8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report:  March 2, 2020

(Date of earliest event reported)

FEDNAT HOLDING COMPANY

(Exact name of registrant as specified in its charter)

Florida	000-25001	65-0248866
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

14050 N.W. 14th Street, Suite 180 Sunrise, FL
	33323
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 293-2532

NOT APPLICABLE

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	FNHC	Nasdaq Global Market

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

Emerging growth company         ☐

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

Item 7.01. Regulation FD Disclosure.

On March 2, 2020, FedNat Holding Company (the "Company") has made available on its website (www.fednat.com) the Investor Presentation attached as Exhibit 99.1 (the "Investor Presentation") and incorporated herein by reference. The Company expects the Investor Presentation, in whole or in part, in connection with presentations to investors, analysts and others. The Company disclaims any obligation to correct or update these materials in the future.

The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is hereby intended to be furnished and, as provided in General Instruction B.2 of Form 8-K, such information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

The investor presentation attached hereto as Exhibit 99.1 contains statements that may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements are therefore entitled to the protection of the safe harbor provisions of these laws. These statements may be identified by the use of forward-looking terminology such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "forecast," "guidance," "indicate," "intend," "may," "might," "outlook," "plan," "possibly," "potential," "predict," "probably," "pro-forma," "project," "seek," "should," "target," "will," "would," "will be," "will continue" or the negative thereof or other variations thereon or comparable terminology. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve a number of risks and uncertainties, many of which are beyond the Company's control. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Management cautions that any such forward-looking statements are not guarantees of future performance, and readers cannot assume that such statements will be realized or that the forward-looking events and circumstances will occur. Factors that might cause such a difference include, without limitation, the risks and uncertainties discussed under "Risk Factors" in the Company's Annual Report on Form 10-K, and discussed from time to time in the Company's reports filed with the Securities and Exchange Commission.

Item 9.01. Financial Statements and Exhibits.

(d)	Exhibits
99.1	FedNat Holding Company Investor Presentation Fourth Quarter 2019.

SIGNATURES

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

	FEDNAT HOLDING COMPANY
Date: March 2, 2020	By:	/s/ Ronald A. Jordan

Name:	Ronald A. Jordan
Title:	Chief Financial Officer
	(Principal Financial Officer)

EX-99.1

FedNat Holding Company (NASDAQ: FNHC) • FedNat Insurance Company • Maison Insurance Company • Monarch National Insurance Company Fourth Quarter 2019 INVESTOR PRESENTATION

SAFE HARBOR STATEMENT Safe harbor statement under the Private Securities Litigation Reform Act of 1995: other initiatives by competitors; legislative and regulatory developments; the outcome of litigation pending against the Company, and any settlement thereof; Statements that are not historical fact are forward-looking statements that are dependence on investment income and the composition of the Company’s subject to certain risks and uncertainties that could cause actual events and results to investment portfolio; insurance agents; ratings by industry services; the reliability and differ materially from those discussed herein. security of our information technology systems; reliance on key personnel; acts of The risks and uncertainties include, without limitation, risks and uncertainties related war and terrorist activities; and other matters described from time to time by the to estimates, assumptions and projections generally; the nature of the Company’s Company in releases and publications, and in periodic reports and other documents business and its ability to integrate operations proposed to be acquired; the adequacy filed with the Securities and Exchange Commission. of its reserves for losses and loss adjustment expense; claims experience; weather In addition, investors should be aware that generally accepted accounting principles conditions (including the severity and frequency of storms, hurricanes, tornadoes and prescribe when a company may reserve for particular risks, including claims and hail) and other catastrophic losses; reinsurance costs and the ability of reinsurers to litigation exposures. Accordingly, results for a given reporting period could be indemnify the Company; raising additional capital and our compliance with minimum significantly affected if and when a reserve is established for a contingency. Reported capital and surplus requirements; potential assessments that support property and results may therefore appear to be volatile in certain accounting periods. casualty insurance pools and associations; the effectiveness of internal financial controls; the effectiveness of our underwriting, pricing and related loss limitation Readers are cautioned not to place undue reliance on these forward-looking methods; changes in loss trends, including as a result of insureds’ assignment of statements, which speak only as of the date on which they are made. We do not benefits; court decisions and trends in litigation; our potential failure to pay claims undertake any obligation to update publicly or revise any forward-looking statements accurately; the timing and ability to obtain regulatory approval of applications for to reflect circumstances or events that occur after the date the forward-looking transactions and requested rate increases, or to underwrite in additional jurisdictions, statements are made. and the timing thereof; the impact that the results of our subsidiaries’ operations may have on our results of operations; inflation and other changes in economic conditions (including changes in interest rates and financial markets); pricing competition and 2

