
FORM 10-K Filing Information Registrant Information Conifer Holdings, Inc. is a Michigan-domiciled insurance holding company, listed on Nasdaq under ticker CNFR, identified as a smaller reporting company with 9,681,728 shares outstanding as of March 11, 2021 - Conifer Holdings, Inc. (Nasdaq: CNFR) is a Michigan-domiciled insurance holding company24 - The company is identified as a smaller reporting company3 Key Metrics | Indicator | Data | | :--- | :--- | | Total market value of common equity held by non-affiliates as of June 28, 2019 | Approximately $21.3 million | | Number of common shares outstanding as of March 11, 2021 | 9,681,728 shares | Part I Business Overview Conifer Holdings, Inc. is a Michigan-domiciled insurance holding company primarily engaged in property and casualty insurance, operating through commercial, personal, and wholesale agency segments, serving underserved markets via independent agents with flexible underwriting and conservative investment strategies - The company primarily sells property and casualty insurance products through commercial, personal, and wholesale agency businesses10 - The company is authorized as an Excess and Surplus (E&S) lines carrier in 45 states (including D.C.) and as an admitted carrier in 42 states (including D.C.), with products available in all 50 states10 - Company revenue is primarily derived from earned premiums from insurance operations, as well as investment income, fees, and wholesale agency commissions10 Legal Organization Conifer Holdings, Inc., established in 2009, is a Michigan-domiciled insurance holding company with several wholly-owned subsidiaries - Conifer Holdings, Inc. was founded in 2009 and is a Michigan-domiciled insurance holding company9 - Its wholly-owned subsidiaries include Conifer Insurance Company (CIC), Red Cedar Insurance Company (RCIC), White Pine Insurance Company (WPIC), American Colonial Insurance Services, and Sycamore Insurance Agency, Inc. (SIA)9 Business Overview The company specializes in providing niche insurance products to underserved policyholders, focusing on the hospitality industry, artisan contractors, and security service providers, with distinct commercial and personal lines offerings - The company focuses on providing specialized insurance products to underserved policyholders, primarily in the hospitality industry (e.g., restaurants, bars), artisan contractors, and security service providers10 - Commercial lines business bundles various insurance products for small business owners, with an average premium account size of $5,30010 - Personal lines business primarily offers low-value dwelling insurance, serving homeowners overlooked by the market, with an average premium account size of $1,00011 Business Mix by Type | Indicator | December 31, 2020 | | :--- | :--- | | Admitted business total premium percentage | 44.4% | | E&S business total premium percentage | 55.6% | Geographic Diversity and Mix of Business The company has strategically shifted focus towards core commercial lines and low-value dwelling personal lines, reducing exposure to catastrophe-prone areas like Florida, Texas, and Hawaii - The company has increased its focus on core commercial lines business in recent years, while gradually reducing Florida homeowners' insurance and other wind-exposed businesses in Texas and Hawaii12 - Future plans include continuing to shift focus towards low-value dwelling insurance to increase personal lines premiums and maintain a strategic balance between commercial and personal lines12 Gross Written Premiums by Business Segment (in thousands of dollars) | Segment | 2020 | Percentage | 2019 | Percentage | 2018 | Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial Lines | 102,763 | 92% | 94,391 | 93% | 97,694 | 94% | | Personal Lines | 8,572 | 8% | 7,462 | 7% | 6,674 | 6% | | Total | 111,335 | 100% | 101,853 | 100% | 104,368 | 100% | Gross Written Premiums by State (in thousands of dollars) | State | 2020 | Percentage | 2019 | Percentage | 2018 | Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Michigan | 23,304 | 20.9% | 19,346 | 19.0% | 19,822 | 19.0% | | Florida | 13,573 | 12.2% | 16,993 | 16.7% | 23,389 | 22.4% | | Texas | 10,243 | 9.2% | 8,236 | 8.1% | 6,509 | 6.2% | | California | 8,140 | 7.3% | 7,037 | 6.9% | 5,691 | 5.5% | | New York | 6,386 | 5.7% | 7,955 | 7.8% | 3,845 | 3.7% | | Pennsylvania | 4,846 | 4.4% | 6,015 | 5.9% | 6,503 | 6.2% | | Mississippi | 4,612 | 4.1% | 639 | 0.6% | 291 | 0.3% | | Ohio | 3,823 | 3.4% | 4,129 | 4.1% | 4,025 | 3.9% | | Indiana | 3,559 | 3.2% | 3,937 | 3.9% | 3,914 | 3.8% | | New Jersey | 3,156 | 2.8% | 2,051 | 2.0% | 4,884 | 4.7% | | Colorado | 2,832 | 2.5% | 3,044 | 3.0% | 2,835 | 2.7% | | All Other States | 26,861 | 24.3% | 22,471 | 22.1% | 22,660 | 21.7% | | Total | 111,335 | 100.0% | 101,853 | 100% | 104,368 | 100% | The Conifer Approach Conifer's strategy involves targeting underserved markets with specialized multi-product offerings, fostering strong independent agent relationships, maintaining underwriting flexibility, and employing conservative risk management through reinsurance and diversified investments - The company focuses on underserved markets, offering specialized insurance products and multi-product, one-stop services to small business clients, avoiding pure price competition15 - Builds strong relationships with independent agents by providing responsive service, attractive commissions, and competitive products15 - Emphasizes flexibility, capable of effectively transitioning between E&S and admitted policies based on client needs and regulatory conditions15 - Adopts a conservative risk management strategy, minimizing single risk exposure through reinsurance and maintaining a diversified, liquid investment portfolio to reduce balance sheet volatility. As of December 31, 2020, the investment portfolio primarily consisted of fixed-income investments with an average credit rating of 'AA+' and an option-adjusted duration of 3.6 years15 Our Competitive Strengths Conifer leverages an experienced team of underwriters and management, disciplined underwriting processes, proactive claims handling, and web-based IT systems to enhance efficiency and competitive positioning - Possesses an experienced team of underwriters with an average of over 27 years of industry experience, effectively managing account profitability through market cycles17 - Implements a controlled and disciplined underwriting process, tailoring coverage based on specific guidelines and continuously monitoring market changes to adjust pricing and underwriting guidelines17 - Employs a proactive claims handling philosophy, utilizing an experienced in-house legal team to manage and oversee claims, effectively controlling costs and maintaining client relationships17 - Senior management team averages over 27 years of insurance industry experience, successfully