GREENWICH, Conn.--(BUSINESS WIRE)--Tiptree Inc. (NASDAQ: TIPT) (the "Company†or "Tiptree†) today announced that, at the Company's Special Meeting of Shareholders (the "Special Meeting†), Tiptree shareholders approved the previously announced Agreement and Plan of Merger (the "Merger Agreement†) by and among Tiptree, The Fortegra Group, Inc. ("Fortegra†) and DB Insurance Co., Ltd. ("DB†), providing for the acquisition by DB of all of the outstanding stock of Fortegra in an all-cash deal by mean. ...

Core Viewpoint - The proposed sale of Fortegra by Tiptree Inc. to DB Insurance has led to divided opinions among proxy advisory firms, setting the stage for a contentious shareholder vote on December 3rd [1][5]. Group 1: Transaction Details - DB Insurance, South Korea's second-largest non-life insurer, plans to acquire 100% of Fortegra's outstanding shares for approximately $1.65 billion in cash [2]. - The transaction is subject to approval by Tiptree stockholders, regulatory clearance, and other customary closing conditions [2]. Group 2: Proxy Advisory Firms' Recommendations - Institutional Shareholder Services Inc. (ISS) has recommended that stockholders vote "FOR" the proposed deal, citing a competitive sales process and the exploration of alternative transaction structures [3][4]. - Conversely, Glass, Lewis & Co. and Egan-Jones Ratings Company have recommended that shareholders vote against the proposed sale, indicating concerns over the sales process and potential value destruction [5][6]. Group 3: Shareholder Perspectives - Tiptree's board unanimously recommends that stockholders vote "FOR" the merger proposal, emphasizing the importance of every vote [5]. - Veradace Partners L.P., holding 5.1% of Tiptree's outstanding common stock, argues that the sale process was flawed and rushed, suggesting that it was designed to benefit management rather than shareholders [6][8]. Group 4: Financial Implications - Concerns have been raised regarding a sharp post-announcement share price decline and potential tax leakage amounting to hundreds of millions of dollars [7]. - Tiptree management has not provided a clear plan for returning nearly $1 billion in transaction proceeds to shareholders, raising further doubts about the transaction's value [7].

Core Viewpoint - Veradace Partners L.P., a significant shareholder of Tiptree Inc., is urging shareholders to reject the proposed sale of The Fortegra Group, Inc. to DB Insurance Co., Ltd. [1] Group 1 - Veradace holds a beneficial ownership of 5.0% of the outstanding common stock of Tiptree Inc. [1] - The proposed transaction involves the sale of Fortegra to DB Insurance. [1] - Veradace has issued a presentation detailing its reasons for opposing the sale. [1]

Core Insights - The U.S. Federal Reserve has reduced the federal funds target rate range by 25 basis points to 3.75% to 4.00%, with the overall event perceived as more hawkish than expected [8][9] - The mortgage industry is seeing significant activity, including mergers and acquisitions, with Carrington Mortgage Services acquiring Reliance First Capital [1] - The Non-QM (Qualified Mortgage) market is expanding, particularly among self-employed borrowers, indicating a growing demand for tailored lending solutions [2] Group 1: Federal Reserve Actions - The FOMC's decision to cut rates was met with dissent among members, reflecting differing views on economic conditions [8] - Fed Chair Powell has indicated that a December rate cut is uncertain, with market-implied odds dropping to around 60% from 90% [9] - The Fed's balance sheet reduction plans, particularly regarding mortgage-backed securities, could impact short-term funding markets [12][13] Group 2: Mortgage Industry Developments - Flyhomes has introduced a solution allowing borrowers to buy before selling, which has helped over 5,000 buyers in the past decade [4] - LoanStream is promoting its Non-QM lending programs with special pricing improvements during November [5] - Brokers Advantage Mortgage is offering early Black Friday deals with pricing improvements on Non-QM loans [6] Group 3: Market Trends and Opportunities - The upcoming NMP Webinar will focus on strategies for serving business owners in the Non-QM space, highlighting the importance of understanding this market segment [2] - The Chrisman Marketplace serves as a hub for mortgage industry vendors, providing cost-effective visibility for lenders [3] - The economic calendar is impacted by the government shutdown, delaying key reports that could influence market conditions [14]

