[Part I — Financial Information](index=3&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) This part presents the unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1 — Financial Statements](index=3&type=section&id=Item%201%20%E2%80%94%20Financial%20Statements) This section presents unaudited consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flows, with detailed notes [Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) The consolidated balance sheets show a decrease in total assets and shareholders' equity, with an increase in total liabilities | Metric (in thousands) | June 30, 2022 (Unaudited) | December 31, 2021 | | :---------------------- | :------------------------ | :------------------ | | Total Assets | $275,055 | $290,404 | | Total Liabilities | $258,078 | $249,901 | | Total Shareholders' Equity | $16,977 | $40,503 | [Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) The statements of operations show a net loss for Q2 and H1 2022, contrasting with net income in prior periods | Metric (dollars in thousands, except per share data) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net earned premiums | $24,576 | $24,838 | $48,531 | $47,673 | | Total revenue and other income | $24,683 | $35,452 | $50,049 | $61,759 | | Losses and loss adjustment expenses, net | $22,251 | $17,926 | $40,269 | $37,288 | | Net income (loss) | $(8,399) | $5,552 | $(11,269) | $916 | | Earnings (loss) per common share, basic and diluted | $(0.86) | $0.57 | $(1.16) | $0.09 | [Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) The statements of comprehensive income (loss) show a total comprehensive loss for Q2 and H1 2022 due to unrealized investment losses | Metric (dollars in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(8,399) | $5,552 | $(11,269) | $916 | | Unrealized investment gains (losses), net of tax | $(5,007) | $394 | $(12,294) | $(1,530) | | Total comprehensive income (loss) | $(13,476) | $6,848 | $(23,633) | $(655) | [Consolidated Statements of Changes in Shareholders' Equity (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20(Unaudited)) Shareholders' equity significantly decreased from December 2021 to June 2022, driven by net loss and comprehensive loss | Metric (dollars in thousands) | December 31, 2021 | June 30, 2022 | | :---------------------------- | :---------------- | :------------ | | Total Shareholders' Equity | $40,503 | $16,977 | | Net income (loss) | — | $(11,269) |\ | Other comprehensive income (loss) | — | $(12,364) | [Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Cash flows show increased cash used in operating activities for H1 2022, with investing and financing providing cash | Metric (dollars in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $(15,474) | $(4,460) | | Net cash provided by (used in) investing activities | $13,698 | $4,942 | | Net cash provided by (used in) financing activities | $5,011 | $(4,007) | | Cash at end of period | $13,148 | $4,668 | [Notes to Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed disclosures on accounting policies, financial instruments, debt, equity, and segment performance [1. Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines accounting policies, including COVID-19 impact and new guidance, with no material disruption or expected impact - The Company has not seen a major disruption in its business as a result of the COVID-19 Pandemic and currently does not expect a **material negative impact** to its financial position or results of operations[28](index=28&type=chunk) - The Company is engaged in the sale of property and casualty insurance products, organized into commercial lines, personal lines, and agency business[30](index=30&type=chunk) - Management does not expect recently issued accounting guidance (ASU 2016-13 and ASU 2020-04) to have a **material impact** on the Company's consolidated financial statements[34](index=34&type=chunk) [2. Investments](index=9&type=section&id=2.%20Investments) This note details the investment portfolio, showing significant unrealized losses on available-for-sale debt securities and increased net investment income | Metric (dollars in thousands) | June 30, 2022 | December 31, 2021 | | :---------------------------- | :------------ | :---------------- | | Total debt securities, at fair value | $119,207 | $149,783 | | Gross Unrealized Losses (Debt Securities) | $(13,248) | $(1,847) | | Metric (dollars in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------- | :----------------------------- | :----------------------------- | | Net investment income | $1,071 | $1,035 | - The Company did not record a credit-related other-than-temporary impairment (OTTI) loss for the six months ended June 30, 2022 and December 31, 2021[37](index=37&type=chunk) [3. Fair Value Measurements](index=12&type=section&id=3.