creating, managing, and growing multiple insurance companies and businesses17 - Utilizes web-based IT systems to enhance organizational efficiency, supporting new product development and launch through third-party vendor infrastructure, thereby reducing time-to-market, enhancing service, and lowering costs17 Marketing and Distribution Independent agents serve as the primary sales channel, with the company maintaining strong relationships through competitive offerings and personalized service, supported by marketing offices and a subsidiary agency for specialized risks - Independent agents are the company's primary sales channel, with relationships maintained through competitive products, personalized service, and attractive commissions18 - In 2020, the top six independent agencies contributed approximately 33% of total commercial lines gross written premiums, and the top four independent agencies contributed approximately 26% of total personal lines gross written premiums18 - The company recruits agents through existing networks, word-of-mouth, advertising, and direct contact, with marketing offices in Michigan, Florida, and Pennsylvania18 - Sycamore Insurance Agency (SIA) reviews direct underwriting opportunities and holds a 50% equity interest in a small insurance agency primarily underwriting small commercial risks in the alarm and security services market20 Underwriting Conifer's underwriting philosophy prioritizes profitability and effective enterprise risk management, leveraging experienced underwriters to assess and price specialized commercial risks and refine personal lines offerings based on market positioning - The company's underwriting philosophy emphasizes profitability and effective enterprise risk management, with a team of senior underwriters averaging over 27 years of experience21 - Commercial lines underwriting assesses specialized risks like the hospitality industry on an individual basis, focusing on small to medium-sized businesses, and customizing coverage terms, conditions, and pricing based on risk profiles21 - All commercial and personal policy applications are underwritten according to established guidelines and integrated into information technology systems, ensuring only compliant policies are accepted21 - Personal lines business involves internal product managers reviewing market positioning, refining pricing, and adjusting premium rates as needed21 Claims The company employs a proactive internal claims handling strategy, managed by experienced professionals and in-house legal teams to control costs, ensure timely assessment, and regularly adjust reserves based on specific claim information and actuarial input - The company adopts a proactive internal claims handling strategy, managed by experienced claims professionals and an in-house legal team, to effectively control costs and ensure timely assessment and processing of claims2224 - Claims personnel are organized by line of business, with reserve and payment authority set by the Senior Vice President and Executive Vice President, ensuring strict adherence24 - Initial claim reserves are set based on statistical averages of paid losses and loss adjustment expenses (LAE) and are regularly evaluated and adjusted based on specific claim information and internal actuarial opinions24 Reinsurance Conifer regularly purchases reinsurance for commercial and personal lines to mitigate large loss volatility and support growth, including an adverse development cover agreement for prior accident years, while retaining full legal liability to policyholders - The company regularly purchases reinsurance for commercial and personal lines to reduce volatility from large losses and provide growth capacity25 - The company entered into an Adverse Development Cover (ADC) reinsurance agreement on September 28, 2017, covering loss development exceeding $17.5 million of established reserves as of June 30, 2017, for accident years 2005 through 201625 - Despite purchasing reinsurance, the company remains fully liable to policyholders25 Loss Reserve Development Loss reserve re-estimation is influenced by differences between claim settlements and initial estimates, updated information on outstanding claims, and variations in reported claim numbers post-year-end, with increasing reliance on internal loss experience for specific business lines Loss and Loss Adjustment Expense (LAE) Reserve Development Net of Reinsurance Recoverables (in thousands of dollars) | Year | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net liability as of December 31 of that year | 18,795 | 17,164 | 17,547 | 24,956 | 28,307 | 30,017 | 47,993 | 67,830 | 63,122 | 84,667 | 87,052 | | Re-estimated one year later | 16,565 | 12,807 | 13,508 | 23,763 | 29,321 | 40,239 | 57,452 | 71,186 | 79,351 | 100,261 | | | Net cumulative surplus (deficiency) | 7,399 | 6,714 | 3,497 | (3,699) | (14,660) | (34,530) | (26,388) | (27,537) | (31,664) | (15,594) | | - Re-estimation of loss reserves is influenced by various factors, including differences between claim settlement amounts and initial estimates, reserve adjustments due to updated information on outstanding claims, and discrepancies between reported and expected claim numbers after the relevant year-end28 - As historical data (loss experience years and data pool size) for specific business lines increases, the company will rely more on its own loss experience to determine loss and LAE reserves30 Regulation Insurance company subsidiaries are subject to state regulation primarily aimed at protecting policyholders, covering aspects like acquisitions, related-party transactions, solvency, and licensing, while the holding company is also regulated by various jurisdictions - Insurance company subsidiaries are subject to state regulation, primarily aimed at protecting policyholders rather than shareholders, covering acquisition approvals, related-party transactions, rate/policy approvals, solvency standards, investment limitations, licensing, and reporting31 - As an insurance holding company, the company is regulated by various jurisdictions, requiring subsidiaries to register with their state insurance departments and disclose information that may affect their financial condition, with related-party transactions required to be fair and reasonable31 - As an admitted property and casualty insurer, the company must be a member of solvency funds or associations in most states and participate in mandatory insurance facilities or funds to protect policyholders from insurer insolvency and provide coverage for consumers unable to obtain insurance in the voluntary market34 Restrictions on Dividends and Risk-Based Capital Information regarding dividend restrictions and risk-based capital is detailed in Note 9 to the consolidated financial statements and the 'Regulatory and Rating Issues' section of Management's