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Conifer Holdings Reports 2024 Fourth Quarter and Year End Financial Results

1. CNFR reported a $23.5 million net income for 2024. 2. Commercial lines premiums decreased significantly, down 50% year-over-year. 3. Personal lines premiums increased 23.4%, demonstrating strong growth. 4. A major operational transition was completed in 2024 with agency sales. 5. The company's book value per share rose to $1.76.

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Why Bullish?

While CNFR's commercial lines experienced major declines, growth in personal lines and the sale of the insurance agency operations may stabilize the company’s finances. Historically, companies that transition successfully can see positive market reactions despite short-term losses.

How important is it?

The operational changes and financial results convey necessary insights that can impact investor confidence and stock performance in the future.

Why Long Term?

The strategic shift towards personal lines will take time to materialize in sustainable growth. However, successful transitions historically improve long-term valuations and investor confidence.

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March 28, 2025 16:01 ET  | Source: Conifer Holdings, Inc. TROY, Mich., March 28, 2025 (GLOBE NEWSWIRE) -- Conifer Holdings, Inc. (Nasdaq: CNFR) (“Conifer” or the “Company”) today announced results for the fourth quarter and year ended December 31, 2024.   Year End 2024 Financial Highlights Net income allocable to common shareholders of $23.5 million$61 Million gain on sale of insurance agency operations in August 2024Continuing Personal Lines business profitable for the fourth quarter of 2024Book value per share of $1.76 as of December 31, 2024 Management Comments Brian Roney, CEO of Conifer, commented, “2024 was indeed a transitional year for Conifer Holdings as we successfully sold our insurance agency operations, paid down considerable debt, further strengthened reserves, streamlined our organization overall, and focused our production efforts on select personal lines going forward.” Reduction of Commercial Lines Business For the full year 2024, total Gross Written Premium was down almost 50% from the prior year, and Net Earned premium was down 27.5% for the same period. As a result of the sale of Conifer’s insurance agency operations, completed in August 2024, we anticipated and planned for this significant decline in Commercial Lines revenue. We expect Commercial Lines business to represent a diminishing percentage of total gross written premium going forward. Future premiums are expected to consist primarily of Personal Lines business, notably our homeowner’s insurance portfolio in Texas and the Midwest. As detailed in the Personal Lines results overview below, gross written premium for those lines of business for the fourth quarter of 2024 increased 10.6% from the prior year period and increased 23.4% for the full year 2024 over the prior year. Additional information regarding the disposal of Conifer’s agency business and its impact on future Company operations can be found in the Company’s 2024 Annual Report to be filed March 28, 2025 on Form 10-K. 2024 Fourth Quarter and Full Year Financial Results Overview      At and for the Three Months Ended December 31, At and for the Year Ended December 31, 2024 2023 % Change 2024 2023 % Change (dollars in thousands, except share and per share amounts)            Gross written premiums$13,683  $24,398  -43.9% $72,053  $143,834  -49.9%Net written premiums 9,526   15,329  -37.9%  49,338   68,688  -28.2%Net earned premiums 12,708   14,821  -14.3%  60,862   83,935  -27.5%            Net investment income 1,352   1,411  -4.2%  5,763   5,447  5.8%Net realized investment gains (losses) -   (20) **  (125)  (20) **Change in fair value of equity investments (21)  13  261.5%  (203)  608  -133.4%            Net income (loss) allocable to common shareholders (25,382)  (19,479) -30.3%  23,530   (25,923) ** Net income (loss) allocable to common shareholders$(2.08) $(1.59) -30.3% $1.93  $(2.12)   per share, diluted                       Adjusted operating income (loss)* (25,821)  (19,411) -33.0%  (34,558)  (27,867) -24.0% Adjusted operating income (loss) per share, diluted*$(2.11) $(1.59) -32.7% $(2.83) $(2.28) -24.1%            Book value per common share outstanding$1.76  $0.24    $1.76  $0.24               Weighted average shares outstanding, basic and diluted 12,222,881   12,222,881     12,222,881   12,220,551               Underwriting ratios:            Loss ratio (1) 254.6%  191.1%    120.2%  97.8%   Expense ratio (2) 38.3%  40.6%    35.8%  37.1%   Combined ratio (3) 292.9%  231.7%    156.0%  134.9%              * 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.             