%20Fair%20Value%20Measurements) This note explains the fair value hierarchy, with most investments in Level 2 and subordinated debt in Level 3 - Fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (unobservable inputs)[43](index=43&type=chunk) - Level 2 investments, primarily debt securities, comprise **80.6%** of the total investment portfolio's fair value as of June 30, 2022[47](index=47&type=chunk) - Subordinated debt is entirely comprised of Level 3 fair value measurements, determined using a valuation model incorporating security attributes and market rates[47](index=47&type=chunk)[49](index=49&type=chunk) [4. Deferred Policy Acquisition Costs](index=15&type=section&id=4.%20Deferred%20Policy%20Acquisition%20Costs) Deferred policy acquisition costs decreased for H1 2022 as amortization exceeded new deferrals | Metric (dollars in thousands) | June 30, 2022 | June 30, 2021 | | :---------------------------- | :------------ | :------------ |\ | Balance at end of period | $10,747 | $13,121 | | Net change (six months) | $(1,520) | $878 | [5. Unpaid Losses and Loss Adjustment Expenses](index=15&type=section&id=5.%20Unpaid%20Losses%20and%20Loss%20Adjustment%20Expenses) This note details reserving for unpaid losses and LAE, showing significant prior-year adverse development, mainly in commercial lines | Metric (dollars in thousands) | June 30, 2022 | June 30, 2021 | | :---------------------------- | :------------ | :------------ | | Gross reserves - end of period | $140,996 | $117,852 | | Prior-year adverse development (six months) | $15,045 | $11,988 | - The **$15.0 million** adverse development for the six months ended June 30, 2022, was substantially all attributable to commercial lines of business, related to 2018 and prior, 2019, and 2020 accident years[53](index=53&type=chunk) [6. Reinsurance](index=16&type=section&id=6.%20Reinsurance) This note describes reinsurance strategy to limit losses, impacting net written and earned premiums for commercial and homeowners risks | Metric (dollars in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------- | :----------------------------- | :----------------------------- | | Net written premiums | $45,287 | $53,015 | | Net earned premiums | $48,531 | $47,673 | | Net Losses and LAE | $40,269 | $37,288 | - The Company ceded **40%** of specific commercial liability risks in excess of **$400,000** and **60%** in excess of **$300,000** in 2022, and specific commercial property risks in excess of **$300,000**[54](index=54&type=chunk) [7. Debt](index=17&type=section&id=7.%20Debt) This note details debt instruments, including senior and subordinated notes and a line of credit, with covenant non-compliance subsequently waived | Debt Type (dollars in thousands) | June 30, 2022 | December 31, 2021 | | :------------------------------- | :------------ | :---------------- | | Senior unsecured notes | $24,056 | $23,926 | | Subordinated notes | $9,664 | $9,638 | | Total Debt | $33,720 | $33,564 | - The Company was not in compliance with tangible net worth and debt-to-total capital covenants for both subordinated notes and the line of credit as of March 31, 2022, and June 30, 2022, but received waivers and amendments[61](index=61&type=chunk)[62](index=62&type=chunk) [8. Shareholder's Equity](index=18&type=section&id=8.%20Shareholder's%20Equity) This note details common stock, including shares outstanding and a **$5.0 million** equity issuance in May 2022, finalized in August | Metric (shares) | June 30, 2022 | | :---------------------- | :------------ | | Issued and outstanding common shares | 9,715,324 | - The Company entered into a subscription agreement to issue **$5.0 million** of equity, which was converted into **2,500,000 shares** of common stock at **$2.00 per share** in August 2022[64](index=64&type=chunk) [9. Accumulated Other Comprehensive Income (Loss)](index=19&type=section&id=9.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Accumulated other comprehensive income (loss) significantly decreased due to unrealized losses on available-for-sale securities | Metric (dollars in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------- | :----------------------------- | :----------------------------- | | Balance at beginning of period | $(2,110) | $912 | | Net other comprehensive income (loss) | $(12,364) | $(1,571) | | Balance at end of period | $(14,474) | $(659) | [10. Earnings Per Share](index=19&type=section&id=10.%20Earnings%20Per%20Share) This note presents basic and diluted earnings (loss) per common share, which were negative for current periods | Metric (dollars in thousands, except per share and share amounts) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(8,399) | $5,552 | $(11,269) | $916 | | Earnings (loss) per common share, basic and diluted | $(0.86) | $0.57 | $(1.16) | $0.09 | [11. Stock-based Compensation](index=19&type=section&id=11.