Financial Performance - Tiptree reported net income of $31.0 million for the nine months ended September 30, 2025, a decrease from $33.8 million in the prior year period, primarily due to deal-related expenses and increased interest expense [225]. - Adjusted net income for the same period was $79.2 million, up from $72.8 million in the prior year, driven by growth in insurance operations [225]. - For the three months ended September 30, 2025, net income attributable to common stockholders was $6.4 million, a decrease of 46.2% from $11.9 million in the prior year period [246]. - Adjusted net income for the three months ended September 30, 2025 was $28.8 million, an increase of 3.2% from $27.9 million in the prior year period [247]. - Adjusted net income increased by $7.3 million, or 23.1%, to $39.1 million for the three months ended September 30, 2025 [276]. - Adjusted net income for the nine months ended September 30, 2025, was $135.2 million, an increase of 18.1% from $114.5 million in the prior year [291]. Revenue Growth - Total revenues for the nine months ended September 30, 2025, were $1.5 billion, reflecting a $26.5 million increase, or 1.8%, from the previous year [232]. - Total revenues for the three months ended September 30, 2025 were $540.3 million, an increase of 9.3% from $494.4 million in the prior year period [253]. - Insurance segment revenues for the three months ended September 30, 2025 were $522.6 million, up 8.6% from $481.0 million in the prior year period [253]. - Total revenues for the nine months ended September 30, 2025, increased by 1.8% to $1.5 billion compared to $1.5 billion in the prior year [292]. Premiums and Underwriting - Gross written premiums and premium equivalents increased by $304.2 million, or 13.7%, to $2.5 billion for the nine months ended September 30, 2025, attributed to growth in E&S insurance lines [232]. - Net written premiums rose to $1.2 billion, a 10.2% increase from the prior year, supported by stable premium retention levels [232]. - The combined ratio improved to 88.5%, an enhancement of 1.7 percentage points, driven by better underwriting performance [232]. - The combined ratio for the insurance segment indicates an underwriting profit, as it remains below 100% [272]. - The combined ratio improved to 87.3% from 90.2% in the prior year, reflecting better underwriting performance [288]. Stockholders' Equity - Tiptree's total stockholders' equity increased by 24.1% to $776.2 million as of September 30, 2025, compared to $625.5 million at the end of 2024 [232]. - Total stockholders' equity rose to $741.4 million as of September 30, 2025, up from $656.2 million as of September 30, 2024 [249]. - Total stockholders' equity as of September 30, 2025, was $741.4 million, up from $656.2 million as of September 30, 2024, representing an increase of 12.9% [345]. Expenses and Interest - Total expenses increased by 7.7% to $467.4 million, with significant increases in other expenses by $24.0 million, or 91.1% [276][282]. - Employee compensation and benefits increased by $3.9 million, or 10.2%, reflecting investments in human capital [282]. - Interest expense increased by $1.1 million, or 15.2%, to $8.3 million, primarily due to the issuance of new debt [283]. - Interest expense increased by 14.6% to $25.6 million for the nine months ended September 30, 2025, primarily due to the issuance of new debt [296]. Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $123.4 million, compared to $170.8 million for the same period in 2024, a decrease of 27.7% [356]. - Cash used in investing activities for the nine months ended September 30, 2025, was $122.9 million, compared to $146.2 million for the same period in 2024, a decrease of 15.9% [358]. - Cash provided by financing activities was $58.1 million for the nine months ended September 30, 2025, primarily from a senior secured credit facility of $75.0 million [360]. Corporate Actions - On September 26, 2025, Tiptree entered into a Merger Agreement to sell Fortegra for $1.65 billion in cash, with transaction expenses of approximately $8.1 million incurred [223]. - The company plans to sell Reliance for an estimated $51 million, representing 93.5% of tangible book value, as of September 30, 2025 [225]. - As of September 30, 2025, Tiptree owned approximately 78.9% of Fortegra [333]. Tax and Liabilities - The total income tax expense for the three months ended September 30, 2025, was $22.7 million, with an effective tax rate of 59.2%, significantly higher than the U.S. statutory rate of 21.0% [327]. - The deferred tax liability related to Fortegra increased to $109.2 million as of September 30, 2025, up by $24.5 million from the previous year [330].

