Schedule II - Condensed Financial Information of Registrant - Statements of Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule II - Condensed Financial Information of Registrant - Statements of Comprehensive Income (Loss)

	December 31,
	2017			2016
Assets
Investment in subsidiaries	$	77,657		$	78,637
Equity securities	400			—
Cash	2,583			4,639
Due from subsidiaries	513			—
Due from affiliate	348			946
Other assets	1,271			2,009
Total assets	$	82,772		$	86,231
Liabilities and Shareholders' Equity
Liabilities:
Debt	$	29,027		$	17,750
Other liabilities	919			687
Total liabilities	29,946			18,437
Shareholders' equity:
Common stock, no par value (100,000,000 shares authorized; 8,520,328 and 7,633,070 issued and outstanding, respectively)	86,199			80,342
Accumulated deficit	(33,010		)	(11,468		)
Accumulated other comprehensive income (loss)	(363		)	(1,080		)
Total shareholders' equity	52,826			67,794
Total liabilities and shareholders' equity	$	82,772		$	86,231

	Year Ended December 31,
	2017			2016			2015
Revenue
Management fees from subsidiaries	$	15,905		$	9,911		$	8,007
Other income	826			51			64
Total revenue	16,731			9,962			8,071
Expenses
Operating expenses	13,496			16,995			13,710
Interest expense	1,362			647			766
Total expenses	14,858			17,642			14,476
Income (loss) before equity in earnings (losses) of subsidiaries and income tax benefit	1,873			(7,680		)	(6,405		)
Income tax benefit	859			(864		)	(1,025		)
Income (loss) before equity earnings (losses) of subsidiaries	1,014			(6,816		)	(5,380		)
Equity earnings (losses) in subsidiaries	(22,556		)	(1,621		)	5,363
Net income (loss)	(21,542		)	(8,437		)	(17		)
Less net loss attributable to noncontrolling interest	—			—			(81		)
Net income (loss) attributable to Conifer	$	(21,542	)	$	(8,437	)	$	64
Other Comprehensive Income
Equity in other comprehensive income (loss) of subsidiaries	717			(1,262		)	(976		)
Total Comprehensive income (loss)	$	(20,825	)	$	(9,699	)	$	(912	)

Schedule II

Conifer Holdings, Inc.

Condensed Financial Information of Registrant

Statement of Cash Flows – Parent Company Only

(dollars in thousands)

	Year Ended December 31,
	2017			2016			2015
Cash Flows from Operating Activities
Net income (loss)	$	(21,542	)	$	(8,437	)	$	(17	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	347			364			321
Deferred income taxes	(485		)	288			140
Equity in undistributed (income) loss of subsidiaries	22,556			1,621			(5,363		)
Incentive awards expenses - vesting of RSUs	895			856			303
Changes in operating assets and liabilities:
Due from subsidiaries	(513		)	150			(921		)
Due from affiliates	598			—			—
Other assets	532			(270		)	(396		)
Other liabilities	590			5			(500		)
Net cash provided by (used in) operating activities	2,978			(5,423		)	(6,433		)
Cash Flows From Investing Activities
Contributions to subsidiaries	(20,860		)	(2,100		)	(7,500		)
Dividends received from subsidiaries	—			5,450			2,700
Purchases of investments	(400		)	—			—
Purchases of property and equipment	(13		)	(192		)	(146		)
Net cash provided by (used in) investing activities	(21,273		)	3,158			(4,946		)
Cash Flows From Financing Activities
Proceeds received from issuance of shares of common stock	5,000			—			36,066
Repurchase of common stock	—			(625		)	—
Repurchase of preferred stock	—			—			(6,275		)
Borrowings under debt arrangements	32,000			7,000			4,400
Repayment of borrowings under debt arrangements	(19,750		)	(2,000		)	(19,212		)
Dividends paid to preferred shareholders	—			—			(384		)
Stock and debt issuance costs	(1,011		)	—			(1,837		)
Net cash provided by financing activities	16,239			4,375			12,758
Net increase (decrease) in cash	(2,056		)	2,110			1,379
Cash at beginning of period	4,639			2,529			1,150
Cash at end of period	$	2,583		$	4,639		$	2,529
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	876		$	641		$	844
Non-cash dividend received from subsidiaries	—			—			400
Paid-in-kind dividends	—			—			61

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‑domiciled 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 are salaries and related costs of personnel, information technology, administrative expenses, and professional fees. The income received from the management and administrative services is used to cover operating costs, meet debt service requirements and cover other holding company obligations.

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 $0.0, $5.5 million and $2.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.