Discussion and Analysis - For information on dividend restrictions and risk-based capital, refer to Note 9 'Statutory Financial Data, Risk-Based Capital and Dividend Restrictions' to the consolidated financial statements and the 'Regulatory and Rating Issues' section in Management's Discussion and Analysis36 NAIC-IRIS Ratios The NAIC's Insurance Regulatory Information System (IRIS) assists state insurance departments in monitoring insurer financial health by identifying companies that may require further review through 13 industry ratios and their 'usual ranges' - The NAIC's Insurance Regulatory Information System (IRIS) is designed to assist state insurance departments in monitoring the financial condition of insurance companies, identifying those that may require further review through 13 industry ratios and their 'usual values'37 Effect of Federal Legislation The Terrorism Risk Insurance Act (TRIA) has been extended to December 31, 2027, requiring insurers to offer terrorism coverage, though the company's exposure is minimal as most policyholders decline this option - The Terrorism Risk Insurance Act (TRIA) has been extended until December 31, 2027, requiring insurers to offer terrorism insurance, but the company's exposure in this area is minimal as most policyholders decline this option38 Employees As of December 31, 2020, the company had 148 employees, predominantly full-time, not subject to collective bargaining agreements, and maintaining good employee relations - As of December 31, 2020, the company had 148 employees, the vast majority of whom were full-time, not subject to any collective bargaining agreements, and maintained good employee relations39 Available Information The company provides free access to its annual reports (Form 10-K), quarterly reports (Form 10-Q), and other SEC filings on its website, with additional information available on the SEC's website - The company provides free access to its annual reports (Form 10-K), quarterly reports (Form 10-Q), and other SEC filings on its website www.cnfrh.com, with related information also available on the SEC's website www.sec.gov[40](index=40&type=chunk) Glossary This glossary defines common terms used in the insurance industry and financial reporting, including accident year, adjusted operating income, combined ratio, and loss reserves, to aid in understanding the report content - The glossary defines key terms such as 'Accident Year,' 'Adjusted Operating Income,' 'Combined Ratio,' and 'Loss Reserves' to ensure clear understanding of the report content4445 Risk Factors The company faces significant operational, investment, liquidity, legal, regulatory, rating agency, and ownership risks, which could materially adversely affect its business, operating results, and financial condition - Operational risks include the COVID-19 pandemic and its economic impact, governmental/regulatory/judicial actions, potential inadequacy of loss and LAE reserves, inaccurate underwriting assessment and pricing, ineffective growth management, intense market competition, information technology security threats, severe weather and catastrophes, difficulty obtaining reinsurance, reliance on independent agents, industry cyclicality, adverse economic factors, failure of loss limitations or exclusions, loss of key management personnel, operational errors or system failures, legal proceedings, and geographic concentration50515254565759616263646566 - Investment risks primarily include market and credit risks to the investment portfolio, as well as the potential adverse impact of interest rate changes on the value of fixed-income securities and investment income7172 - Liquidity risks involve debt service obligations reducing available funds, and terms and covenants of existing and future debt potentially adversely affecting financial performance and liquidity, while the holding company structure and regulatory restrictions may limit subsidiary dividend payment ability74 - Legal and regulatory risks encompass extensive regulatory requirements (e.g., capital, reserves, rate approvals, related-party transactions), non-compliance potentially leading to fines and business suspension, and the possibility of additional future governmental or market regulation76777879 - Rating agency risks indicate that a downgrade in financial strength ratings could lead to reduced new or renewal business and increased reinsurance costs, while the company also faces assessments and surcharges from state guaranty funds and mandatory state insurance facilities8283 - Common stock ownership risks include stock price volatility, limited public float and low trading volume, potential need for additional capital in the future, no guarantee of future dividend payments, significant control over company affairs by major shareholders and management, substantial costs of operating as a public company, and corporate governance documents and Michigan law potentially deterring or delaying mergers and acquisitions858687888990 - Publicly traded debt ownership risks include the holding company structure and regulatory restrictions potentially limiting the company's ability to fulfill debt obligations, a potentially limited trading market for notes, default on other debt potentially affecting note payments, limited covenants in note indentures, notes being structurally subordinated to subsidiary debt, and common stock market price fluctuations potentially adversely affecting note trading prices929394969798 Unresolved Staff Comments As of the filing date of this report, the company has no unresolved staff comments - The company has no unresolved staff comments100 Properties The company leases office spaces in Birmingham (main administrative office), Southfield, Jacksonville, Orlando, Miami, and Somerset, deeming current facilities adequate and additional space obtainable if needed - The company leases office space for its main administrative office in Birmingham, Michigan, and in Southfield, Michigan; Jacksonville, Orlando, and Miami, Florida; and Somerset, Pennsylvania101 - The company believes its facilities are adequate for current needs and that suitable additional or alternative space can be obtained if required101 Legal Proceedings The company and its subsidiaries are involved in various legal proceedings in the ordinary course of business, which management believes will not individually or in aggregate have a material adverse effect on the consolidated financial position, results of operations, or liquidity - The company and its subsidiaries are involved in various legal proceedings in the ordinary course of business102 - Management believes that the outcome of these proceedings will not have a material adverse effect on the company's consolidated financial position, results of operations, or liquidity102 Mine Safety Disclosures This item is not applicable - Mine safety