What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-08 compared with 2022-03-14 · 544 added, 565 removed, 1847 unchanged (38% of the section changed)

112 unchanged sentences

Non-controlling interests:

Fortegra preferred interests 77,679 —

Common interests 58,529 17,227

Total non-controlling interests 136,208 17,227

Total stockholders’ equity 533,573 400,181

40 unchanged sentences

Other comprehensive income (loss), net of tax:

Unrealized gains (losses) on available for sale securities:

Unrealized holding gains (losses) arising during the period ( 10,112 ) 5,653 6,320

Related (provision) benefit for income taxes 2,223 ( 1,289 ) ( 1,409 )

Reclassification of (gains) losses included in net income (loss) ( 638 ) ( 528 ) ( 1,312 )

Change in unrealized gains (losses) on available for sale securities ( 55,290 ) ( 10,750 ) 5,125

Change in unrealized currency translation adjustments ( 7,351 ) — —

Related (provision) benefit for income taxes 14,973 2,362 ( 1,176 )

Unrealized gains (losses) on available for sale securities, net of tax ( 8,388 ) 3,949 3,879

Other comprehensive income (loss), net of tax ( 47,668 ) ( 8,388 ) 3,949

6 unchanged sentences

(in thousands, except shares)

Common stock Non-controlling interests

Number of shares Par value Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Total

stockholders’ equity Non-controlling interests Total stockholders' equity

stockholders’ equity Fortegra preferred interests Common interests Total stockholders' equity

Balance at December 31, 2019 34,562,553 $ 35 $ 326,140 $ 1,698 $ 70,189 $ 398,062 $ — $ 13,353 $ 411,415

5 unchanged sentences

Shares purchased under stock purchase plan ( 2,384,286 ) ( 2 ) ( 13,887 ) — — ( 13,889 ) — — ( 13,889 )

Non-controlling interest contributions — — — — — — 61 61

Non-controlling interest distributions — — ( 645 ) — — ( 645 ) — ( 1,389 ) ( 2,034 )

Net change in non-controlling

interest — — — — — — 2,500 2,500

Dividends declared — — — — ( 5,502 ) ( 5,502 ) — ( 5,502 )

Net change in non-controlling interests and other — — ( 135 ) — — ( 135 ) — ( 425 ) ( 560 )

Common stock dividends declared — — — — ( 5,566 ) ( 5,566 ) — — ( 5,566 )

Other comprehensive income (loss), net of tax — — — 3,934 — 3,934 — 15 3,949

1 unchanged sentence

Balance at December 31, 2020 32,682,462 $ 33 $ 315,014 $ 5,674 $ 35,423 $ 356,144 $ — $ 17,394 $ 373,538

Adoption of accounting standard (3)

— — — 42 ( 42 ) — — —

Amortization of share-based incentive compensation — — 2,331 — — 2,331 — 1,725 4,056

Vesting of share-based incentive compensation 596,601 — 3,563 — — 3,563 — ( 4,816 ) ( 1,253 )

Shares issued in exchange for vested subsidiary awards (3)

1,166,307 2 105 — — 107 — ( 1,565 ) ( 1,458 )

Shares purchased under stock purchase plan ( 528,662 ) ( 1 ) ( 2,881 ) — — ( 2,882 ) — — ( 2,882 )

Shares issued upon exercise of warrants 207,445 — — — — — — — —

Repurchase of vested subsidiary awards — — ( 770 ) — — ( 770 ) — ( 309 ) ( 1,079 )

Non-controlling interest contributions — — — — — — — 100 100

Non-controlling interest distributions — — — — — — — ( 1,095 ) ( 1,095 )

Net change in non-controlling interest — — ( 135 ) — — ( 135 ) ( 425 ) ( 560 )

Dividends declared — — — — ( 5,566 ) ( 5,566 ) — ( 5,566 )

Net change in non-controlling interests and other — — 97 — — 97 — ( 97 ) —

Common stock dividends declared — — — — ( 5,409 ) ( 5,409 ) — — ( 5,409 )

Other comprehensive income (loss), net of tax — — — ( 8,359 ) — ( 8,359 ) — ( 29 ) ( 8,388 )

1 unchanged sentence

Balance at December 31, 2021 34,124,153 $ 34 $ 317,459 $ ( 2,685 ) $ 68,146 $ 382,954 $ — $ 17,227 $ 400,181

AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except shares)

Common stock Non-controlling interests

Number of shares Par value Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Total

stockholders’ equity Fortegra preferred interests Common interests Total stockholders' equity

Balance at December 31, 2021 34,124,153 34 317,459 ( 2,685 ) 68,146 382,954 — 17,227 400,181

Amortization of share-based incentive compensation — — 6,600 — — 6,600 — 869 7,469

4 unchanged sentences

Shares issued upon exercise of warrants 1,999,989 2 13,722 — — 13,724 — — 13,724

Repurchase of vested subsidiary awards — — ( 770 ) — — ( 770 ) ( 309 ) ( 1,079 )

Shares issued upon exercise of options 19,296 — — — — — — — —

Transfer of liability awards — — 4,847 — — 4,847 — — 4,847

WP Transaction — — 41,092 7,193 — 48,285 77,679 41,044 167,008

Non-controlling interest contributions — — — — — — — 250 250

Non-controlling interest distributions — — — — — — — ( 3,939 ) ( 3,939 )

Net change in non-controlling

interest — — 97 — — 97 ( 97 ) —

Dividends declared — — — — ( 5,409 ) ( 5,409 ) — ( 5,409 )

Net change in non-controlling interests and other — — ( 42 ) — — ( 42 ) — 491 449

Common stock dividends declared — — — — ( 5,759 ) ( 5,759 ) — — ( 5,759 )

Other comprehensive income (loss), net of tax — — — ( 43,937 ) — ( 43,937 ) — ( 3,731 ) ( 47,668 )

Subsidiary preferred dividends declared — — — — ( 3,384 ) ( 3,384 ) — — ( 3,384 )

Net income (loss) — — — — ( 4,890 ) ( 4,890 ) — 8,451 3,561

4 unchanged sentences

See Note (19) Stock Based Compensation.

(3) Amounts reclassified due to adoption of ASU 2016-13.

See Note (2) Summary of Significant Accounting Policies.

(3) Exchange included $ 1,458 in cash.

(4) Exchange included $ 181 in cash .

See accompanying notes to consolidated financial statements.

10 unchanged sentences

Net realized and unrealized (gains) losses ( 69,983 ) ( 151,350 ) ( 62,410 )

Net (gain) loss on sale of businesses 1,928 4,428 ( 7,598 )

Net (gain) loss on held for sale of business ( 3,825 ) 1,928 4,428

Non-cash compensation expense 9,705 11,130 8,117

4 unchanged sentences

Amortization of deferred financing costs 1,341 1,607 1,015

Change in fair value of liability classified warrants ( 939 ) — —

Net loss on extinguishment of debt 940 — 353

Other 197 291 ( 686 )

15 unchanged sentences

Proceeds from sales and maturities of investments 1,260,594 1,172,044 1,400,229

Proceeds from the sale of real estate and other assets 8,604 2,981 11,857

Proceeds from the sale of real estate, businesses and other assets 742 8,729 3,481

Purchases of property, plant and equipment ( 10,727 ) ( 2,764 ) ( 6,694 )

Proceeds from the sale of businesses 125 500 18,329

Proceeds from notes receivable 85,435 56,055 41,582

Issuance of notes receivable ( 114,187 ) ( 77,077 ) ( 62,088 )

Business and asset acquisitions, net of cash, restricted cash and deposits (1)

133 ( 5,313 ) ( 4,633 )

Business and asset acquisitions, net of cash and deposits ( 14,960 ) 133 ( 5,313 )

Net cash provided by (used in) investing activities 9,514 ( 273,759 ) ( 123,491 )

1 unchanged sentence

Dividends paid ( 7,775 ) ( 5,409 ) ( 5,566 )

Cash received for the exercise of warrants 13,724 —

Net non-controlling interest (redemptions) contributions ( 5,590 ) ( 3,532 ) ( 2,134 )

Issuance of Fortegra Common Stock 98,433 — —

Issuance of Fortegra Warrants 13,101 — —

Issuance of Fortegra Additional Warrants (Warburg) 6,230 — —

Issuance of Fortegra Preferred Stock 83,486 — —

Payment of WP Transaction costs ( 12,910 ) — —

Payment of debt issuance costs ( 1,380 ) ( 114 ) ( 4,571 )

3 unchanged sentences

Net cash provided by (used in) financing activities ( 115,186 ) 73,735 31,749

Effect of exchange rate changes on cash ( 1,828 ) — —

Net increase (decrease) in cash, cash equivalents and restricted cash 355,573 4,292 48,427

2 unchanged sentences

Cash, cash equivalents and restricted cash – end of period 560,019 204,446 200,154

Reclassification of cash to assets held for sale 9,360 4,879 7,137

Reclassification of cash to held for sale / deconsolidation of cash previously held for sale 9,172 9,360 4,879

Cash, cash equivalents and restricted cash – end of period $ 550,847 $ 195,086 $ 195,275

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

For the Year Ended December 31,

2022 2021 2020

Supplemental Disclosure of Cash Flow Information:

3 unchanged sentences

Right of use asset obtained in exchange for lease liability $ 14,698 $ 4,281 $ 9,989

Equity securities acquired as part of a dividend reinvestment plan $ — $ 953 $ —

Acquired real estate properties through, or in lieu of, foreclosure of the related loan $ — $ — $ 2,596

Bonds and trade receivables exchanged for corporate loans and equity securities $ 19,846 $ — $ —

Shares issued in exchange for vested subsidiary awards $ 866 $ 107 $ —

Acquisition of non-controlling interest $ — $ — $ 2,500

Equity securities acquired as part of a dividend reinvestment plan $ — $ — $ 953

As of December 31,

3 unchanged sentences

Total cash, cash equivalents and restricted cash shown in the statements of cash flows $ 550,847 $ 195,086 $ 195,275

(1) Changes in balance sheet balances due to acquisitions have been netted down in the respective line items.

See Note (3) Acquisitions for additional information.

See accompanying notes to consolidated financial statements.

10 unchanged sentences

We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable segments and other business activities, as Tiptree Capital.

On June 21, 2022, the Company closed the WP Transaction whereby Warburg invested $ 200,000 in Fortegra in exchange for Fortegra Common Stock, Fortegra Preferred Stock, Fortegra Warrants and Fortegra Additional Warrants.

See Note (17) Stockholders’ Equity for additional information regarding the terms of the securities issued in connection with the closing of the WP Transaction.

As of December 31, 2022, Fortegra was owned approximately 79.5 % by Tiptree Holdings, 17.4 % by Warburg and 3.1 % by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and the conversion of outstanding preferred stock.

(2) Summary of Significant Accounting Policies

18 unchanged sentences

• The realization of deferred tax assets, and recognition and measurement of uncertain tax positions;

• Vessel valuations, residual value of vessels and the useful lives of vessels;

• Other matters that affect the reported amounts and disclosure of contingencies in the consolidated financial statements

Although these and other estimates and assumptions are based on the best available estimates, actual results could differ materially from management’s estimates.

Business Combination Accounting

The Company accounts for business combinations by applying the acquisition method of accounting.

The acquisition method requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at fair value as of the closing date of the acquisition.

The net assets acquired may consist of tangible and intangible assets and the excess of purchase price over the fair value of identifiable net assets acquired, or goodwill.

The determination of estimated

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

useful lives and the allocation of the purchase price to the intangible assets requires significant judgment and affects the amount of future amortization and possible impairment charges.

Business Combination Accounting

The Company accounts for business combinations by applying the acquisition method of accounting.

The acquisition method requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at fair value as of the closing date of the acquisition.

The net assets acquired may consist of tangible and intangible assets and the excess of purchase price over the fair value of identifiable net assets acquired, or goodwill.

The determination of estimated useful lives and the allocation of the purchase price to the intangible assets requires significant judgment and affects the amount of future amortization and possible impairment charges.

Contingent consideration, if any, is measured at fair value on the date of acquisition.

4 unchanged sentences

Acquisitions that do not meet the criteria for the acquisition method of accounting are accounted for as acquisitions of assets.

Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

Dispositions and Assets and Liabilities Held for Sale

The results of operations of a business that has either been disposed of or are classified as held for sale are reported in discontinued operations if the disposal of the business represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.

1 unchanged sentence

At the time of reclassification to held for sale, the Company ceases the recording of depreciation and amortization on assets transferred.

Accounting policies specific to our dispositions, assets and liabilities held for sale and discontinued operations are described in more detail in (4) Dispositions and Assets and Liabilities Held for Sale.

Accounting policies specific to our dispositions and assets and liabilities held for sale are described in more detail in Note (4) Dispositions and Assets and Liabilities Held for Sale.

Fair Value Measurement

11 unchanged sentences

• Level 3 – Significant inputs that are unobservable inputs for the asset or liability, including the Company’s own data and assumptions that are used in pricing the asset or liability.

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.

Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.

In such cases, for disclosure purposes, the level in the fair value hierarchy within

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

which the fair value measurement in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.

Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.

In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Tiptree’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and the consideration of factors specific to the instrument.

11 unchanged sentences

Derivative Financial Instruments and Hedging

From time to time, derivative instruments are used in the overall strategy to manage exposure to market risks primarily related to fluctuations in interest rates.

The Company utilizes derivative financial instruments as part of its overall investment and hedging activities.

Derivative contracts are subject to additional risk that can result in a loss of all or part of an investment.

The Company’s derivative activities are primarily entered into in order to manage underlying credit risk, market risk, interest rate risk and currency exchange rate risk.

As a matter of policy, derivatives are not used for speculative purposes.

Derivative instruments are measured at fair value on a recurring basis and are included in other investments or other liabilities and accrued expenses on the consolidated balance sheets.

See Note (10) Derivative Financial Instruments and Hedging.

The Fortegra Additional Warrants (Warburg) are classified as a derivative liability given that (i) the holder can exercise the warrant for a variable number of shares and (ii) and the value of the warrant varies inversely with the value of Fortegra’s common stock.

As such, the derivative liability is marked to fair value at each reporting period and its change in fair value is recorded in other expenses.