2024 Fourth Quarter Gross Written Premium Gross written premiums decreased 43.9% in the fourth quarter of 2024 to $13.7 million, compared to $24.4 million in the prior year period. This decrease reflects the Company’s operational shift away from commercial lines insurance business given the sale of our agency group earlier in the year. Commercial Lines Financial and Operational Review       Three Months Ended December 31, Year Ended December 31,  2024 2023 % Change2024 2023 % Change  (dollars in thousands)              Gross written premiums$3,124  $14,850  -79.0% $26,686  $107,078  -75.1% Net written premiums 488   7,009  93.0%  14,541   36,580  -60.2% Net earned premiums 4,254   7,296  -41.7%  28,160   59,221  -52.4%              Underwriting ratios:            Loss ratio 650.8%  316.7%    184.8%  105.7%   Expense ratio 33.8%  38.4%    29.8%  35.5%   Combined ratio 684.6%  355.1%    214.6%  141.2%                Contribution to combined ratio from net            (favorable) adverse prior year development 550.9%  205.5%    118.5%  32.3%                Accident year combined ratio (1) 133.7%  149.6%    96.1%  108.9%                (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 production was down 79% for the fourth quarter of 2024 and represented roughly 23% of total gross written premium in quarter. Commercial Lines net earned premium was down 41.7% for the same period. The Commercial Lines loss ratio for the quarter increased significantly as the Company’s management focused on additional commercial lines reserve strengthening overall. Personal Lines Financial and Operational Review               Three Months Ended December 31, Year Ended December 31,  2024 2023 % Change 2024 2023 % Change  (dollars in thousands)              Gross written premiums$10,559  $9,548  10.6% $45,367  $36,756  23.4% Net written premiums 9,038   8,320  8.6%  34,797   32,108  8.4% Net earned premiums 8,454   7,525  12.3%  32,702   24,714  32.3%              Underwriting ratios:            Loss ratio 55.2%  69.0%    64.6%  78.9%   Expense ratio 40.6%  42.7%    41.1%  40.7%   Combined ratio 95.8%  111.7%    105.7%  119.6%                Contribution to combined ratio from net            (favorable) adverse prior year development 0.9%  -2.6%    0.8%  -5.6%                Accident year combined ratio 94.9%  114.3%    104.9%  125.2%                 Personal Lines premium represented 77% of total gross written premium for the fourth quarter of 2024. Personal Lines production increased 10.6% from the prior year period to $10.6 million for the quarter, led by growth in the Company’s low-value dwelling line of business in Texas and the Midwest. Despite storm activity in the full year, the combined ratio for personal lines business improved significantly in 2024 compared to the same period in 2023. Combined Ratio Analysis   Three Months Ended December 31,  Year Ended December 31,  2024 2023  2024 2023              Underwriting ratios:         Loss ratio254.6% 191.1%  120.2% 97.8% Expense ratio38.3% 40.6%  35.8% 37.1% Combined ratio292.9% 231.7%  156.0% 134.9%           Contribution to combined ratio from net (favorable)         adverse prior year development185.0% 100.0%  55.3% 21.2%           Accident year combined ratio107.9% 131.7%  100.7% 113.7%            Net Investment IncomeNet investment income increased 5.8% to $5.8 million for the year ending December 31, 2024, compared to $5.4 million in the prior year period. Change in Fair Value of Equity SecuritiesDuring the quarter, the Company reported a loss of $21,000 from the change in fair value of equity investments, compared to a $13,000 gain in the prior year period. Net Income (Loss) allocable to common shareholdersThe Company reported a net loss allocable to common shareholders of $25.4 million, or $2.08 per share, for the fourth quarter of 2024. For the full year 2024, the Company reported net income allocable to common shareholders of $23.5 million, or $1.93 per share. Adjusted Operating Income (Loss) In the fourth quarter of 2024, the Company reported an adjusted operating loss of $25.8 million, or $2.11 per share. See Definitions of Non-GAAP Measures. About Conifer HoldingsConifer Holdings, Inc. is a Michigan-based property and casualty holding company. Through its subsidiaries, Conifer offers specialty insurance coverage for both commercial and personal lines, marketing through independent agents. The Company is traded on the Nasdaq Capital Market under the symbol CNFR. Additional information is available on the Company's website at www.ir.cnfrh.com. 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 future revenue, premiums, earnings, its capital position, expansion, and business 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 28, 2025 and subsequent reports filed with or furnished to the SEC. Any forward-looking statement made by us in this press release 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. Definitions of Non-GAAP MeasuresConifer 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: 1) net realized investment gains and losses, 2) change in fair value of equity securities 3) other gains and 4) net income from discontinued operations. 