial and Operational
Review
Personal
Lines Financial Review |
|
Three Months
Ended December 31, |
|
Year Ended
December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
$ |
5,978 |
|
|
$ |
3,979 |
|
|
50.2 |
% |
|
$ |
21,151 |
|
|
$ |
15,020 |
|
|
40.8 |
% |
Net written
premiums |
|
5,390 |
|
|
|
3,723 |
|
|
44.8 |
% |
|
|
18,914 |
|
|
|
14,122 |
|
|
33.9 |
% |
Net earned
premiums |
|
4,496 |
|
|
|
3,298 |
|
|
36.3 |
% |
|
|
15,888 |
|
|
|
11,043 |
|
|
43.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
ratios: |
|
|
|
|
|
|
|
|
|
|
|
Loss ratio |
|
79.7 |
% |
|
|
34.2 |
% |
|
|
|
|
66.9 |
% |
|
|
53.6 |
% |
|
|
Expense ratio |
|
35.5 |
% |
|
|
42.4 |
% |
|
|
|
|
41.0 |
% |
|
|
41.7 |
% |
|
|
Combined ratio |
|
115.2 |
% |
|
|
76.6 |
% |
|
|
|
|
107.9 |
% |
|
|
95.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution
to combined ratio from net |
|
|
|
|
|
|
|
|
|
|
|
(favorable) adverse prior year development |
|
(0.5 |
)% |
|
|
0.9 |
% |
|
|
|
|
2.6 |
% |
|
|
8.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accident
year combined ratio |
|
115.7 |
% |
|
|
75.7 |
% |
|
|
|
|
105.3 |
% |
|
|
86.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
excluding Hurricane Ian |
|
72.5 |
% |
|
|
34.2 |
% |
|
|
|
|
64.8 |
% |
|
|
53.6 |
% |
|
|
Expense
ratio excluding Hurricane Ian |
|
35.3 |
% |
|
|
42.4 |
% |
|
|
|
|
40.9 |
% |
|
|
41.7 |
% |
|
|
Combined
ratio excluding Hurricane Ian |
|
107.8 |
% |
|
|
76.6 |
% |
|
|
|
|
105.7 |
% |
|
|
95.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accident
year loss ratio |
|
|
|
|
|
|
|
|
|
|
|
excluding Hurricane Ian |
|
73.0 |
% |
|
|
33.3 |
% |
|
|
|
|
62.2 |
% |
|
|
45.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accident
year combined ratio |
|
|
|
|
|
|
|
|
|
|
|
excluding Hurricane Ian |
|
108.3 |
% |
|
|
75.7 |
% |
|
|
|
|
103.1 |
% |
|
|
86.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal lines, representing 17.3% of total
gross written premium for the fourth quarter of 2022, consists
largely of low-value dwelling homeowner’s insurance.
Personal lines gross written premium increased
50.2% to $6.0 million in the fourth quarter of 2022 compared to the
prior year period, led by growth in the Company’s low-value
dwelling line of business in Texas and Oklahoma.
Personal lines combined ratio was 115.2% for the
three months ended December 31, 2022; excluding the impact of
Hurricane Ian, the combined ratio was 107.8%. For the full year
2022, the personal lines combined ratio was 107.9%; excluding the
impact of Hurricane Ian, it was 105.7%. Personal Lines experienced
a few more severe fire losses in 2022 than the recent historical
averages which added to the loss
ratio.
The personal lines accident year combined ratio,
excluding Hurricane Ian, was 108.3% for the fourth quarter of 2022;
for the twelve months, the accident year combined ratio was 103.1%
excluding the impact of Hurricane Ian.