See Note (10) Derivative Financial Instruments and Hedging, Note (12) Fair Value of Financial Instruments and Note (17) Stockholders’ Equity for additional information.

Derivative Instruments Designated as Cash Flow Hedging Instruments

4 unchanged sentences

Stock Based Compensation

The Company accounts for share‑based compensation issued to employees, directors, and affiliates of the Company using the current fair value based methodology.

The Company accounts for share‑based compensation issued to employees, directors, and affiliates of the Company using the current fair value methodology based on the type of vesting condition – time based, performance based or market based or combination.

See Note (19) Stock Based Compensation.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

The Company initially measures the cost of all share-based compensation incentive awards at fair value on the date of grant, whether accounted for as an equity or liability award.

6 unchanged sentences

The Company reassesses the probability of satisfaction of the performance condition for the performance vesting RSUs for each reporting period.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

Deferred tax assets and liabilities are determined using the asset and liability method.

3 unchanged sentences

Several of the Company’s subsidiaries file state tax returns on a standalone basis.

Two of our subsidiaries file federal and state tax returns on a stand-alone basis, one of which is held for sale.

As of June 21, 2022, Fortegra began filing federal and state tax returns on a stand-alone basis.

federal and state income tax returns, when filed, will be subject to examination by the Internal Revenue Service and state departments of revenue.

14 unchanged sentences

Realized gains (losses) are determined using the specific-identification method.

The Company classifies its investments in debt securities as available for sale or held-to-maturity based on the Company’s intent and ability to hold the debt security to maturity.

The Company classifies its investments in debt securities as available for sale, trading or held-to-maturity based on the Company’s intent and ability to hold the debt security to maturity.

The Company did not have any held-to-maturity securities at December 31, 2022 and 2021.

See Note (6) Investments .

Available for Sale Securities, at Fair Value (AFS)

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

AFS are securities that are not classified as trading or held-to-maturity and are intended to be held for indefinite periods of time.

4 unchanged sentences

In making the assessment of whether a loss is from credit or other factors, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions related to the security, among other factors.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

the security.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security.

If the present value of cash flows is less than the amortized cost basis, a credit loss exists and an allowance is created, limited by the amount that the fair value is less than the amortized cost basis.

23 unchanged sentences

Investments in vessels, net are carried at cost (inclusive of capitalized acquisition costs, where applicable) less accumulated depreciation.

Subsequent expenditures are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels;

Subsequent expenditures are also capitalized when they appreciably extend the life, increase the earning

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

capacity or improve the efficiency or safety of the vessels;

otherwise, these amounts are expensed as incurred.

3 unchanged sentences

Vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

Upon transferring the vessels and related assets to held for sale on the consolidated balance sheets, the vessels are no longer depreciated.

Vessels are reviewed for potential impairment when events or changes in circumstances indicate that the carrying amount of a particular vessel may not be fully recoverable.

3 unchanged sentences

An impairment charge would be recognized if the estimated undiscounted future net cash flows expected to result from the operation and subsequent disposal of the vessel are less than the vessel’s carrying amount.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

The Company’s estimate of future revenue is based upon time charter equivalent (TCE) rates using current market rates.

2 unchanged sentences

The projected undiscounted future cash flows are comprised of the net of these inflows and outflows, plus an estimated salvage value.

As of December 31, 2021, the appraised values and undiscounted future cash flows were both higher than the carrying amount of each of the vessels in the Company’s fleet and, as such, no loss on impairment was recognized.

There were no impairments recognized for the years ended December 31, 2022 or 2021.

As of December 31, 2022, all remaining tanker and dry-bulk vessels had been sold.

See Note (4) Dispositions and Assets and Liabilities Held for Sale.

Cash and Cash Equivalents

14 unchanged sentences

Accounts and Premiums Receivable, Net

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Accounts and premiums receivable, net are primarily trade receivables from the insurance business that are carried at their approximate fair value.

6 unchanged sentences

Reinsurance Receivables

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

Through the insurance business, the Company has various reinsurance agreements in place whereby the amount of risk in excess of its retention goals is reinsured by unrelated domestic and foreign insurance companies.

14 unchanged sentences

As a result of the Company’s evaluations, no write-offs for unrecoverable deferred acquisition costs were recognized during the years ended December 31, 2022, 2021 and 2020.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Goodwill and Intangible Assets, net

13 unchanged sentences

Changes in fair value are recorded in net realized and unrealized gains (losses) on the consolidated statements of operations in the period of change.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

Debt is carried on the consolidated balance sheets at an amount equal to the unpaid principal balance, net of any remaining unamortized discount or premium and direct and any incremental costs attributable to issuance.

17 unchanged sentences

The Company has not made any changes to its methodologies for determining claim reserves in the periods presented.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Credit life and accidental death and dismemberment (AD&D) unpaid claims reserves include claims in the course of settlement and incurred but not reported (IBNR).

14 unchanged sentences

For December 31, 2022 and 2021, our appointed independent third-party actuaries found the Company’s reserves to be adequate.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

Deferred Revenue

14 unchanged sentences

The amount ceded is proportional to the amount of risk assumed by the reinsurer.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Service and Administrative Fees

16 unchanged sentences

As experience changes, adjustments to the ceding commissions are reflected in the period incurred and are based on the claim experience of the related policy.

The adjustment is calculated by adding the earned premium and investment income from the assets held in

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

trust for the Company’s benefit less earned commissions, incurred claims and the reinsurer's fee for the coverage.

The adjustment is calculated by adding the earned premium and investment income from the assets held in trust for the Company’s benefit less earned commissions, incurred claims and the reinsurer's fee for the coverage.

Vessel Related Revenue

5 unchanged sentences

Vessel related revenue is recorded in other investment income as a part of other revenue.

See Note (16) Other Revenue and Other Expenses.

Policy and Contract Benefits

6 unchanged sentences

Net losses include actual claims paid and the change in unpaid claim reserves.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Commissions Payable and Expense

5 unchanged sentences

Commissions payable are included in other liabilities and accrued expenses.

Recent Accounting Standards

Recently Adopted Accounting Pronouncements

See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

Standard Description Adoption Date Impact on Financial Statements

Recent Accounting Standards

Recently Adopted Accounting Pronouncements

Accounting Standard Update Description Adoption Date Impact on Financial Statements

2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) The standard simplifies the accounting for certain financial instruments.

The guidance reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity.

This standard amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.

Either a full or modified retrospective method of transition is permissible for the adoption of this standard.

January 1, 2022 The adoption of the standard did not materially impact the Company’s consolidated financial statements.

2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers This standard addresses diversity in practice and inconsistency related to recognition of an acquired contract liability, and payment terms and their effect on subsequent revenue recognized by the acquirer.

This standard is effective for annual periods beginning after December 15, 2023, including interim periods within those fiscal years.

Entities should apply the provisions of the new standard prospectively to business combinations occurring on or after the effective date of the standard.

Early adoption is permitted, including in an interim period .

We early adopted this standard and applied it to all 2022 business combinations.

January 1, 2022 The adoption of the standard did not materially impact the Company’s consolidated financial statements.

2019-12 Income Taxes (Topic 740):

1 unchanged sentence

The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods.

January 1, 2021 The standard makes changes to areas of tax accounting for transactions and situations

which do not currently apply to the Company’s activity, so the adoption of the standard does

not currently impact the Company’s financial

January 1, 2021 The standard makes changes to areas of tax accounting for transactions and situations which do not currently apply to the Company’s activity, so the adoption of the standard does

not currently impact the Company’s financial statements.

2016-13 Financial Instruments -Credit Losses (Topic 326):

7 unchanged sentences

January 1, 2020 The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.

2018-13 Fair Value Measurement (Topic 820):

Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement The amendments in this update require additions, modifications and elimination to the fair value measurement disclosure.

The objective of these disclosure requirements is to provide users of financial statements with information about assets and liabilities measured at fair value:

(a) The valuation techniques and inputs that a reporting entity uses to arrive at its measures of fair value, including judgments and assumptions that the entity makes,

(b) The uncertainty in the fair value measurements as of the reporting date, and

January 1, 2020 The retrospective adoption of this standard resulted in additional disclosures related to inputs of Level 3 investments.

This adoption resulted in an immaterial impact to the Company’s consolidated financial statements.

See Note (12) Fair Value of Financial Instruments.

2018-02 Income Statement—Reporting Comprehensive Income (Topic 220):

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income The amendments in this update allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017.

The amendments in this update affect any entity that is required to apply the provisions of Topic 220 and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP.

January 1, 2019 The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.

2016-02 Leases (Topic 842) This new standard introduced a new lessee model that brings substantially all leases onto the balance sheet.

In addition, while the new guidance retains most of the principles of the previous existing lessor model in GAAP, it aligns many of those principles with ASC 606, Revenue From Contracts With Customers.

January 1, 2019 The adoption of this guidance (practical expedient) resulted in the Company recognizing a right of use asset of $ 32,052 as part of other assets and a lease liability of $ 33,558 as part of other liabilities and accrued expenses in the consolidated balance sheets, as well as de-recognizing the liability for deferred rent that was required under the previous guidance for its operating lease agreements at January 1, 2019.

AND SUBSIDIARIES

5 unchanged sentences

2020-04 Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting The amendments in this update provide optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting and 2022-06 Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 The amendments in these updates provide optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met.

The standard is effective for all entities as of March 12, 2020, through December 31, 2024.

The Company is evaluating their option to adopt the guidance when it is applicable.

The Company is currently evaluating the effect on its consolidated financial statements.

The Company is evaluating its option to adopt the guidance when it is applicable.

(3) Acquisitions

Acquisition of Smart AutoCare

On January 3, 2020, a subsidiary of the Company acquired (the Acquisition) all of the equity interests of Accelerated Service Enterprise LLC., SAC Holdings Inc., Dealer Motor Services, Inc., Independent Dealer Group, Inc., Ownershield, Inc., Freedom Insurance Company, Ltd.

(Freedom), SAC Admin, Inc., SAC Insurance Company, Inc., Smart AutoCare, Inc.

and Smart AutoCare Administration Solutions, Inc.

(together Smart AutoCare), pursuant to the Equity Interest Purchase Agreement (as amended, the Purchase Agreement) between Fortegra Warranty Holdings, LLC.

(Buyer) and Peter Masi (Seller), dated as of December 16, 2019.

Concurrent with the Acquisition, Freedom terminated reinsurance agreements with affiliates of Seller (the Commutation Transaction).

Tiptree paid Seller $ 111,804 , net of working capital true-ups, in cash at closing, $ 8,250 of which was held in an escrow account to satisfy indemnity claims and was released on August 3, 2021.

Simultaneously, pursuant to the Commutation Transaction, affiliates of Seller paid Freedom $ 102,000 in cash.

The Purchase Agreement also provides for an earn out of up to $ 50,000 in cash based on Smart AutoCare achieving specified performance metrics measured on the 4-year and 6-year anniversary of closing (Reserve Based Earn-Out Amount) and an additional earn out of up to $ 30,000 payable in cash or Tiptree common stock based on Smart AutoCare achieving other certain specified performance metrics measured on the 4-year anniversary of closing (Profits Based Earn-Out Amount).

In addition, the purchase price will be subject to a true-up following the 6-year anniversary of the closing (Underwriting Profitability True-Up) based on the adequacy of certain legacy reserves, offset by certain earnings on new business.

Fortegra Warranty may hold back all or a portion of any Reserve Based Earn-Out Amounts until final determination of the legacy reserves used to calculate the Underwriting Profitability True-Up if in Tiptree’s reasonable opinion such amount may be needed to offset a deficiency in such legacy reserves.

In addition, if the deficiency in the legacy reserves used to calculate the Underwriting Profitability True-Up is greater than the aggregate amount owing to Seller for the Reserve-Based Earn-Out Amount and Profits-Based Earn-Out Amount, Seller shall pay Tiptree an amount equal to the lesser of such difference and $ 10,000 .

Smart AutoCare’s results are included in the Company’s Insurance segment.

The financial results of Smart AutoCare have been included in the Company’s results as of the acquisition date.

The fair value of assets acquired and liabilities assumed represent the allocation as our evaluation of facts and circumstances available as of the acquisition date.

The allocation of the purchase price to the intangible assets is based on fair value estimates and have been reviewed by management.

The allocation of the purchase price has been finalized and all measurement period adjustments have been recorded.

Management’s allocation of the purchase price to the net assets acquired resulted in the recording of finite-lived intangible assets valued at $ 93,700 , with an estimated amortization period of 5 to 13.5 years and will be tax deductible over a 15 year period.

The residual amount of the purchase price after the allocation to net assets acquired and identifiable intangibles of $ 60,346 has been allocated to goodwill.

This goodwill is included in the Insurance segment.

It is expected that $ 21,127 of this goodwill will be tax deductible over a 15 year period.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

The following table presents the determination of the acquisition date fair value amounts for the identifiable assets acquired, liabilities assumed, and goodwill recorded in connection with the Acquisition, in accordance with the acquisition method of accounting:

Available for sale securities, at fair value $ 110

Total investments 110

Cash and cash equivalents 120,934

Restricted cash 764

Notes and accounts receivable, net 6,214

Reinsurance receivables 71,337

Intangible assets, net 93,700

Other assets 34,053

Total assets $ 327,112

Policy liabilities and unpaid claims $ 55,151

Deferred revenue 182,568

Reinsurance payable 27,075

Other liabilities and accrued expenses 10,860

Total liabilities 275,654

Net assets acquired 51,458

Goodwill 60,346

Acquisition costs $ 3,539

Supplemental pro forma results of operations have not been presented for the Acquisition as they are not material in relation to the Company’s reported results.

The following table shows the values recorded by the Company, as of the acquisition date, for finite-lived intangible assets and the range of their estimated amortization period:

Intangible Assets Weighted Average Amortization Period

(in Years) Value as of acquisition date

Customer relationships 7.2 $ 86,000

Software licensing 5.0 600

Trade names 13.5 7,100

Total acquired finite-lived intangible assets 7.7 $ 93,700

Acquisition of Sky Auto

On December 31, 2020, a subsidiary in our insurance business acquired all of the equity interests in Sky Auto for total net cash consideration of approximately $ 25,200 .

