CNFR Conifer Holdings Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event Reported): August 14, 2024

 

Conifer Holdings Inc.

(Exact Name of Registrant as Specified in Charter)

 

Michigan	001-37536	27-1298795
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

 

3001 West Big Beaver Road, Suite 200

Troy, MI 48084

(Address of Principal Executive Offices) (Zip Code)

 

Registrant's telephone number, including area code: (248) 559-0840

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, no par value		CNFR		The Nasdaq Stock Market LLC
9.75% Senior Notes due 2028		CNFRZ		The Nasdaq Stock Market LLC

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 7.01 Regulation FD Disclosure.

On August 14, 2024 Conifer Holdings, Inc. (the “Company”) presented additional background information on the Company and on its strategic plan (the “Investor Presentation”) on its conference call/webcast to discuss results for the second quarter ended June 30, 2024. A copy of the Investor Presentation, which is available on the Company’s website at www.CNFRH.com under the tab “Investors,” is attached hereto as Exhibit 99.1, and is incorporated herein by reference. The information in this Item 7.01 and the attached exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly stated by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1	Investor Presentation dated August 14, 2024
Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		Conifer Holdings Inc.
Date: August 14, 2024		By:	/s/ BRIAN J. RONEY
			Brian J. Roney
			President

 

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Nasdaq: CNFR Fulfilling the Unique Needs of Specialty Insurance Markets as a Long-Term Partner Q2 2024 Investor Conference Call August 14, 2024

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Safe Harbor Statement This presentation contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management’s beliefs and assumptions and on information currently available to management. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations concerning our market position, product expansion, future operations, margins, profitability, future efficiencies, and other financial and operating information. When used in this discussion, the words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,” “expects,” “should,” “assumes,” “continues,” “potential,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, inherent risks and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this presentation. Our actual future results may be materially different from what we expect due to factors largely outside our control, including the occurrence of severe weather conditions and other catastrophes, the cyclical nature of the insurance industry, future actions by regulators, our ability to obtain reinsurance coverage at reasonable rates and the effects of competition. These and other risks and uncertainties associated with our business are described under the heading “Risk Factors” in our most recently filed Annual Report on Form 10-K and our earnings press release for the quarter ended June 30, 2024, which should be read in conjunction with this presentation. The company and subsidiaries operate in a dynamic business environment, and therefore the risks identified are not meant to be exhaustive. Risk factors change and new risks emerge frequently. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. 2

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Q2 2024 Highlights Strategic Shift Agency Commission Incomefor Q2 2024: $8.8M+8.6M over Q2 2023 Focus is on a production-based revenue model Maintaining profitable premium in Texas and Midwest homeowners business Future Profitability Expected Q2 2024 Expense Ratio: 32.1%, well below 35%near-term target Optimizing Commercial Lines business through utilization of capacity providers with A.M. Best ratings of A- or better Broader reach for existing profitable programs Adjusted Book Value of $2.26 per share Includes $28.8M of DTAs ($2.36 per share) Total adjusted book value of $2.26 as of quarter ended June 30, 2024 3 Strategic Shift: Scalable & Sustainable Profitability through Production-Based Revenue Model

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Conifer Holdings, Inc. provides niche market insurance programs through Conifer Insurance Services, Conifer Insurance Company and White Pine Insurance Company on both an admitted and E&S basis. Program Portfolio Cannabis Craft Beverage CBD & Hemp Food & Beverage Liquor Liability Marijuana Liability Workers’ Compensation Specialty Homeowners Conifer’s Infrastructure Conifer Insurance Company Founded in 2009 Licensed & Admitted in 4 States (MI, IL, IN, SD) E&S in 49 States (Exc. NY) White Pine Insurance Company Founded in 2010 Licensed & Admitted in 44 States & DC 4 Conifer Insurance Services Wholly owned general agency Acts as a conduit for retail agents to access and write E&S and admitted policies for Conifer and White Pine Insurance Companies Facilitates specialty programs and markets on a select basis

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Our Lines Of Business Commercial Personal 5 Gross Written Premium for Q2 2024: $19.0 Million, Down 57.5% YoY