FEDNAT CORPORATE PROFILE Key Metrics*: 2019 Gross Written Premiums Book Value Per Common Share A regional insurance holding company that writes $611M $17.25 homeowners insurance in the southeast United States with business in FL, TX, LA, SC, AL & MS Florida OIR Market Share Agency Partnerships Corporate Overview ~4.5% 4,500+ • Leader in Florida homeowners market • Expanding presence in neighboring states organically and recent acquisition Demotech Financial Cash and Investments Stability Rating • High quality book of business with proven underwriting excellence • Strong, large partner agent network and brand recognition $680M+ • Allstate and GEICO agency relationships A • Experienced leadership team * As of December 31, 2019, unless otherwise noted 3

2019 SETS UP POSITIVE 2020 OUTLOOK ✓ Florida: strong brand and agent distribution with underwriting discipline and multiple rounds of recent rate increases GROWTH OF CORE HOMEOWNERS BUSINESS ✓ Non-Florida: successful organic business via partnership with MGU plus recent acquisition of Maison ✓ Auto: No policies in force and shorter tail largely complete EXIT FROM NON-CORE BUSINESSES SUBSTANTIALLY COMPLETED ✓ CGL: No policies in force and runoff of claims underway ✓ $8 million annual reinsurance savings in current treaty year BENEFITS FROM MAISON SYNERGIES ✓ $3 million annual ongoing operational synergies ✓ Announced $10M share repurchase program for current calendar year STRONG BALANCE SHEET SUPPORTS GROWTH OPPORTUNITIES ✓ Recently increased quarterly dividend by ~13% — dividend yield 2%+ ✓ Non-insurance company liquidity is $65M+ Long-term target ROE of 15% in years with normalized CAT activity 4

LONG-TERM TRACK RECORD OF BOOK VALUE GROWTH BOOK VALUE PER SHARE SINCE 2011 CAGR 11.3% $20.00 $17.25 $18.00 $16.84 $16.52 $16.01 $16.29 $16.00 $14.00 $13.91 $12.00 $9.79 $10.00 $8.26 $8.00 $7.32 $6.00 $4.00 $2.00 $0.00 * * 2011 2012 2013 2014 2015 2016 * 2017 * 2018 * 2019 * * Impacted by full catastrophe reinsurance retention events Note: Based on GAAP financial information 5

LEADING POSITION IN FLORIDA HOMEOWNERS MARKET

LEADING POSITION IN FRAGMENTED FLORIDA MARKET Market dominated by “specialists,” of which FedNat is among the top four, with limited national P&C carrier presence OPERATING ENVIRONMENT S U M M A R Y • Nation’s third largest state with 21 million people—projected at 26 million by 2030 ~$10B • $10 billion homeowners insurance market with strong home construction Total Addressable Florida and growing housing inventory throughout the state Homeowners Market • Highly fragmented market with national players comprising less than 20%, none with higher market share than FedNat • FedNat’s focus is on quality, well-mitigated homes, built after 1994 Focus on Quality, Well-mitigated Homes • With Citizens policies reduced by ~two-thirds since 2011, FedNat has opportunity for incremental organic growth • AOB reform is a positive development AOB Reform Improves Long-Term Environment 7