Sky Auto markets vehicle service contracts to consumers within the United States.

Acquisition of ITC Compliance GRP Limited

On April 1, 2022, a subsidiary in our insurance business acquired all of the equity interests in ITC for total cash consideration of approximately $ 15,000 , net of cash acquired of $ 6,123 , plus earn out payments based on achievement of specific performance metrics.

ITC is a provider of regulatory support and compliance services to the retail automotive sector in the United Kingdom.

The preliminary purchase price allocation below has been developed based on preliminary estimates of fair value using the historical financial statements of ITC as of the acquisition date and is subject to the completion of management’s final analysis.

Identifiable assets acquired were primarily made up of goodwill and intangible assets.

Management’s allocation of the purchase price to the net assets acquired resulted in the recording of goodwill and intangible assets of $ 19,867 and $ 5,340 .

The tax basis in goodwill and intangible assets is equal to the GAAP values provided above.

The acquired goodwill and intangibles will be amortized over a period of 15 years for tax purposes.

Management’s preliminary allocation of the purchase price to the net assets acquired resulted in the recording of goodwill and intangible assets of $ 8,122 and $ 10,964 , respectively, which the Company may modify during the one year period allowed for purchase accounting adjustments during the measurement period.

See Note (9) Goodwill and Intangible Assets, net.

3 unchanged sentences

(in thousands, except share data)

On July 1, 2019, a subsidiary in our insurance business acquired a majority interest in Ingenasys, Ltd., the parent holding company of Defend Insurance Group (Defend), for total net cash consideration of approximately $ 4,600 .

Defend is an automotive finance and insurance provider and insurance administrator operating in the Czech Republic, Poland, Hungary, Slovakia, and the UK.

Identifiable assets acquired were primarily made up of goodwill and intangible assets.

See Note (9) Goodwill and Intangible Assets, net.

(4) Dispositions and Assets and Liabilities Held for Sale

On April 26, 2019, the Company completed the sale of the management contracts and related assets for the CLOs managed by Telos Asset Management, LLC (Telos).

The pre-tax gain on sale for the year ended December 31, 2019 was $ 7,598 , which is included in other revenue.

See (16) Other Revenue and Other Expenses.

The sale did not meet the requirements to be classified as a discontinued operation.

The sale agreement also contains a provision which provides for contingent consideration if the Telos business achieves specific performance metrics.

This contingent consideration represents a gain contingency, and the Company will not recognize any additional gain unless such consideration is realized.

During the year ended December 31, 2022, the Company completed the sale of three dry bulk vessels and two product tankers from its maritime shipping operations.

The Company recognized a net gain of $ 34,803 , based on proceeds of $ 116,678 plus final settlement of assets.

The transactions did not meet the requirements to be classified as discontinued operations.

Assets and Liabilities Held for Sale

The Company has entered into a definitive agreement to sell Luxury, and it is classified as held for sale at December 31, 2021 and December 31, 2020.

The agreement did not meet the requirements to be classified as a discontinued operation.

The Company entered into a definitive agreement to sell Luxury, which was classified as held for sale at December 31, 2021.

The Company deconsolidated Luxury effective as of July 1, 2022 due to the execution of an amendment to the definitive agreement to sell Luxury on that date.

As of that date, Tiptree no longer had a variable interest in Luxury and all of the risks and rewards associated with Luxury were transferred to the buyer.

The transaction did not meet the requirements to be classified as a discontinued operation.

The following table presents detail of Luxury’s assets and liabilities held for sale in the consolidated balance sheets for the following periods:

9 unchanged sentences

Other liabilities and accrued expenses (1)

15,021 13,040

Liabilities held for sale $ 242,994

(1) Includes deferred tax liabilities of $ 659 and $ 939 as of December 31, 2021 and December 31, 2020, respectively.

During the year ended December 31, 2021 and December 31, 2020, the Company recorded an impairment of $ 1,928 and $ 4,428 , respectively, related to assets and liabilities held for sale.

See Note (16) Other Revenue and Other Expenses.

No impairment related to assets and liabilities held for sale was recorded for the year ended December 31, 2019.

Luxury has a total borrowing capacity at December 31, 2021 of $ 299,500 .

As of December 31, 2021 and 2020, a total of $ 227,973 and $ 162,072 , respectively, was outstanding under such financing agreements.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

(5) Segment Data

(1) Includes deferred tax liabilities of $ 659 as of December 31, 2021.

Luxury’s earni ngs had no impact to net income (loss) attributable to common stockholders for the years ended December 31, 2022 and 2021.

(5) Operating Segment Data

Tiptree is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments.

Tiptree’s principal operating subsidiary, The Fortegra Group, LLC and its subsidiaries (Fortegra), is a leading provider of specialty insurance, service contract products and related service solutions.

Based on the ASC 280 quantitative analysis performed as of December 31, 2021, our reportable segments are Insurance and Mortgage.

We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable operating segments and other business activities, as Tiptree Capital.

Tiptree’s principal operating subsidiary, Fortegra, is a leading provider of specialty insurance, service contract products and related service solutions.

Based on the ASC 280, Segment Reporting, quantitative analysis performed as of December 31, 2022, our reportable segments are Insurance and Mortgage.

We refer to our non-insurance operations, assets and other investments, comprised of our Mortgage reportable segment and our non-reportable operating segments and other business activities, as Tiptree Capital.

Corporate activities include holding company interest expense, employee compensation and benefits, and other expenses.

3 unchanged sentences

Descriptions of our Insurance reportable segment and Tiptree Capital, including our Mortgage reportable segment, are as follows:

Insurance operations are conducted through Fortegra, which includes Fortegra Financial Corporation and Fortegra Warranty.

Fortegra is a leading provider of specialty insurance products and related services.

Fortegra designs, markets and underwrites specialty commercial and personal property and casualty insurance products incorporating value-added coverages and services for select target markets or niches.

Insurance operations are conducted through Fortegra, which is a leading provider of specialty insurance products and related

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Fortegra designs, markets and underwrites specialty property and casualty insurance products incorporating value-added coverages and services for select target markets or niches.

Fortegra’s products and services include niche commercial and personal lines, service contracts, and other insurance services.

1 unchanged sentence

Mortgage operations are conducted through Reliance.

The Company’s mortgage origination business originates loans for sale to institutional investors, including GSEs and FHA/VA and services loans on behalf of Fannie Mae, Freddie Mac, and Ginnie Mae.

Other includes our maritime shipping operations, asset management, other investments (including our Invesque shares), and our held-for-sale mortgage operations (Luxury Mortgage).

The Company’s mortgage business originates loans for sale to institutional investors, including GSEs and FHA/VA and services loans on behalf of Fannie Mae, Freddie Mac, and Ginnie Mae.

Other includes our maritime shipping operations, asset management, other investments (including our Invesque shares), and Luxury mortgage operations (deconsolidated effective as of July 1, 2022).

The tables below present the components of revenue, expense, income (loss) before taxes, and assets for our reportable segments as well as Tiptree Capital - Other for the following periods:

10 unchanged sentences

Net income (loss) attributable to common stockholders $ ( 8,274 )

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

For the Year Ended December 31, 2021

12 unchanged sentences

Insurance Mortgage Other Total

Total revenues $ 635,085 $ 66,121 $ 71,522 $ 772,728

Total expenses ( 598,055 ) ( 63,162 ) ( 48,131 ) ( 709,348 )

Corporate expenses — — — ( 34,241 )

Total revenue $ 691,061 $ 112,165 $ 7,075 $ 810,301

Total expense ( 664,113 ) ( 81,063 ) ( 68,317 ) ( 813,493 )

Corporate expense — — — ( 35,660 )

Income (loss) before taxes $ 26,948 $ 31,102 $ ( 61,242 ) $ ( 38,852 )

4 unchanged sentences

The Company conducts its operations primarily in the U.S.

with 7.2 %, 5.2 %, and 2.9 % of total revenues generated overseas for the years ended December 31, 2021, 2020 and 2019 respectively.

The following table presents the reportable segments and Tiptree Capital - Other assets for the following periods:

As of December 31, 2021 As of December 31, 2020

Tiptree Capital Tiptree Capital

Insurance Mortgage Other Corporate Total Insurance Mortgage Other Corporate Total

Total assets $ 3,002,152 $ 201,134 $ 384,564 $ 11,297 $ 3,599,147 $ 2,452,798 $ 217,138 $ 302,068 $ 23,756 $ 2,995,760

w ith 8.8 %, 7.2 % and 5.2 % of total revenues generated overseas for the years ended December 31, 2022, 2021 and 2020, respectively.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

The following table presents the reportable segments.

Tiptree Capital - Other and Corporate assets for the following periods:

As of December 31, 2022 As of December 31, 2021

Tiptree Capital Tiptree Capital

Insurance Mortgage Other Corporate Total Insurance Mortgage Other Corporate Total

Total assets $ 3,702,577 $ 156,122 $ 86,402 $ 94,462 $ 4,039,563 $ 3,002,152 $ 201,134 $ 384,564 $ 11,297 $ 3,599,147

(6) Investments

17 unchanged sentences

Available for Sale Securities, at fair value

All of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of December 31, 2021 and December 31, 2020 are held by subsidiaries in the insurance segment.

All of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of December 31, 2022 and 2021 are held by subsidiaries in the insurance segment.

The following tables present the Company's investments in AFS securities:

18 unchanged sentences

Obligations of state and political subdivisions 57,923 — 1,050 ( 313 ) 58,660

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Corporate securities 145,997 ( 241 ) 517 ( 1,396 ) 144,877

5 unchanged sentences

Amount excludes unrealized losses relating to non-credit factors.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

The amortized cost and fair values of AFS securities, by contractual maturity date, are shown below.

34 unchanged sentences

Asset backed securities 7,454 ( 84 ) 38 2,316 ( 2,062 ) 5

Certificates of deposit 1,339 — 2 — — —

Obligations of foreign governments 2,278 ( 58 ) 8 — — —

$ 344,073 $ ( 4,403 ) 762 $ 25,110 $ ( 2,707 ) 102

(1) Presented in whole numbers.

Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities that were in an unrealized loss position as of December 31, 2021 until full recovery of their amortized cost basis.

Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

that were in an unrealized loss position as of December 31, 2022 until full recovery of their amortized cost basis.

The table below presents a roll-forward of the activity in the allowance for credit losses on AFS securities by type as of December 31, 2022:

1 unchanged sentence

Balance at December 31, 2020 $ — $ — $ — $ — $ —

Increase in the allowance for the initial adoption of ASU 2016-13 ( 1 ) ( 50 ) ( 2 ) — ( 53 )

(Increase) in allowance for credit losses — ( 296 ) — ( 6 ) ( 302 )

Reduction in credit losses due to AFS securities sold during the year — 3 — 1 4

3 unchanged sentences

(Increase) in allowance for credit losses ( 3 ) ( 69 ) ( 1 ) ( 1 ) ( 74 )

Reduction in credit losses due to AFS securities sold during the year — 3 — 1 4

Gains from recoveries of amounts previously written off — 127 — 2 129

37 unchanged sentences

Total loans, at fair value $ 64,843 $ 65,393 $ ( 550 ) $ 50,113 $ 105,583 $ 105,420 $ 163 $ 95,542

(1) The cost basis of Corporate loans was approximately $ 9,094 and $ 11,282 at December 31, 2021 and December 31, 2020, respectively.

(2) As of December 31, 2021 and December 31, 2020, there was one mortgage loan held for sale and two mortgage loans held for sale that were 90 days or more past due, respectively, with a fair value of $ 136 and $ 534 , respectively.

(1) The cost basis of Corporate loans was approximately $ 16,032 and $ 9,094 at December 31, 2022 and 2021, respectively.

(2) As of December 31, 2022, there were no mortgage loans held for sale that were 90 days or more past due.

As of December 31, 2021, t here was one mortgage loan held for sale that was 90 days or more past due, with a fair value of $ 136 .

Equity Securities

Equity securities consist mainly of publicly traded common and preferred stocks and fixed income exchange traded funds.

Included within the equity securities balance are 17.0 million shares of Invesque as of December 31, 2021 and December 31, 2020, for which the Company has elected to apply the fair value option.

Included within the equity securities balance are 17.0 million shares of Invesque as of December 31, 2022 and 2021, for which the Company has elected to apply the fair value option.

The following table presents information on the cost and fair value of the Company’s equity securities related to insurance operations and other Tiptree investing activity as of the following periods:

25 unchanged sentences

Vessels, net (2)

— — 79,368 79,368

Debentures 23,853 — — 23,853

Trade claims 19,737 — — 19,737

Other 230 4,038 1,894 6,162

8 unchanged sentences

Debentures 21,057 — — 21,057

Trade claims 19,737 — — 19,737

Other 216 7,981 1,332 9,529

Total other investments $ 79,975 $ 7,981 $ 80,700 $ 168,656

(1) The cost basis of corporate bonds was $ 36,436 and $ 97,284 as of December 31, 2021 and December 31, 2020, respectively.

(2) Net of accumulated depreciation of $ 13,059 and $ 8,372 as of December 31, 2021 and December 31, 2020, respectively.

(1) The cost basis of corporate bonds was $ 45,630 and $ 36,436 as of December 31, 2022 and 2021, respectively.

(2) Net of accumulated depreciation of $ 118 and $ 13,059 as of December 31, 2022 and 2021, respectively.

Net Investment Income - Insurance

11 unchanged sentences

Other Investment Income - Tiptree Capital

Other investment income represents other revenue from other Tiptree non-insurance activities as disclosed within other revenue on the consolidated statements of operations, see Note (16) Other Revenue and Other Expenses.

Other investment income represents revenue from non-insurance activities as disclosed within other revenue on the consolidated statements of operations, see Note (16) Other Revenue and Other Expenses.

The following tables present the components of other investment income by type:

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

For the Year Ended December 31,

2 unchanged sentences

$ 5,384 $ 7,184 $ 5,617

Other — — 269

Dividends from equity securities — — 2,533

2 unchanged sentences

Other investment income $ 53,660 $ 64,580 $ 48,747

(1) Primarily relates to Loans, at fair value classified as Held for Sale.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

(1) Includes income related to loans at fair value classified as Held for Sale for the periods prior to July 1, 2022.

