UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly period ended September 30, 2024

OR

 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from            to            

Commission File Number: 001-33549

Tiptree Inc.

(Exact name of Registrant as Specified in Its Charter)

Maryland         38-3754322

(State or Other Jurisdiction of Incorporation of Organization        (IRS Employer Identification No.)

660 Steamboat Road, 2nd Floor, Greenwich, Connecticut     06830

(Address of Principal Executive Offices)     Zip Code

Registrant’s Telephone Number, Including Area Code: (212) 446-1400

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
common stock, par value $0.001 per share	TIPT	NASDAQ	Capital Market

    Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x No ¨ 

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes x     No   ¨

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨                    Accelerated filer x

Non-accelerated filer ¨                    Smaller reporting company ☐

            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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)    Yes ☐     No ☒

As of October 30, 2024, there were 37,055,838 shares, par value $0.001, of the registrant’s common stock outstanding.

Tiptree Inc.

Quarterly Report on Form 10-Q

September 30, 2024

Table of Contents

ITEM	Page Number
PART I. Financial Information	F- 1
Item 1. Financial Statements (Unaudited)	F- 3
Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	F- 3
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023	F- 4
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2023	F- 5
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the periods ended September 30, 2024 and 2023	F- 6
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	F- 8
Notes to Condensed Consolidated Financial Statements	F- 9
(1) Organization	F- 9
(2) Summary of Significant Accounting Policies	F- 9
(3) Acquisitions	F- 10
(4) Operating Segment Data	F- 10
(5) Investments	F- 13
(6) Notes and Accounts Receivable, net	F- 19
(7) Reinsurance Recoverable and Prepaid Reinsurance Premiums	F- 20
(8) Goodwill and Intangible Assets, net	F- 23
(9) Derivative Financial Instruments and Hedging	F- 24
(10) Debt, net	F- 25
(11) Fair Value of Financial Instruments	F- 27
(12) Liability for Unpaid Claims and Claim Adjustment Expenses	F- 33
(13) Revenue from Contracts with Customers	F- 34
(14) Other Assets and Other Liabilities and Accrued Expenses	F- 35
(15) Other Revenue and Other Expenses	F- 36
(16) Stockholders’ Equity	F- 37
(17) Accumulated Other Comprehensive Income (Loss)	F- 39
(18) Stock Based Compensation	F- 40
(19) Income Taxes	F- 43
(20) Commitments and Contingencies	F- 44
(21) Earnings Per Share	F- 45
(22) Related Party Transactions	F- 45
(23) Subsequent Events	F- 46
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3. Quantitative and Qualitative Disclosures About Market Risk	73
Item 4. Controls and Procedures	73
PART II. Other Information	74
Item 1. Legal Proceedings	74
Item 1A. Risk Factors	74
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3. Defaults Upon Senior Securities	74
Item 4. Mine Safety Disclosures	74
Item 5. Other Information	74
Item 6. Exhibits, Financial Statement Schedules	75
Signatures	76

PART I. FINANCIAL INFORMATION

Forward-Looking Statements

Except for the historical information included and incorporated by reference in this Quarterly Report on Form 10-Q, the information included and incorporated by reference herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations, our strategic plans and objectives, and government legislation. When we use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions, we intend to identify forward-looking statements.

Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, in this Quarterly Report on Form 10-Q and in our other public filings with the SEC.

The factors described herein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the applicable law, we undertake no obligation to update any forward-looking statements.

Market and Industry Data

Certain market data and industry data included in this Quarterly Report on Form 10-Q were obtained from reports of governmental agencies and industry publications and surveys. We believe the data from third-party sources to be reliable based upon our management’s knowledge of the industry, but have not independently verified such data and as such, make no guarantees as to its accuracy, completeness or timeliness.

Note to Reader

In reading this Quarterly Report on Form 10-Q, references to:

“AM Best” means AM Best Company, Inc.

“EBITDA” means earnings before interest, taxes, depreciation and amortization.

“EBITDAR” means earnings before interest, taxes, depreciation and amortization, and restructuring or rent costs.