Financial Performance - Total revenues for Q3 2025 were $540.3 million, representing a 9.3% increase from $494.4 million in Q3 2024[7] - Net income attributable to common stockholders for Q3 2025 was $6.4 million, down from $11.9 million in Q3 2024, with year-to-date net income at $31.0 million compared to $33.8 million in the prior year[7] - Adjusted net income for Q3 2025 was $28.8 million, an increase of 3.2% from $27.9 million in Q3 2024, with an annualized adjusted return on average equity of 22.9%[7] - The company reported a 1.8% increase in total revenues for the nine months ended September 30, 2025, compared to the same period in 2024[7] - Adjusted net income for the three months ended September 30, 2025, was $39.067 million, compared to $31.728 million for the same period in 2024, reflecting a year-over-year increase of 23.1%[15] - Total income before taxes for the three months ended September 30, 2025, was $38.27 million, up from $36.78 million in the prior year, representing a growth of 4.0%[15] - Total income before taxes for the nine months ended September 30, 2025, was $116,300,000, compared to $107,100,000 for the same period in 2024, representing an increase of approximately 8.3%[17] - Adjusted net income for the nine months ended September 30, 2025, was $106,794,000, up from $90,744,000 in 2024, reflecting a year-over-year growth of about 17.7%[17] - The adjusted net income before non-controlling interests for the nine months ended September 30, 2025, was $135,190,000, compared to $114,491,000 in 2024, marking an increase of approximately 18.1%[17] Assets and Liabilities - Total assets as of September 30, 2025, were $6.42 billion, up from $5.69 billion as of December 31, 2024[12] - Total liabilities increased to $5.67 billion as of September 30, 2025, compared to $5.04 billion at the end of 2024[12] - Cash and cash equivalents rose to $366.1 million as of September 30, 2025, from $320.1 million at the end of 2024[12] Corporate Actions - The company agreed to sell its mortgage business, Reliance First Capital, for approximately $51 million, expected to close in Q1 2026[6] - Tiptree's pro-forma book value as of September 30, 2025, is estimated to be $930 million after taxes and transaction expenses from the upcoming sales[6] - The company declared a dividend of $0.06 per share, with a record date of November 17, 2025, and a payment date of November 24, 2025[6] Equity and Returns - Adjusted return on average equity for Tiptree Inc. was 26.3% for the three months ended September 30, 2025, compared to 27.7% for the same period in 2024, indicating a slight decrease[15][16] - The average stockholders' equity for the three months ended September 30, 2025, was $732.394 million, compared to $637.1 million for the same period in 2024, showing an increase of 14.9%[15][16] - The adjusted return on average equity for the nine months ended September 30, 2025, was 20.5%, compared to 20.9% for the same period in 2024[17] - Average stockholders' equity increased to $700,867,000 for the nine months ended September 30, 2025, from $616,300,000 in 2024, indicating a growth of approximately 13.7%[17] Expenses and Losses - The company reported net realized and unrealized losses of $24.506 million for the three months ended September 30, 2025, compared to losses of $2.423 million in the same period of 2024, indicating increased volatility in investment performance[15] - Stock-based compensation expense for the three months ended September 30, 2025, was $5.627 million, compared to $5.957 million in the prior year, reflecting a decrease of 5.5%[15] - Non-recurring expenses for the three months ended September 30, 2025, totaled $12.501 million, while the previous year reported $119, indicating a significant increase in one-time costs[15] - The company reported a non-recurring expense of $18,050,000 for the nine months ended September 30, 2025, which included legal and other expenses related to the Fortegra IPO[19] - Non-cash fair value adjustments for the nine months ended September 30, 2025, amounted to $17,560,000, reflecting changes in the fair value of the Fortegra Additional Warrant liability[20] Tax Impacts - The impact of tax deconsolidation of Fortegra contributed $5.943 million to adjusted net income for the three months ended September 30, 2025[15] - The impact of tax deconsolidation of Fortegra contributed $18,603,000 to the adjusted net income for the nine months ended September 30, 2025[17] - The company incurred a tax expense of $2,728,000 on adjustments for the nine months ended September 30, 2025[17] Segment Performance - The company’s corporate segment reported a loss of $11.707 million for the three months ended September 30, 2025, compared to a loss of $5.257 million in the same period of 2024, indicating a worsening performance in this segment[15]