See Note (4) Dispositions and Assets and Liabilities Held for Sale.

17 unchanged sentences

24,403 61,312 40,466

Net realized gains on vessel sales 34,803 — —

Other 761 1,632 ( 4,713 )

16 unchanged sentences

See Note (4) Dispositions and Assets and Liabilities Held for Sale.

(7) Notes and Accounts Receivable, net

The following table presents the total notes and accounts receivable, net:

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

(7) Notes and Accounts Receivable, net

The following table presents the total notes and accounts receivable, net:

As of December 31,

12 unchanged sentences

Accounts and premiums receivable, net $ 94 $ 120 $ 56 $ 33 $ 28

(1) As of December 31, 2021 and December 31, 2020, there were $ 1,311 and $ 215 in balances classified as 90 days plus past due, respectively.

(1) As of December 31, 2022 and 2021, there were $ 168 and $ 1,311 in balances classified as 90 days plus past due, respectively.

(8) Reinsurance Receivables

22 unchanged sentences

Total premiums written $ 1,380,100 $ 706,108 $ 220,748 $ 894,740 24.7 %

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

Direct amount Ceded to other companies Assumed from other companies Net amount Percentage of amount - assumed to net

Premiums earned:

3 unchanged sentences

Total premiums earned $ 1,103,091 $ 630,123 $ 212,584 $ 685,552 31.0 %

As of December 31, 2019

Life insurance in force $ 5,176,056 $ 2,884,009 $ — $ 2,292,047

For the Year Ended December 31, 2019

Premiums written:

Life insurance $ 75,060 $ 40,555 $ 1,692 $ 36,197 4.7 %

Accident and health insurance 133,514 87,447 3,201 49,268 6.5 %

Property and liability insurance 709,515 350,093 92,246 451,668 20.4 %

Total premiums written 918,089 478,095 97,139 537,133 18.1 %

Premiums earned:

Life insurance 68,282 35,929 1,607 33,960 4.7 %

Accident and health insurance 123,182 82,660 3,165 43,687 7.2 %

Property and liability insurance 597,852 242,180 65,789 421,461 15.6 %

Total premiums earned $ 789,316 $ 360,769 $ 70,561 $ 499,108 14.1 %

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

The following table presents the components of policy and contract benefits, including the effect of reinsurance on losses and loss adjustment expenses (LAE) incurred:

8 unchanged sentences

Total policy and contract benefits $ 452,605

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

Direct amount Ceded to other companies Assumed from other companies Net amount Percentage of amount - assumed to net

For the Year Ended December 31, 2021

35 unchanged sentences

Total of the three largest receivable balances from non-affiliated reinsurers $ 189,233

As of December 31, 2021, the non-affiliated reinsurers from whom our insurance business has the largest receivable balances were:

Allianz Global Corporate & Specialty SE (A.

A+ rated), Canada Life International Reinsurance (Bermuda) Corporation (A.

A+ rated), and Canada Life Assurance Company (A.

The related receivables of these reinsurers are collateralized by assets on hand, assets held in trust accounts and letters of credit.

As of December 31, 2021, the Company does not believe there is a risk of loss due to the concentration of credit risk in the reinsurance program given the collateralization.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

As of December 31, 2022, the non-affiliated reinsurers from whom our insurance business has the largest receivable balances were:

Allianz Global Corporate & Specialty SE (A.M.

A+ rated), Canada Life Assurance Company (A.M.

A+ rated), and Canada Life International Reinsurance (Bermuda) Corporation (A.M.

A majority of the related receivables from these reinsurers are collateralized by assets on hand and letters of credit;

receivable balances from authorized reinsurers do not require collateral.

Allianz Global Corporate & Specialty SE and Canada Life Assurance Company are authorized reinsurers in the states in which Fortegra’s U.S.

based insurance entities are domiciled.

The Company monitors authorization status and A.M.

Best ratings of its reinsurers periodically.

As of December 31, 2022, the Company does not believe there is a risk of loss due to the concentration of credit risk in the reinsurance program given the collateralization.

(9) Goodwill and Intangible Assets, net

23 unchanged sentences

The following table presents the activity in goodwill, by operating segment and/or reporting unit, as appropriate, and includes the adjustments made to the balance of goodwill to reflect the effect of the final valuation adjustments made for acquisitions, as well as the reduction to any goodwill attributable to impairment related charges:

Tiptree Capital

Insurance Other Total

Balance at December 31, 2020 177,528 1,708 179,236

Goodwill acquired (1)

84,476 — 84,476

Purchase accounting adjustments ( 133 ) — ( 133 )

( 4,387 ) — ( 4,387 )

Balance at December 31, 2021

Purchase accounting adjustment (2)

$ 177,395 $ 1,708 $ 179,103

Goodwill acquired (1)

8,112 — 8,112

Foreign currency translation and other ( 607 ) — ( 607 )

Balance at December 31, 2022 $ 184,900 $ 1,708 $ 186,608

Accumulated impairments $ — $ 699 $ 699

(1) Relates to acquisitions in in our insurance business as of December 31, 2020.

See Note (3) Acquisitions.

(2) Relates to adjustments during the measurement period as permitted under ASC 805 for the final valuation of acquisitions in our insurance business as of January 3, 2020 and December 31, 2020.

(1) See Note (3) Acquisitions for more information.

The Company conducts annual impairment tests of its goodwill as of October 1.

For the years ended December 31, 2022, 2021 and 2020, no impairments were recorded on the Company’s goodwill.

Intangible Assets, net

The following table presents the activity, by operating segment and/or reporting unit, as appropriate, in finite and indefinite-lived other intangible assets and includes the adjustments made to the balance to reflect the effect of any final valuation adjustments made for acquisitions, as well as any reduction attributable to impairment-related charges:

There is no accumulated impairment recorded in the goodwill balance as of December 31, 2022 or 2021.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

Intangible Assets, net

Insurance Other Total

1 unchanged sentence

Intangible assets acquired — 124 124

99,040 1,000 100,040

Purchase accounting adjustment (2)

( 300 ) — ( 300 )

amortization expense ( 15,410 ) ( 171 ) ( 15,581 )

Balance at December 31, 2021

Intangibles acquired — 124 124

$ 121,308 $ 1,450 $ 122,758

Intangible assets acquired (1)

10,964 604 11,568

Amortization expense ( 16,229 ) ( 126 ) ( 16,355 )

Foreign currency translation and other ( 956 ) — ( 956 )

Balance at December 31, 2022 $ 115,087 $ 1,928 $ 117,015

(1) Relates to acquisitions in in our insurance business as of December 31, 2020.

See Note (3) Acquisitions.

(2) Relates to adjustments during the measurement period as permitted under ASC 805 for the final valuation of acquisitions in our insurance business as of July 1, 2019.

(1) See Note (3) Acquisitions for more information.

The following table presents the amortization expense on finite-lived intangible assets for the following periods:

12 unchanged sentences

2028 and thereafter 43,207 — 43,207

Total $ 107,547 $ 326 $ 107,873

$ 102,243 $ 200 $ 102,443

(1) Does not include foreign currency translation adjustment of ( $ 917 ) as of December 31, 2022.

(10) Derivative Financial Instruments and Hedging

1 unchanged sentence

Derivative contracts are subject to additional risk that can result in a loss of all or part of an investment.

The Company’s derivative activities are primarily classified by underlying credit risk and interest rate risk.

In addition, the Company is also subject to additional counterparty risk should its counterparties fail to meet the contract terms.

The derivative financial instruments are reported in other investments.

The Company’s derivative activities are primarily entered into in order to manage underlying credit risk, market risk, interest rate risk and currency exchange rate risk.

In addition, the Company is also subject to counterparty risk should its counterparties fail to meet the contract terms.

Derivative assets are reported in other investments.

Derivative liabilities are reported within other liabilities and accrued expenses .

Derivatives, at fair value

Interest Rate Lock Commitments

The Company enters into interest rate lock commitments (IRLCs) with customers in connection with its mortgage banking activities to fund residential mortgage loans with certain terms at specified times in the future.

IRLCs that relate to the origination of mortgage loans that will be classified as held-for-sale are considered derivative instruments under applicable accounting guidance.

As such, these IRLCs are recorded at fair value with changes in fair value typically resulting in recognition of a gain when the Company enters into IRLCs.

In estimating the fair value of an IRLC, the Company assigns a probability that the loan commitment will be exercised and the loan will be funded (“pull through”).

The fair value of the commitments is derived from the fair value of related mortgage loans, net of estimated costs to complete.

Outstanding IRLCs expose the Company to the risk that the price of the loans underlying the commitments might decline from inception of the rate lock to funding of the loan.

To manage this risk, the Company utilizes forward delivery contracts and to be announced (TBA) mortgage backed securities to economically hedge the risk of potential changes in the value of the loans that would

Derivatives for our mortgage business are primarily comprised of interest rate lock commitments (IRLCs), forward delivery contracts, and TBA mortgage backed securities.

The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position.

Our mortgage origination subsidiary issues IRLCs to their customers, which are carried at estimated fair value on the Company’s

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

result from the commitments.

consolidated balance sheets.

The estimated fair values of these commitments are generally calculated by reference to the value of the underlying loan associated with the IRLC net of costs to produce and an expected pull through assumption.

The fair values of these commitments generally fall under Level 3 in the fair value hierarchy.

Forward Delivery Contracts and TBA Mortgage Backed Securities

The Company enters into forward delivery contracts with loan aggregators and other investors as one of the tools to manage the interest rate risk associated with IRLCs and loans held for sale.

In addition, the Company enters into TBA mortgage backed securities which facilitate hedging and funding by allowing the Company to prearrange prices for mortgages that are in the process of originating.

The Company utilizes these hedging instruments for Agency (Fannie Mae and Freddie Mac) and FHA/VA (Ginnie Mae) eligible IRLCs.

Our mortgage origination subsidiary manages their exposure by entering into forward delivery commitments with loan investors.

For loans not locked with investors under a forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates.

The fair values of TBA mortgage-backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.

The remaining derivatives are generally comprised of a combination of swaps and options, which are generally classified as Level 2 in the fair value hierarchy.

In addition, the Fortegra Additional Warrant (Warburg) is a derivative liability and classified as Level 3 in the fair value hierarchy.

See Note (17) Stockholders’ Equity for additional information regarding the Fortegra Additional Warrant.

The following table presents the gross notional and fair value amounts of derivatives (on a gross basis) categorized by underlying risk:

6 unchanged sentences

TBA mortgage backed securities 133,500 273 141 316,000 262 425

Fortegra Additional Warrants (Warburg) (1)

— — 5,291 — — —

Other 13,427 230 7,730 9,232 216 1,657

Total $ 327,050 $ 4,267 $ 13,201 $ 650,703 $ 8,196 $ 2,141

(1) See Note (17) Stockholders’ Equity for additional information .

AND SUBSIDIARIES

9 unchanged sentences

$ — $ — $ — $ —

Secured term credit agreements (LIBOR + 6.75 %) (2)

— — 114,063 114,063

Secured term credit agreement

Preferred trust securities (LIBOR + 4.10 %)

6 unchanged sentences

60,628 — — 60,628

Residential mortgage warehouse borrowings (LIBOR + 1.88 % to 3.00 %) (2)(3)

— 72,518 — 72,518

Vessel backed term loan (LIBOR + 4.75 %)

Residential mortgage warehouse borrowings ( 1.88 % to 2.50 % over SOFR;

2.00 % to 3.00 % over BSBY) (3)(4)

— 47,454 — 47,454

8 unchanged sentences

$ 2,160 $ — $ — $ 2,160

Secured term credit agreements (LIBOR + 6.75 %) (2)

Secured term credit agreement (LIBOR + 6.75 %) (5)

— — 114,063 114,063

16 unchanged sentences

Total debt, net $ 195,996 $ 85,049 $ 112,304 $ 393,349

(1) The secured revolving credit agreements provide a two rate structure at the Company’s discretion;

Prime + 1.25 % for swing loans and LIBOR + 2.25 %.

(2) Includes LIBOR floor of 1.00 %.

(3) The weighted average coupon rate for residential mortgage warehouse borrowings was 2.76 % and 2.75 % at December 31, 2021 and December 31, 2020, respectively.

Includes LIBOR floor ranging from 0.50 % to 1.00 %

(1) The secured credit agreements include separate tranches with multiple rate structures which are adjustable based on Fortegra’s senior leverage ratio, which as of December 31, 2022 was SOFR + 1.50 %.

(2) On January 31, 2023, the borrowing was amended to use SOFR as the reference rate.

See Note (24) Subsequent Events.

(3) Includes SOFR floor and BSBY floor o f 0.25 % and 0.50 %, r espectively, as of December 31, 2022.

(4) The weighted average coupon rate for residential mortgage warehouse borrowings was 6.31 % a nd 2.76 % at December 31, 2022 and 2021, respectively.

(5) Includes LIBOR floor o f 1 %.

The following table presents the amount of interest expense the Company incurred on its debt for the following periods:

16 unchanged sentences

Secured Revolving Credit Agreements

As of December 31, 2021 and December 31, 2020, a total of $ 2,160 and $ 0 , respectively, was outstanding under the revolving line of credit in our insurance business.

The maximum borrowing capacity under the agreements as of December 31, 2021 is $ 200,000 .

On August 4, 2020, Fortegra entered into an Amended and Restated Credit Agreement by and among Fortegra Financial and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the Fortegra Credit Agreement).

The Fortegra Credit Agreement provides for a $ 200,000 revolving credit facility, all of which is available for the issuance of letters of credit, with a sub-limit of $ 17,500 for swing loans and matures on August 4, 2023.

The Fortegra Credit Agreement replaced the $ 30,000 revolving line of credit with the Fifth Third Bank (the “Working Capital Facility”) .

As of December 31, 2022 and 2021, a total of $ 0 and $ 2,160 , respectively, was outstanding under the revolving line of credit in our insurance business.

The maximum borrowing capacity under the agreements as of December 31, 2022 was $ 200,000 .

On October 21, 2022, Fortegra entered into a Second Amended and Restated Credit Agreement by and among Fortegra Financial and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the Fortegra Credit Agreement).