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Gross written premium decrease reflects the Company’s strategic decision to reduce premium leverage on operating subsidiaries and focus on commission-based revenue through its wholly owned MGA, Conifer Insurance Services Utilization of capacity providers with A.M. Best ratings of A- or better offers opportunity to expand reach in key markets for existing profitable programs, while governing risk through a scalable and sustainable production-based revenue model Commercial Lines represented roughly 36% of the premium written in Q2 2024 $34.8 $6.8 MILLIONS (80.5)% Gross Written Premium Commercial Lines 6 YTD June 30, 2024 Top Five States Gross Written Premium $ in thousands Michigan $ 12,688 64.9% Ohio 1,338 6.8% West Virginia 690 3.5% Kentucky 671 3.4% Pennsylvania 634 3.3% All Other 3,523 18.1% Total $ 19,544 100.0%

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$9.9M $12.2M MILLIONS Gross Written Premium Personal Lines gross written premium represented approximately 64% of total premium in Q2 2024 Growth in Personal Lines premium for the quarter was generated primarily through low-value dwelling segment in Texas and the Midwest +23.0% Personal Lines YTD June 30, 2024 Top Five States Gross Written Premium $ in thousands Texas $ 16,258 68.5% Oklahoma 6,138 25.9% Indiana 889 3.7% Illinois 355 1.5% Nevada 78 0.3% All Other 22 0.1% Total $ 23,740 100.0% 7

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8 Q2 2024 Investment Portfolio Net Investment Income for Q2 2024: $1.5M Highly liquid portfolio of investment grade debt securities Total investment portfolio of $154.1M at June 30, 2024: Average duration: 2.6 years Average tax-equivalent yield: ~3.4% Average credit quality: AA+ Debt Security Portfolio Credit Rating $ in thousands June 30, 2024 Fair Value % of Total AAA $ 56,979 48% AA 36,882 31% A 16,622 14% BBB 8,888 7% Total Debt Securities $ 119,371 100% Debt Security Portfolio Allocation

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Aligned and Experienced Management Team Insiders own 70% of outstanding stock Nicholas Petcoff CEO & Director As Chief Executive Officer of Conifer Holdings, Inc., Nick Petcoff oversees the Company's Underwriting, Reinsurance, Claims and Information Technology operations. Mr. Petcoff is also Director and President of Conifer Insurance Company and President of White Pine Insurance Company, both wholly owned subsidiaries of Conifer Holdings, Inc. He has been with the Company since 2009 and has more than 19 years of experience in the insurance industry. Mr. Petcoff’s distinctive skillset in the areas of Underwriting, Claims and Treaty Reinsurance equips him to direct the Company’s overall strategy, growing the business while enabling the Company to conceptualize and deftly respond to market needs. Brian Roney President As President of Conifer Holdings, Inc., Brian Roney oversees the Company's finance and investor relations functions, as well as general operations. He has been with the Company since 2010 and has more than 25 years of experience in the insurance industry. Mr. Roney has a B.A. from the University of Notre Dame and a M.B.A. from the University of Detroit. Mr. Roney has more than 35 years of financial services experience and spent 10 years in the securities industry as a principal with a broker-dealer, where he specialized in public and private offerings and held FINRA (NASD) Series 7, 24 and 63 licenses. Mr. Roney's prior experience with multiple publicly traded insurance companies brings vital public company expertise to the executive leadership team. Harold Meloche Chief Financial Officer & Treasurer As Chief Financial Officer and Treasurer of Conifer Holdings, Inc., Harold Meloche has primary responsibility over accounting and financial reporting. Mr. Meloche has been with the Company since 2013 and has over 30 years of experience in the insurance industry. Mr. Meloche is a registered Certified Public Accountant, and his analytical expertise bears considerable value to the Company’s financial leadership team. 9

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Contact:Jessica Gulis (248) 559-0840 ir@cnfrh.com Appendix Income Statement Balance Sheet Summary Financial Information Adjusted Operating EPS 10

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Net loss allocable to common shareholders of $4.0 million, or $0.32 per share, based on 12.2 million average shares outstanding For Q2 2024, adjusted operating loss was $3.6 million, or $0.30 per share Three Months Ended June 30, ($ in thousands, except per share data) 2024 2023 Gross Written Premium $ 18,971 $ 44,674 Net Written Premium 13,247 29,328 Net Earned Premium 16,666 23,183 Net Income (Loss) allocable to common shareholders (3,950) (4,739) EPS, Basic and Diluted $ (0.32) $ (0.39) Adjusted Operating Income (Loss) (3,636) (4,727) Adjusted Operating Income (Loss) per share $ (0.30) $ (0.39) Q2 2024 Income Statement 11