Company Overview - Tiptree was founded in 2007 with a focus on long-term value creation for shareholders [24] - The company has a flexible capital allocation model and aligned management incentives [16] - Insider ownership is at 34% [24] Financial Performance - Tiptree has $24 billion of realized investments representing a 28x MOIC and 22% IRR since inception [24] - $177 million of capital has been returned to shareholders through share repurchases, tax-deferred distributions, and common dividends [17] - The company's realized investment IRR is 22% [30] Recent Transactions - Tiptree agreed to sell Fortegra in an all-cash transaction for $165 billion, with $112 billion in gross proceeds to Tiptree [13] - The Fortegra valuation is 23x book value (39x tangible book value) and 107x LTM net income [13] - The estimated gross return on the Fortegra sale is 141x MOIC and 227% IRR, with an anticipated closing in mid-2026 [13] - Tiptree agreed to sell Reliance First Capital for 935% of tangible book value at closing, or $51 million of estimated gross proceeds as of September 30, 2025 [13] - The estimated gross return on the Reliance sale is 29x MOIC and 135% IRR, with an anticipated closing in the first quarter of 2026 [13] - Pro-forma book value as of September 30, 2025, is estimated to be $930 million, net of estimated taxes and transaction expenses for both transactions [13]

Core Insights - Fortegra Group Inc. has secured a box in the underwriting room at Lloyd's, marking a significant milestone in its commitment to the London insurance market [1][3] - The company operates from over 20 locations globally, including its London office in the "Walkie Talkie" building [2] - The acquisition by South Korea's DB Insurance Co. for $1.65 billion is expected to be completed by mid-2026, pending stockholder and regulatory approvals [4] Group 1 - Fortegra's presence in the Lloyd's underwriting room enhances its ability to deliver reliable insurance solutions and market access [3] - The move is part of Fortegra's long-term expansion strategy, building on established operations in London and Brussels [3] - The company aims to deepen relationships with brokers and partners, positioning itself at the center of international risk transfer [3] Group 2 - The acquisition deal with DB Insurance Co. is valued at $1.65 billion, highlighting Fortegra's market value and strategic importance [4] - The completion of the acquisition is anticipated in mid-2026, indicating a timeline for stakeholders [4]

Core Insights - Fortegra Group has secured a box in the underwriting room at Lloyd's, marking a significant milestone in its strategic commitment to the London insurance market [1][2] - The company will operate from Box 388, enhancing its position as a key player in developing reliable insurance solutions for complex and evolving risks [2] - This move is part of Fortegra's long-term expansion strategy and aims to deepen relationships with brokers and partners in the global specialty insurance market [4] Company Operations - Fortegra now has a network of over 20 locations, including its London office at the 20 Fenchurch Street "Walkie Talkie" building and offices across the US and Europe [3] - The presence in the Lloyd's underwriting room builds upon established operations in London and Brussels, enhancing the company's ability to deliver reliable insurance solutions [4] Strategic Developments - The acquisition of Fortegra Group by DB Insurance Co., Ltd., the second-largest non-life insurer in South Korea, for approximately $1.65 billion from Tiptree and Warburg Pincus was announced last month [4]

Core Viewpoint - DB Insurance is set to acquire Fortegra, a U.S.-based specialty insurer, for approximately $1.65 billion, marking a significant entry into the U.S. market for a Korean non-life insurer [1][5][6]. Company Overview - DB Insurance, established in 1962, is the second largest non-life insurer in South Korea, servicing over 11 million customers with a diversified portfolio [8]. - Fortegra, founded in 1978 and headquartered in Jacksonville, Florida, has a strong presence in specialty insurance across the U.S. and Europe, with gross written premiums of $3.07 billion for 2024 [3][4]. Strategic Rationale - The acquisition aims to enhance DB Insurance's global growth, particularly in the property and casualty markets, and to enter profitable sectors such as surety and warranty [5][6]. - Fortegra's projected annual premiums of KRW 4.4 trillion for 2024 reflect its significant market position, which DB Insurance seeks to leverage for scale and capabilities [2][4]. Financial Strength - Fortegra has maintained a long-term combined ratio of approximately 90% and holds an A- financial strength rating from A.M. Best, indicating strong underwriting discipline and risk management [3][4]. - The acquisition will provide Fortegra with a robust capital base, enhancing its growth potential as part of a financially strong insurance group rated A+ by AM Best and S&P [5][6]. Market Impact - This transaction represents the first acquisition of a U.S. insurer by a Korean non-life insurer, marking a pivotal moment for DB Insurance in its ambition to become a global insurer [6]. - The deal is expected to close in mid-2026, pending stockholder and regulatory approvals [8].