“E&S” means excess and surplus.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fannie Mae” means Federal National Mortgage Association.

“Fortegra” or “The Fortegra Group” means The Fortegra Group, Inc. and its subsidiaries.

“Fortegra Additional Warrants” means the additional warrants issued to Warburg and Tiptree Holdings to acquire Fortegra Common Stock.

“Fortegra Additional Warrants (Warburg)” means the Fortegra Additional Warrants issued to Warburg.

“Fortegra Common Stock” means the common stock of Fortegra.

“Fortegra Plan” means the 2022 Equity Incentive Plan of Fortegra.

“Fortegra Preferred Stock” means the 5,333,333 shares of Series A Preferred Stock of Fortegra issued to Warburg.

“Fortegra Warrants” means the warrants to purchase shares of Fortegra Common Stock.

“Freddie Mac” means Federal Home Loan Mortgage Corporation.

“GAAP” means U.S. generally accepted accounting principles.

“Ginnie Mae” means Government National Mortgage Association.

“GSE” means government-sponsored enterprise.

“Invesque” means Invesque Inc.

“NAIC” means the National Association of Insurance Commissioners.

“Premia” means Premia Solutions Limited.

“Reliance” means Reliance First Capital, LLC.

“SEC” means the U.S. Securities and Exchange Commission.

F - 1

“Securities Act” means the Securities Act of 1933, as amended.

“SOFR” means the Secured Overnight Financing Rate.

“Tiptree”, the “Company”, “we”, “its”, “us” and “our” means, unless otherwise indicated by the context, Tiptree Inc. and its consolidated subsidiaries.

“Tiptree Advisors” means collectively: Tiptree Advisors Holdings, L.P., Tiptree Advisors, LLC, Tiptree GP Holdings, LLC and Tiptree Holdings GP, LLC.

“Tiptree Holdings” means Tiptree Holdings LLC.

“Transition Services Agreement” means the Amended and Restated Transition Services Agreement between Tiptree Advisors and Tiptree Inc., effective as of January 1, 2019.

“Warburg” means WP Falcon Aggregator, L.P., a Delaware limited partnership affiliated with funds advised or managed by Warburg Pincus LLC.

“WP Transaction” means the $200 million strategic investment in Fortegra by Warburg.

F - 2

TIPTREE INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)

	As of
	September 30, 2024		December 31, 2023
Assets:
Investments:
Available for sale securities, at fair value, net of allowance for credit losses	$	1,010,067	$	802,609
Loans, at fair value	81,816		69,556
Equity securities	95,330		68,308
Other investments	59,250		111,088
Total investments	1,246,463		1,051,561
Cash and cash equivalents	396,187		468,711
Restricted cash	108,183		23,850
Notes and accounts receivable, net	789,624		684,608
Reinsurance recoverable	932,656		953,886
Prepaid reinsurance premiums	978,149		900,524
Deferred acquisition costs	570,923		565,746
Goodwill	208,565		206,155
Intangible assets, net	108,482		118,757
Other assets	166,501		165,515
Total assets	$	5,505,733	$	5,139,313
Liabilities and Stockholders’ Equity
Liabilities:
Debt, net	$	388,523	$	402,411
Unearned premiums	1,709,966		1,695,058
Policy liabilities and unpaid claims	1,192,857		844,848
Deferred revenue	692,389		673,085
Reinsurance payable	458,610		543,602
Other liabilities and accrued expenses	407,188		403,744
Total liabilities	$	4,849,533	$	4,562,748
Stockholders’ Equity:
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding	$	—	$	—
Common stock: $0.001 par value, 200,000,000 shares authorized, 36,789,571 and 36,756,187 shares issued and outstanding, respectively	37		37
Additional paid-in capital	389,275		382,239
Accumulated other comprehensive income (loss), net of tax	(15,171)		(26,073)
Retained earnings	87,805		60,663
Total Tiptree Inc. stockholders’ equity	461,946		416,866
Non-controlling interests:
Fortegra preferred interests	77,679		77,679
Common interests	116,575		82,020
Total non-controlling interests	194,254		159,699
Total stockholders’ equity	656,200		576,565
Total liabilities and stockholders’ equity	$	5,505,733	$	5,139,313

See accompanying notes to condensed consolidated financial statements.