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Shareholders’ equity of $(1.2) million – book value of $(0.10) per share $2.36 per share full valuation allowance against deferred tax assets not reflected in book value Total adjusted book value of $2.26 as of quarter ended June 30, 2024 Summary Balance Sheet $ in thousands June 30, 2024 June 30, 2023 Cash & Invested Assets $ 154,067 $ 166,651 Reinsurance Recoverables 82,972 62,333 Goodwill and Intangible Assets 985 985 Total Assets $ 292,934 $ 296,523 Unpaid Losses and Loss Adjustment Expenses 174,786 145,004 Unearned Premiums 44,820 78,468 Debt 24,832 34,031 Total Liabilities $ 294,099 $ 279,666 Total Shareholders' Equity $ (1,165) $ 16,857 June 30, 2024 Balance Sheet 12

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Operating Results Three Months Ended June 30,  $ in thousands, except per share data 2024 2023 Gross Written Premiums $18,971 44,674 Ceded Written Premiums (5,724) (15,346) Net Written Premiums 13,247 29,328 Net Earned Premiums 16,666 23,183 Net Investment Income 1,505 1,354 Net Realized Investment Gains (Losses) (118) - Change in Fair Value of Equity Securities (196) (12) Other Gains (Losses) - - Agency commission income 8,831 211 Other Income 160 187 Total Revenue and Other Income 26,848 24,923 Losses and Loss Adjustment Expenses, Net 15,281 19,319 Policy Acquisition Costs 10,480 4,413 Operating Expenses 4,256 5,114 Interest Expense 869 820 Total Expenses 30,886 29,666 Income (Loss) before Equity Earnings in Affiliate and Income Taxes (4,038) (4,743) Equity Earnings in Affiliate, Net of Tax 228 4 Income Tax (Benefit) Expense (18) - Net Income (Loss) (3,792) (4,739) Preferred stock dividends 158 - Net income (loss) allocable to common shareholders (3,950) (4,739) Earnings (Loss) per Common Share, Basic and Diluted (0.32) (0.39) Weighted Average Common Shares Outstanding, Basic and Diluted 12,222,881 12,220,331 Summary Financial Information 13

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Definitions of Non-GAAP Measures Conifer prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners' (NAIC) Accounting Practices and Procedures Manual, and therefore is not reconciled to GAAP data. We believe that investors’ understanding of Conifer’s performance is enhanced by our disclosure of adjusted operating income. Our method for calculating this measure may differ from that used by other companies and therefore comparability may be limited. We define adjusted operating income (loss), a non-GAAP measure, as net income (loss) excluding: 1) net realized investment gains and losses, 2) change in fair value of equity securities and 3) Other gains (losses). We use adjusted operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted Operating Income 14 * The Company has recorded a full valuation allowance against its deferred tax assets as of June 30, 2024 and June 30, 2023, respectively. As a result, there were no taxable impacts to adjusted operating income from the adjustments to net income (loss) in the table above after taking into account the use of NOLs and the change in the valuation allowance.

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Document and Entity Information	Aug. 14, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Entity Registrant Name	Conifer Holdings Inc.
Entity Central Index Key	0001502292
Document Period End Date	Aug. 14, 2024
Entity Emerging Growth Company	false
Entity File Number	001-37536
Entity Incorporation, State or Country Code	MI
Entity Tax Identification Number	27-1298795
Entity Address, Address Line One	3001 West Big Beaver Road
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Troy
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48084
City Area Code	248
Local Phone Number	559-0840
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Common Stock, No Par Value
Document Information [Line Items]
Title of each class	Common Stock, no par value
Trading Symbol(s)	CNFR
Name of each exchange on which registered	NASDAQ
9.75% Senior Notes due 2028
Document Information [Line Items]
Title of each class	9.75% Senior Notes due 2028
Trading Symbol(s)	CNFRZ
Name of each exchange on which registered	NASDAQ

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