DISCIPLINED UNDERWRITING DRIVES IMPROVED ECONOMICS HOMEOWNERS FLORIDA TOTAL INSURED VALUE HOMEOWNERS FLORIDA MARKET SHARE AND POLICIES IN-FORCE Premiums in Force and % Market Share Premiums In-Force ($in Mill) Policies In-Force (# in Thousands) % of Market Share per OIR 120 390 $99 360 600 7.00% 100 $96 $92 330 $89 $88 $87 $87 $85 $84 $486.2 $482.1 6.00% 273 300 500 $476.4 $468.5 PIF (Thousands) PIF $466.9 265 $461.8 $457.2 $451.5 $451.3 256 80 249 270 246 244 240 241 237 End Quarterat Force - 5.00% 240 400 60 210 4.00% 180 TIV(Billions) 300 273 265 256 249 246 244 150 240 237 241 3.00% 40 120 200 2.00% 90 Premiums/Policies In 20 60 100 1.00% 30 0 0 0 0.00% Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Total Insured Value Policies In Force Flat premiums on decreased exposure drives improved profitability profile Note: Q4-19 includes Maison of $2.6B of TIV; 7k of Policies In-Force and $15M of Premiums In-Force. 8

RIGOROUS EXPOSURE MANAGEMENT All States 1-in-100 Year Probable Maximum Loss / In-Force Premium (“PML to Premium”) 300% 250% 200% 194% 200% 187% 182% 180% 176% 172% 166% 164% 150% 100% 50% 0% Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Notes: PML modeled using average of AIR and RMS. Includes Monarch National from Q1-18 forward & Maison in Q4-19. Assumptions: LT, No LA, No SS 9

2019-2020 REINSURANCE STRUCTURE FNIC / MNIC / MAISON COMBINED $1.3B 190 Yr MAISON REINSURANCE SYNERGIES Florida Only RMS Long Term More efficient spread of risk across a larger and With Loss Amplification increased non-Florida presence resulted in: • Smaller more efficient reinsurance program • $8M of savings as compared to the sum of Hurricane Irma: $868M towers under two separate programs $1.275B xs $27M Catastrophe Excess of Loss Reinsurance (Including FHCF Coverage) REINSURANCE PARTNERS Multiple Events 2005**: $670M Hurricane Michael: $479M Multiple Events 2004*: $448M Hurricane Andrew: $319M Hurricane Wilma: $203M Hurricane Matthew: $53M Brevard Hailstorm: $43M Company Retention - $27M ($20M FNIC + $2M MNIC + $5M Maison) with 2nd/3rd Event: $10M per event for Florida Only *2004 Events: Charley, Frances, Ivan & Jeanne (FNIC/MNIC) **2005 Events: Dennis, Katrina, Rita & Wilma 1st Event Florida ($926M, 9/30/19P Structure based on FHCF limit at time of purchase 100 year RMS LT+DS RP) Event losses are combined FNIC + MNIC + Maison totals 10

DISCIPLINED UNDERWRITING APPROACH FedNat’s meticulous underwriting approach allows it to manage current exposures while profitably underwriting new risks HIGH - QUALITY BOOK Properties with more advanced wind/hurricane mitigation features and lower All Other Peril (non-catastrophe) losses PROVEN MODEL Generalized Linear Model (“GLM”) used to derive pre-quote pass/fail position based on each risk’s associated expenses, CAT and non-CAT exposure, cost of capital and risk concentration: • Manual reviews of every bound risk to ensure accuracy of information • Regulatory approved use of our GLM-based analytics to provide a layer of pre-binding portfolio optimization management RATE DISCIPLINE Rates on every policy are a function of FNIC’s historical loss experience, PRUDENT EXPANSION concentration of risk, expenses and Business written by MNIC utilizes a similar current market conditions disciplined approach as its policies are also underwritten by FedNat Underwriters (“FNU”), the Company’s wholly owned MGA 11