%20Stock-based%20Compensation) This note details stock-based compensation, including issued stock options and RSUs, and recognized compensation expense - The Company issued options to purchase **630,000 shares** of common stock to executive officers on March 8, 2022, with a strike price of **$4.53 per share** and a 5-year vesting period[69](index=69&type=chunk) | Metric (dollars in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------- | :----------------------------- | :----------------------------- | | Compensation expense related to RSUs | $29 | $108 | | Compensation expense related to stock options | $67 | $25 | [12. Commitments and Contingencies](index=20&type=section&id=12.%20Commitments%20and%20Contingencies) This note addresses legal proceedings, with management believing no material loss will exceed accrued amounts - The Company is subject to various claims, lawsuits, and proceedings, primarily related to alleged errors or omissions in insurance placement and claims administration[72](index=72&type=chunk) - Management believes that there is no reasonable possibility of any **material loss** exceeding amounts already accrued from these legal proceedings[72](index=72&type=chunk) [13. Segment Information](index=20&type=section&id=13.%20Segment%20Information) This note provides segment financial information, showing an underwriting loss for commercial lines and a gain for personal lines for H1 2022 | Metric (dollars in thousands) | Six Months Ended June 30, 2022 | | :---------------------------- | :----------------------------- | | Commercial Lines Gross written premiums | $60,662 | | Personal Lines Gross written premiums | $9,720 | | Total Underwriting Gross written premiums | $70,382 | | Commercial Lines Segment gain (loss) | $(10,506) | | Personal Lines Segment gain (loss) | $300 | - The Company's primary measure for assessing segment performance is segment underwriting gain or loss, which includes net earned premiums and other income less losses, policy acquisition costs, and operating expenses[73](index=73&type=chunk) [14. Subsequent Events](index=23&type=section&id=14.%20Subsequent%20Events) This note discloses significant post-June 30, 2022 events, including a **$5.0 million** equity issuance and a **$14.5 million** FHLB loan - On August 10, 2022, the Company issued **2,500,000 shares** of common stock at **$2.00 per share**, increasing total shareholders' equity by **$5.0 million**[78](index=78&type=chunk) - One of the Company's Insurance Company Subsidiaries borrowed **$14.5 million** from the Federal Home Loan Bank of Indiana on July 7, 2022, for short-term cash needs[79](index=79&type=chunk) [Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202%20%E2%80%94%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, covering recent developments, business overview, accounting policies, and analysis of operations, liquidity, and non-GAAP measures [Forward-Looking Statements](index=24&type=section&id=Forward-Looking%20Statements) This disclaimer highlights that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on management's good-faith belief and reasonable judgment, but actual results may differ materially due to important factors, risks, and uncertainties[83](index=83&type=chunk) [Recent Developments](index=24&type=section&id=Recent%20Developments) Recent developments include reduced COVID-19 risk, agency business sale, and an A.M. Best rating downgrade not expected to materially affect business - The Company sees **reduced risk** from the COVID-19 Pandemic and does not expect a **material negative impact** to its financial position or results of operations[84](index=84&type=chunk) - On June 30, 2021, the Company's agency sold certain personal and commercial lines customer accounts to Venture Agency Holdings, Inc., a related party, recognizing an **$8.9 million gain**[85](index=85&type=chunk) - A.M. Best downgraded the Company's Long-Term Issuer Credit Rating to '**bb-**' and its insurance subsidiaries' Financial Strength Rating to '**B+**' in April 2022, with a Stable outlook, not expected to have a **material effect**[88](index=88&type=chunk) [Business Overview](index=25&type=section&id=Business%20Overview) The company offers specialty commercial and personal insurance and wholesale agency services, de-emphasizing Florida homeowners and expanding non-risk revenue - The Company markets and services product offerings through specialty commercial and specialty personal insurance business lines, authorized to write in **45 states** as an excess and surplus lines carrier and licensed in **42 states** as an admitted carrier[89](index=89&type=chunk) - The Company is de-emphasizing its Florida homeowners' business and reducing exposures in other wind-exposed states due to recent industry events[89](index=89&type=chunk) - The