Tiptree Inc.: Form 10-Q for the period ended Sep 30, 2025

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented in this section as follows:

• Overview
• Results of Operations
• Non-GAAP Measures and Reconciliations
• Liquidity and Capital Resources
• Critical Accounting Policies and Estimates

OVERVIEW

Tiptree allocates capital to select small and middle market companies with the mission of building long-term value. Established in 2007, we have a significant track record investing in the insurance sector and across a variety of other industries, including mortgage, specialty finance and shipping. Our largest operating subsidiary, Fortegra, is a leading provider of specialty insurance products and related services. We also generate earnings from a diverse group of select investments that we refer to as Tiptree Capital, which includes our Mortgage segment and other, non-insurance businesses and assets. We evaluate performance primarily by the comparison of stockholders’ long-term total return on capital, as measured by growth in stock price plus dividends paid, in addition to Adjusted Net Income.

Our year-to-date 2025 highlights include:

Overall:

• On September 26, 2025, Tiptree entered into the Merger Agreement with Purchaser and Fortegra, pursuant to which and subject to the conditions set forth therein, Tiptree and Warburg will sell all of the issued and outstanding shares of common stock of Fortegra to Purchaser for aggregate consideration of $1.65 billion in cash (subject to certain adjustments set forth in the Merger Agreement). A subsidiary of Purchaser, Merger Sub, to be incorporated in Delaware following the date of the Merger Agreement and prior to the Closing will, upon its formation, execute a joinder to the Merger Agreement and at the Closing, Merger Sub will merge with and into Fortegra, with Fortegra being the surviving corporation. As of September 30, 2025, Tiptree owns approximately 69.1% of Fortegra on a fully diluted basis. The terms of the Merger, as contemplated by the Merger Agreement, provide that, at the Closing, Purchaser will acquire complete common equity ownership of Fortegra and all of its subsidiaries. This pending transaction has had no impact on Tiptree's financial statements at September 30, 2025, other than incurred transaction expenses of approximately $8.1 million and $11.7 million, respectively, for the three and nine months ended September 30, 2025. If the transaction had been completed as of September 30, 2025, Tiptree would have reflected the below:

• Tiptree reported net income of $31.0 million for the nine months ended September 30, 2025, compared to $33.8 million in the prior year period, with the decrease driven by deal-related expenses, increase in the Fortegra Additional Warrant liability, and incremental interest expense on $74.4 million of outstanding borrowings at the holding company level, partially offset by growth in Fortegra’s underwriting and fee income, and investment gains on equities. Return on average equity was 8.6% for the nine months ended September 30, 2025 as compared to 10.3% for the nine months ended September 30, 2024.
• Adjusted net income of $79.2 million increased from $72.8 million in the nine months ended September 30, 2024, driven by growth in insurance operations. Adjusted return on average equity was 21.9%, as compared to 22.1% in 2024.
• On October 31, 2025, Tiptree entered into the Purchase Agreement with Reliance Buyer and Reliance, pursuant to which and subject to the conditions set forth therein, Tiptree will sell all of the issued and outstanding shares of common stock of Reliance to Reliance Buyer for aggregate consideration of 93.5% of tangible book value, or an estimated $51 million of gross proceeds as of September 30, 2025 (subject to certain adjustments set forth in the Purchase Agreement).

Insurance:

• Gross written premiums and premium equivalents were $2.5 billion for the nine months ended September 30, 2025, an increase of $304.2 million, or 13.7%, from the prior year period as a result of growth in E&S insurance lines in the U.S. and Europe.
• Net written premiums were $1.2 billion for the nine months ended September 30, 2025, an increase of 10.2% from the nine months ended September 30, 2024, driven by growth in gross written premiums and stable premium retention levels.
• Total revenues were $1.5 billion, an increase of $26.5 million, or 1.8%, from the nine months ended September 30, 2024, driven by growth in earned premiums, net, net investment income, and net realized and unrealized gains, partially offset by decreases in service and administrative fees and other revenue.
• Combined ratio of 88.5%, an improvement of 1.7 percentage points, driven by improvement in the underwriting ratio, partially offset by an increased expense ratio as we continue to invest in U.S. and European E&S markets.
• Income before taxes of $160.4 million as compared to $135.3 million in the nine months ended September 30, 2024, with the increase driven by improved insurance operations and higher investment gains. Return on average equity was 22.2% in 2025 as compared to 25.1% in the nine months ended September 30, 2024.
• Adjusted net income (before NCI) was $135.2 million, an increase of $20.7 million, or 18.1%, from the nine months ended September 30, 2024. Adjusted return on average equity was 25.7%, as compared to 28.8% in the nine months ended September 30, 2024.
• Fortegra’s total stockholders’ equity was $776.2 million as of September 30, 2025, compared to $625.5 million as of December 31, 2024, an increase of 24.1%, driven by growth in retained earnings and a decrease in the accumulated other comprehensive loss position.