POSITIVE AOB CLAIMS TRENDS IN FEDNAT FLORIDA BOOK 2019 AOB IMPACT AND REFORM CLAIMS CONTINUE, BUT LAWSUITS ON THE DECLINE 1. AOB Reform was enacted on July 1, 2019 AOB LITIGATION * Since AOB reform passed, FNHC has received 6 2. AOB reform is expected to mitigate average severity of claims suits, compared to 70+ during 2H18—a 90%+ reduction. 3. Claims pre-AOB reform, with dates of loss before 7/1/19, are LAWSUITS ARE COSTLIER ** more severe though the impact is expected to Claims with lawsuits tend to average $15,000 lessen in recent months more in costs. Savings will drive substantial severity benefit on dates of loss from July 1, 2019 4. Claims post-AOB reform, with dates of loss after 7/1/19, are forward. less severe 12

CORE EARNINGS POWER…MASKED BY HEADWINDS (In millions) $80.0 Four full-retention events in less than three $70.0 years, after 11 years $17.2 with none $60.0 $50.0 $7.0 $1.6 $17.9 $40.0 $13.1 $30.8 3 substantial headwinds $30.0 $13.1 have reduced core earnings since 2015 $23.5 $23.0 $20.0 $38.9 $9.1 $19.6 $10.0 $5.1 $14.7 $10.2 $1.3 $1.0 $0.9 $5.3 $- 2015 2016 2017 2018 2019 Reported Net Income Non-Core AOB Weather (CAT) AOB alone has reduced net income by over $100 million since 2015 13

POSITIONED FOR EARNINGS GROWTH

PRUDENT UNDERWRITING IN FLORIDA FEDNAT – FLORIDA MARKET FOR HOMEOWNERS Panhandle • Statewide offering of HO3, HO6, HO4 and DP3 11.8% Forms • Risk management through utilization of both North FL 5.6% analytics and geographic exposure management Central FL • Distribute through independent retail partner 14.1% Total Florida Tampa/ agents and national carrier affinities Policies in Force St. Pete • 13.1% Managed catastrophe exposure by ceding risk for Homeowners/Fire through reinsurance treaties Treasure as of December 31, 2019 Coast 241,000 7.2% Tri-County SW FL 26.3% 21.9% 15

EXECUTING ON NON-FLORIDA MARKET OPPORTUNITY FNIC NON-FLORIDA IN-FORCE PREMIUM – STRONG ORGANIC GROWTH $ in thousands 160,000 • FedNat’s non-Florida book has increased by $127.7M of premium 140,000 $137,202 since 12/31/2014 with the help of MGU Partner and Maison acquisition 120,000 • Gaining market share in Texas, 100,000 Louisiana, South Carolina and Alabama $81,453 +68% 80,000 • 78,000 policies in-force $54,643 60,000 +49% $35,385 40,000 +54% $22,287 +59% 20,000 $9,518 +134% - 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 Louisiana Alabama South Carolina Texas 16

MAISON ACCELERATES NON-FLORIDA EXPANSION FEDNAT IN-FORCE POLICY COUNTS - REGIONALLY 1% PROFITABLE GROWTH FUNDAMENTALS & STRATEGY 3% 1% 13% • Limited to Gulf and Atlantic coastal states 4% 8% • Staying narrow—no new lines of business • Focus on coastal zones 12% 1 and 2 where need is greatest 16% 25% 33% • Leveraging best practices developed over NON-FLORIDA NON-FLORIDA our 25+ years of experience 67% • Organic non-Florida growth via voluntary 75% business distributed through partner managing general underwriter and national carrier affiliations LEGACY FNHC POST-MAISON ACQUISITION EXPECTED TO GROW TO ~40% OF TOTAL POLICY COUNT Florida Texas Louisiana South Carolina Alabama OVER NEXT 3 YEARS Note: Based on homeowners/fire lines of business at 12/31/2019. 17