wholesale agency business aims to develop more non-risk revenue streams, but its production for third-party insurers will diminish following the sale of certain agency business[89](index=89&type=chunk) [Critical Accounting Policies and Estimates](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No material changes occurred to critical accounting policies and estimating methodologies during the six months ended June 30, 2022 - No **material changes** occurred to the Company's critical accounting policies and estimating methodologies during the six months ended June 30, 2022[90](index=90&type=chunk) [Executive Overview](index=25&type=section&id=Executive%20Overview) The company reported increased gross written premiums but a net loss for Q2 and H1 2022, with a combined ratio over **100%** | Metric (dollars in millions, except per share data) | Q2 2022 | Q2 2021 | 6 Months 2022 | 6 Months 2021 | | :------------------------------------------------ | :------ | :------ | :------------ | :------------ | | Gross written premiums | $37.4 | $35.0 | $70.4 | $65.4 | | Net income (loss) | $(8.4) | $5.6 | $(11.3) | $0.9 | | Earnings (loss) per share | $(0.86) | $0.57 | $(1.16) | $0.09 | | Underwriting combined ratio | 129.2% | 113.2% | 121.0% | 120.8% | [Results of Operations For The Three Months Ended June 30, 2022 and 2021](index=26&type=section&id=Results%20of%20Operations%20For%20The%20Three%20Months%20Ended%20June%2030%2C%202022%20and%202021) Q2 2022 saw increased gross written premiums, decreased net premiums due to reinsurance, and significantly higher net losses and LAE, resulting in an underwriting loss | Metric (dollars in thousands) | Q2 2022 | Q2 2021 | Change ($) | Change (%) | | :---------------------------- | :-------- | :-------- | :--------- | :--------- | | Gross written premiums | $37,418 | $34,981 | $2,437 | 7.0% | | Net written premiums | $27,266 | $28,532 | $(1,266) | (4.4)% | | Net earned premiums | $24,576 | $24,838 | $(262) | (1.1)% | | Net losses and LAE | $22,251 | $17,926 | $4,325 | 24.1% | | Underwriting gain (loss) | $(7,207) | $(3,660) | $(3,547) | * | | Loss ratio | 90.2% | 71.9% | | | | Expense ratio | 39.0% | 41.3% | | | | Combined ratio | 129.2% | 113.2% | | | - The increase in losses was driven by **$9.5 million** of adverse development in commercial lines during Q2 2022, compared to **$6.2 million** in Q2 2021[105](index=105&type=chunk)[106](index=106&type=chunk) - The expense ratio decreased by **2.3 percentage points** due to a **$2.1 million** ceding commission from new excess of loss reinsurance treaties, which were not present in 2021[109](index=109&type=chunk) [Results of Operations For The Six Months Ended June 30, 2022 and 2021](index=30&type=section&id=Results%20of%20Operations%20For%20The%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) H1 2022 saw increased gross written premiums, significantly decreased net written premiums due to reinsurance, and higher net losses and LAE, leading to an underwriting loss | Metric (dollars in thousands) | 6 Months 2022 | 6 Months 2021 | Change ($) | Change (%) | | :---------------------------- | :------------ | :------------ | :--------- | :--------- | | Gross written premiums | $70,382 | $65,354 | $5,028 | 7.7% | | Net written premiums | $45,287 | $53,015 | $(7,728) | (14.6)% | | Net earned premiums | $48,531 | $47,673 | $858 | 1.8% | | Net losses and LAE | $40,269 | $37,288 | $2,981 | 8.0% | | Underwriting gain (loss) | $(10,196) | $(10,730) | $534 | 5.0% | | Loss ratio | 82.7% | 77.9% | | | | Expense ratio | 38.3% | 42.9% | | | | Combined ratio | 121.0% | 120.8% | | | - The Company experienced **$15.0 million** of adverse development for the six months ended June 30, 2022, primarily in commercial lines, compared to **$12.0 million** in the prior year[119](index=119&type=chunk)[120](index=120&type=chunk) - The expense ratio decreased by **4.6 percentage points** due to a **$4.3 million** ceding commission from new excess of loss reinsurance treaties[125](index=125&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by cash and investments, with operating activities using cash, while investing and financing provided cash; statutory capital decreased - At June 30, 2022, the Company had **$41.1 million** in cash, cash equivalents, and short-term investments[128](index=128&type=chunk) | Cash Flow Activity (six months, dollars in millions) | 2022 | 2021 | | :------------------------------------------------- | :------ | :------ | | Operating Activities | $(15.5) | $(4.5) | | Investing Activities | $13.7 | $4.9 | | Financing Activities | $5.0 | $(4.0) | | Statutory Capital and Surplus (dollars in millions) | June 30, 2022 | December 31, 2021 | | :------------------------------------------------ | :------------ | :---------------- | | Aggregate statutory capital and surplus | $58.0 | $63.9 | [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP Adjusted Operating Income and Per Share, excluding volatile items to assess ongoing performance | Metric (dollars in thousands, except per share data) | Q2 2022 | Q2 2021 | 6 Months 2022 | 6 Months 2021 | | :------------------------------------------------- | :-------- | :-------- | :------------ | :------------ | | Adjusted operating income (loss) | $(7,279) | $(3,893) | $(10,355) | $(10,913) | | Adjusted operating income (loss) per share | $(0.75) | $(0.40) | $(1.07) | $(1.13) | - Adjusted operating income excludes net realized investment gains or losses, other gains or losses, and changes in fair value of equity securities, all net of tax, to provide insight into ongoing business performance[131](index=131&type=chunk)[133](index=133&type=chunk) [Recently Issued Accounting Pronouncements](index=35&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section refers to Note 1 for detailed information on recently issued accounting pronouncements - Refer to Note 1 for detailed information regarding recently issued accounting pronouncements[134](index=134&type=chunk) [Item 3 — Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses primary market risks, including interest rate risk on fixed-income portfolios and credit risk with reinsurers, and mitigation strategies - The Company's primary market risk exposure is interest rate risk on its investment-grade, fixed-income securities portfolio, which had a fair value of **$148.2 million** at June 30, 2022[137](index=137&type=chunk) - Interest rate risk is mitigated by investing in securities with varied maturity dates and managing the portfolio's duration to a defined range of **three to four years** (effective duration was **3.5 years** at June 30, 2022)[137](index=137&type=chunk) - Credit risk, particularly with reinsurers, is managed by selecting financially strong reinsurers (A.M. Best rating of '**A-**' or better) and monitoring their financial condition[138](index=138&type=chunk) [Item 4 — Controls and Procedures](index=37&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control - The Company's disclosure controls and procedures were evaluated and deemed **effective** as of June 30, 2022[142](index=142&type=chunk) - There were no changes in internal control over financial reporting that **materially affected** or are reasonably likely to **materially affect** the Company's internal control over financial reporting for the three months ended June 30, 2022[143](index=143&type=chunk) [Part II — Other Information](index=38&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) This part includes information on legal proceedings, risk factors, other subsequent events, and exhibits [Item 1 — Legal Proceedings](index=38&type=section&id=Item%201%20%E2%80%94%20Legal%20Proceedings) This section refers to Note 12 of the Consolidated Financial Statements for legal proceedings information - Information on legal proceedings is incorporated by reference from Note 12 ~ Commitments and Contingencies of the Notes to the Consolidated Financial Statements[146](index=146&type=chunk) [Item 1A — Risk Factors](index=38&type=section&id=Item%201A%20%E2%80%94%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K - No **material changes** to the risk factors disclosed in the Annual Report on Form 10-K filed on March 10, 2022[147](index=147&type=chunk) [Item 5 — Other Information](index=38&type=section&id=Item%205%20%E2%80%94%20Other%20Information) This section details subsequent events: an unregistered equity private placement, a line of credit amendment, and a new FHLB loan [(a) Unregistered Sales of Equity Securities and Use of Proceeds after June 30, 2022](index=38&type=section&id=(a)%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%20after%20June%2030%2C%202022) A private placement on August 10, 2022, issued **2,500,000 shares** for **$5.0 million**, with proceeds for growth capital in commercial segments - On August 10, 2022, the Company issued **2,500,000 shares** of common stock at **$2.00 per share**, totaling **$5.0 million**, through a private placement offering to accredited investors[148](index=148&type=chunk) - The proceeds from the equity issuance will be used for growth capital in the Company's specialty core commercial business segments[148](index=148&type=chunk) [(b) Amendment of Line of Credit after June 30, 2022](index=38&type=section&id=(b)%20Amendment%20of%20Line%20of%20Credit%20after%20June%2030%2C%202022) The **$10.0 million** line of credit was amended on August 8, 2022, waiving prior covenant breaches and eliminating future financial debt covenants - The Company's **$10.0 million** line of credit was amended on August 8, 2022, to waive June 30, 2022, debt covenant breaches and eliminate future financial debt covenant requirements[149](index=149&type=chunk) - The