The Fortegra Credit Agreement provides for a $ 200,000 revolving credit facility, all of which is available for the issuance of letters of credit, with a sub-limit of $ 25,000 for swing loans and matures on October 1, 2027.

Secured Term Credit Agreement

On February 21, 2020, the Operating Company borrowed $ 125,000 under a new credit agreement (Credit Agreement) with Fortress Credit Corp.

The proceeds were used to repay the Company’s prior credit agreement with Fortress, with a balance of $ 68,210 as of December 31, 2019, and for working capital and general corporate purposes.

Pursuant to an Amendment, Assumption and Consent Agreement, dated July 17, 2020 by and among Tiptree, certain of its subsidiaries and Fortress, Tiptree Holdings LLC (Tiptree Holdings) became the borrower under the Credit Agreement, dated as of February 21, 2020, by and among Tiptree, certain of its subsidiaries and Fortress.

The Credit Agreement will mature on February 21, 2025, with principal amounts of the loans to be repaid in consecutive quarterly installments.

Loans under the Credit Agreement bear interest at a variable rate per annum equal to LIBOR (with a minimum LIBOR rate of 1.00 %), plus a margin of 6.75 % per annum.

The obligations under the Credit Agreement are secured by liens on substantially all of the assets of Tiptree Holdings and guaranteed by the Company and Tiptree Holdings’ direct wholly owned first tier subsidiaries (Guarantors).

The Credit Agreement contains various customary affirmative and negative covenants of the Company, Tiptree Holdings and the other Guarantors (subject to customary exceptions), including, but not limited to, limitations on indebtedness, liens, investments and acquisitions, negative pledges, junior payments, conduct of business, transactions with affiliates, dispositions of assets, prepayment of certain indebtedness and limits on guarantees by subsidiaries of Tiptree Holdings’ and the Guarantors’ indebtedness.

The Credit Agreement also contains a financial covenant which limits corporate leverage as defined by its Corporate Leverage Ratio (as defined in the Credit Agreement).

The Credit Agreement also contains customary mandatory repayment provisions (subject to customary exceptions) and requires that net cash proceeds from the sale by Tiptree and certain of its subsidiaries of capital stock of Invesque be applied to prepay loans until the outstanding principal amount of loans is $ 62,500 , with remaining proceeds subject to reinvestment rights.

Prepayments, whether mandatory or voluntary, reduce future scheduled amortization payments in the order they come

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

The Credit Agreement also requires the payment of a prepayment fee upon a repricing transaction or equity issuance consummated after the closing date, or the sale of Fortegra, or any of its material subsidiaries.

As of December 31, 2021, a total of $ 114,063 was outstanding under this agreement.

The maximum borrowing capacity on this agreement is $ 114,063 .

The remaining balance of the corporate secured term credit agreement was fully repaid during June 2022 in connection with the WP Transaction.

As of December 31, 2021, the maximum borrowing capacity and borrowings outstanding were $ 114,063 .

Junior Subordinated Notes

A subsidiary in our insurance business issued $ 125,000 of 8.50 % Fixed Rate Resetting Junior Subordinated Notes due October 2057.

Substantially all of the net proceeds were used to repay the existing secured credit agreement, which was terminated thereafter.

The notes are unsecured obligations of the subsidiary and rank in right of payment and upon liquidation, junior to all of the subsidiary’s current and future senior indebtedness.

The notes are not obligations of or guaranteed by any subsidiaries of the subsidiary, or any other Tiptree entities.

On October 16, 2017, a subsidiary of Fortegra issued $ 125,000 of 8.50 % Fixed Rate Resetting Junior Subordinated Notes due October 2057.

Substantially all of the net proceeds were used to repay the existing secured credit agreement at that time, which was terminated thereafter.

The notes are unsecured obligations of the subsidiary and rank in right of payment and upon liquidation, junior to all of the Fortegra subsidiary’s current and future senior indebtedness.

The notes are not obligations of or guaranteed by any other subsidiaries of Fortegra, or any other Tiptree entities.

So long as no event of default has occurred and is continuing, all or part of the interest payments on the notes can be deferred on one or more occasions for up to five consecutive years per deferral period.

1 unchanged sentence

Preferred Trust Securities

A subsidiary in our insurance business has $ 35,000 of preferred trust securities due June 15, 2037.

On June 20, 2007, a subsidiary of Fortegra issued $ 35,000 of preferred trust securities due June 15, 2037.

Interest is payable quarterly at an interest rate of LIBOR plus 4.10 %.

The Company may redeem the preferred trust securities, in whole or in part, at a price equal to the full outstanding principal amount of such preferred trust securities outstanding plus accrued and unpaid interest.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Asset Based Debt

Asset Backed Revolving Financing

On October 16, 2020, subsidiaries in our insurance business entered into a three year $ 75,000 secured credit agreement, which replaced the individual agreements in its premium finance and service contract finance businesses.

Asset Based Revolving Financing

On October 16, 2020, subsidiaries of Fortegra entered into a three year $ 75,000 secured credit agreement, which replaced the individual agreements in its premium finance and service contract finance businesses.

The borrowers can select from various borrowing and rate options under the agreement, as well the option to convert certain borrowings to term loans, if no default or event of default exists.

The agreement extends up to $ 20,000 for our premium finance business and up to $ 55,000 for our service contract finance business, and is secured by substantially all of the assets of the borrowers.

The obligations under the agreement are non-recourse to Fortegra and its subsidiaries (other than borrowers and their subsidiaries).

As of December 31, 2021, a total of $ 42,310 was outstanding under the borrowing.

The obligations under the agreement are non-recourse to Fortegra and its other subsidiaries (other than borrowers and their subsidiaries).

As of December 31, 2022 and 2021, a total of $ 60,628 and $ 42,310 , respectively, was outstanding under the borrowing related to our premium finance and service contract finance offerings in our insurance business.

Residential Mortgage Warehouse Borrowings

In March 2021, the $ 60,000 warehouse line of credit was renewed and the maturity date was extended from April 2021 to April 2022.

In April 2022, the $ 60,000 warehouse line of credit was renewed and the maturity date was extended from April 2022 to April 2023.

In January 2023, the $ 60,000 warehouse line of credit was renewed and the maturity date was extended from January 2023 to January 2024.

In July 2021, the $ 50,000 warehouse line of credit was renewed and the maturity date was extended from August 2021 to August 2022.

In April 2020, a subsidiary in our mortgage business renewed the $ 60,000 warehouse line of credit, extending the maturity date to April 2021 and establishing a LIBOR floor of 1.0 %.

Additionally, during March 2020, another warehouse line maturing in August 2020 temporarily raised the maximum borrowing capacity to $ 65,000 , returning to a maximum borrowing capacity of $ 50,000 in May 2020 and establishing a LIBOR floor of 0.50 %.

In August 2020, the $ 50,000 warehouse line of credit was extended to August 2021, and established a LIBOR floor of 0.50 % to 1.00 %.

As of December 31, 2021 and December 31, 2020, a total of $ 72,518 and $ 55,994 , respectively, was outstanding under such financing agreements.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

In August 2022, the $ 50,000 warehouse line of credit was renewed and the maturity date was extended from August 2022 to August 2023.

As of December 31, 2022 and 2021, a total of $ 47,454 and $ 72,518 , respectively, was outstanding under such financing agreements.

Vessel-Backed Term Loan

On November 28, 2019, subsidiaries in our shipping business entered into a $ 18,000 term loan facility.

Amounts borrowed under the facility are not allowed to be reborrowed.

The borrowing has a maturity date of November 28, 2024 and a rate of LIBOR plus 4.75 %, with quarterly principal payments of $ 550 .

This facility is secured by liens on 2.00 of our vessels as well as the assets of the borrowing entities and their parent guarantor.

This credit agreement contains customary financial covenants that require, among other items, minimum liquidity, positive working capital, minimum required security coverage ratio of 150 %, and the existence of a maintenance reserve account funded on a quarterly basis prior to anticipated scheduled drydocking costs.

As of December 31, 2021, a total of $ 13,600 was outstanding under the borrowing.

As of December 31, 2021, the Company is in compliance with the representations and covenants for its outstanding debt or has obtained waivers for any events of non-compliance.

The remaining balance of the vessel backed term loan was fully repaid at a discount during May 2022, for a net gain of $ 1,168 .

As of December 31, 2021, the maximum borrowing capacity and borrowings outstanding were $ 13,600 .

Debt Covenants

As of December 31, 2022, the Company was in compliance with the representations and covenants for its outstanding debt or obtained waivers for any events of non-compliance.

(12) Fair Value of Financial Instruments

9 unchanged sentences

Management analyzes the third-party valuation methodologies and its related inputs to perform assessments to determine the appropriate level within the fair value hierarchy and to assess reliability of values.

Further, management has a process in place to review all changes in fair value that occurred during each measurement period.

Further, management has a process in place to review

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

all changes in fair value that occurred during each measurement period.

Any discrepancies or unusual observations are followed through to resolution through the source of the pricing as well as utilizing comparisons, if applicable, to alternate pricing sources.

6 unchanged sentences

expected cash flow streams, default rates, supply and demand considerations and market volatility.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

Available for Sale Securities, at fair value

10 unchanged sentences

The fair values of publicly traded common and preferred equity securities and exchange traded funds (“ETFs”) are obtained from market value quotations provided by an independent pricing service and fall under Level 1 in the fair value hierarchy.

The fair values of non-publicly traded common and preferred stocks are based on prices obtained from an independent pricing service using unobservable inputs and fall under Level 3 in the fair value hierarchy.

The fair values of non-publicly traded common and preferred stocks are based on prices derived from multiples of comparable public companies and fall under Level 3 in the fair value hierarchy.

Loans, at fair value

1 unchanged sentence

These loans are comprised of middle market loans and bank loans and are generally classified under either Level 2 or Level 3 in the fair value hierarchy.

To determine fair value, the Company uses quoted prices which include those provided from pricing vendors which provide coverage of secondary market participants, where available.

To determine fair value, the Company uses quoted prices, including those provided from pricing vendors, which provide coverage of secondary market participants, where available.

The values represent a composite of mark-to-market bid/offer prices.

3 unchanged sentences

Derivative Assets and Liabilities

Derivatives are primarily comprised of IRLCs, forward delivery contracts and TBA mortgage backed securities.

Derivatives for our mortgage business are primarily comprised of IRLCs, forward delivery contracts and TBA mortgage backed securities.

The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position.

3 unchanged sentences

Our mortgage origination subsidiaries manage their exposure by entering into forward delivery commitments with loan investors.

For loans not locked with investors under a forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates.

The fair values of TBA mortgage backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.

Corporate Bonds

Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is provided by a third-party investment manager, based on quoted market prices.

We perform internal price verification procedures monthly to ensure that the prices provided are reasonable.

For loans not locked with investors under a

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates.

The fair values of TBA mortgage backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.

The remaining derivatives are generally comprised of a combination of swaps and options, which are generally classified as Level 2 in the fair value hierarchy.

In addition, the Fortegra Additional Warrants (Warburg) are a derivative liability and classified as Level 3 in the fair value hierarchy.

See Note (17) Stockholders’ Equity for additional information regarding the Fortegra Additional Warrant.

Corporate Bonds

Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is provided by a third-party investment manager, based on quoted market prices.

We perform internal price verification procedures monthly to ensure that the prices provided are reasonable.

Trade claims represent unsecured claims of bankrupt companies and are generally classified under Level 3 in the fair value hierarchy.

7 unchanged sentences

Various observable and unobservable inputs are used to determine fair value, including discount rate, cost to service and weighted average prepayment speed.

The following tables present the Company’s fair value hierarchies for financial assets and liabilities, measured on a recurring basis:

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

The following tables present the Company’s fair value hierarchies for financial assets and liabilities, measured on a recurring basis:

As of December 31, 2022

25 unchanged sentences

Derivative assets 7 608 3,652 4,267

Trade claims — — 19,737 19,737

CLOs — — 441 441

Other — — 324 324

Total other investments, at fair value 7 42,688 3,976 46,671

4 unchanged sentences

Derivative liabilities — 7,910 — 7,910

Fortegra Additional Warrants (Warburg) — — 5,291 5,291

Contingent consideration payable — — 2,904 2,904

1 unchanged sentence

(1) Included in other assets.

See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

(2) Included in other liabilities and accrued expenses.

See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

AND SUBSIDIARIES

28 unchanged sentences

Derivative assets 113 569 7,514 8,196

CLOs — — 802 802

Trade claims — — 19,737 19,737

Other — — 441 441

Total other investments, at fair value 113 39,534 27,692 67,339

14 unchanged sentences

The following table presents additional information about assets that are measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value for the following periods:

For the Year Ended December 31,

Balance at January 1, $ 61,443 $ 33,455

4 unchanged sentences

Purchases 13 24,956

Sales ( 9,238 ) ( 6,672 )

Sales and repayments ( 3,815 ) ( 9,238 )

Conversions to mortgage loans held for sale ( 56,794 ) ( 111,023 )

Settlement of trade claims ( 19,169 ) —

Exchange of bonds for term loans 12,673 —

Exchange of trade receivables for equity securities 7,360 —

Balance at December 31,

5 unchanged sentences

2022 2021 Valuation technique Unobservable input(s)

Assets Fair Value Range WA Range WA

Assets Fair value Range WA (1)

IRLCs $ 3,652 $ 7,514 Internal model Pull through rate 55 % to 95 % 65 % 55 % to 95 % 66 %

2 unchanged sentences

Prepayment speed 4 % to 85 % 9 % 5 % to 100 % 15 %

Trade claims 19,737 — Internal model Plan projected recovery rate 15 % to 18 % 17 % N/A N/A

Trade claims — 19,737 Internal model Plan projected recovery rate N/A 15 % to 18 % 17 %

Equity securities 6,837 — Internal model Forecast EBITDAR $ 728 to $ 1,039 N/A N/A

Corporate loans and related receivables 11,208 — Internal model EBITDA $ 170,000 N/A N/A

Total $ 63,123 $ 57,084

Contingent consideration payable - Smart AutoCare $ 200 $ 200 Cash Flow Model Forecast Cash EBITDA $ 20,000 to $ 30,000 N/A $ 20,000 to $ 30,000 N/A

Actuarial Analysis Assumed Claim Liabilities $ 55,000 $ 55,000

Fortegra Additional Warrants (Warburg) $ 5,291 $ — External model Discount rate 3 % to 5 % 3.3 % N/A

Implied Equity Volatility 40 % to 50 % 45 %

Contingent consideration payable 2,904 — Cash Flow model Forecast Cash EBITDA $ 2,500 to $ 4,000 N/A N/A

Cash Flow model Forecast Underwriting EBITDA $ — to $ 2,000 N/A N/A

Total $ 8,195 $ —

42 unchanged sentences

The following table presents the activity in the net liability for unpaid losses and allocated loss adjustment expenses of short duration contracts for the following periods:

For the Year Ended December 31,

Policy liabilities and unpaid claims balance as of January 1, $ 331,703 $ 233,438

29 unchanged sentences

Total losses incurred $ 361,601 $ 253,473 $ 178,248

During the year ended December 31, 2021 , the Company experienced an increase in prior year development of $ 2,606 , primarily as a result of higher-than-expected claim severity from business written by a small group of producers of our personal and commercial lines of business.