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 (loss) and adjusted operating income (loss) per share:     Three Months Ended December 31, Year Ended December 31,   2024 2023 2024 2023   (dollar in thousands, except share and per share amounts)          Net income (loss)$(25,382) $(19,460) $24,347  $(25,904) Less:        Net realized investment gains (losses) -   (20)  (125)  (20) Change in fair value of equity securities (21)  13   (203)  608  Other gains 646   -   646   -  Net income from discontinued operations (186)  (42)  58,587   1,375  Impact of income tax expense (benefit) from adjustments * -   -   -   -  Adjusted operating income (loss)$(25,821) $(19,411) $(34,558) $(27,867)           Weighted average common shares, diluted 12,222,881   12,222,881   12,222,881   12,220,551            Diluted income (loss) per common share:        Net income (loss)$(2.08) $(1.59) $1.99  $(2.12) Less:        Net realized investment gains (losses) -   -   (0.01)  -  Change in fair value of equity securities -   -   (0.02)  0.05  Other gains 0.05   -   0.06   -  Net income from discontinued operations (0.02)  -   4.79   0.11  Impact of income tax expense (benefit) from adjustments * -   -   -   -  Adjusted operating income (loss), per share$(2.11) $(1.59) $(2.83) $(2.28)            * The Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2024 and December 31, 2023, respectively. As a result, there were no taxable impacts to adjusted operating income from the adjustments to net income (loss) in the table above after taking into account the use of NOLs and the change in the valuation allowance.      Conifer Holdings, Inc. and Subsidiaries Consolidated Balance Sheets (dollars in thousands)       December 31 December 31,   2024   2023  Assets    Investment securities:    Debt securities, at fair value (amortized cost of $117,827 and$105,665  $122,113  $135,370, respectively)    Equity securities, at fair value (cost of $1,836 and $2,385, respectively) 1,603   2,354  Short-term investments, at fair value 21,151   20,838  Total investments 128,419   145,305       Cash and cash equivalents 27,654   10,663  Premiums and agents' balances receivable, net 9,901   29,364  Receivable from Affiliate -   1,047  Reinsurance recoverables on unpaid losses 84,490   70,807  Reinsurance recoverables on paid losses 6,919   12,619  Prepaid reinsurance premiums 6,088   28,908  Deferred policy acquisition costs 6,380   6,405  Receivable from contingent considerations 8,070   -  Other assets 3,735   7,036  Assets from discontinued operations -   3,452  Total assets$281,656  $315,606       Liabilities and Shareholders' Equity    Liabilities:    Unpaid losses and loss adjustment expenses$189,285  $174,612  Unearned premiums 30,590   65,150  Reinsurance premiums payable 1   246  Debt 11,932   25,061  Funds held under reinsurance agreements 25,829   24,550  Premiums payable to other insureds -   13,986  Liabilities from discontinued operations -   4,083  Accounts payable and accrued expenses 2,494   5,029  Total liabilities 260,131   312,717       Commitments and contingencies -   -       Shareholders' equity:    Series A Preferred stock, no par value (10,000,000 shares authorized; 0 and 1,000   issued and outstanding, respectively) -   6,000  Common stock, no par value (100,000,000 shares authorized; 12,222,881    issued and outstanding, respectively) 98,178   98,100  Accumulated deficit (63,153)  (86,683) Accumulated other comprehensive income (loss) (13,500)  (14,528) Total shareholders' equity 21,525   2,889  Total liabilities and shareholders' equity$281,656  $315,606             Conifer Holdings, Inc. and SubsidiariesConsolidated Statements of Operations (Unaudited)(dollars in thousands, except share and per share data)          Three Months Ended Year Ended  December 31, December 31,  2024 2023 2024 2023          Revenue and Other Income        Premiums        Gross earned premiums$19,721  $38,115  $106,612  $146,572  Ceded earned premiums (7,013)  (23,294)  (45,750)  (62,637) Net earned premiums 12,708   14,821   60,862   83,935  Net investment income 1,352   1,411   5,763   5,447  Net realized investment gains (losses) -   (20)  (125)  (20) Change in fair value of equity securities (21)  13   (203)  608  Other gains 646   -   646   -  Other income 41   144   328   552  Total revenue and other income 14,726   16,369   67,271   90,522           Expenses        Losses and loss adjustment expenses, net 32,349   28,470   73,302   82,413  Policy acquisition costs 3,535   2,392   13,335   15,797  Operating expenses 3,165   3,969   11,831   16,738  Interest expense 862   845   4,883   3,206  Total expenses 39,911   35,676   103,351   118,154           Income (loss) from continuing operations before income taxes (25,185)  (19,307)  (36,080)  (27,632) Income tax expense (benefit) 11   111   (1,840)  (353)          Net income (loss) from continuing operations$(25,196) $(19,418) $(34,240) $(27,279) Net income (loss) from discontinued operations (186)  (42)  58,587   1,375  Net income (loss) (25,382)  (19,460)  24,347   (25,904) Series A Preferred Stock Dividends and Redemption premium -   19   817   19  Net income (loss) allocable to common shareholders (25,382)  (19,479)  23,530   (25,923)          Earnings (loss) per common share, basic and diluted        Net income (loss) from continuing operations$(2.06) $(1.59) $(2.87) $(2.23) Net income (loss) from discontinued operations$(0.02) $(0.00) $4.79  $0.11  Net income (loss) allocable to common shareholders$(2.08) $(1.59) $1.93  $(2.12)          Weighted average common shares outstanding,        basic and diluted 12,222,881   12,222,881   12,222,881   12,220,551            For Further Information:Jessica Gulis, 248.559.0840ir@cnfrh.com

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