amendment requires prior bank approval for any future draws on the line of credit[149](index=149&type=chunk) [(c) Federal Home Loan Bank of Indiana Loan](index=38&type=section&id=(c)%20Federal%20Home%20Loan%20Bank%20of%20Indiana%20Loan) This section refers to Note 14 for details on a **$14.5 million** loan from the Federal Home Loan Bank of Indiana - Refer to Note 14 ~ Subsequent Events for more information regarding the **$14.5 million** loan from the Federal Home Loan Bank of Indiana[150](index=150&type=chunk) [Item 6 — Exhibits](index=39&type=section&id=Item%206%20%E2%80%94%20Exhibits) This section lists exhibits filed with Form 10-Q, including credit agreement amendments and various certifications - The exhibits include the Six Amendment to Credit Agreement, Section 302 Certifications from Co-CEOs and CFO, Section 906 Certifications from Co-CEOs and CFO, and inline XBRL documents[153](index=153&type=chunk) [Signatures](index=40&type=section&id=Signatures) This section contains official signatures, certifying the report filing by Conifer Holdings, Inc. through its Chief Financial Officer - The report is duly signed on behalf of Conifer Holdings, Inc. by Harold J. Meloche, Chief Financial Officer, Principal Financial Officer, and Principal Accounting Officer, dated August 10, 2022[156](index=156&type=chunk)[157](index=157&type=chunk)

Q1 2022 INVESTOR CONFERENCE CALL May 12, 2022 Nasdaq: CNFR Fulfilling the Unique Needs of Specialty Insurance Markets as a Long-Term Partner 2 SAFE HARBOR STATEMENT | --- | --- | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Gross written premiums increased by 9% to approximately $33 million, primarily due to rate increases on the book of business [8][12] - The combined ratio improved to 112% from 129% year-over-year, with a loss ratio of 75%, down from 84% [22][24] - The company reported a net loss of $2.9 million or $0.30 per share, compared to a net loss of $4.6 million or $0.48 per share in the prior year [26][27] Business Line Data and Key Metrics Changes - Commercial lines accounted for 87% of total gross written premiums, with a 5% increase to $29 million [12][16] - Personal lines premiums grew by 39% to approximately $4 million, representing 13% of gross written premiums, with a combined ratio of 85% [19][20][22] Market Data and Key Metrics Changes - The company continues to expand its market share in key geographies, particularly in Michigan, which accounted for over 28% of total gross written premiums [15][19] - Claims in the quick service restaurant sector decreased significantly, with open claims down 52% from Q1 2021 [18] Company Strategy and Development Direction - The company is focused on disciplined expansion in specialty markets and improving underwriting profitability through a better business mix [10][11] - Management is committed to mitigating future reserve development and enhancing loss ratio improvement through various initiatives [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current accident years performing well and noted that claims are decreasing [61] - The company is optimistic about moving in the right direction with its book of business and geographic management [61] Other Important Information - The expense ratio improved to 38%, down 700 basis points from 45% in the same period last year, with a near-term goal of 35% [24][42] - The company recorded a net realized investment loss of $69,000 for the first quarter of 2022, compared to a net realized gain of $2.9 million in the prior year [25] Q&A Session Summary Question: Update on claim costs going down and court activity - Management confirmed that court activity has picked up, leading to both more cases going to trial and quicker settlements [30][31] Question: Patterns in reserve development related to court cases - Management noted that judges are actively trying to resolve cases, which has led to increased activity in the courts [33] Question: Competitive environment for rates and terms - The property side remains a strong rate environment, with evidence of rate increases picking up again into Q2 [35] Question: Expense ratio improvement and future targets - Management indicated that the expense ratio improvement is sustainable, but reaching the 35% target this year may be too ambitious [42][44] Question: Geographic exposures in commercial lines - Management confirmed a decline in Florida exposure while focusing on growth in Michigan and Texas [49] Question: Catastrophe exposure and reinsurance structure - The company has a retention of $2 million for catastrophes, with improved reinsurance coverage reducing overall risk [51][52]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-37536 Conifer Holdings, Inc. (Exact name of registrant as specified in its charter) Michigan 27-1298795 (State or other jurisdiction of inc ...