Combined Ratio Analysis
|
Three Months
EndedDecember 31, |
|
Year
EndedDecember 31, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
Underwriting
ratios: |
|
|
|
|
|
|
|
Loss ratio |
105.2 |
% |
|
62.5 |
% |
|
83.9 |
% |
|
70.5 |
% |
Expense ratio |
37.2 |
% |
|
41.4 |
% |
|
38.4 |
% |
|
42.4 |
% |
Combined ratio |
142.4 |
% |
|
103.9 |
% |
|
122.3 |
% |
|
112.9 |
% |
|
|
|
|
|
|
|
|
Contribution
to combined ratio from net (favorable) |
|
|
|
|
|
|
|
adverse prior year development |
26.2 |
% |
|
14.5 |
% |
|
25.0 |
% |
|
19.6 |
% |
|
|
|
|
|
|
|
|
Accident
year combined ratio |
116.2 |
% |
|
89.4 |
% |
|
97.3 |
% |
|
93.3 |
% |
|
|
|
|
|
|
|
|
Loss ratio
excluding Hurricane Ian |
90.5 |
% |
|
62.5 |
% |
|
80.6 |
% |
|
70.5 |
% |
Expense
ratio excluding Hurricane Ian |
34.9 |
% |
|
41.4 |
% |
|
37.8 |
% |
|
42.4 |
% |
Combined
ratio excluding Hurricane Ian |
125.4 |
% |
|
103.9 |
% |
|
118.4 |
% |
|
112.9 |
% |
|
|
|
|
|
|
|
|
Accident
year loss ratio |
|
|
|
|
|
|
|
excluding Hurricane Ian |
65.9 |
% |
|
48.0 |
% |
|
55.9 |
% |
|
50.9 |
% |
|
|
|
|
|
|
|
|
Accident
year combined ratio |
|
|
|
|
|
|
|
excluding Hurricane Ian |
100.8 |
% |
|
89.4 |
% |
|
93.7 |
% |
|
93.3 |
% |
|
|
|
|
|
|
|
|
Combined Ratio:The Company's combined ratio was
142.4% for the quarter ended December 31, 2022, due largely to the
combined impact of Hurricane Ian and additional reserve bolstering.
The combined ratio was 122.3% for the year ended December 31, 2022.
The Company’s accident year combined ratio for the twelve-month
period was 97.3%; excluding the impact of Hurricane Ian, the
accident year combined ratio for the full year was 93.7%.
Loss Ratio: The Company’s losses and loss
adjustment expenses were $24.5 million for the three months ended
December 31, 2022. The accident year loss ratio, excluding the
impact of Hurricane Ian, was 55.9% for the full year 2022, which
aligns with the Company’s target loss ratio in its select specialty
lines of business.
Expense Ratio: Improvements continue, due to the
Company’s emphasis on expense management: the expense ratio for the
fourth quarter of 2022 was 37.2%, down from 41.4% in the prior year
period. For the full year 2022, the expense ratio improved 400
basis points to 38.4%
Net Investment IncomeNet
investment income was $1.1 million during the quarter ended
December 31, 2022, compared to $419,000 in the prior year period.
For the full year 2022, net investment income was $3.0 million, up
from $2.0 million for the full year 2021.
Net Realized Investment Gains
(Losses)Net realized investment gains were flat during the
fourth quarter of 2022, compared to net realized investment losses
of $1.0 million in the prior year period.
Change in Fair Value of Equity
SecuritiesDuring the quarter, the Company reported a small
loss from the change in fair value of equity investments of
$43,000, compared to a gain of $1.2 million in the prior year
period. For the full year 2022, the Company reported a gain of
$403,000, compared to a $2.0 million loss in 2021.
Net Income (Loss) The Company
reported net income of $2.1 million, or $0.17 per share, for the
fourth quarter of 2022; an improvement compared to a net loss of
$801,000, or $0.08 per share, in the prior year period.
Adjusted Operating Income
(Loss)In the fourth quarter of 2022, the Company reported
an adjusted operating loss of $1.3 million, or $0.10 per share,
compared to an adjusted operating loss of $986,000, or $0.10 per
share, for the same period in 2021. See Definitions of Non-GAAP
Measures.
Earnings Conference Call with
Accompanying Slide PresentationThe Company will hold a
conference call/webcast on Thursday, March 9, 2023 at 8:30 a.m. ET
to discuss results for the fourth quarter and year ended December
31, 2022.