F-3

TIPTREE INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenues:
Earned premiums, net	$	359,496	$	291,293	$	1,105,273	$	826,418
Service and administrative fees	95,362		100,146		311,696		290,291
Ceding commissions	3,716		2,440		11,525		10,761
Net investment income	9,111		5,416		22,250		19,613
Net realized and unrealized gains (losses)	8,316		1,457		36,518		12,459
Other revenue	18,361		15,762		51,994		43,115
Total revenues	494,362		416,514		1,539,256		1,202,657
Expenses:
Policy and contract benefits	203,442		153,966		645,081		443,375
Commission expense	154,005		153,744		484,232		442,893
Employee compensation and benefits	52,335		45,663		151,438		130,844
Interest expense	7,614		6,716		23,919		20,225
Depreciation and amortization	5,395		6,347		16,254		17,475
Other expenses	34,790		28,937		111,206		94,857
Total expenses	457,581		395,373		1,432,130		1,149,669
Income (loss) before taxes	36,781		21,141		107,126		52,988
Less: provision (benefit) for income taxes	16,308		12,273		48,799		29,119
Net income (loss)	20,473		8,868		58,327		23,869
Less: net income (loss) attributable to non-controlling interests	8,558		6,715		24,511		16,789
Net income (loss) attributable to common stockholders	$	11,915	$	2,153	$	33,816	$	7,080
Net income (loss) per common share:
Basic earnings per share	$	0.32	$	0.06	$	0.91	$	0.19
Diluted earnings per share	$	0.29	$	0.04	$	0.83	$	0.18
Weighted average number of common shares:
Basic	36,789,571		36,749,199		36,781,408		36,672,120
Diluted	37,818,491		37,684,131		37,784,637		37,569,405
Dividends declared per common share	$	0.06	$	0.05	$	0.18	$	0.15

See accompanying notes to condensed consolidated financial statements.

F-4

TIPTREE INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income (loss)	$	20,473	$	8,868	$	58,327	$	23,869
Other comprehensive income (loss), net of tax:
Change in unrealized gains (losses) on available for sale securities	21,682		(9,990)		16,065		(4,065)
Change in unrealized currency translation adjustments	6,332		(4,234)		5,241		1,398
Related (provision) benefit for income taxes	(8,990)		4,412		(6,640)		1,174
Other comprehensive income (loss), net of tax	19,024		(9,812)		14,666		(1,493)
Comprehensive income (loss)	39,497		(944)		72,993		22,376
Less: comprehensive income (loss) attributable to non-controlling interests	13,537		4,254		28,275		16,444
Comprehensive income (loss) attributable to common stockholders	$	25,960	$	(5,198)	$	44,718	$	5,932

See accompanying notes to condensed consolidated financial statements.

F-5

TIPTREE INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(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 Tiptree Inc. stockholders’ equity		Fortegra preferred interests		Common interests		Total stockholders' equity
Balance at December 31, 2023	36,756,187	$	37	$	382,239	$	(26,073)	$	60,663	$	416,866	$	77,679	$	82,020	$	576,565
Amortization of share-based incentive compensation	—	—		6,983		—		—		6,983		—		2,524		9,507
Vesting of share-based incentive compensation	33,384	—		53		—		—		53		—		(752)		(699)
Non-controlling interest contributions	—	—		—		—		—		—		—		9,956		9,956
Non-controlling interest distributions	—	—		—		—		—		—		—		(644)		(644)
Common stock dividends declared	—	—		—		—		(6,674)		(6,674)		—		—		(6,674)
Other comprehensive income (loss), net of tax	—	—		—		10,902		—		10,902		—		3,764		14,666
Subsidiary preferred dividends declared	—	—		—		—		(4,804)		(4,804)		—		—		(4,804)
Net income (loss)	—	—		—		—		38,620		38,620		—		19,707		58,327
Balance at September 30, 2024	36,789,571	$	37	$	389,275	$	(15,171)	$	87,805	$	461,946	$	77,679	$	116,575	$	656,200