Tiptree Capital:

• Mortgage income before taxes was $0.2 million for the nine months ended September 30, 2025, as compared to income of $1.2 million in the nine months ended September 30, 2024, with the decrease primarily driven by negative fair value adjustments in mortgage servicing rights, partially offset by higher loan servicing fees.

Key Trends:

Our results of operations are affected by a variety of factors including, but not limited to, general economic conditions and GDP growth, market liquidity and volatility, consumer confidence, U.S. demographics, employment and wage growth, business confidence and investment, inflation, interest rates and spreads, the impact of the regulatory environment, and the other factors set forth in Part I, Item 1A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Generally, our businesses are positively affected by a healthy U.S. consumer, stable to gradually rising interest rates, stable markets and business conditions, and global growth and trade flows. Conversely, rising unemployment, volatile markets, rapidly rising interest rates, inflation, changing regulatory requirements, economic uncertainty arising from the imposition of tariffs, and slowing business conditions can have a material adverse effect on our results of operations or financial condition.

Insurance results primarily depend on pricing, underwriting, risk retention and the accuracy of reserves, reinsurance arrangements, returns on invested assets, and policy and contract renewals and run-off. Factors affecting these items, including conditions in financial markets, the global economy and the markets in which we operate, fluctuations in exchange rates, interest rates and inflation, including the current period of inflationary pressures, may have a material adverse effect on our results of operations or financial condition. Fortegra designs, markets and underwrites specialty property and casualty insurance products for select target markets or niches. The business has historically generated significant fee-based revenues by incorporating value-add coverages and services. Underwriting risk is mitigated through a combination of reinsurance and sliding scale commission structures with agents, distribution partners and/or third-party reinsurers. To mitigate counterparty risk, Fortegra ensures its reinsurance receivables are placed with highly rated and appropriately capitalized counterparties or with our distribution partners’ captive insurance vehicles which are collateralized with highly liquid investments, cash or letters of credit. While Fortegra’s insurance operations have historically maintained a relatively stable combined ratio, initiatives to change the business mix along with these economic factors could generate different results than the business has historically experienced. In particular, inflation can have an impact on replacement costs associated with claims from our customers to the extent we are unable to pass the higher costs of claims through higher premiums. In addition, fluctuations of the U.S. dollar relative to other currencies, including the British pound and Euro, would have an impact on book value between periods.

Fortegra’s investment portfolio includes fixed maturity securities, loans, credit investment funds, and equity securities. Many of those investments are held at fair value. From 2021 to 2024, the U.S. fixed income markets experienced a significant rise in interest rates. Rising interest rates have and could continue to impact the value of Fortegra’s fixed maturity securities, with any unrealized losses recorded in equity, and if realized, could impact our results of operations. Offsetting the impact of a rising interest rate environment, new investments in fixed rate instruments from both maturities and portfolio growth have and could continue to result in higher net interest income on investments. The weighted average duration of our fixed income available for sale securities is less than three years. While our asset and liability mix is relatively matched, should we need to liquidate any of these investments before maturity to pay claims, any realized losses could materially negatively impact our results of operations. Changes in fair value for loans, credit investment funds, and equity securities in Fortegra’s investment portfolio are reported as unrealized gains or losses in revenues and can be impacted by changes in interest rates, credit risk, currency risk, or market risk, including specific company or industry factors. In addition, our equity holdings are relatively concentrated. General equity market trends, along with company and industry specific factors, can impact the fair value which can result in unrealized gains and losses affecting our results.