Investors, analysts, employees and the general
public are invited to listen to the conference call via:
|
Webcast: |
On the Event
Calendar at IR.CNFRH.com |
|
Conference Call: |
844-868-8843 (domestic) or 412-317-6589 (international) |
The webcast will be archived on the Conifer
Holdings website and available for replay for at least one
year.
About Conifer HoldingsConifer
Holdings, Inc. is a specialty insurance holding company, offering
customized coverage solutions tailored to the needs of our insureds
nationwide. Conifer is traded on the NASDAQ exchange under the
symbol “CNFR”. Additional information is available on the Company’s
website at www.CNFRH.com.
Definitions of Non-GAAP
Measures
Conifer prepares its public financial statements
in conformity with accounting principles generally accepted in the
United States of America (GAAP). Statutory data is prepared in
accordance with statutory accounting rules as defined by the
National Association of Insurance Commissioners' (NAIC) Accounting
Practices and Procedures Manual, and therefore is not reconciled to
GAAP data.
We believe that investors’ understanding of
Conifer’s performance is enhanced by our disclosure of adjusted
operating income. Our method for calculating this measure may
differ from that used by other companies and therefore
comparability may be limited. We define adjusted operating income
(loss), a non-GAAP measure, as net income (loss) excluding the
after-tax amounts of: 1) net realized investment gains and losses,
2) change in fair value of equity securities, 3) gain from VSRM
Transaction, 4) Loss portfolio transfer (loss) and 5) Other gains
(losses). We use adjusted operating income as an internal
performance measure in the management of our operations because we
believe it gives our management and other users of our financial
information useful insight into our results of operations and our
underlying business performance.
Reconciliations of adjusted operating income and adjusted
operating income per share:
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
(dollar in
thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
2,111 |
|
|
$ |
(801 |
) |
|
$ |
(10,681 |
) |
|
$ |
(1,094 |
) |
Less: |
|
|
|
|
|
|
|
Net realized investment gains (losses), net of tax |
|
- |
|
|
|
(1,005 |
) |
|
|
(1,505 |
) |
|
|
2,878 |
|
Change in fair value of equity securities, net of tax |
|
(43 |
) |
|
|
1,214 |
|
|
|
403 |
|
|
|
(2,020 |
) |
Gain from VSRM Transaction, net of tax |
|
8,810 |
|
|
|
- |
|
|
|
8,810 |
|
|
|
- |
|
Loss portfolio transfer (loss), net of tax |
|
(5,400 |
) |
|
|
- |
|
|
|
(5,400 |
) |
|
|
- |
|
Other gains (losses), net of tax |
|
(1 |
) |
|
|
(24 |
) |
|
|
59 |
|
|
|
11,664 |
|
Adjusted
operating income (loss) |
$ |
(1,255 |
) |
|
$ |
(986 |
) |
|
$ |
(13,048 |
) |
|
$ |
(13,616 |
) |
|
|
|
|
|
|
|
|
Weighted
average common shares, diluted |
|
12,215,479 |
|
|
|
9,707,203 |
|
|
|
10,692,090 |
|
|
|
9,691,998 |
|
|
|
|
|
|
|
|
|
Diluted
income (loss) per common share: |
|
|
|
|
|
|
|
Net income
(loss) |
$ |
0.17 |
|
|
$ |
(0.08 |
) |
|
$ |
(1.00 |
) |
|
$ |
(0.11 |
) |
Less: |
|
|
|
|
|
|
|
Net realized investment gains (losses), net of tax |
|
- |
|
|
|
(0.10 |
) |
|
|
(0.14 |
) |
|
|
0.30 |
|