PROFITABLY GROWING NON-FLORIDA BOOK NEAR-TERM NON-FLORIDA EXPANSION • Our incremental non-Florida growth over the past 7+ years has been with our partner, SageSure, and has been recently supplemented with our acquisition of Maison in December 2019 o Implementing 5% TX and 4% LA rate increases in 4Q19 o Additional 5% TX rate increase anticipated into 2Q20 • Maison – Improved pricing with underwriting discipline o Earning in 31% TX rate increase (40% in Dallas/Ft. Worth) from August 2019 o Numerous rate filings in process o Non-renewals of unprofitable Maison policies • $3M of annual expense ratio benefits in Maison synergies o Mostly from insourcing to occur over the next 12 months • Recently entered the Mississippi market Greater combined ratio flexibility outside of Florida — targeted combined ratio at or under 90% 18

FLORIDA & NON-FLORIDA PREMIUM TRENDS FEDNAT IN-FORCE PREMIUM $ in thousands 750,000 • Premium mix shifting to non-Florida $686,437 700,000 • Non-Florida growth initiatives have 650,000 supplemented intentional contraction of Florida book of business over prior four 600,000 years $543,280 550,000 $540.845 • Avg. Premium in the Florida book of $514,443 business has grown over the past 2 years, 500,000 with policy count beginning to stabilize 450,000 • Acquisition of Maison adds $96.2M of premium, including $81.1M of non-Florida 400,000 premium 350,000 12/31/16 12/31/17 12/31/18 12/31/19 Florida Non-Florida 19

MITIGATION FROM REINSURANCE PRICE HIKE Rate increases and FHCF participation lever can mitigate reinsurance rate increases ~30% 3.5% 1 Gross Premium FNHC Net Rate Reinsurance is factored into FNHC rate filings that are ~30% FedNat has a clear track record FNIC/MNIC participation in the every policy written and of any reinsurance pricing of market leadership in Florida Hurricane Catastrophe represents ~30% of the gross increase will maintain FedNat’s proactively taking rate when Fund at 90% for the ‘20-’21 premium profitability costs rise treaty year • Reinsurance cost is one of • e.g. 10% reinsurance price • AOB disruption 1 • The increase in participation the key factors in our increase requires a 3.5% underwriting and renewal • Reinsurance pricing level from 75% in the ’19 - net overall FedNat rate assessment process increases ’20 treaty year reduces increase to maintain exposures to private market current profitability levels • Weather experience price increases 2.8% FNIC Florida rate increase from limited reinsurance filing takes effect in March 2020 1. 3% grossed up to provide for related acquisition costs of 15%. 20

PROACTIVE HOMEOWNERS RATE INCREASES IN 2020 1 INCREMENTAL PREMIUM IN 2020-2021 (In millions) 5.0% Texas Rate Increase Goes in Effect $10.9 $28M 2.8% 7.4% Anticipated incremental Florida Rate Increase Florida Rate Increase premium from rate increases Goes in Effect Goes in Effect in 2020 $46.6 $2.2 $85M $1.6 $2.2 $1.0 Across the FL and Non-FL books $3.5 $4.6 5.7 $6.9 over the next two years Q1 ‘20 Q2 ‘20 Q3 ‘20 Q4 ‘20 FY ‘21 Florida Homeowners Non-Florida Homeowners 1. Reflects actual and anticipated rate increases from April 2019 forward. 21