Elevated 10-year treasury yields, and the tapering of the Federal Reserve’s purchases of mortgage-backed securities, has resulted in substantial increases in mortgage interest rates. Low mortgage interest rates driven by the Federal Reserve intervention in mortgage markets, and rising home prices in certain markets, provided tailwinds to the mortgage markets in 2020 and 2021, which benefited our mortgage operations and margins. The substantial rise in rates resulted in a sharp reversal of those trends, with volumes and margins declining significantly. Only partially offsetting the declines in mortgage originations is an increase in the fair value of our mortgage servicing portfolio as rising rates slow prepayment speeds, with a resulting increase in servicing income. Continued elevated mortgage rates could have a negative impact on our mortgage operations, and is likely to be only partially mitigated by the improvement in mortgage servicing revenues. A sustained period of negative profitability in the mortgage industry could also impact the availability of funding sources for our mortgage business.

Rising interest rates can also impact the cost of floating interest rate debt obligations, while declining rates can decrease the cost of debt. Our secured revolving and term credit agreements, preferred trust securities and asset based revolving financing are all floating rate obligations.

RESULTS OF OPERATIONS

The following is a summary of our condensed consolidated financial results for the three and nine months ended September 30, 2025 and 2024. In addition to GAAP results, management uses the Non-GAAP measures Adjusted net income, Adjusted return on average equity and book value per share as measurements of operating performance. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and comparison among companies.

Adjusted Net Income and Adjusted Return on Average Equity. Adjusted net income is defined as income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses) and intangibles amortization associated with purchase accounting. The calculation of adjusted net income excludes net realized and unrealized gains (losses) that relate to investments or assets rather than business operations. Adjusted return on average equity represents adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. Management uses Adjusted net income and adjusted return on average equity as part of its capital allocation process and to assess comparative returns on invested capital. We believe adjusted net income provides additional clarity on the results of the Company’s underlying business operations as a whole for the periods presented by excluding distortions created by the unpredictability and volatility of realized and unrealized gains (losses). We also believe adjusted net income provides useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies.

Adjusted net income and adjusted return on average equity are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income. See “Non-GAAP Reconciliations” for a reconciliation of these measures to their GAAP equivalents.

Selected Key Metrics

($ in thousands, except per share information)

(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues

For the three months ended September 30, 2025, revenues were $540.3 million, which increased $45.9 million, or 9.3%, compared to the prior year period. For the nine months ended September 30, 2025, revenues were $1.6 billion, which increased $27.2 million, or 1.8%, compared to the prior year period. The increase for the three month period was primarily driven by growth in earned premiums, net, and net realized and unrealized gains, partially offset by a decline in other revenue. The increase for the nine month period was primarily driven by growth in earned premiums, net, higher net investment income and net realized and unrealized gains, partially offset by declines in service and administrative fees and other revenue.

The table below provides a break down between net realized and unrealized gains and losses from Invesque and other securities which impacted our consolidated results on a pre-tax basis. Many investments are carried at fair value and marked to market through unrealized gains and losses. As a result, we expect earnings related to these investments to be relatively volatile between periods. Fixed income securities are primarily marked to market through AOCI in stockholders’ equity and do not impact net realized and unrealized gains and losses until they are sold.

($ in thousands)

(1) On April 15, 2024, the Company sold its 16.98 million shares of Invesque for $0.6 million of proceeds resulting in a realized loss of $134.2 million.

(2) Excludes Invesque and Mortgage realized and unrealized gains and losses.

Net Income (Loss) Attributable to common stockholders

For the three months ended September 30, 2025, the net income attributable to common stockholders was $6.4 million, compared to $11.9 million in the prior year period. For the nine months ended September 30, 2025, the net income attributable to common stockholders was $31.0 million, compared to a net income of $33.8 million in the prior year period. Decreases in both periods were driven by deal-related expenses, an increase in the Fortegra Additional Warrant liability, and incremental interest expense on $74.4 million of outstanding borrowings at the holding company level, partially offset by growth in Fortegra’s underwriting and fee income, and investment gains on equities.

Adjusted net income & Adjusted return on average equity - Non-GAAP

Adjusted net income for the three months ended September 30, 2025 was $28.8 million, an increase of $0.9 million, or 3.2%, from the three months ended September 30, 2024, driven by growth in Fortegra's operations. For the three months ended September 30, 2025, adjusted return on average equity was 22.9%, as compared to 24.8% for the three months ended September 30, 2024.

Adjusted net income for the nine months ended September 30, 2025 was $79.2 million, an increase of $6.4 million, or 8.8%, from the nine months ended September 30, 2024, driven by growth in Fortegra's operations. For the nine months ended September 30, 2025 and 2024, adjusted return on average equity was 21.9% as compared to 22.1% in the prior year period.