	Common stock											Non-controlling interests
	Number of shares	Par value		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings		Total Tiptree Inc. stockholders’ equity		Fortegra preferred interests		Common interests		Total stockholders' equity
Balance at June 30, 2024	36,785,305	$	37	$	387,513	$	(29,216)	$	78,115	$	436,449	$	77,679	$	103,941	$	618,069
Amortization of share-based incentive compensation	—	—		1,693		—		—		1,693		—		839		2,532
Vesting of share-based incentive compensation	4,266	—		69		—		—		69		—		(130)		(61)
Common stock dividends declared	—	—		—		—		(2,225)		(2,225)		—		—		(2,225)
Other comprehensive income (loss), net of tax	—	—		—		14,045		—		14,045		—		4,979		19,024
Subsidiary preferred dividends declared	—	—		—		—		(1,612)		(1,612)		—		—		(1,612)
Net income (loss)	—	—		—		—		13,527		13,527		—		6,946		20,473
Balance at September 30, 2024	36,789,571	$	37	$	389,275	$	(15,171)	$	87,805	$	461,946	$	77,679	$	116,575	$	656,200

F-6

TIPTREE INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(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 Tiptree Inc. stockholders’ equity		Fortegra preferred interests		Common interests		Total stockholders' equity
Balance at December 31, 2022	36,385,299	$	36	$	382,645	$	(39,429)	$	54,113	$	397,365	$	77,679	$	58,529	$	533,573
Amortization of share-based incentive compensation	—	—		4,711		—		—		4,711		—		1,155		5,866
Vesting of share-based incentive compensation	309,462	1		(350)		—		—		(349)		—		(470)		(819)
Shares issued upon exercise of options	55,007	—		—		—		—		—		—		—		—
Non-controlling interest distributions	—	—		(1,751)		—		—		(1,751)		—		(3,174)		(4,925)
Net change in non-controlling interests and other	—	—		(4,267)		—		—		(4,267)		—		2,106		(2,161)
Common stock dividends declared	—	—		—		—		(5,550)		(5,550)		—		—		(5,550)
Other comprehensive income (loss), net of tax	—	—		—		(1,148)		—		(1,148)		—		(345)		(1,493)
Subsidiary preferred dividends declared	—	—		—		—		(4,787)		(4,787)		—		—		(4,787)
Net income (loss)	—	—		—		—		11,867		11,867		—		12,002		23,869
Balance at September 30, 2023	36,749,768	$	37	$	380,988	$	(40,577)	$	55,643	$	396,091	$	77,679	$	69,803	$	543,573

	Common stock											Non-controlling interests
	Number of shares	Par value		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings		Total Tiptree Inc. stockholders’ equity		Fortegra preferred interests		Common interests		Total stockholders' equity
Balance at June 30, 2023	36,742,295	$	37	$	379,741	$	(33,226)	$	55,340	$	401,892	$	77,679	$	66,497	$	546,068
Amortization of share-based incentive compensation	—	—		1,135		—		—		1,135		—		665		1,800
Vesting of share-based incentive compensation	7,473	—		112		—		—		112		—		—		112
Common stock dividends declared	—	—		—		—		(1,850)		(1,850)		—		—		(1,850)
Other comprehensive income (loss), net of tax	—	—		—		(7,351)		—		(7,351)		—		(2,461)		(9,812)
Subsidiary preferred dividends declared	—	—		—		—		(1,613)		(1,613)		—		—		(1,613)
Net income (loss)	—	—		—		—		3,766		3,766		—		5,102		8,868
Balance at September 30, 2023	36,749,768	$	37	$	380,988	$	(40,577)	$	55,643	$	396,091	$	77,679	$	69,803	$	543,573