FINANCIAL OVERVIEW

RECENT FINANCIAL & OPERATING HIGHLIGHTS (in thousands) 4Q18 * 1Q19** 2Q19 3Q19 4Q19*** Q4 NOTES/HIGHLIGHTS Income Statement Data: • Adjusted operating loss result of $0.59 per share driven by higher losses from weather Gross Premiums Written $127,613 $132,233 $169,170 $159,131 $150,074 events of $3.4M and PYD of $9M as well as Net Premiums Earned 91,098 88,784 92,306 87,374 95,188 HO-FL reserve strengthening of $3.8M Net Investment Income 3,402 3,710 4,259 4,068 3,865 • Gross premiums written increased 17.6% Net Income (Loss) (9,305) (3,865) 7,110 4,659 (6,893) over 4Q18 driven by growth in homeowners Florida FNIC (up 2%), non-Florida (up 67%) Diluted Earnings Per Share (0.73) (0.30) 0.55 0.36 0.51 and Maison $6.6M Adjusted Operating Income (4,937) (2,394) 5,666 4,292 (7,925) • Maison’s December results were $1.2M Adjusted Operating Income Per Share ($0.39) ($0.19) $0.44 $0.33 ($0.59) pre-tax income as a result of good loss experience Balance Sheet Data: Cash and Investments 515,948 569,423 611,522 612,931 684,002 • Ongoing annual savings from $6 million in staff reductions that occurred primarily in Shareholders Equity 215,259 217,916 230,785 237,389 248,693 2018 Book Value per Share $16.84 $16.98 $17.96 $18.45 $17.25 Financial Ratios: • Holding company liquidity of $65+ million as of December 31, 2019 Net Loss Ratio 79.4% 75.3% 70.8% 71.1% 82.8% Net Expense Ratio 38.9% 38.9% 30.7% 34.4% 39.3% Net Combined Ratio 118.3% 114.2% 101.5% 105.5% 122.1% * Impact from Hurricane Michael was $23 million, pre-tax, and approximately $17.2 million, after-tax. ** Impact from the Brevard County hail storm was $18.7 million, pre-tax, and approximately $14.0 million, after-tax. *** Impact from CAT weather, prior year adverse development & AY19 reserve strengthening was $21.5 million, pre-tax and approximately $16.2 million, after-tax. 23

RESULTS BY LINE OF BUSINESS (In thousands) Q4 2018 * Q3 2019** Q4 2019*** HO Auto Other Consolidated HO Auto Other Consolidated HO Auto Other Consolidated Total Revenue $95,357 $289 $796 $96,442 $93,735 $4 $5,737 $99,476 $102,615 $1 $6,371 $108,987 Costs and expenses: Losses and loss adjustment expenses 64,634 4,840 2,844 72,318 60,708 742 655 62,105 70,777 2,334 5,688 78,799 All other expenses 32,537 780 3,201 36,518 28,593 50 3,351 31,994 35,297 50 3,972 39,319 Total costs and expenses 97,171 5,620 6,045 108,836 89,301 792 4,006 94,099 106,074 2,384 9,660 118,118 Income before income taxes (1,814) (5,331) (5,249) (12,394) 4,434 (788) 1,731 5,377 (3,459) (2,383) (3,289) (9,131) Income taxes (460) (1,351) (1,278) (3,089) 1,036 (175) (143) 718 (1,143) (584) (511) (2,238) Net income (1,354) (3,980) (3,971) (9,305) 3,398 (613) 1,874 4,659 (2,316) (1,799) (2,778) (6,893) Net loss attributable to noncontrolling interest - - - - - - - - - - - - Net income attributable to FNHC shareholders (1,354) (3,980) (3,971) (9,305) 3,398* (613) 1,874 4,659 (2,316) (1,799) (2,778) (6,893) Adjusted operating income ($1,049) ($3,979) $91 ($4,937) $3,585 ($608) $1,315 $4,292 ($2,306) ($1,799) ($3,820) ($7,925) Excluding incremental losses from CAT & reserve strengthening, FNHC would have earned $8.3M in 4Q19 Note: The “Other” line of business primarily consists of our commercial general liability and federal flood businesses, along with corporate and investment operations. * Impact from Hurricane Michael was $23 million, pre-tax, and approximately $17.2 million, after-tax. ** Impact from Hurricane Dorian, Hurricane Barry and TS Imelda was $7.0 million, pre-tax, and approximately $5.3 million, after-tax. *** Impact from CAT weather, prior year adverse development & AY19 reserve strengthening was $21.5 million, pre-tax and approximately $16.2 million, after-tax. 24