Book Value per share - Non-GAAP

Total stockholders’ equity was $741.4 million as of September 30, 2025 compared to $656.2 million as of September 30, 2024, with the increase driven by comprehensive income over the trailing four quarters, partially offset by net changes in non-controlling interests, preferred dividends paid at Fortegra and common dividends paid by Tiptree. In the nine months ended September 30, 2025, Tiptree returned $6.8 million to stockholders through dividends paid.

Book value per share for the period ended September 30, 2025 was $13.36, a 6.4% increase from book value per share of $12.56 as of September 30, 2024, driven by comprehensive income per share, partially offset by dividends paid of $0.49 per share, net changes in non-controlling interests and preferred dividends paid at Fortegra.

Results by Segment

We classify our business into two reportable segments, Insurance and Mortgage, with the remainder of our operations aggregated into Tiptree Capital - Other. Corporate activities include holding company interest expense, corporate employee compensation and benefits, and other expenses, including public company expenses.

The following tables present the components of Revenue, Income (loss) before taxes and Adjusted net income for the following periods:

($ in thousands)

(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Insurance

Fortegra is a specialty insurance underwriter and service provider, which focuses on niche lines and fee-oriented services. The combination of specialty insurance underwriting, service contract products, and related service solutions delivered through a vertically integrated business model creates a blend of traditional underwriting revenues, investment income and unregulated fee revenues. The business is an agent-driven model, distributing products through independent insurance agents, consumer finance companies, online retailers, auto dealers, and regional big box retailers to deliver products that complement the consumer transaction.

As of September 30, 2025, Fortegra was owned approximately 78.9% by Tiptree, 17.6% by Warburg and 3.5% by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and management options, and the conversion of outstanding preferred stock. The following tables and discussion present the Insurance segment results, including non-controlling interests, for the three months ended September 30, 2025 and 2024.

Components of our Results of Operations

Revenues

Earned Premiums, net represents the earned portion of gross written and assumed premiums, less the earned portion that is ceded to third-party reinsurers under reinsurance agreements. Fortegra’s insurance policies generally have a term of six months to seven years depending on the underlying product and premiums are earned pro rata over the term of the policy. At the end of each reporting period, premiums written but not earned are classified as unearned premiums and are earned in subsequent periods over the remaining term of the policy.

Service and Administrative Fees represent the earned portion of gross written premiums and premium equivalents, which is generated from non-insurance products including warranty service contracts, motor club contracts and other services offered as part of Fortegra’s vertically integrated product offerings. Such fees are typically positively correlated with transaction volume and are recognized as revenue when realized and earned. At the end of each reporting period, gross written premiums and premium equivalents written for service contracts not earned are classified as deferred revenue, which are earned in subsequent periods over the remaining term of the policy.

Ceding Commissions and Other Revenue consists of commissions earned on policies written on behalf of third-party insurance companies with no exposure to the insured risk and certain fees earned in conjunction with underwriting policies. Other revenue also includes the interest income earned on cash equivalents and premium finance product offerings.

Net Investment Income represents earned investment income on our portfolio of invested assets. Our invested assets are primarily comprised of fixed maturity securities, and may also include cash and cash equivalents and equity securities. The principal factors that influence net investment income are the size of our investment portfolio, the yield on that portfolio and expense due to external investment managers. The insurance investment portfolio includes investments held in statutory insurance companies and in unregulated entities. The portfolios held in statutory insurance companies are subject to different regulatory considerations, including with respect to types of assets, concentration limits, affiliate transactions and the use of leverage.

Net Realized and Unrealized Gains (Losses) on investments are a function of the difference between the amount received by us on the sale of a security and the security’s cost-basis, as well as any “other-than-temporary” impairments and allowances for credit losses which are recognized in earnings. In addition, equity securities and certain other investments are carried at fair value with unrealized gains and losses included in this line. Fortegra’s investment strategy is designed to achieve attractive risk-adjusted returns across select asset classes, sectors and geographies while maintaining adequate liquidity to meet claims payment obligations. As such, volatility from realized and unrealized gains and losses may impact period-over-period performance. Unrealized gains and losses on equity securities and loans held at fair value impact current period net income, while unrealized gains and losses on AFS securities impact AOCI.