[FORM 10-K Filing Information](index=1&type=section&id=FORM%2010-K) This section provides key registrant details for Conifer Holdings, Inc., a Michigan-registered insurance holding company, including its Nasdaq listing and auditor information [Registrant Information](index=1&type=section&id=Registrant%20Information) Conifer Holdings, Inc. is a Michigan-registered insurance holding company, filing its 10-K annual report as a smaller reporting company for the fiscal year ended December 31, 2021 - Conifer Holdings, Inc. is a **Michigan-registered** insurance holding company, filing its 10-K annual report as a **smaller reporting company** for the fiscal year ended **December 31, 2021**[2](index=2&type=chunk)[3](index=3&type=chunk)[4](index=4&type=chunk) - The company's common stock is listed on Nasdaq under the ticker symbol **CNFR**[3](index=3&type=chunk) Key Registrant Information | Metric | Detail | | :--- | :--- | | Registrant Name | Conifer Holdings, Inc. | | State of Incorporation | Michigan | | Ticker Symbol | CNFR | | Exchange Registered | The Nasdaq Stock Market LLC | | Filing Type | Smaller reporting company | | Aggregate Market Value of Non-Affiliate Common Stock (June 30, 2021) | Approximately **$10.1 million** | | Shares of Common Stock Outstanding (March 10, 2022) | **9,707,817 shares** | | Auditor | Deloitte & Touche LLP | | Auditor Location | Detroit, MI | [Part I](index=3&type=section&id=Part%20I) This section provides a comprehensive overview of Conifer Holdings, Inc.'s business, including its operational structure, product lines, competitive strengths, and regulatory environment [Business Overview](index=3&type=section&id=ITEM%201.%20BUSINESS) Conifer Holdings, Inc. is an insurance holding company primarily selling property and casualty insurance products through its subsidiaries, with a business model centered on commercial, personal, and wholesale agency operations - The company primarily sells property and casualty insurance products through its insurance subsidiaries, with business lines covering commercial, personal, and wholesale agency operations[11](index=11&type=chunk) - The company focuses on underserved markets, distributing products through over **4,600 independent agents**, emphasizing underwriting discipline and conservative investment strategies[11](index=11&type=chunk)[16](index=16&type=chunk) - As of December 31, 2021, approximately **45.5%** of the company's total premiums were admitted business, and **54.5%** were Excess and Surplus (E&S) business[13](index=13&type=chunk) [Legal Organization](index=3&type=section&id=Legal%20Organization) Conifer Holdings, Inc., established in 2009, is a Michigan-registered insurance holding company with three insurance subsidiaries and one wholesale agency subsidiary - Conifer Holdings, Inc. was established in **2009** as a Michigan-registered insurance holding company[10](index=10&type=chunk) - The company owns three insurance subsidiaries: Conifer Insurance Company (CIC), Red Cedar Insurance Company (RCIC), White Pine Insurance Company (WP

Conifer Holdings Inc. Q4 2021 INVESTOR CONFERENCE CALL March 3, 2022 Nasdaq: CNFR Fulfilling the Unique Needs of Specialty Insurance Markets as a Long-Term Partner 2 SAFE HARBOR STATEMENT | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Gross written premiums increased by approximately 19% year-over-year, leading to greater net earned premium growth and a reduction in the expense ratio [7][24] - The combined ratio improved to 104% in Q4 2021 from 111% in Q4 2020, with an overall loss ratio of 62%, down from 67% in the same period last year [24] - The company reported a net loss of $801,000 or $0.08 per share for Q4 2021, compared to a net income of $3.3 million or $0.34 per share in the prior year [28] Business