Schedule II - Condensed Financial Information of Registrant - Balance Sheets

12 Months Ended

Dec. 31, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule II - Condensed Financial Information of Registrant - Balance Sheets

Schedule II

Conifer Holding, Inc.

Condensed Financial Information of Registrant

Balance Sheets – Parent Company Only

(dollars in thousands)

	December 31,
	2015			2014
Assets
Investment in subsidiaries	$	84,982		$	75,692
Cash	2,529			1,150
Due from subsidiaries	1,096			175
Other assets	1,912			1,759
Total assets	$	90,519		$	78,776
Liabilities and Shareholders' Equity
Liabilities:
Senior debt	$	12,750		$	27,562
Accounts payable and accrued expenses	311			330
Other liabilities	196			606
Total liabilities	13,257			28,498
Redeemable preferred stock (0 and 1,000,000 shares authorized; 0 and 60,600 shares issued and outstanding, respectively)	—			6,119
Shareholders' equity:
Common stock, no par value (100,000,000 and 12,240,000 shares authorized; 7,644,492 and 3,995,013 issued and outstanding, respectively)	80,111			46,119
Accumulated deficit	(3,031		)	(3,095		)
Accumulated other comprehensive income	182			1,158
Total shareholders' equity attributable to Conifer	77,262			44,182
Noncontrolling interest	—			(23		)
Total shareholders' equity	77,262			44,159
Total liabilities and shareholders' equity	$	90,519		$	78,776

Schedule II

Conifer Holding, Inc.

Condensed Financial Information of Registrant

Statements of Comprehensive Income (Loss) – Parent Company Only

(dollars in thousands)

	Year Ended December 31,
	2015			2014			2013
Revenue
Management fees from subsidiaries	$	8,007		$	8,100		$	5,757
Other income	64			20			55
Total revenue	8,071			8,120			5,812
Expenses
Operating expenses	13,710			9,962			6,816
Interest expense	766			584			541
Total expenses	14,476			10,546			7,357
Income (loss) before equity in income (loss) of subsidiaries and income tax (benefit) expense	(6,405		)	(2,426		)	(1,545		)
Income tax expense (benefit)	(1,025		)	(77		)	(88		)
Income (loss) before equity in income (loss) of subsidiaries	(5,380		)	(2,349		)	(1,457		)
Equity earnings (losses) in subsidiaries	5,363			(4,590		)	1,737
Net income (loss)	(17		)	(6,939		)	280
Less net income (loss) attributable to noncontrolling interest	(81		)	(4		)	(69		)
Net income (loss) attributable to Conifer	$	64		$	(6,935	)	$	349
Other Comprehensive Income
Equity in other comprehensive income (loss) of subsidiaries	(976		)	622			(694		)
Total Comprehensive income (loss)	$	(912	)	$	(6,313	)	$	(345	)

Schedule II

Conifer Holding, Inc.

Condensed Financial Information of Registrant

Statement of Cash Flows – Parent Company Only

(dollars in thousands)

	Year Ended December 31,
	2015			2014			2013
Cash Flows from Operating Activities
Net income (loss)	$	(17	)	$	(6,939	)	$	280
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	321			287			243
Deferred income taxes	140			3			27
Equity in undistributed income (loss) of subsidiaries	(5,363		)	4,590			(1,737		)
Incentive awards expenses - vesting of RSU	303			—			—
Changes in operating assets and liabilities:
Changes in due from / payable to subsidiaries	(921		)	(10		)	706
Other assets	(396		)	(92		)	(164		)
Accounts payable and accrued expenses	(20		)	86			(270		)
Other liabilities	(480		)	(19		)	487
Net cash used in operating activities	(6,433		)	(2,094		)	(428		)
Cash Flows From Investing Activities
Contributions to subsidiaries	(7,500		)	(46,006		)	(1,317		)
Dividends received from subsidiaries	2,700			500			1,000
Purchases of property and equipment	(146		)	(434		)	(230		)
Net cash used in investing activities	(4,946		)	(45,940		)	(547		)
Cash Flows From Financing Activities
Proceeds received from issuance of shares of common stock	36,066			28,475			—
Issuance of shares of common stock to noncontrolling interest	—			—			50
Proceeds from issuance of shares of preferred stock	—			6,060			—
Repurchase of preferred stock	(6,275		)	—			—
Borrowings under debt arrangements	4,400			18,500			1,350
Repayment of borrowings under debt arrangements	(19,212		)	(4,075		)	(250		)
Dividends paid to preferred shareholders	(384		)	(191		)	—
Payment of offering costs	(1,837		)	—			—
Net cash provided by financing activities	12,758			48,769			1,150
Net (decrease) increase in cash	1,379			735			175
Cash at beginning of period	1,150			415			240
Cash at end of period	$	2,529		$	1,150		$	415
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	844		$	510		$	364
Non-cash dividend received from subsidiaries	400			—			—

Conifer Holding, Inc.

Condensed Financial Information of Registrant

Parent Company Only

Notes to Condensed Financial Statements

1. Accounting Policies

Organization

Conifer Holdings, Inc. (the “Parent”) is a Michigan‑based holding company organized for the purpose of managing its insurance entities. The Parent conducts its principal operations through these entities.

Basis of Presentation

The accompanying condensed financial information should be read in conjunction with the Consolidated Financial Statements and related Notes of Conifer Holdings, Inc. and Subsidiaries. Investments in subsidiaries are accounted for using the equity method. Under the equity method, the investment in subsidiaries is stated at cost plus contributions and equity in undistributed income (loss) of consolidated subsidiaries less dividends received since the date of acquisition.

The Parent’s operations consist of income earned from management and administrative services performed for the insurance entities pursuant to intercompany services agreements. These management and administrative services include providing management, marketing, offices and equipment, and premium collection, for which the insurance companies pay fees based on a percentage of gross premiums written. Also, the Parent receives commission income for performing agency services. The primary operating costs of the Parent include salaries and related costs of corporate personnel, including information technology, administrative expenses, and professional fees. The income received from the management and administrative services is used to meet debt service requirements and pay federal income taxes.

Estimates and Assumptions

Preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates.

Dividends

The Parent received cash dividends from its subsidiaries of $2,700,000, $500,000 and $1,000,000 for the years ended December 31, 2015, 2014, and 2013, respectively.