Change in fair value of equity securities, net of tax |
|
(0.01 |
) |
|
|
0.12 |
|
|
|
0.04 |
|
|
|
(0.21 |
) |
Gain from VSRM Transaction, net of tax |
|
0.72 |
|
|
|
- |
|
|
|
0.82 |
|
|
|
- |
|
Loss portfolio transfer (loss), net of tax |
|
(0.44 |
) |
|
|
- |
|
|
|
(0.51 |
) |
|
|
- |
|
Other gains (losses), net of tax |
|
- |
|
|
|
- |
|
|
|
0.01 |
|
|
|
1.20 |
|
Adjusted
operating income (loss), per share |
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
|
$ |
(1.22 |
) |
|
$ |
(1.40 |
) |
|
|
|
|
|
|
|
|
Forward-Looking Statement
This press release contains forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements give current expectations or forecasts of future events
or our future financial or operating performance, and include
Conifer’s expectations regarding premiums, earnings, its capital
position, expansion, and growth strategies. The forward-looking
statements contained in this press release are based on
management’s good-faith belief and reasonable judgment based on
current information. The forward-looking statements are qualified
by important factors, risks and uncertainties, many of which are
beyond our control, that could cause our actual results to differ
materially from those in the forward-looking statements, including
those described in our form 10-K (“Item 1A Risk Factors”) filed
with the SEC on March 10, 2022 and subsequent reports filed with or
furnished to the SEC. Any forward-looking statement made by us in
this report speaks only as of the date hereof or as of the date
specified herein. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by any
applicable laws or regulations.
For Further Information:Jessica
Gulis, 248.559.0840ir@cnfrh.com
Conifer
Holdings, Inc. and Subsidiaries |
Consolidated
Balance Sheets |
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, |
|
December
31, |
|
|
|
|
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
(Unaudited) |
|
|
Investment securities: |
|
|
|
|
|
Debt securities, at fair value (amortized cost of $127,119 and |
|
$ |
110,201 |
|
|
$ |
149,783 |
|
|
|
$150,732, respectively) |
|
|
|
|
|
Equity securities, at fair value (cost of $1,905 and $10,972,
respectively) |
|
1,267 |
|
|
|
9,931 |
|
|
Short-term investments, at fair value |
|
|
25,929 |
|
|
|
23,013 |
|
|
|
Total investments |
|
|
137,397 |
|
|
|
182,727 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
28,035 |
|
|
|
9,913 |
|
Premiums and agents' balances receivable, net |
|
|
21,802 |
|
|
|
21,197 |
|
Receivable from Affiliate |
|
|
1,261 |
|
|
|
5,784 |
|
Reinsurance recoverables on unpaid losses |
|
|
82,651 |
|
|
|
40,344 |
|
Reinsurance recoverables on paid losses |
|
|
6,653 |
|
|
|
1,347 |
|
Prepaid reinsurance premiums |
|
|
16,399 |
|
|
|
8,301 |
|
Deferred policy acquisition costs |
|
|
10,290 |
|
|
|
12,267 |
|
Other assets |
|
|
7,862 |
|
|
|
8,524 |
|
|
|
|
Total assets |
|
$ |
312,350 |
|
|
$ |
290,404 |
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders' Equity |
|
|
|
|
Liabilities: |
|
|
|
|
|
Unpaid losses and loss adjustment expenses |
|
$ |
165,539 |
|
|
$ |
139,085 |
|
|
Unearned premiums |
|
|
67,887 |
|
|
|
65,269 |
|
|
Reinsurance premiums payable |
|
|
6,144 |
|
|
|
5,318 |
|
|
Debt |
|
|
|
33,876 |
|
|