disclosures are not applicable103 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq under 'CNFR', with price fluctuations between $2.00 and $5.00 in 2020; no dividends are anticipated, and the company repurchased shares in 2020 while issuing common stock via private placement in 2019 - The company's common stock trades on Nasdaq under the ticker symbol 'CNFR'108 Common Stock High and Low Prices (USD) | Year | Quarter | High Price | Low Price | | :--- | :--- | :--- | :--- | | 2019 | Q1 | 4.86 | 3.70 | | | Q2 | 4.80 | 3.42 | | | Q3 | 4.00 | 3.20 | | | Q4 | 4.50 | 3.50 | | 2020 | Q1 | 4.14 | 2.00 | | | Q2 | 3.87 | 2.18 | | | Q3 | 4.00 | 2.19 | | | Q4 | 5.00 | 2.16 | - The company's holding company has no substantial income and primarily relies on intercompany service fees, cash dividends, or distributions from subsidiaries to pay operating expenses, service debt, and distribute dividends to shareholders. Subsidiary dividend payments are restricted by state laws and regulations and require regulatory approval. The company has historically not paid dividends and does not anticipate paying cash dividends in the foreseeable future108 - As of March 11, 2021, the company had 26 registered holders of common stock111 - In 2020, the company repurchased 2,398 shares of stock (approximately $8 thousand) under its stock repurchase program and 9,188 shares related to the vesting of restricted stock units (approximately $28 thousand)112 - In June 2019, the company issued $5 million of common stock, totaling 1,176,471 shares at $4.25 per share, through a private placement to support professional core business growth113 Selected Consolidated Financial Data This section presents selected consolidated historical financial information for Conifer Holdings, Inc. and its subsidiaries, highlighting a net income of $595 thousand in 2020, improved total assets and shareholder equity, and a combined ratio of 108.4%, indicating better underwriting performance Selected Consolidated Financial Data (in thousands of dollars, except per share data) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Results: | | | | | | | Gross written premiums | 111,335 | 101,853 | 104,368 | 114,284 | 114,923 | | Net written premiums | 92,940 | 87,724 | 89,086 | 91,240 | 99,929 | | Net earned premiums | 89,103 | 89,089 | 93,811 | 91,729 | 89,627 | | Net investment income | 3,156 | 4,031 | 3,336 | 2,728 | 2,173 | | Net realized investment gains | 8,126 | 1,196 | 61 | 70 | 1,365 | | Total revenue | 103,488 | 95,998 | 98,911 | 96,837 | 93,883 | | Losses and LAE, net | 56,228 | 59,744 | 62,515 | 73,917 | 59,003 | | Total expenses | 103,726 | 105,119 | 108,376 | 118,891 | 102,526 | | Net income (loss) | 595 | (7,822) | (9,227) | (21,542) | (8,437) | | Net income (loss) per share | 0.06 | (0.88) | (1.08) | (2.74) | (1.11) | | Balance Sheet Data: | | | | | | | Cash and investment assets | 191,400 | 177,196 | 150,894 | 169,518 | 141,023 | | Total assets | 261,597 | 247,265 | 232,752 | 239,032 | 203,701 | | Unpaid losses and LAE | 111,270 | 107,246 | 92,807 | 87,896 | 54,651 | | Debt | 40,997 | 35,824 | 33,502 | 29,027 | 17,750 | | Total liabilities | 217,184 | 204,540 | 190,589 | 186,206 | 135,907 | | Shareholders' equity attributable to Conifer | 44,413 | 42,725 | 42,163 | 52,826 | 67,794 | | Other Data: | | | | | | | Shareholders' equity per share | 4.59 | 4.45 | 4.97 | 6.20 | 8.88 | | Statutory capital and surplus | 64,066 | 59,561 | 63,993 | 62,451 | 62,189 | | Underwriting Ratios: | | | | | | | Loss ratio | 62.8% | 66.8% | 66.4% | 79.9% | 65.0% | | Expense ratio | 45.6% | 44.0% | 45.9% | 44.8% | 47.2% | | Combined ratio | 108.4% | 110.8% | 112.3% | 124.7% | 112.2% | Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a detailed discussion of the company's financial condition and operating results for the year ended December 31, 2020, compared to 2019 and 2018, showing a net income of $595 thousand in 2020, a 9.3% increase in gross written premiums, and improved loss and combined ratios - In 2020, the company reported net income of $595 thousand, compared to a net loss of $7.8 million in 2019, primarily driven by $8.1 million in net realized investment gains and $3.2 million in net investment income143 - In 2020, gross written premiums increased by 9.3% to $111.3 million, with commercial lines growing by 8.9% and personal lines by 14.9%143 Underwriting Ratios | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Loss ratio | 62.8% | 66.8% | | Expense ratio | 45.6% | 44.0% | | Combined ratio | 108.4% | 110.8% | Forward-Looking Statements Forward-looking statements in this report are based on management's current beliefs and judgments but are subject to significant factors, risks, and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements in this report are based on management's current good faith and reasonable judgment, but are subject to significant factors, risks, and uncertainties that could cause actual results to differ materially from expectations120 Recent Developments The COVID-19 pandemic has significantly disrupted public health, the global economy, financial markets, and business activities, leading to remote work for most employees and a substantial contraction in hospitality industry revenue - The COVID-19 pandemic has caused significant disruption to public health, the global economy, financial markets, and business activities, leading to most company employees working remotely and a substantial contraction in hospitality industry revenue121 - Despite continuous customer service, business, and claims processing, the company cannot provide additional forward-looking guidance due to the ultimate uncertainty of the pandemic's impact121 Business Overview The company operates as an insurance holding company, marketing products through specialized commercial and personal lines across all 50 states, complemented by a wholesale agency business providing non-risk income - The company is an insurance holding company that markets and services products through specialized commercial and personal lines business segments, with operations across all 50 states122 - Commercial lines business offers coverages such as commercial property, commercial general liability, commercial auto, and workers' compensation, targeting small to medium-sized businesses122 - Personal lines business primarily offers low-value dwelling insurance and has gradually reduced its exposure in Florida and other wind-prone states due to industry events in Florida123124 - Wholesale agency business provides non-risk income through commissions and policy fees, offering independent retail agents access to products from both subsidiaries and third-party insurers124 Critical Accounting Policies and Estimates The preparation of financial statements requires significant management judgments and estimates regarding future outcomes, impacting reported