During the year ended December 31, 2020 , the Company experienced an increase in prior year development of $ 5,443 , primarily as a result of higher than expected claim frequency from business written by a small group of producers of our personal and commercial lines of business.

The underlying cause of this development was the result of a subset of risk where the loss ratio pegs used in our year end actuarial determination was low given the ultimate frequency that emerged.

During the year ended December 31, 2019, the Company experienced an increase in prior year development of $ 5,169 , primarily in our non-standard auto business.

The underlying cause of this development was higher than expected claim frequency.

During the year ended December 31, 2022, the Company experienced favorable prior year development of $ 858 , primarily as a result of lower-than-expected claim severity in our commercial lines business.

During the year ended December 31, 2021, the Company experienced unfavorable prior year development of $ 2,606 , primarily as a result of higher-than-expected claim severity from business written by a small group of producers of our personal and commercial lines of business.

Management considers the prior year development for each of these years to be insignificant when considered in the context of our annual earned premiums, net as well as our net losses and loss adjustment expenses and member benefit claims expenses.

We analyze our development on a quarterly basis and given the short duration nature of our products, favorable or adverse development emerges quickly and allows for timely reserve strengthening, if necessary, or modifications to our product pricing or offerings.

The favorable prior year development of $ 858 in 2022 represented 1.3 % of our insurance business pre-tax income of $ 68,150 and 0.6 % of the opening net liability for losses and loss adjustment expenses of

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

The prior year development in 2021, 2020, and 2019 of $ 2,606 , $ 5,443 and $ 5,169 , respectively, represented 3.7 %, 20.2 % and 13.9 % of pretax income of our insurance business of $ 69,857 , $ 26,948 and $ 37,030 in each year, and 3.1 %, 12.4 % and 18.7 % of the opening net liability for losses and loss adjustment expenses of $ 83,945 , $ 43,881 and $ 27,615 , as of January 1 of each year.

$ 154,412 , as of January 1, 2022.

The unfavorable prior year development of $ 2,606 in 2021 represented 3.7 % of our insurance business pretax income of $ 69,857 , and 3.1 % of the opening net liability for losses and loss adjustment expenses of $ 83,945 , as of January 1, 2021.

Based upon our internal analysis and our review of the statement of actuarial opinions provided by our actuarial consultants, we believe that the amounts recorded for policy liabilities and unpaid claims reasonably represent the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Incurred and Paid Development

4 unchanged sentences

The Company considers a claim that does not result in a liability as a claim closed without payment.

In 2020 and 2021, timing effects related to the COVID 19 pandemic impacted claim activity and, consequently, the duration of paid claims relative to incurred losses.

We believe these impacts are temporary and do not reflect a long term fundamental change in duration or the relationship between paid claims and incurred losses.

Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022

1 unchanged sentence

Accident Year 2014 2015 2016 2017 2018 2019 2020 2021 2022

(Unaudited) 2017

(Unaudited) 2018

(Unaudited) 2019

(Unaudited) 2020

(Unaudited) 2021

2014 $ 43,449 $ 39,614 $ 39,914 $ 39,887 $ 39,874 $ 39,869 $ 39,883 $ 39,884 $ 39,932 $ 5 122

4 unchanged sentences

2019 144,925 149,166 151,772 153,325 $ 10,352 422

2020 172,007 169,706 165,820 $ 20,818 344

2021 250,300 263,249 $ 13,964 492

2022 361,462 $ 160,915 516

Total $ 1,361,334

1 unchanged sentence

Accident Year 2014 2015 2016 2017 2018 2019 2020 2021 2022

(Unaudited) 2017

(Unaudited) 2018

(Unaudited) 2019

(Unaudited) 2020

(Unaudited) 2021

2014 $ 30,435 $ 38,752 $ 39,596 $ 39,822 $ 39,818 $ 39,874 $ 39,878 $ 39,881 $ 39,927

3 unchanged sentences

2018 105,740 112,619 114,490 115,407 114,756

2019 122,348 128,787 132,747 131,885

2020 127,721 129,832 132,997

2021 174,334 224,193

Total $ 1,063,277

1 unchanged sentence

Liabilities for loss and loss adjustment expenses, net of reinsurance $ 298,057

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

The following table presents supplementary information about average historical claims duration as of December 31, 2022 for short duration contracts:

2 unchanged sentences

Short duration 72.4 % 14.6 % 2.0 % 0.7 % 0.3 % 0.2 % — % — % 0.1 %

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Reconciliation of Reserves to Balance Sheet

7 unchanged sentences

Short duration 266,889

Other insurance lines 210

Total reinsurance recoverable on unpaid losses and loss adjustment expenses 267,099

13 unchanged sentences

Vessel related revenue 30,144 35,562 22,697

Management fee income — — 1,267

Other 5,916 17,784 6,127

1 unchanged sentence

Service and Administrative Fees

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

Service fee revenue is recognized as the services are performed.

6 unchanged sentences

Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less.

The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at December 31, 2021.

The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of December 31, 2022.

The timing of our revenue recognition may differ from the timing of payment by our customers.

8 unchanged sentences

The following table presents the activity in the significant deferred assets and liabilities related to revenue from contracts with customers for the following period:

January 1, 2021 December 31, 2021

January 1, 2022

December 31, 2022

Beginning balance Additions Amortization Ending balance

10 unchanged sentences

For the periods presented, no write-offs for unrecoverable deferred acquisition costs and deferred revenue were recognized.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

(15) Other Assets and Other Liabilities and Accrued Expenses

10 unchanged sentences

Total other assets $ 172,143 $ 146,844

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

(1) See Note (21) Commitments and Contingencies for additional information.

11 unchanged sentences

38,031 29,396

Due to brokers 10,763 45,047

Commissions payable 42,741 20,412

11 unchanged sentences

$ 53,660 $ 64,580 $ 48,747

Gain (loss) on sale of businesses (2)

22,525 8,827 3,163

Management fee income — — 1,267

10,755 7,591 5,038

Total other revenue $ 76,185 $ 73,407 $ 51,910

(1) See Note (6) Investments for the components of Other investment income.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

(2) Relates to the impairment of Luxury.

See Note (4) Dispositions and Assets and Liabilities Held for Sale.

(2) Includes $ 17,559 , $ 10,384 , and $ 7,025 for the years ended December 31, 2022, 2021, and 2020, respectively, related to Insurance.

9 unchanged sentences

Operating expenses from vessels 6,418 13,797 13,210

Loss on extinguishment of debt — 353 1,241

Other 15,795 9,652 8,431

Total other expenses $ 132,580 $ 142,044 $ 109,148

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

(17) Stockholders' Equity

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The Board of Directors authorized the Company to make repurchases of up to $ 20,000 of shares of the Company’s outstanding common stock in the aggregate, at the discretion of the Company's Executive Committee.

The following table presents the Company’s stock repurchase activity and remaining authorization.

For the Year Ended

December 31, 2021

Number of shares purchased Weighted average price per share

Share repurchase plan 528,662 $ 5.45

Remaining repurchase authorization $ 13,669

In April 2021, warrants were exercised for 207,445 shares of Tiptree common stock.

As of December 31, 2021, there were warrants for 2,021,506 shares of Tiptree common stock outstanding at an exercise price of $ 6.97 .

During the year ended December 31, 2022, 165,040 shares were repurchased for a weighted average price per share of $ 10.44 .

As of December 31, 2022, the remaining repurchase authorization was $ 11,945 .

Tiptree Warrants

In the year ended December 31, 2022, warrant s were exercised for 1,999,989 shares of Tiptree common stock, with 1,979,325 warrants exercised for $ 13,724 in cash, and 20,664 exercised cashless.

As of December 31, 2022, there were no warrants for shares of Tiptree common stock outstanding.

The Company declared cash dividends per share for the following periods presented below:

Dividends per share for the

For the Year Ended December 31,

4 unchanged sentences

Fourth quarter 0.04 0.04 0.04

0.04 0.04 0.04

Total cash dividends declared $ 0.16 $ 0.16 $ 0.16

(1) See Note (24) Subsequent Events for when the dividend was declared.

Statutory Reporting and Insurance Company Subsidiaries Dividend Restrictions

The Company’s U.S.

insurance subsidiaries prepare financial statements in accordance with Statutory Accounting Principles

Fortegra Non-Controlling Interests

On June 21, 2022, the Company closed the WP Transaction.

On that date, Fortegra converted to a Delaware corporation and Warburg made a $ 200,000 investment in Fortegra in exchange for Fortegra Common Stock, Fortegra Preferred Stock, Fortegra Warrants and Fortegra Additional Warrants.

Also, in connection with the closing of the Warburg Transaction, Tiptree was issued Fortegra Additional Warrants, and management’s interests in LOTS Intermediate were exchanged for interests in Fortegra.

As of December 31, 2022, Fortegra was owned approximately 79.5 % by Tiptree Holdings, 17.4 % by Warburg and 3.1 % by management and directors of Fortegra.

As a result of the WP Transaction, the Company recorded an increase of $ 167,008 to total stockholders’ equity of which $ 48,285 impacted Tiptree Inc.

stockholders’ equity and $ 118,723 impacted non-controlling interests.

Of the increase to Tiptree Inc.

stockholders’ equity, $ 41,092 impacted additional paid in capital and $ 7,193 impacted accumulated other comprehensive income (loss).

Additionally, the Company recognized $ 9,059 of net income attributable to non-controlling interests during the year ended December 31, 2022 due to the increase in non-controlling interest.

Fortegra Preferred Stock

The face amount of the Fortegra Preferred Stock is $ 80,000 .

Dividends are cumulative and accrue at a rate of 8 % per annum, compounding quarterly.

Any quarterly dividend may be paid in cash, at Fortegra’s option.

For the year ended December 31, 2022, the Company declared $ 3,384 of cash dividends, of which $ 2,016 was paid in cash and $ 1,368 was accrued in other liabilities and accrued expenses.

See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

(SAP) prescribed or permitted by the insurance departments of their states of domicile.

Warburg has the option to convert, at any time, its shares of Fortegra Preferred Stock into shares of Fortegra Common Stock at an initial conversion premium of 33 % to Warburg’s initial investment valuation (the “Fortegra Preferred Stock Conversion Price”).

The Fortegra Preferred Stock Conversion Price is adjusted for any Fortegra Common Stock splits, dividends, extraordinary dividends and similar transactions.

All of the Fortegra Preferred Stock will automatically convert into shares of Fortegra Common Stock at the Fortegra Preferred Stock Conversion Price upon the closing of a qualifying initial public offering, subject to a five year make-whole provision.

Upon conversion, the Fortegra Preferred Stock would result in Warburg owning an additional 6.6 % interest in Fortegra, for a total as converted ownership of 24.0 % (including its ownership of Fortegra Common Stock).

Fortegra Warrants

The Fortegra Warrants have a seven-year term and an exercise premium of 33 % to Warburg’s initial investment valuation (the “Fortegra Warrant Exercise Price”).

The Fortegra Warrant Exercise Price will be reduced by any Fortegra Common Stock cash dividends made by Fortegra and adjusted for stock splits, common stock dividends, extraordinary dividends and similar transactions.

The Fortegra Warrants, if exercised with cash, would result in Warburg owning an additional 3.8 % interest in Fortegra.

Fortegra Additional Warrants

The Fortegra Additional Warrants issued to both Warburg and Tiptree have a seven-year term and an exercise price of $ 0.01 per share of Fortegra Common Stock.

The Fortegra Additional Warrants issued to Warburg will be forfeited based on Warburg achieving an all-in return on its investment in excess of 23 %, as measured primarily by Fortegra’s Common Stock price.

The Fortegra Additional Warrants issued to Warburg are classified as liabilities, at fair value.

The Fortegra Additional Warrants issued to Tiptree will vest based on Warburg achieving an all-in return on its investment in excess of 30 %, as measured primarily by Fortegra’s Common Stock price.

The number of shares of Fortegra Common Stock issuable to Warburg or Tiptree with respect to the Fortegra Additional Warrants is subject to adjustment for Fortegra Common Stock splits, stock or cash dividends and similar transactions.

The Fortegra Additional Warrants are exercisable from the earlier of a transaction that results in Warburg having sold 50 % of its Fortegra Common Stock or the fifth anniversary of the closing date.

The maximum number of shares issued to Warburg or Tiptree, if exercised with cash, would be an additional 1.7 % interest in Fortegra on an as converted basis (including its ownership of Fortegra Common and Preferred Stock).

The following table presents the components of non-controlling interests as reported in the consolidated balance sheets:

As of December 31,

Fortegra preferred interests $ 77,679 $ —

Fortegra common interests 55,364 11,066

Other third-party common interests 3,165 6,161

Total non-controlling interests $ 136,208 $ 17,227

Statutory Reporting and Insurance Company Subsidiaries Dividend Restrictions

The Company’s U.S.

insurance subsidiaries prepare financial statements in accordance with Statutory Accounting Principles (SAP) prescribed or permitted by the insurance departments of their states of domicile.

Prescribed SAP includes the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (the NAIC) as well as state laws, regulations and administrative rules.