Expenses

Net Losses and Loss Adjustment Expenses represent actual insurance claims paid, changes in unpaid claim reserves, net of amounts ceded and the costs of administering claims for insurance lines. Incurred claims are impacted by loss frequency, which is a measure of the number of claims per unit of insured exposure, and loss severity, which is based on the average size of claims. Factors affecting loss frequency and loss severity include the volume of underwritten contracts, changes in claims reporting patterns, claims settlement patterns, judicial decisions, economic conditions, morbidity patterns and the attitudes of claimants towards settlements, and original pricing of the product for purposes of the loss ratio in relation to loss emergence over time. Losses and loss adjustment expenses are based on an actuarial analysis of the estimated losses, including losses incurred during the period and changes in estimates from prior periods.

Member Benefit Claims represent the costs of services and replacement devices incurred in warranty and motor club service contracts. Member benefit claims represent claims paid on behalf of contract holders directly to third-party providers for roadside assistance and for the repair or replacement of covered products. Claims can also be paid directly to contract holders as a reimbursement payment, provided supporting documentation of loss is submitted to the Company. Claims are recognized as expense when incurred.

Commission Expenses reflect commissions paid to retail agents, third party administrators and managing general underwriters, net of ceding commissions received on business ceded under certain reinsurance contracts. Commission expenses are deferred and amortized to expense in proportion to the premium earned over the policy life. Commission expense is incurred on most product lines. The majority of commissions are retrospective commissions paid to agents, distributors and retailers selling the Company’s products, including credit insurance policies, warranty service contracts and motor club memberships. When claims increase, in most cases distribution partners bear the risk through a reduction in their retrospective commissions. Commission rates are, in many cases, set by state regulators, such as in credit and collateral protection programs and are also impacted by market conditions and the retention levels of distribution partners.

Operating and Other Expenses represent the general and administrative expenses of insurance operations including employee compensation and benefits and other expenses, including, technology costs, office rent, and professional services fees, such as legal, accounting and actuarial services.

Interest Expense consists primarily of interest expense on corporate revolving debt, notes, preferred trust securities due June 15, 2037 and asset based debt for premium finance and warranty service contract financing, which is non-recourse to Fortegra.

Depreciation Expense is primarily associated with furniture, fixtures and equipment. Amortization Expense is primarily associated with purchase accounting amortization including values associated with acquired customer relationships, trade names and internally developed software and technology.

Key Performance Metrics

We discuss certain key performance metrics, described below, which provide useful information about our business and the operational factors underlying its financial performance.

Gross written premiums and premium equivalents represent total gross written premiums from insurance policies and warranty service contracts issued, as well as premium finance volumes during a reporting period. They represent the volume of insurance policies written or assumed and warranty service contracts issued during a specific period of time without reduction for policy acquisition costs, reinsurance costs or other deductions. Gross written premiums is a volume measure commonly used in the insurance industry to compare sales performance by period. Premium equivalents are used to compare sales performance of warranty service and administrative contract volumes to gross written premiums. Similar to how management considers gross written premiums to be a relevant measure of volume, regardless of the impact of reinsurance on net earned premiums, management considers premium equivalents to be a relevant measure of contract volume, regardless of whether the Company retains the full obligation. Investors also use these measures to compare sales growth among comparable companies, while management uses these measures to evaluate the relative performance of various sales channels.

Net written premiums are gross written premiums less ceded written premiums. Gross written premiums are the amounts received, or to be received, for insurance policies written or assumed by us during a specific period of time without reduction for policy acquisition costs, reinsurance costs or other deductions. The volume of our gross written premiums in any given period is generally influenced by new business submissions, binding of new business submissions into policies, renewals of existing policies, and average size and premium rate of bound policies. Ceded written premiums are the amount of gross written premiums ceded to reinsurers. We enter into reinsurance contracts to limit our exposure to potential large losses. Ceded written premiums are earned over the reinsurance contract period in proportion to the period of risk covered. The volume of our ceded written premiums is impacted by the level of our gross written premiums and any decision we make to increase or decrease retention levels, policy limits and co-participations.

Combined Ratio, Loss Ratio, Acquisition Ratio, Underwriting Ratio and Operating Expense Ratio

Combined ratio is an operating measure, which equals the sum of the underwriting ratio and the operating expense ratio. Loss ratio is the ratio of the GAAP line items net losses and loss adjustment expenses and member benefit claims to earned premiums, net, service and administrative fees (excluding ceding fees), and other revenue (excluding cash and cash equivalent interest income). Acquisition ratio is the ratio of the GAAP line items commission expense (less ceding fees and ceding commissions) to earned premiums, net, service and administrative fees (excluding ceding fees), and other revenue (excluding cash and cash equivalent interest income). Underwriting ratio is the combination of the loss ratio and the acquisition ratio. Operating expense ratio is the ratio of the GAAP line items employee compensation and benefits and other expenses to earned premiums, net, service and administrative fees (excluding ceding fees) and other revenue (excluding cash and cash equivalent interest income).