amounts of assets, liabilities, revenues, and expenses, as well as disclosures of contingent assets and liabilities - The company must make significant judgments and estimates about future results and developments when preparing financial statements, which affect the reported amounts of assets, liabilities, revenues, and expenses, as well as disclosures of significant contingent assets and liabilities125 Loss and Loss Adjustment Expense Reserves Loss and LAE reserves represent management's best estimate of unpaid losses and LAE, including reported case reserves and incurred but not reported (IBNR) reserves, which are estimated quarterly by the actuarial department using various methods and are not discounted - Loss and Loss Adjustment Expense (LAE) reserves are management's best estimate of unpaid losses and LAE, including reported case reserves and incurred but not reported (IBNR) reserves, and are not discounted126 - IBNR reserves are estimated quarterly by the actuarial department and reviewed by the Reserve Review Committee, using multiple actuarial methods such as the loss ratio method, loss development method, Bornheutter-Ferguson method, and frequency/severity method127128 IBNR Reserves as a Percentage of Total Reserves Net of Reinsurance Recoverables as of December 31, 2020 (in thousands of dollars) | Business Line | Case Reserves | IBNR Reserves | Total Reserves | IBNR as % of Total Reserves | | :--- | :--- | :--- | :--- | :--- | | Commercial Lines | 48,576 | 36,316 | 84,892 | 42.8% | | Personal Lines | 1,511 | 649 | 2,160 | 30.0% | | Total | 50,087 | 36,965 | 87,052 | 42.5% | Net Loss and LAE Reserve Sensitivity Analysis as of December 31, 2020 (in thousands of dollars) | Accident Year | Sensitivity Factor | Ultimate Losses and LAE | Net Loss and LAE Reserves | Potential Impact on 2020 Pre-Tax Income | Potential Impact on Shareholders' Equity | | :--- | :--- | :--- | :--- | :--- | :--- | | Increase Ultimate Losses and LAE | | | | | | | 2020 | 10.0% | 40,625 | 27,035 | 4,062 | 3,209 | | 2019 | 5.0% | 49,270 | 23,095 | 2,463 | 1,946 | | 2018 | 2.5% | 60,671 | 18,964 | 1,517 | 1,198 | | Decrease Ultimate Losses and LAE | | | | | | | 2020 | (10.0)% | 40,625 | 27,035 | (4,062) | (3,209) | | 2019 | (5.0)% | 49,270 | 23,095 | (2,463) | (1,946) | | 2018 | (2.5)% | 60,671 | 18,964 | (1,517) | (1,198) | Investment Valuation and Impairment Available-for-sale debt securities are reported at fair value with unrealized gains/losses in other comprehensive income, while equity securities are measured at fair value with changes recognized in net income, and non-temporary impairment is regularly assessed using a three-level fair value hierarchy - The company reports available-for-sale debt securities at fair value, with unrealized gains and losses included in other comprehensive income; equity securities are measured at fair value, with changes recognized in net income134135 - The company regularly assesses available-for-sale investments for other-than-temporary impairment and categorizes fair value measurements into a three-level hierarchy (Level 1, Level 2, Level 3) and Net Asset Value (NAV) based on the ASC 820 framework135136 Income Taxes Income taxes are accounted for using the balance sheet method, recognizing deferred tax assets and liabilities for temporary differences, with a valuation allowance of $13.3 million against deferred tax assets due to cumulative losses, indicating insufficient recoverability - Income taxes are accounted for using the balance sheet method, with deferred tax assets and liabilities recognized for temporary differences between the carrying amounts and tax bases of assets and liabilities137139 - As of December 31, 2020, the company had federal net operating loss (NOL) carryforwards of $59.2 million and state NOL carryforwards of $17.1 million139 - The company has recorded a valuation allowance of $13.3 million (compared to $13.6 million in 2019) against deferred tax assets due to cumulative losses over the three years ended December 31, 2020, indicating insufficient recoverability of deferred tax assets139 - If the valuation allowance were reversed in the future, it would increase book value per share by $1.37139 Non-GAAP Financial Measures Adjusted operating income (loss) and adjusted operating income (loss) per share are non-GAAP metrics that reflect the company's ongoing operating performance by excluding items such as net realized investment gains/losses, tax reform impacts, fair value changes in equity securities, and ADC deferred gain capitalization and amortization - Adjusted operating income (loss) and adjusted operating income (loss) per share are non-GAAP measures that reflect the company's ongoing operating performance by excluding items such as net realized investment and other gains/losses, tax reform impacts, fair value changes in equity securities, and the capitalization and amortization of ADC deferred gains141 Reconciliation of Net Income to Adjusted Operating Income (Loss) (in thousands of dollars) | Indicator | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net income (loss) | 595 | (7,822) | (9,227) | | Less: Net realized investment gains and other gains (after tax) | 8,386 | 1,196 | 61 | | Less: Tax impact of unrealized investment gains (losses) | — | 824 | 0 | | Less: Fair value changes in equity securities (after tax) | 228 | (427) | 121 | | Less: Net (increase) decrease in ADC loss transfer deferred gain (after tax) | — | 5,677 | (5,677) | | Adjusted operating income (loss) | (8,019) | (15,092) | (3,732) | | Diluted net income (loss) per share | 0.06 | (0.88) | (1.08) | | Adjusted operating income (loss) per share | (0.83) | (1.69) | (0.44) | Executive Overview In 2020, the company achieved net income of $595 thousand (or $0.06 per share), a significant improvement from a $7.8 million net loss in 2019, driven by net realized investment gains, with commercial and personal lines showing premium growth despite COVID-19 impacts - In 2020, the company's commercial lines gross written premiums grew by 8.9% to $102.8 million, and personal lines gross written premiums grew by 14.9% to $8.6 million143 - In 2020, the company achieved net income of $595 thousand (or $0.06 per share), compared to a net loss of $7.8 million (or $0.88 per share) in 2019, primarily due to net realized investment gains143 - Adjusted operating loss in 2020 was $8.0 million (or $0.83 per share), an improvement from $15.1 million (or $1.69 per share) in 2019143 - Commercial lines experienced lower claims activity in 2020 due to the COVID-19 pandemic, and the company had limited exposure to pandemic-related losses143 Results of Operations - 2020 Compared to 2019 Total gross written premiums increased by 9.3% to $111.3 million in 2020, while net losses and LAE decreased by 5.9%, leading to an improved calendar year loss ratio of 62.8%, despite a 1.6% rise