Line Data and Key Metrics Changes - Commercial lines represented 88% of total production, with gross written premiums up 10% to $29 million in Q4 2021 and up almost 14% for the full year [12] - Personal lines saw a 63% increase in premiums for Q4 2021 to approximately $4 million, and a 75% increase for the full year to $15 million [15] - The combined ratio for personal lines improved to 77%, a significant improvement from the previous year's ratio [25] Market Data and Key Metrics Changes - Michigan gross written premiums increased by $6 million or 26% in 2021, indicating room for continued market share expansion [13] - Hospitality premiums began to rebound as COVID restrictions eased, contributing to overall premium growth [14] Company Strategy and Development Direction - The company is focused on optimizing its business mix and expanding its book of business in profitable lines [8][10] - Management emphasized the importance of driving bottom-line profitability for shareholders while reducing exposure to lines that have negatively impacted reserves [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a sub-40 expense ratio by mid-2022, with expectations for continued top-line growth [35][36] - The competitive environment is described as firm, particularly in property lines, although some softening in rate increases was noted [37] Other Important Information - The company recognized a $1.2 million increase in the fair value of equity investments in Q4 2021 [27] - Total assets were reported at $290 million at year-end, with a book value of $4.17 per share [30] Q&A Session Summary Question: Outlook for the expense ratio becoming sub-40 - Management expects to see below 40 expense ratios by the second quarter of 2022, possibly even in the first quarter [35] Question: Competitive environment and rate increases - Management noted that while overall rate increases may not be as significant, certain lines continue to experience strong rate environments [36][37] Question: Details on commercial lines reserve development - The QSR line was highlighted as the largest area of reserve development, particularly from accident years 2018 and 2019 [40] Question: Concerns about litigation environment - Management acknowledged a combination of IBNR and increased litigation costs affecting reserves, particularly in Florida [44] Question: Changes in reinsurance and ceded premium - A new reinsurance treaty effective December 31 caused an increase in ceded written premium, but it is expected to have minimal impact on the bottom line [50]

Call Start: 08:30 January 1, 0000 8:55 AM ET Conifer Holdings, Inc. (NASDAQ:CNFR) Q3 2021 Earnings Conference Call November 11, 2021 08:30 ET Company Participants Adam Prior - Investor Relations, The Equity Group, Inc. Jim Petcoff - Chairman & Chief Executive Officer Nick Petcoff - Executive Vice President, Secretary & Director Harold Meloche - Treasurer & Chief Financial Officer Brian Roney - President Conference Call Participants Bob Farnam - Boenning & Scattergood Alex Bolton - Raymond James Operator Goo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-37536 Conifer Holdings, Inc. (Exact name of registrant as specified in its charter) Michigan 27-1298795 (State or other jurisdiction of ...

Conifer Holdings, Inc. (NASDAQ:CNFR) Q2 2021 Earnings Conference Call August 12, 2021 9:00 AM ET Company Participants James Petcoff - Chairman & CEO Nick Petcoff - EVP, Secretary & Director Harold Meloche - Treasurer & CFO Andrew Petcoff - SVP & Director Brian Roney - President Adam Prior - IR, The Equity Group Conference Call Participants Paul Newsome - Piper Sandler Bob Farnam - Boenning and Scattergood Alex Bolton - Raymond James Operator Good morning, and welcome to the Conifer Holdings Second Quarter 2 ...