FAVORABLE PREMIUM COMPOSITION GROSS PREMIUMS WRITTEN NET PREMIUMS EARNED 4.9% 3.7% Florida Homeowners 14.3% 18.0% Non-Florida Homeowners Non-Core 2018 Full Year 80.9% 78.3% 2020 IN-FORCE 2.8% 0.4% 31.8% 24.4% 2019 Full Year 21.8% 68.2% 75.2% 75.4% 25

STRONG CAPITAL STRUCTURE NON-INSURANCE LIQUIDITY $ in millions $115 $115 $120 $106 $100 $80 $65 * $60 $53 $40 $20 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 * Q4-19 decrease due to closing of Maison transaction in Dec 2019. FINANCIAL LEVERAGE UNDERWRITING LEVERAGE Debt/Capital NPE/Equity 35% 31.1% 44% 29.9% 29.3% 28.4% 30% 42.3% 25% 42% 40.7% 40.0% 20% 17.1% 40% 15% 38.3% 10% 38% 36.8% 5% 36% 0% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 34% Q4 2018 Q1 2019 Q2 2019 Q3 2019* Q4 2019* * Driven by higher ceded catastrophe reinsurance premiums. 26

CONSERVATIVE INVESTMENT PORTFOLIO PORTFOLIO COMPOSITION INVESTMENT CRITERIA Corporate & Collaterized • Designed to preserve capital, maximize after-tax Mortgage Obligations $309.0 investment income, maintain liquidity and minimize risk, across a range of economic scenarios State. Muni, and • As of 12/31/2019, 98.6% of the Company’s fixed Political Subs income portfolio was rated investment grade $24.0 • Average duration: 3.459 years Common Stock & • Composite rating: A- (S&P Composite) Mutual Funds • YTM: 2.247% $20.0 • Book yield: 2.947% • Historical total returns on cash and investments as Cash and Cash of 12/31/2019 Equivalents $133.4 US Gov. & Agency • 1 Year: 7.14% Sec. • 2 Years: 3.815% as of December 31, 2019 $197.6 (in millions) 27

RETURNING VALUE | REPURCHASES & DIVIDENDS SINCE CLOSE OF MAISON ONGOING VALUE CREATION $ ~$7M$29M+ 13%$29M+ Shares repurchased Quarterly Dividend Increase Effective 4Q19 (2.2% yield) ~$34M ~$7M Remaining Authorization in Returned to shareholders Share Repurchase Program in since 2017 CY2020 Committed to maximizing shareholder value through disciplined capital allocation 28

POSITIVE OUTLOOK FOR 2020 AND BEYOND • Focused on profitable growth opportunities in core homeowners business o Rate adequacy is paramount o $28M incremental premium in 2020 & over $50M annually when fully earned, as compared to 2019, from rate increases ▪ 2.8% FNIC FL and 5% FNIC TX rate increases effective 1H20 ▪ 7.4% FNIC annual rate filing, subject to regulatory approval, expected to be effective 2Q20 ▪ Multiple Maison rate filings in process o Opportunity for further catastrophe reinsurance “fast-track” rate increases, if needed • Greater scale in non-Florida business from Maison book • Strong capital structure supports returning value to shareholders • Long-term targeted combined ratio of 95% for Florida and 90% for non-Florida • Long-term target ROE of 15% in years with normalized CAT activity 29

Questions? Michael Braun Chief Executive Officer Ron Jordan Chief Financial Officer Bernie Kilkelly Investor Relations, Ellipsis investorrelations@FedNat.com