in the expense ratio and a 21.7% decline in net investment income Summary of Operations (in thousands of dollars) | Indicator | 2020 | 2019 | Change Amount | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Gross written premiums | 111,335 | 101,853 | 9,482 | 9.3% | | Net written premiums | 92,940 | 87,724 | 5,216 | 5.9% | | Net earned premiums | 89,103 | 89,089 | 14 | 0.02% | | Other income | 2,615 | 2,109 | 506 | 24.0% | | Losses and LAE, net | 56,228 | 59,744 | (3,516) | (5.9%) | | Policy acquisition costs | 26,105 | 24,911 | 1,194 | 4.8% | | Operating expenses | 18,468 | 17,582 | 886 | 5.0% | | Underwriting gain (loss) | (9,083) | (11,039) | 1,956 | 17.7% | | Net investment income | 3,156 | 4,031 | (875) | (21.7%) | | Net realized investment gains | 8,126 | 1,196 | 6,930 | * | | Fair value changes in equity securities | 228 | (427) | 655 | * | | Other gains (losses) | 260 | — | 260 | * | | Interest expense | 2,925 | 2,882 | 43 | 1.5% | | Income (loss) before taxes | (238) | (9,121) | 8,883 | * | | Equity in earnings (losses) of unconsolidated affiliates, after tax | 839 | 386 | 453 | 117.4% | | Income tax expense (benefit) | 6 | (913) | 919 | * | | Net income (loss) | 595 | (7,822) | 8,417 | * | | Underwriting Ratios: | | | | | | Loss ratio | 62.8% | 66.8% | | | | Expense ratio | 45.6% | 44.0% | | | | Combined ratio | 108.4% | 110.8% | | | - Total gross written premiums increased by 9.3% to $111.3 million, primarily due to premium growth in small business programs, partially offset by a decrease in hospitality programs150 - Net losses and LAE decreased by 5.9% to $56.2 million, with the calendar year loss ratio improving from 66.8% in 2019 to 62.8% in 2020154 - The expense ratio increased by 1.6% to 45.6%, primarily due to higher policy acquisition costs from increased reinsurance rates, partially offset by expense reduction efforts158159 - Net investment income decreased by 21.7% to $3.1 million, primarily due to lower yields resulting from declining market interest rates163 - Net realized investment gains significantly increased by 579% to $8.1 million, primarily attributable to gains realized from the company's bond investment portfolio and equity securities in 2020164 Results of Operations - 2019 Compared to 2018 Total gross written premiums decreased by 2.4% to $101.9 million in 2019, primarily due to reduced hospitality program premiums, while net losses and LAE decreased by 4.4%, and net investment income grew by 20.8% Summary of Operations (in thousands of dollars) | Indicator | 2019 | 2018 | Change Amount | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Gross written premiums | 101,853 | 104,368 | (2,515) | (2.4%) | | Net written premiums | 87,724 | 89,086 | (1,362) | (1.5%) | | Net earned premiums | 89,089 | 93,811 | (4,722) | (5.0%) | | Other income | 2,109 | 1,582 | 527 | 33.3% | | Losses and LAE, net | 59,744 | 62,515 | (2,771) | (4.4%) | | Policy acquisition costs | 24,911 | 25,534 | (623) | (2.4%) | | Operating expenses | 17,582 | 17,683 | (101) | (0.6%) | | Underwriting gain (loss) | (11,039) | (10,339) | (700) | * | | Net investment income | 4,031 | 3,336 | 695 | 20.8% | | Net realized investment gains | 1,196 | 61 | 1,135 | * | | Fair value changes in equity securities | (427) | 121 | (548) | * | | Interest expense | 2,882 | 2,644 | 238 | 9.0% | | Income (loss) before taxes | (9,121) | (9,465) | 344 | * | | Equity in earnings (losses) of unconsolidated affiliates, after tax | 386 | 290 | 96 | 33.1% | | Income tax expense (benefit) | (913) | 52 | (965) | * | | Net income (loss) | (7,822) | (9,227) | 1,405 | * | | Underwriting Ratios: | | | | | | Loss ratio | 66.8% | 66.4% | | | | Expense ratio | 44.0% | 45.9% | | | | Combined ratio | 110.8% | 112.3% | | | - Total gross written premiums decreased by 2.4% to $101.9 million, primarily due to reduced hospitality program premiums, partially offset by increased small business program premiums172 - Net losses and LAE decreased by 4.4% to $59.7 million, with the calendar year loss ratio slightly increasing from 66.4% in 2018 to 66.8% in 2019179 - The expense ratio decreased by 1.9% to 44.0%, primarily due to lower operating and reinsurance costs in 2019, partially offset by a decrease in net earned premiums182 - Net investment income increased by 20.8% to $4.0 million, primarily due to an increase in average investment assets in 2019186 - Net realized investment gains increased by $1.1 million to $1.2 million, primarily attributable to an increase in the value of the company's equity securities in 2019187 Liquidity and Capital Resources As of December 31, 2020, the company held $21.5 million in cash, cash equivalents, and short-term investments, with primary funding from premiums, investment income, and asset sales, while the holding company relies on subsidiary service fees for debt and administrative expenses, subject to state dividend restrictions - As of December 31, 2020, the company had $21.5 million in cash, cash equivalents, and short-term investments, with primary funding sources including insurance premiums, investment income, and proceeds from asset sales192 - The holding company primarily relies on intercompany service fees paid by subsidiaries to meet debt service and administrative expenses, with subsidiary dividend payments restricted by state insurance laws192 Summary of Cash Flows (in thousands of dollars) | Activity Type | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Cash flow from operating activities | 3,000 (inflow) | 15,400 (inflow) | (17,000) (outflow) | | Cash flow from investing activities | (7,300) (outflow) | (25,000) (outflow) | 12,200 (inflow) | | Cash flow from financing activities | 5,100 (inflow) | 6,300 (inflow) | 3,700 (inflow) | - As of December 31, 2020, the company's debt included $24.4 million in publicly traded senior unsecured notes, $10.5 million in subordinated notes, and a $10.0 million revolving credit facility (which included $2.7 million from the Paycheck Protection Program loan)196 - The company repurchased $919 thousand face value of senior unsecured notes in 2020, resulting in a $260 thousand gain on extinguishment of debt196 Summary of Contractual Obligations and Commitments as of December 31, 2020 (in thousands of dollars) | Obligation Type | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Senior unsecured notes | 24,381 | — | 24,381 | — | — | | Senior unsecured notes interest | 4,526 | 1,646 | 2,880 | — | — | | Subordinated notes | 10,500 | — | — | — | 10,500 | | Subordinated notes interest | 22,182 | 788 | 1,706 | 2,625 | 17,063 | | Lease obligations | 2,634 | 849 | 1,396 | 389 | — | | Revolving credit facility | 7,745 | 5,000 | 2,745 | — | — | | Losses and LAE | 111,270 | 44,157 | 49,093 | 14,371 | 3,647 | | Purchase obligations | 630 | 360 | 270 | — | — | | Total | 183,868 | 52,800 | 82,471 | 17,385 | 31,210 | Regulatory and Rating