A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss. These ratios are commonly used in the insurance industry as a measure of underwriting profitability, excluding earnings on the insurance portfolio. Investors commonly use these measures to compare underwriting performance among companies separate from the performance of the investment portfolio. Management uses these measures to compare the profitability of various products we underwrite as well as profitability among our various agents and sales channels.

Return on average equity is expressed as the ratio of net income to average stockholders’ equity during the period. Management uses this ratio as a measure of the on-going performance of the totality of the Company’s operations.

Non-GAAP Financial Measures

Adjusted net income represents income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses), and intangibles amortization associated with purchase accounting.

Adjusted return on average equity represents adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.

See “—Non-GAAP Reconciliations” for a reconciliation of adjusted net income and adjusted return on average equity to their GAAP equivalents.

Results of Operations - Three Months Ended September 30, 2025 compared to 2024

($ in thousands)

(1) Net income was $36.6 million for the three months ended September 30, 2025 compared to $35.1 million for the three months ended September 30, 2024.

(2) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues - Three Months Ended September 30, 2025 compared to 2024

For the three months ended September 30, 2025, total revenues increased 8.6%, to $522.6 million, as compared to $481.0 million for the three months ended September 30, 2024. Earned premiums, net of $383.9 million increased $24.4 million, or 6.8%, driven by growth in specialty E&S and admitted insurance lines. Earned premiums assumed from other insurance companies were $135.8 million, or 35.4% of the total, compared to $129.5 million, or 36.0% of the total, in the prior year period. As it expands to new geographies and expands product offerings, the Company works to obtain necessary licenses and intends to write this business directly upon obtaining necessary licenses. The Company views direct written and assumed business as having similar characteristics. Service and administrative fees of $95.8 increased by 0.5% driven primarily by an increase in ceding fee income, partially offset by a decline in service fee income in the U.S. and Europe. Ceding commissions of $3.5 million decreased by $0.2 million, or 6.3%. Other revenues decreased by $3.8 million, or 34.5%, driven by lower interest income on cash equivalents and premium finance product offerings.

For the three months ended September 30, 2025, net investment income was $7.4 million as compared to $9.1 million in the prior year period, a decrease of $1.7 million driven by $5.7 million of incentive fees related to realized and unrealized gains on equities and alternatives securities, partially offset by increased yields on investments and increased allocation to fixed income securities compared to cash equivalents. Net realized and unrealized gains were $24.8 million, an improvement of $22.5 million, as compared to net realized and unrealized gains of $2.2 million in the prior year period, primarily driven by the change in fair value of certain equity and other investments carried at fair value. Unrealized gains on AFS securities impacting OCI for the three months ended September 30, 2025 were $10.7 million, driven by positive fair value adjustments on U.S. Treasury securities and obligations of U.S. government authorities and agencies, corporate bonds and other investments.

Expenses - Three Months Ended September 30, 2025 compared to 2024

For the three months ended September 30, 2025, net losses and loss adjustment expenses were $192.4 million, member benefit claims were $24.9 million and commission expense was $144.9 million, as compared to $175.9 million, $27.5 million, and $154.0 million, respectively, for the three months ended September 30, 2024. The increase in net losses and loss adjustment expenses of $16.5 million, or 9.4%, was in line with the increase in earned premiums, net, driven by the U.S. insurance lines. During three months ended September 30, 2025 and 2024, the Company experienced unfavorable prior year development of $1.2 million, and $1.4 million, respectively, driven by higher-than-expected claims in our commercial lines of business. The decrease in member benefit claims of $2.6 million, or 9.4%, was driven by the decrease in service fee income, partially offset by higher replacement costs and labor rates on vehicle service contracts in the U.S. and Europe. Commission expenses decreased by $9.1 million, or 5.9%, driven by a decrease in service fee income, in addition to the impacts from sliding scale commissions on warranty contracts.

