ratio            101.4%       128.0%                     108.4%       130.0% 
                 ======       ======                     ======       ====== 
 
 

Personal lines premium represented 73% of total gross written premium for the quarter. Personal lines gross written premium increased 10% from the prior year period to just over $11 million for the third quarter of 2024, led by growth in the Company's low-value dwelling line of business in Texas and the Midwest. Despite significant storm activity in the period and for the year, the combined ratio for personal lines business improved compared to the same period in 2023.

Combined Ratio Analysis

 
                      Three Months Ended        Nine Months Ended 
                         September 30,            September 30, 
                       2024         2023        2024         2023 
                   ------------  ----------  -----------  ---------- 
 
 
Underwriting 
ratios: 
 Loss ratio          103.8%        86.9%        84.8%       77.8% 
 Expense ratio        39.3%        33.9%        35.2%       36.3% 
                   -------       ------      -------      ------ 
 Combined ratio      143.1%       120.8%       120.0%      114.1% 
                   =======       ======      =======      ====== 
 
 
Contribution to 
 combined ratio 
 from net 
 (favorable) 
 adverse prior 
 year 
 development          53.9%        15.0%        21.1%        4.2% 
                   -------       ------      -------      ------ 
 
Accident year 
 combined ratio       89.2%       105.8%        98.9%      109.9% 
                   =======       ======      =======      ====== 
 
 

Net Investment Income

Net investment income was $1.4 million for both the quarter ended September 30, 2024 and the quarter ended September 30, 2023.

Change in Fair Value of Equity Securities

During the quarter, the Company reported a loss from the change in fair value of equity investments of $29,000, compared to a $87,000 loss in the prior year period.

Net Income (Loss) allocable to common shareholders

The Company reported net income allocable to common shareholders of $52.8 million, or $4.32 per share, for the third quarter of 2024.

Adjusted Operating Income (Loss)

In the third quarter of 2024, the Company reported an adjusted operating loss of $7.4 million, or $0.60 per share. See Definitions of Non-GAAP Measures.

About Conifer Holdings

Conifer Holdings, Inc. is a Michigan-based property and casualty holding company. Through its subsidiaries, Conifer offers specialty insurance coverage for both commercial and personal lines, marketing through independent agents. The Company is traded on the Nasdaq Capital Market under the symbol CNFR. Additional information is available on the Company's website at www.ir.cnfrh.com.

Forward-Looking Statement

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance, and include Conifer's expectations regarding future revenue, premiums, earnings, its capital position, expansion, and business strategies. The forward-looking statements contained in this press release are based on management's good-faith belief and reasonable judgment based on current information. The forward-looking statements are qualified by important factors, risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including those described in our Form 10-K ("Item 1A Risk Factors") filed with the SEC on April 1, 2024, the Form 10-Q filed with the SEC on November 13, 2024 and subsequent reports filed with or furnished to the SEC. Any forward-looking statement made by us in this press release speaks only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws or regulations.

Definitions of Non-GAAP 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) net income from discontinued operations. We use adjusted operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance.

Reconciliations of adjusted operating income (loss) and adjusted operating income (loss) per share:

 
                     Three Months Ended           Nine Months Ended 
                        September 30,                September 30, 
                 --------------------------  ---------------------------- 
                     2024          2023          2024          2023 
                  ----------    ----------    ----------    ---------- 
                     (dollar in thousands, except share and per share 
                                         amounts) 
 
Net income 
 (loss) 
 allocable to 
 common 
 shareholders    $    52,788   $    (2,706)  $    48,912   $    (6,444) 
Less: 
  Net realized 
   investment 
   gains 
   (losses)               (7)            -          (125)            - 
  Change in 
   fair value 
   of equity 
   securities            (29)          (87)         (182)          595 
  Net income 
   from 
   discontinued 
   operations         60,176         1,656        58,773         1,417 
  Impact of 
  income tax 
  expense 
  (benefit) 
  from 
  adjustments 
  *                        -             -             -             - 
Adjusted 
 operating 
 income (loss)   $    (7,352)  $    (4,275)  $    (9,554)  $    (8,456) 
                  ==========    ==========    ==========    ========== 
 
Weighted 
 average common 
 shares, 
 diluted          12,222,881    12,222,881    12,222,881    12,219,713 
 
Diluted income 
(loss) per 
common share: 
Net income 
 (loss) 
 allocable to 
 common 
 shareholders    $      4.32   $     (0.22)  $      4.00   $     (0.53) 
Less: 
  Net realized 
   investment 
   gains 
   (losses)                -             -         (0.01)            - 
  Change in 
   fair value 
   of equity 
   securities              -         (0.01)        (0.02)         0.05 
  Net income 
   from 
   discontinued 
   operations           4.92          0.14          4.81          0.11 
  Impact of 
  income tax 
  expense 
  (benefit) 
  from 
  adjustments 
  *                        -             -             -             - 
Adjusted 
 operating 
 income (loss), 
 per share       $     (0.60)  $     (0.35)  $     (0.78)  $     (0.69) 
                  ==========    ==========    ==========    ========== 
 
 

* The Company has recorded a full valuation allowance against its deferred tax assets as of September 30, 2024 and September 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.

 
 
              Conifer Holdings, Inc. and Subsidiaries 
                    Consolidated Balance Sheets 
                       (dollars in thousands) 
 
                                    September 30,     December 31, 
                                          2024            2023 
             Assets                  (Unaudited) 
Investment securities: 
 Debt securities, at fair value 
  (amortized cost of $125,257 
  and $135,370, respectively)        $    115,161    $    122,113 
 Equity securities, at fair 
  value (cost of $1,838 and 
  $2,385, respectively)                     1,625           2,354 
 Short-term investments, at fair 
  value                                    21,255          20,838 
                                   ---  ---------       --------- 
    Total investments                     138,041         145,305 
 
Cash and cash equivalents                  32,389          10,663 
Premiums and agents' balances 
 receivable, net                           12,753          29,364 
Receivable from Affiliate                       -           1,047 
Reinsurance recoverables on 
 unpaid losses                             65,860          70,807 
Reinsurance recoverables on paid 
 losses                                    12,919          12,619 
Prepaid reinsurance premiums                9,545          28,908 
Deferred policy acquisition 
 costs                                      6,590           6,405 
Receivable from contingent 
 considerations                            12,924               - 
Other assets                                8,831           7,036 
Assets from discontinued 
 operations                                     -           3,452 
                                   ---  ---------       --------- 
       Total assets                  $    299,852    $    315,606 
                                   ===  =========       ========= 
 
 Liabilities and Shareholders' 
             Equity 
Liabilities: 
 Unpaid losses and loss 

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