Issues As of December 31, 2020, all company insurance subsidiaries exceeded NAIC Risk-Based Capital (RBC) thresholds, with statutory combined ratios of 1.7:1.0 for gross written premiums to statutory surplus and 1.5:1.0 for net written premiums to statutory surplus, and no regulatory actions due to NAIC IRIS ratios - As of December 31, 2020, all of the company's insurance subsidiaries exceeded the minimum thresholds set by the NAIC Risk-Based Capital (RBC) formula199 - As of December 31, 2020, on a statutory consolidated basis for the preceding twelve months, the company's ratio of gross written premiums to statutory surplus was 1.7:1.0, and net written premiums to statutory surplus was 1.5:1.0199 - The company's insurance subsidiaries have not been subject to regulatory action due to NAIC Insurance Regulatory Information System (IRIS) ratio results or any other reason199 Recently Issued Accounting Pronouncements The company is evaluating the impact of FASB ASU No. 2016-13, 'Financial Instruments—Credit Losses,' effective after December 15, 2022, and early adopted FASB ASU 2020-04, 'Reference Rate Reform,' on April 1, 2020, with no significant impact expected - The company is evaluating the impact of FASB ASU No. 2016-13, 'Financial Instruments—Credit Losses,' which becomes effective after December 15, 2022266 - The company early adopted FASB ASU 2020-04, 'Reference Rate Reform,' on April 1, 2020, and does not expect it to have a significant impact on the consolidated financial statements266 Quantitative and Qualitative Disclosures About Market Risk The company primarily faces interest rate and credit risks, managing the former through diversified maturities and portfolio duration, and the latter by investing in investment-grade securities and selecting highly-rated reinsurers, while considering inflation's impact on pricing and loss reserves - The company's investment portfolio primarily consists of investment-grade fixed-income securities, with the main market risk exposure being interest rate risk, where fair value moves inversely with market interest rate changes204 - The company mitigates interest rate risk by investing in securities with diverse maturities and managing the investment portfolio duration within a range of 3 to 4 years. As of December 31, 2020, the option-adjusted duration of the debt securities portfolio was 3.6 years204 Sensitivity of Investment Portfolio Fair Value to Interest Rate Changes as of December 31, 2020 (in thousands of dollars) | Interest Rate Assumption Change | Estimated Fair Value | Estimated Change in Fair Value | Percentage Change in Fair Value | Percentage Change in Shareholders' Equity | | :--- | :--- | :--- | :--- | :--- | | Increase 200 basis points | 152,719 | (12,597) | (7.6%) | (28.4%) | | Increase 100 basis points | 159,017 | (6,299) | (3.8%) | (14.2%) | | No change | 165,316 | — | — | —% | | Decrease 100 basis points | 168,259 | 2,943 | 1.8% | 6.6% | | Decrease 200 basis points | 168,969 | 3,653 | 2.2% | 8.2% | - The company manages credit risk by primarily investing in investment-grade securities and adhering to statutory requirements, and by selecting reinsurers with A.M. Best ratings of 'A-' or better to mitigate reinsurance counterparty risk206 - The company believes inflation does not have a material impact on operating results but considers its effects on interest rates and claims costs in pricing and estimating unpaid losses and LAE reserves208 Financial Statements and Supplementary Data This section directs readers to the financial statement schedules listed in Item 15 and Note 18 'Quarterly Financial Data (Unaudited)' to the consolidated financial statements for detailed financial information - This section directs readers to the financial statement schedules listed in Item 15 of this annual report on Form 10-K and Note 18 'Quarterly Financial Data (Unaudited)' to the consolidated financial statements209 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company states there have been no changes in or disagreements with accountants on accounting and financial disclosure - The company has had no changes in or disagreements with accountants on accounting and financial disclosure209 Controls and Procedures Company management, including the CEO and CFO, concluded that disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2020, with no attestation report from a registered public accounting firm due to the company's smaller reporting company status - As of December 31, 2020, the company's management, including the Chief Executive Officer and Chief Financial Officer, evaluated and concluded that the company's disclosure controls and procedures were effective210 - Management also concluded that the company's internal control over financial reporting was effective as of December 31, 2020, and no material changes occurred in internal control during the fourth quarter of 2020211 - This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting due to the company's status as a smaller reporting company211 Other Information The company states there is no other information required to be disclosed - The company has no other information required to be disclosed212 Part III Items 10-14 Information for Items 10 through 14 of Part III has been omitted and incorporated by reference from the company's definitive proxy statement, to be filed within 120 days after the fiscal year-end, covering directors, executive officers, corporate governance, compensation, security ownership, related-party transactions, and independent registered public accounting firm approvals - Information for Items 10 through 14, inclusive, of Part III has been omitted and incorporated by reference from the company's definitive proxy statement, to be filed within 120 days after the fiscal year-end216 - The incorporated information includes details on directors, executive officers, corporate governance, code of ethics, audit committee report, compensation, security ownership, related-party transactions, and approval of the independent registered public accounting firm216 Part IV Exhibits, Financial Statement Schedules This section lists exhibits and financial statement schedules filed as part of or incorporated by reference into the report, including the independent registered public accounting firm's report, consolidated financial statements, and specific schedules for registrant's condensed financial information and valuation and qualifying accounts - This report includes the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income (Loss), Consolidated Statements of Changes in Shareholders' Equity, and Consolidated Statements of Cash Flows219 - Financial statement schedules include the Registrant's Condensed Financial Information (Schedule II) and Valuation and Qualifying Accounts (Schedule V)219 - Schedules I, III, IV, and VI have been omitted because