Statutory Capital and Surplus

The Company’s insurance company subsidiaries must maintain minimum amounts of statutory capital and surplus as required

by regulatory authorities, including the NAIC;

their capital and surplus levels exceeded respective minimum requirements as

of December 31, 2021 and December 31, 2020.

The Company’s insurance company subsidiaries must maintain minimum amounts of statutory capital and surplus as required by regulatory authorities, including the NAIC;

their capital and surplus levels exceeded respective minimum requirements as of December 31, 2022 and 2021.

As of December 31,

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Required minimum statutory capital and surplus $ 75,750 $ 75,750

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Under the National Association of Insurance Commissioners Risk-Based Capital Act of 1995, a company's Risk-Based Capital (RBC) is calculated by applying certain risk factors to various asset, claim and reserve items.

1 unchanged sentence

The Company's U.S.

domiciled insurance company subsidiaries' RBC levels, as calculated in accordance with the NAIC’s RBC instructions, exceeded all RBC thresholds as of December 31, 2021.

domiciled insurance company subsidiaries' RBC levels, as calculated in accordance with the NAIC’s RBC instructions, exceeded all RBC thresholds as of December 31, 2022 and 2021.

The following table presents the statutory net income of the Company’s U.S.

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At December 31, 2022, the maximum amount of dividends that our U.S.

domiciled regulated insurance company subsidiaries could pay under applicable laws and regulations without regulatory approval was approximately $ 18,519 .

domiciled insurance company subsidiaries could pay under applicable laws and regulations without regulatory approval was approximately $ 35,145 .

The Company may seek regulatory approval to pay dividends in excess of this permitted amount, but there can be no assurance that the Company would receive regulatory approval if sought.

(18) Accumulated Other Comprehensive Income (Loss)

The following table presents the activity of AFS securities in accumulated other comprehensive income (loss) (AOCI), net of tax, for the following periods:

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

The following table presents the activity of AFS securities in AOCI, net of tax, for the following periods:

Unrealized gains (losses) on available for sale securities Foreign currency translation adjustment Total AOCI

Amount attributable to non-controlling interests Total AOCI to Tiptree Inc.

3 unchanged sentences

OCI ( 8,388 ) — ( 8,388 ) 29 ( 8,359 )

Adoption of accounting standard (1)

( 99 ) — ( 99 )

Balance at December 31, 2021 $ ( 2,686 ) $ — $ ( 2,686 ) $ 1 $ ( 2,685 )

Other comprehensive income (losses) before reclassifications 4,364 ( 15 ) 4,349

Amounts reclassified from AOCI ( 415 ) ( 415 )

OCI 3,949 ( 15 ) 3,934

Adoption of accounting standard (1)

Balance at December 31, 2021 $ ( 2,686 ) $ — $ ( 2,686 ) $ 1 $ ( 2,685 )

1 unchanged sentence

Amounts reclassified from AOCI ( 843 ) — ( 843 ) — ( 843 )

WP Transaction — — — 7,193 7,193

OCI ( 40,357 ) ( 7,311 ) ( 47,668 ) 10,924 ( 36,744 )

Balance at December 31, 2022 $ ( 43,043 ) $ ( 7,311 ) $ ( 50,354 ) $ 10,925 $ ( 39,429 )

(1) Amounts reclassified to retained earnings due to adoption of ASU 2016-13.

See Note (2) Summary of Significant Accounting Policies.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

The following table presents the reclassification adjustments out of AOCI included in net income and the impacted line items on the consolidated statement of operations for the following periods:

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2017 Omnibus Incentive Plan

The Company adopted the Tiptree 2017 Omnibus Incentive Plan (2017 Equity Plan) on June 6, 2017, which permits the grant of restricted stock units (RSUs), stock, and stock options up to a maximum of 6,100,000 shares of common stock.

The general purpose of the 2017 Equity Plan is to attract, motivate and retain selected employees and directors for the Company and its subsidiaries, to provide them with incentives and rewards for performance and to better align their interests with the interests of the Company’s stockholders.

Unless otherwise extended, the 2017 Equity Plan terminates automatically on June 6, 2027.

Amendment No.

1 to the 2017 Equity Plan, to increase the aggregate shares issuable under the pl an by 4,000,000 shares, was approved by stockholders on June 7, 2022.

The table below summarizes changes to the issuances under the Company’s 2017 Equity Plan for the periods indicated, excluding awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock:

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

2017 Equity Plan Number of shares (1)

Available for issuance as of December 31, 2019 4,765,863

RSU and option awards granted ( 702,264 )

Forfeited 8,318

Exchanged for vested subsidiary awards ( 14,405 )

Available for issuance as of December 31, 2019 4,765,863

RSU, stock and option awards granted ( 977,446 )

4 unchanged sentences

Available for issuance as of December 31, 2021

RSU, stock and option awards granted ( 247,093 )

Forfeited 5,276

Amendment to 2017 Equity Plan 4,000,000

PRSU awards granted ( 3,616,667 )

Exchanged for vested subsidiary awards ( 114,353 )

Available for issuance as of December 31, 2022

(1) Excludes awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock.

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The Company values RSUs at their grant-date fair value as measured by Tiptree’s common stock price.

Generally, the Tiptree RSUs vest and become non-forfeitable with respect to one-third of Tiptree shares granted on each of the first, second and third year anniversaries of the date of the grant, and expensed using the straight-line method over the requisite service period.

Generally, the Tiptree RSUs vest and become non-forfeitable either (i) after the third anniversary, or (ii) with respect to one-third of Tiptree shares granted on each of the first, second and third year anniversaries of the date of the grant.

RSU awards are expensed using the straight-line method over the requisite service period.

The RSUs granted after 2019 include a retirement provision and are amortized over the lesser of the service condition or expected retirement date.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Stock Awards - Directors’ Compensation

4 unchanged sentences

Unvested units as of December 31, 2019 958,609 $ 6.23

Granted 476,449 6.25

Vested ( 557,633 ) 6.54

Forfeited ( 8,318 ) 6.10

Unvested units as of December 31, 2020 953,145 $ 6.52

1 unchanged sentence

Unvested units as of December 31, 2021

599,012 $ 6.59

247,093 12.83

Vested ( 339,822 ) 7.13

Forfeited ( 5,276 ) 10.10

Unvested units as of December 31, 2022

8 unchanged sentences

Taxes ( 47,274 ) ( 34,828 ) ( 53,438 )

Exchanged — — 14,405

Net Vested 292,548 381,018 504,195

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

(1) Includes 256,619 and 307,148 shares that vest ratably over three years and 212,638 and 112,907 shares that cliff vest in February 2023 and 2022 for the years ended December 31, 2020 and 2019, respectively.

(1) Includes 94,410 shares that vest ratably over three years and 113,166 shares that cliff vest in 2025 for the year ended December 31, 2022.

Tiptree Senior Management Incentive Plan

On August 4, 2021, a total of 3,500,000 Performance Restricted Stock Units (PRSUs) were awarded to members of the Company’s senior management.

An additional 350,000 PRSUs were awarded on October 14, 2022.

The PRSUs have a 10-year term and are subject to the recipient’s continuous service and a market requirement.

3 unchanged sentences

The below table illustrates the aggregate number of PRSUs that will vest upon the achievement of each Tiptree share price target.

Such price targets will be adjusted down for cumulative dividends paid by the Company since grant (e.g., the next share price target is $ 19.92 as adjusted for cumulative dividends paid to date).

Tiptree Share Price Target Number of PRSUs that Vest

Such price targets are adjusted down for cumulative dividends paid by the Company since grant (e.g., the next share price target is $ 19.76 as adjusted for cumulative dividends paid to date).

Original Tiptree Share Price Target Number of PRSUs that Vest

$ 45 1,033,333

$ 60 1,291,667

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Upon vesting, the Company will issue shares, or if shares are not available under the 2017 Equity Plan, then the Company may in its sole discretion instead deliver cash equal to the fair market value of the underlying shares.

As of December 31, 2021, the Company does not have sufficient shares available in the 2017 Equity Plan to settle the PRSUs awarded;

as such, the PRSUs are classified as liability awards and will be remeasured at each reporting date until the date of settlement, and expensed using the straight-line method over the requisite service period.

The fair value of the PRSUs are estimated on the date of grant and at each subsequent reporting date using a Black-Scholes-Merton option pricing formula embedded within a Monte Carlo model used to simulate the future stock prices of the Company, which assumes that the market requirement is achieved.

The historical volatility is computed based on historical daily returns of the Company’s stock price simulated over the performance period using a lookback period of 10 years .

The valuation is done under a risk-neutral framework using the 10-year zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the reporting date.

As of December 31, 2021, the Company did not have sufficient shares available in the 2017 Equity Plan to settle the PRSUs awarded;

as such, the PRSUs were classified as liability awards and were remeasured at each subsequent reporting date, and expensed using the straight-line method over the requisite service period.

On June 7, 2022, the Board of Directors authorized additional shares, and the Company now has sufficient shares available in the 2017 Equity Plan to settle the PRSUs awarded.

As such, the PRSUs were valued on June 7, 2022, and converted to equity awards on that date, and will be expensed using the straight-line method over the remaining derived service period.

The fair value of the PRSUs was estimated using a Black-Scholes-Merton option pricing formula embedded within a Monte Carlo model used to simulate the future stock prices of the Company, which assumes that the market requirement is achieved.

The historical volatility was computed based on historical daily returns of the Company’s stock price simulated over the performance period using a lookback period of 10 years.

The valuation was done under a risk-neutral framework using the 10-year zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the reporting date.

The current quarterly dividend rates in effect as of the reporting date are used to calculate a spot dividend yield for use in the model.

The following table presents the assumptions used to remeasure the fair value of the PRSUs as of December 31, 2021, which were granted in 2021 and classified as liability awards.

Valuation Input For the Year Ended December 31, 2021

Assumption Average

The following table presents the assumptions used to remeasure the fair value of the PRSUs issued in 2021 as of June 7, 2022, when they were converted to equity awards.

Valuation Input Assumption

Historical volatility 38.75 %

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These awards are subject to performance-vesting criteria based on the performance of the subsidiary (performance vesting awards) and time-vesting subject to continued employment (time vesting awards).

Following the service period, such vested awards may be exchanged

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

at fair market value, at the option of the holder, for Tiptree common stock under the 2017 Equity Plan.

Following the service period, certain vested awards may be exchanged at fair market value, at the option of the holder, for Tiptree common stock under the 2017 Equity Plan.

The service period for certain grants has been achieved and those vested subsidiary awards are currently eligible for exchange.

3 unchanged sentences

Unvested balance as of December 31, 2019 $ 4,279

Granted 1,108

Vested ( 4,237 )

5 unchanged sentences

Unvested balance as of December 31, 2021

Granted 1,278

Vested ( 1,124 )

1 unchanged sentence

Unvested balance as of December 31, 2022

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

The net vested balance of subsidiary awards eligible for exchange as of December 31, 2022 translates to 87,052 shares of Tiptree common stock.

3 unchanged sentences

The option awards have a 10-year term and are subject to the recipient’s continuous service, a market requirement, and vest one third on each of the three , four , and five-year anniversaries of the grant date.

The market requirement is the Company's 20-day volume weighted average per share trading price plus actual cash dividends paid following issuance of the option that exceeds the book value on the option grant date.

If the service condition is met, the full amount of the compensation expense will be recognized over the appropriate vesting period whether the market requirement is met or not.

The options granted after 2017 include a retirement provision and are amortized over the lesser of the service condition or expected retirement date.

There were no options granted during the year ended December 31, 2021.

Book value targets for grants in 2020, 2019, 2018, 2017 and 2016 are $ 11.52 , $ 10.79 , $ 9.97 , $ 10.14 and $ 8.96 , respectively.

During the year ended December 31, 2021, book value targets for all outstanding options were achieved.

The fair value option grants are estimated on the date of grant using a Black-Scholes-Merton option pricing formula embedded within a Monte Carlo model used to simulate the future stock prices of the Company, which assumes that the market requirement is achieved.

Historical volatility was computed based on historical daily returns of the Company’s stock between the grant date and July 1, 2013, the date of the business combination through which Tiptree became a public company.

The valuation is done under a risk-neutral framework using the 10-year zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date.

The current quarterly dividend rates in effect as of the date of the grant are used to calculate a spot dividend yield as of the date of grant for use in the model.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

There were no stock option awards granted in 2021.

The following table presents the assumptions used to estimate the fair values of the stock options granted in 2020.

Valuation Input (1)

For the Year Ended December 31, 2020

Assumption Average

Historical volatility 27.60 % N/A

Risk-free rate 1.51 % N/A

Dividend yield 2.20 % N/A

Expected term (years) 7.0

(1) Not applicable for the year ended December 31, 2021 as there were no new grants during the period.

During the year ended December 31, 2021, the market requirement for all outstanding options was achieved.

There were no stock option awards granted in 2022 or 2021.

The following table presents the Company's stock option activity for the current period:

1 unchanged sentence

Balance, December 31, 2021

1,715,619 $ 6.49 $ 2.29 712,542

Balance, December 31, 2022

1 unchanged sentence

Weighted average remaining contractual term at December 31, 2022 (in years)

Fortegra Equity Incentive Plan

Fortegra adopted the 2022 Equity Incentive Plan (“Fortegra Plan”) on June 21, 2022, which permits the grant of RSUs, stock based awards and options up to approximately 7 % of Fortegra Common Stock (assuming conversion of the Fortegra Preferred Stock), of which the substantial majority is expected to be delivered in options.

The general purpose of the Fortegra Plan is to attract, motivate and retain selected employees of Fortegra, to provide them with incentives and rewards for performance and to better align their interests with those of Fortegra’s stockholders.

Unless otherwise extended, the Fortegra Plan terminates automatically on June 21, 2032.

The awards under the Fortegra Plan are not exchangeable for Tiptree common stock.

As of December 31, 2022, time vesting RSUs and options equal to approximately 0.4 % of Fortegra Common Stock (assuming conversion of the Fortegra Preferred Stock) have been granted under the Fortegra Plan.

The unvested RSUs were exchanged for prior RSUs granted to management of Fortegra under the LOTS Intermediate Co.