|
33,564 |
|
|
Accounts payable and accrued expenses |
|
|
19,954 |
|
|
|
6,665 |
|
|
|
|
Total liabilities |
|
|
293,400 |
|
|
|
249,901 |
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
Common stock, no par value (100,000,000 shares authorized;
12,215,849 and |
|
|
|
|
9,707,817 issued and outstanding, respectively) |
|
|
97,913 |
|
|
|
92,692 |
|
|
Accumulated deficit |
|
|
(60,760 |
) |
|
|
(50,079 |
) |
|
Accumulated other comprehensive income (loss) |
|
|
(18,203 |
) |
|
|
(2,110 |
) |
|
|
Total shareholders' equity |
|
|
18,950 |
|
|
|
40,503 |
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
312,350 |
|
|
$ |
290,404 |
|
|
|
|
|
|
|
|
|
Conifer
Holdings, Inc. and Subsidiaries |
Consolidated
Statements of Operations (Unaudited) |
(dollars in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year
Ended |
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue and Other Income |
|
|
|
|
|
|
|
|
|
Premiums |
|
|
|
|
|
|
|
|
|
|
Gross earned premiums |
|
$ |
34,454 |
|
|
$ |
32,805 |
|
|
$ |
135,401 |
|
|
$ |
123,050 |
|
|
|
Ceded earned premiums |
|
|
(11,232 |
) |
|
|
(6,617 |
) |
|
|
(38,690 |
) |
|
|
(24,248 |
) |
|
|
|
Net earned
premiums |
|
|
23,222 |
|
|
|
26,188 |
|
|
|
96,711 |
|
|
|
98,802 |
|
|
Net investment income |
|
|
1,112 |
|
|
|
419 |
|
|
|
3,043 |
|
|
|
1,968 |
|
|
Net realized investment gains (losses) |
|
|
- |
|
|
|
(1,005 |
) |
|
|
(1,505 |
) |
|
|
2,878 |
|
|
Change in fair value of equity securities |
|
|
(43 |
) |
|
|
1,214 |
|
|
|
403 |
|
|
|
(2,020 |
) |
|
Gain from VSRM Transaction |
|
|
8,810 |
|
|
|
- |
|
|
|
8,810 |
|
|
|
- |
|
|
Loss portfolio transfer (loss) |
|
|
(5,400 |
) |
|
|
- |
|
|
|
(5,400 |
) |
|
|
- |
|
|
Other gains (losses) |
|
|
(1 |
) |
|
|
(24 |
) |
|
|
59 |
|
|
|
11,664 |
|
|
Other income |
|
|
804 |
|
|
|
697 |
|
|
|
2,768 |
|
|
|
2,671 |
|
|
|
|
Total
revenue and other income |
|
|
28,504 |
|
|
|
27,489 |
|
|
|
104,889 |
|
|
|
115,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses, net |
|
|
24,500 |
|
|
|
16,414 |
|
|
|
81,440 |
|
|
|
69,861 |
|
|
Policy acquisition costs |
|
|
4,760 |
|
|
|
7,632 |
|
|
|
22,179 |
|
|
|
28,451 |
|
|
Operating expenses |
|
|
5,779 |
|
|
|
3,741 |
|
|
|
18,789 |
|
|
|
16,509 |
|
|
Interest expense |
|
|
755 |
|
|
|
698 |
|
|
|
2,971 |
|
|
|
2,852 |
|
|
|
|
Total
expenses |
|
|
35,794 |
|
|
|
28,485 |
|
|
|
125,379 |
|
|
|
117,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity earnings in Affiliate and income
taxes |
|
|
(7,290 |
) |
|
|
(996 |
) |
|
|
(20,490 |
) |
|
|
(1,710 |
) |
|
Equity earnings in Affiliate, net of tax |
|
|
- |
|
|
|
212 |
|
|
|
368 |
|
|
|
824 |
|
|
Income tax expense (benefit) |
|
|
(9,401 |
) |
|
|
17 |
|
|
|
(9,441 |
) |
|
|
208 |
|
Net income (loss) |
|
|
2,111 |
|
|
|
(801 |
) |
|
|
(10,681 |
) |
|
|
(1,094 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share, |
|
|
|
|
|
|
|
|
|
basic and diluted |
|
$ |
0.17 |
|
|
$ |
(0.08 |
) |
|
$ |
(1.00 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding, |
|
|
|
|
|
|
|
|
|
basic and diluted |
|
|
12,215,479 |
|
|
|
9,707,203 |
|
|
|
10,692,090 |
|
|
|
9,691,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Conifer (NASDAQ:CNFRL)
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