the information is included in the consolidated financial statements or their notes219 List of Financial Statements The list of financial statements includes the independent registered public accounting firm's report, consolidated balance sheets, statements of operations, comprehensive income (loss), changes in shareholders' equity, cash flows, and notes to consolidated financial statements - The list of financial statements includes the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income (Loss), Consolidated Statements of Changes in Shareholders' Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements219 Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP issued an unqualified opinion on the company's consolidated financial statements for 2020 and 2019, affirming fair presentation in all material respects according to U.S. GAAP, with no internal control audit due to the company's smaller reporting company status - Deloitte & Touche LLP issued an unqualified opinion on the company's consolidated financial statements as of December 31, 2020, and 2019, stating they are fairly presented in all material respects in accordance with U.S. Generally Accepted Accounting Principles222 - The audit was conducted in accordance with PCAOB standards, aiming to provide reasonable assurance that financial statements are free of material misstatement. No audit of internal control was performed due to the company's smaller reporting company status224 Consolidated Balance Sheets The consolidated balance sheets present the company's financial position, detailing assets such as investment securities, cash, and receivables, alongside liabilities including loss and LAE reserves, unearned premiums, and debt, culminating in total liabilities and shareholders' equity Consolidated Balance Sheets (in thousands of dollars) | Item | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Assets | | | | Investment securities | 183,207 | 169,732 | | Cash and cash equivalents | 8,193 | 7,464 | | Premiums receivable and agents' balances, net | 20,162 | 20,168 | | Reinsurance recoverables | 27,672 | 28,984 | | Deferred policy acquisition costs | 12,243 | 11,906 | | Other assets | 10,112 | 8,698 | | Total Assets | 261,597 | 247,265 | | Liabilities and Shareholders' Equity | | | | Unpaid losses and LAE | 111,270 | 107,246 | | Unearned premiums | 56,224 | 51,503 | | Debt | 40,997 | 35,824 | | Accounts payable and accrued expenses | 8,693 | 9,967 | | Total Liabilities | 217,184 | 204,540 | | Shareholders' equity | 44,413 | 42,725 | | Total Liabilities and Shareholders' Equity | 261,597 | 247,265 | Consolidated Statements of Operations The consolidated statements of operations detail the company's revenues, including net earned premiums, investment income, and other gains, offset by expenses such as losses, policy acquisition costs, and operating expenses, to arrive at net income (loss) and earnings per share Consolidated Statements of Operations (in thousands of dollars, except per share data) | Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Revenue | | | | | Net earned premiums | 89,103 | 89,089 | 93,811 | | Net investment income | 3,156 | 4,031 | 3,336 | | Net realized investment gains | 8,126 | 1,196 | 61 | | Fair value changes in equity securities | 228 | (427) | 121 | | Other gains (losses) | 260 | — | — | | Other income | 2,615 | 2,109 | 1,582 | | Total Revenue | 103,488 | 95,998 | 98,911 | | Expenses | | | | | Losses and LAE, net | 56,228 | 59,744 | 62,515 | | Policy acquisition costs | 26,105 | 24,911 | 25,534 | | Operating expenses | 18,468 | 17,582 | 17,683 | | Interest expense | 2,925 | 2,882 | 2,644 | | Total Expenses | 103,726 | 105,119 | 108,376 | | Income (loss) before taxes | (238) | (9,121) | (9,465) | | Equity in earnings of unconsolidated affiliates, after tax | 839 | 386 | 290 | | Income tax expense (benefit) | 6 | (913) | 52 | | Net Income (Loss) | 595 | (7,822) | (9,227) | | Net Income (Loss) per Share, Basic and Diluted | 0.06 | (0.88) | (1.08) | | Weighted Average Common Shares, Basic and Diluted | 9,625,059 | 8,880,107 | 8,543,876 | Consolidated Statements of Comprehensive Income (Loss) The consolidated statements of comprehensive income (loss) present net income (loss) alongside other comprehensive income (loss) items, primarily unrealized investment gains and losses, to arrive at total comprehensive income (loss) Consolidated Statements of Comprehensive Income (Loss) (in thousands of dollars) | Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net income (loss) | 595 | (7,822) | (9,227) | | Other comprehensive income (loss), after tax: | | | | | Unrealized investment gains (losses): | | | | | Unrealized investment gains (losses) during period | 1,589 | 3,725 | (1,825) | | Income tax expense (benefit) | — | 824 | — | | Unrealized investment gains (losses), after tax | 1,589 | 2,901 | (1,825) | | Less: Reclassification adjustments to: | | | | | Net realized investment gains (losses) included in net income (loss) | 1,166 | (200) | (55) | | Income tax expense (benefit) | — | — | — | | Total reclassifications included in net income (loss), after tax | 1,166 | (200) | (55) | | Other Comprehensive Income (Loss) | 423 | 3,101 | (1,770) | | Total Comprehensive Income (Loss) | 1,018 | (4,721) | (10,997) | Consolidated Statement of Changes in Shareholders' Equity The consolidated statement of changes in shareholders' equity tracks movements in common stock, retained earnings (accumulated deficit), and accumulated other comprehensive income (loss) over time, reflecting the overall change in equity attributable to Conifer Consolidated Statement of Changes in Shareholders' Equity (in thousands of dollars) | Item | Common Stock Shares | Common Stock Amount | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as of December 31, 2017 | 8,520,328 | 86,199 | (33,010) | (363) | 52,826 | | Balance as of December 31, 2018 | 8,478,202 | 86,533 | (41,758) | (2,612) | 42,163 | | Balance as of December 31, 2019 | 9,592,861 | 91,816 | (49,580) | 489 | 42,725 | | Balance as of December 31, 2020 | 9,681,728 | 92,486 | (48,985) | 912 | 44,413 | Consolidated Statements of Cash Flows The consolidated statements of cash flows categorize cash movements into operating, investing, and financing activities, providing a comprehensive view of cash inflows and outflows and their impact on the company's cash position Consolidated Statements of Cash Flows (in thousands of dollars) | Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Cash Flows from Operating Activities | | | | | Net income (loss) | 595 | (7,822) | (9,227) | | Net cash provided by (used in) operating activities | 2,982 | 15,361 | (17,008) | | Cash Flows from Investing Activities | | | | | Net cash provided by (used in) investing activities | (7,337) | (25,013) | 12,222 | | Cash Flows from Financing Activities | | | | | Net cash provided by f