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Schedule II - Condensed Financial Information of Registrant - Statements of Comprehensive Income (Loss)
 12 Months Ended
Dec. 31, 2018
Condensed Financial Information Disclosure [Abstract]  
Schedule II - Condensed Financial Information of Registrant - Statements of Comprehensive Income (Loss)
 
December 31,
 
2018
 
2017
 
 
 
 
Assets
 
 
 
Investment in subsidiaries
$
72,419

 
$
77,657

Equity securities
—

 
400

Cash
1,133

 
2,583

Due from subsidiaries
403

 
513

Due from affiliate
445

 
348

Other assets
1,822

 
1,271

Total assets
$
76,222

 
$
82,772

 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
Liabilities:
 
 
 
Debt
$
33,502

 
$
29,027

Other liabilities
557

 
919

Total liabilities
34,059

 
29,946

 
 
 
 
Shareholders' equity:
 
 
 
Common stock, no par value (100,000,000 shares authorized; 8,478,202 and 8,520,328 issued and outstanding, respectively)
86,533

 
86,199

Accumulated deficit
(41,758
)
 
(33,010
)
Accumulated other comprehensive income (loss)
(2,612
)
 
(363
)
Total shareholders' equity
42,163

 
52,826

Total liabilities and shareholders' equity
$
76,222

 
$
82,772

 
Year Ended December 31,
 
2018
 
2017
 
2016
Revenue
 
 
 
 
 
Management fees from subsidiaries
$
13,567

 
$
15,905

 
$
9,911

Other income
73

 
826

 
51

Total revenue
13,640

 
16,731

 
9,962

 
 
 
 
 
 
Expenses
 
 
 
 
 
Operating expenses
17,336

 
13,496

 
16,995

Interest expense
2,644

 
1,362

 
647

Total expenses
19,980

 
14,858

 
17,642

 
 
 
 
 
 
Income (loss) before equity in earnings (losses)
of subsidiaries and income tax expense (benefit)
(6,340
)
 
1,873

 
(7,680
)
Income tax expense (benefit)
(581
)
 
859

 
(864
)
Income (loss) before equity earnings (losses) of subsidiaries
(5,759
)
 
1,014

 
(6,816
)
Equity earnings (losses) in subsidiaries
(3,468
)
 
(22,556
)
 
(1,621
)
 
 
 
 
 
 
Net income (loss)
(9,227
)
 
(21,542
)
 
(8,437
)
 
 
 
 
 
 
Other Comprehensive Income
 
 
 
 
 
Equity in other comprehensive income (loss) of subsidiaries
(1,770
)
 
717

 
(1,262
)
Total Comprehensive income (loss)
$
(10,997
)
 
$
(20,825
)
 
$
(9,699
)
Schedule II
Conifer Holdings, Inc.
Condensed Financial Information of Registrant
Statement of Cash Flows – Parent Company Only
(dollars in thousands) 
 
Year Ended December 31,
 
2018
 
2017
 
2016
Cash Flows from Operating Activities
 
 
 
 
 
Net income (loss)
$
(9,227
)
 
$
(21,542
)
 
$
(8,437
)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
 
 
 
 
 
Depreciation and amortization
379

 
347

 
364

Equity in undistributed (income) loss of subsidiaries
3,468

 
22,556

 
1,621

Incentive awards expenses - vesting of RSUs
970

 
895

 
856

Changes in operating assets and liabilities:
 
 
 
 
 
Due from subsidiaries
110

 
(513
)
 
150

Due from affiliates
(97
)
 
598

 
—

Current income tax recoverable
(488
)
 
(485
)
 
288

Other assets
(229
)
 
532

 
(270
)
Other liabilities
(360
)
 
590

 
5

Net cash provided by (used in) operating activities
(5,474
)
 
2,978

 
(5,423
)
Cash Flows From Investing Activities
 
 
 
 
 
Contributions to subsidiaries
—

 
(20,860
)
 
(2,100
)
Dividends received from subsidiaries
—

 
—

 
5,450

Purchases of investments
400

 
(400
)
 
—

Purchases of property and equipment
(86
)
 
(13
)
 
(192
)
Net cash provided by (used in) investing activities
314

 
(21,273
)
 
3,158

Cash Flows From Financing Activities
 
 
 
 
 
Proceeds received from issuance of shares of common stock
—

 
5,000

 
—

Repurchase of common stock
(636
)
 
—

 
(625
)
Borrowings under debt arrangements
25,300

 
32,000

 
7,000

Repayment of borrowings under debt arrangements
(19,500
)
 
(19,750
)
 
(2,000
)
Stock and debt issuance costs
(1,454
)
 
(1,011
)
 
—

Net cash provided by financing activities
3,710

 
16,239

 
4,375

Net increase (decrease) in cash
(1,450
)
 
(2,056
)
 
2,110

Cash at beginning of period
2,583

 
4,639

 
2,529

Cash at end of period
$
1,133

 
$
2,583

 
$
4,639

 
 
 
 
 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Interest paid
$
3,116

 
$
876

 
$
641



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 no cash dividends from its subsidiaries in 2018 or 2017 and $5.5 million in 2016.

2. Guarantees
The Parent has guaranteed the principal and interest obligations of a $10 million surplus note issued by Conifer Insurance Company to White Pine Insurance Company (both wholly owned subsidiaries).  The note pays interest annually at a per annum rate of 4% and has no maturity.