Restricted Stock Unit Program.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Stock Based Compensation Expense

3 unchanged sentences

Employee compensation and benefits $ 9,219 $ 10,665 $ 7,571

$ 10,665 $ 7,571 $ 6,062

Director compensation 469 465 546

1 unchanged sentence

Net stock based compensation expense $ 7,654 $ 8,792 $ 6,412

(1) Includes $ 6,609 related to liability awards recorded in other liabilities as of December 31, 2021.

Additional information on total non-vested stock based compensation is as follows:

2 unchanged sentences

Unrecognized compensation cost related to non-vested awards (1)

$ 137 $ 536 $ 8,429

Weighted - average recognition period (in years) 1.19 0.89 1.09

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

(1) Includes $ 105 of unrecognized compensation cost related to stock options at The Fortegra Group that vest ratably over three years .

(20) Income Taxes

13 unchanged sentences

Total provision (benefit) for income taxes $ 50,450 $ 21,291 $ ( 13,627 )

On June 21, 2022, the WP Transaction was completed, in which Warburg invested $ 200,000 in Tiptree’s insurance subsidiary, Fortegra.

The WP Transaction, along with Fortegra management’s ownership, reduced Tiptree’s ownership in Fortegra below 80% such that, while still consolidated for GAAP financial reporting purposes, Fortegra will no longer be included in the consolidated tax return group with Tiptree.

Tiptree has recorded deferred tax liabilities related to the basis difference in Tiptree’s investment in Fortegra as of December 31, 2022.

This deferred tax liability represents the tax that would be due, before consideration of loss carryforwards, if Tiptree were to sell any of its Fortegra stock at its carrying value on the Company’s balance sheet.

The deferred tax liability as of December 31, 2022 relating to the WP Transaction is $ 39,970 , of which $ 14,064 was recorded directly in stockholders’ equity, a benefit of $ 2,424 in other comprehensive income and $ 28,330 as a provision for income taxes in the consolidated statements of operations for the year ended December 31, 2022.

Additional one time impacts from the transaction caused $ 4,803 of expense, leading to $ 33,133 of expense in the statement of operations.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses.

During the year ended December 31, 2020, the Company recorded a $ 7,293 tax benefit related to the ability to carryback net operating losses to prior periods under the CARES Act, resulting in a decrease of our deferred tax asset of $ 16,795 and an increase to our current receivable of $ 24,088 .

The Company continues to assess the potential tax impacts of this legislation on its financial position and results of operations.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

federal rate is before the consideration of rate reconciling items.

9 unchanged sentences

Effect of CARES Act refund claims — — ( 7,293 )

Effect of tax deconsolidation of subsidiaries 33,133 — —

Effect of change in valuation allowance 3,285 1,692 759

Effect of foreign operations ( 18 ) ( 541 ) ( 938 )

7 unchanged sentences

The effective tax rate for the year ended December 31, 2022 is higher than the U.S.

statutory income tax rate of 21.0 % primarily from the impact of state taxes and non-deductible compensation, partially offset by the effect of stock based compensation.

For the year ended December 31, 2020, the Company’s effective tax rate on income from was equal to 35.1 %.

statutory income tax rate of 21.0 % primarily from the impact of the tax deconsolidation of Fortegra and non-deductible compensation.

For the year ended December 31, 2021, the Company’s effective tax rate on income was equal to 32.6 %.

The effective tax rate for the year ended December 31, 2021 is higher than the U.S.

statutory income tax rate of 21.0 % primarily from the impact of expected refunds arising from the CARES Act.

For the year ended December 31, 2020, the Company’s effective tax rate on losses was equal to 35.1 %.

The effective tax rate for the year ended December 31, 2020 is higher than the U.S.

statutory income tax rate of 21.0 % primarily due to the return-to-provision, as well as ongoing state and foreign taxes.

The table below presents the components of the Company’s net deferred tax assets and liabilities as of the respective balance sheet dates:

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

For the year ended December 31, 2019, the Company’s effective tax rate on losses from was equal to 31.0 %.

The effective tax rate for the year ended December 31, 2019 is higher than the U.S.

statutory income tax rate of 21.0 % primarily due to the return-to-provision, as well as ongoing state and foreign taxes.

The table below presents the components of the Company’s net deferred tax assets and liabilities as of the respective balance sheet dates:

As of December 31,

16 unchanged sentences

Intangibles 14,284 11,370

Investment in Fortegra 39,970 —

Total deferred tax liabilities 233,400 157,447

1 unchanged sentence

$ 90,391 $ 40,708

(1) Includes $ 659 and $ 939 classified as held for sale as of December 31, 2021 and December 31, 2020, respectively.

(1) Includes $ 659 classified as held for sale as of December 31, 2021.

See Note (4) Dispositions and Assets and Liabilities Held for Sale.

As of January 2016, Tiptree has established a U.S.

federal consolidated income tax group and as such files on a consolidated basis, with certain exceptions such as a Fortegra life insurance company and Luxury.

Tiptree consolidated, and certain subsidiaries on a separate basis, file returns in various state jurisdictions, and as such may have state tax obligations.

As of January 2016, Tiptree established a U.S.

federal consolidated income tax group and files on a consolidated basis, with limited exceptions.

As of June 2022, Fortegra and its subsidiaries are no longer part of Tiptree’s consolidated income tax group and formed their own tax consolidation group.

Tiptree’s consolidated group, and certain subsidiaries on a separate basis, file returns in various state jurisdictions, and as such may have state tax obligations.

Additionally, as needed the Company will take all necessary steps to comply with any income tax withholding requirements.

15 unchanged sentences

Management believes it is more likely than not the remaining NOLs and deferred tax assets will be utilized prior to their expiration dates.

As of December 31, 2021, the consolidated valuation allowance for Tiptree was $ 8,563 .

As of December 31, 2022, the consolidated valuation allowance for the Company was $ 11,848 .

In 2022, the Company recorded a net increase in its valuation allowances equal to $ 3,285 , compared to a net increase in its valuation allowance of $ 1,692 in 2021.

1 unchanged sentence

Federal tax years 2017 and onward are open for examination as of December 31, 2022.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2021

(in thousands, except share data)

(21) Commitments and Contingencies

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All leases are office space leases and are classified as operating leases that expire through 2033.

Some of our office leases include the option to extend for up to 5 years or less at management’s discretion.

Some of our office leases include the option to extend for up to five years or less at management’s discretion.

Such extension options were not included in the measurement of the lease liability.

Below is a summary of our right of use asset and lease liability as of December 31, 2022:

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

December 31, 2022

Right of use asset - Operating leases $ 31,499

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As of December 31, 2022, the approximate aggregate minimum future lease payments required for our lease liability over the remaining lease periods are as follows:

December 31, 2022

2028 and thereafter 22,192

Total minimum payments 64,696

liabilities held for sale 829

present value adjustment 23,799

Total $ 29,396

(1) Does not include lease incentive receivable of $ 2,866 as of December 31, 2022

The following table presents rent expense for the Company’s office leases recorded on the consolidated statements of operations for the following periods:

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$ 9,301 $ 8,924 $ 7,374

(1) Includes lease expense of $ 609 and $ 509 for the year ended December 31, 2021 and 2020, respectively, for assets held for sale.

(1) Includes lease exp ense of $ 202 , $ 609 and $ 509 for the year ended December 31, 2022, 2021 and 2020, respectively, for assets held for sale.

The Company entered into a sublease of their former corporate office space in December 2022.

As a result of the sublease, future lease payments will be offset by $ 1,842 annually beginning July 2023 through and August 2029.

The Company is a defendant in Mullins v.

Southern Financial Life Insurance Co., which was filed in February 2006, in the Pike County Circuit Court, in the Commonwealth of Kentucky.

A class was certified in June 2010.

At issue is whether the coverage period of certain credit disability and life insurance policies issued in Kentucky were limited by the term of the associated loan.

The action alleges violations of the Kentucky Consumer Protection Act and certain insurance statutes, common law fraud and breach of contract and the covenant of good faith and fair dealing.

Plaintiffs seek compensatory and punitive damages, attorneys’ fees and interest.

In July 2021, the court entered an Order granting Plaintiffs’ Motion for Partial Summary Judgment as to certain disability policies, ruling that if a class member became disabled during the coverage period, benefits could extend beyond the coverage period until the associated loan was paid off.

The Company intends to challenge the court’s ruling.

Southern Financial Life Insurance Co., a class action filed in February 2006, in Pike County Circuit Court in the Commonwealth of Kentucky on behalf of Kentucky consumers that purchased certain credit life and disability insurance coverage between 1997-2007.

The action alleges violations of the Kentucky Consumer Protection Act (“KCPA”) and certain insurance statutes, common law fraud and breach of contract and the covenant of good faith and fair dealing.

The plaintiffs seek compensatory and punitive damages, attorneys’ fees and interest.

Two classes were certified in June 2010:

Subclass A includes class members who suffered a disability during the coverage period but allegedly received less than full disability benefits;

Subclass B includes all class members whose loan termination date extended beyond the termination date of the credit disability coverage period.

In a series of orders issued in October 2022 on competing motions for partial summary judgment, the court found in favor of the plaintiffs as to the Subclass A breach of contract claim (the “Subclass A Order”) and, as to Subclass B, found that the Company was unjustly enriched to the extent the premium it collected exceeded the proportion of the premium for which the Company provided benefits coverage (the “Subclass B Order”).

The court found in favor of the Company as to the plaintiffs’ claims for common law fraud and violation of Kentucky’s insurance statutes and ordered the plaintiffs’ Motion for Sanctions for Spoliation of Evidence held in abeyance.

The Company has appealed the Subclass A Order and Subclass B Order and all interlocutory orders made final by entry of the Subclass A Order and Subclass B Order.

AND SUBSIDIARIES

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(in thousands, except share data)

2022, a hearing was held on competing motions for partial summary judgment on the principal claims.

A hearing for Plaintiffs’ Motion for Sanctions for Spoliation of Evidence is scheduled for June 9, 2022.

The court has not yet ruled on the pending motions.

No additional hearings are scheduled and a trial date has not been set.

In December 2022, the court dismissed the plaintiffs’ KCPA claims as to both Subclass A and Subclass B.

The court also dismissed the plaintiffs’ breach of covenant of good faith and fair dealing claim as to Subclass B but declined to dismiss such claim as to Subclass A pending resolution of the Company’s appeal.

A trial has been scheduled for December 2023.

The Company considers such litigation customary in the insurance industry.

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Securities of subsidiaries — ( 780 ) —

Adjustments to income relating to exchangeable interests, net of tax 9 — —

Adjustments to income relating to exchangeable interests and contingent considerations, net of tax — 9 —

Net income (loss) attributable to Tiptree Inc.

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Corvid Peak is a related party of the Company because Corvid Peak is deemed to be controlled by Michael Barnes, the Company’s Executive Chairman.

The Company is invested in a fund managed by Corvid Peak (the “Corvid Peak Fund”) and Corvid Peak manages investment portfolio accounts of Fortegra and certain of its subsidiaries under an investment advisory agreement (the “IAA”).

With respect to the Corvid Peak Fund and IAA, the Company incurred $ 1,988 , $ 2,792 and $ 1,006 of management and incentive fees for the years ended December 31, 2021, 2020 and 2019, respectively.

Beginning January 1,

The Company is invested in funds managed by Corvid Peak (the “Corvid Peak Funds”) and Corvid Peak manages investment portfolio accounts of Fortegra and certain of its subsidiaries under an investment advisory agreement (the “IAA”).

With respect to the Corvid Peak Funds and IAA, the Company incurred $ 3,808 , $ 1,988 and $ 2,792 of management and incentive fees for the years ended December 31, 2022, 2021 and 2020, respectively.

Beginning January 1, 2021, Tiptree has been allocated 10.2 % of certain profits interests earned by Corvid Peak with an

AND SUBSIDIARIES

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(in thousands, except share data)

2021, Tiptree has been allocated 10.2 % of certain profits interests earned by Corvid Peak with an additional 10.2 % interest for each of the next consecutive four years.

As of January 1, 2022, Tiptree’s percentage interest was 21.95 % (including interests acquired from former Corvid Peak equity holders).

For the year ended December 31, 2021, the Company recognized a $ 81 loss of allocated profit/loss interest that has been recorded in other revenue in the consolidated statements of operations.

additional 10.2 % interest for each of the next consecutive four years .

Beginning on January 1, 2023, Tiptree’s percentage interest increased to 31.84 % (includi ng interests acquired from former Corvid Peak equity holders).

On November 10, 2022, the Company contributed $ 505 of cash (representing its pro rata share) to Corvid Peak to fund an escrow account for the repurchase of a revenue share by a third party effective as of January 1, 2025.

Pursuant to the Transition Services Agreement, Tiptree and Corvid Peak have mutually agreed to provide certain services to one another.

Payments under the Transition Services Agreement in the years ended December 31, 2021, 2020 and 2019 were not material.

Payments under the Transition Services Agreement in the year ended December 31, 2022 and 2021 were not material.

Pursuant to a Partner Emeritus Agreement, Tiptree agreed to provide Mr.

Inayatullah, a greater than 5 % stockholder of the Company, office space and support services, and reimburse Mr.

Inayatullah, a greater than 5 % stockholder of the Company, support services and reimburse Mr.

Inayatullah for a portion of benefit expenses in exchange for advice and other consulting services as requested by the Company’s Executive Committee.

Transactions related to the Partner Emeritus Agreement in the years ended December 31, 2021 and 2020 were not material.

Transactions related to the Partner Emeritus Agreement in the year ended December 31, 2022 and 2021 were not material.

In 2022, Michael Barnes, the Company’s Executive Chairman, exercised warrants for 979,146 shares of Tiptree common stock for $ 6,783 and Mr.

Inayatullah exercised warrants for 440,318 shares of Tiptree common stock for $ 3,050 .

(24) Subsequent Events

On January 31, 2023, subsidiaries of Fortegra amended the asset backed revolving financing to increase the revolving commitment to $ 100,000 and transition to SOFR.

On March 7, 2023, the Company’s board of directors declared a quarterly cash dividend of $ 0.05 per share to holders of common stock with a record date of March 20, 2023, and a payment date of March 27, 2022.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data