For the three months ended September 30, 2025, employee compensation and benefits were $41.7 million and other expenses were $50.3 million, as compared to $37.9 million and $26.3 million, respectively, for the three months ended September 30, 2024. Employee compensation and benefits increased by $3.9 million, or 10.2%, driven by investments in human capital associated with growth in E&S, admitted and services lines and increases in stock-based compensation. Other expenses increased by $24.0 million, or 91.1%, driven by an increase in fair value of the Fortegra Additional Warrant liability of $17.0 million. Included in other expenses were $3.7 million of deal-related expenses for the three months ended September 30, 2025, compared to $0.1 million of expenses in the prior year period.

For the three months ended September 30, 2025, interest expense was $8.3 million as compared to $7.2 million for the three months ended September 30, 2024. On November 7, 2024, Fortegra issued $150.0 million of 9.25% Fixed Rate Resetting Junior Subordinated Notes due November 2064. The proceeds of the 2024 Notes were used to repay outstanding indebtedness under Fortegra’s credit agreement, for insurance company growth capital and general corporate purposes. The increase in interest expense of $1.1 million, or 15.2%, was primarily driven by the issuance of the new debt.

For the three months ended September 30, 2025, depreciation and amortization expense was $4.8 million, as compared to $5.0 million in 2024. Intangible amortization for the 2025 and 2024 periods is related to purchase accounting associated with acquisitions of Fortegra in 2014 and additional services businesses from 2019 to 2023.

Gross Written Premiums and Premium Equivalents (1)

The below table shows gross written premiums and premium equivalents by business mix for the three months ended September 30, 2025 and 2024:

($ in thousands)

(1) The total gross written premiums and premium equivalents of $859.8 million and $776.8 million for the three months ended September 30, 2025 and 2024, respectively, were comprised of gross written premiums of $667.4 million and $573.0 million, plus assumed premiums of $129.7 million and $108.0 million, plus gross service and administrative fee additions of $62.6 million and $95.8 million, respectively. See Note (6) Reinsurance Recoverable and Prepaid Reinsurance Premiums and Note (12) Revenue from Contracts with Customers within the respective periods for more information.

Total gross written premiums and premium equivalents for the three months ended September 30, 2025 were $859.8 million, representing an increase of $82.9 million, or 10.7%, as compared to the prior year period. The increase was driven by a combination of factors including expanding Fortegra’s distribution partner network and growing E&S insurance lines. E&S premiums were $391.5 million for the three months ended September 30, 2025 compared to $312.1 million in the prior year period, a 25.5% increase.

For the three months ended September 30, 2025, Insurance increased by $116.1 million, or 17.0% as compared to the prior year period, driven by growth across all the product lines, most notably in property and short tail, general liability, and European lines. For the three months ended September 30, 2025, Services decreased by $33.2 million, or 34.6%, driven by lower volume in consumer goods and vehicle service contracts.

Net written premiums

($ in thousands)

Net written premiums for the three months ended September 30, 2025 were $396.7 million, representing an increase of $7.4 million, or 1.9% as compared to the prior year period. For the three months ended September 30, 2025, net written premiums from commercial lines increased by $17.8 million, or 5.2%, driven by growth in E&S lines. For the three months ended September 30, 2025, net written premiums from personal lines decreased by $10.4 million, or 23.9%, driven by declines in personal credit and auto insurance lines. Net written premiums from property and short-tail lines represented $134.7 million, or 34.0%, of the total net written premiums for the three months ended September 30, 2025 compared to $152.0 million, or 39.1%, for the prior year period. Property and short-tail net written premiums were diversified by geographic location, exposure and risk type with substantial reinsurance protection. As of September 30, 2025, the net loss to the Company in a 1-in-250 year catastrophe event represented approximately 3.7% of Fortegra’s stockholders’ equity. This reported loss includes the impact of incurred losses based on the estimated frequency and severity of potential events, reinstatements premiums, reinsurance recoveries and taxes.

Combined Ratio

The combined ratio was 87.3% and 90.2% for the three months ended September 30, 2025 and 2024, respectively, reflecting the consistent underwriting performance and scalability of the Company’s operating platform. The underwriting ratio was 73.3%, a decrease of 2.9 percentage points from the prior year period, which consists of a loss ratio of 46.4%, compared to 45.1% in the prior year period, and an acquisition ratio of 26.9%, compared to 31.1% in the prior year period. The increase in loss ratio was driven by changes in business mix towards commercial lines and increases in repair and labor costs on vehicle service contracts compared to prior year period, which was more than offset by the decline in acquisition ratio as a result of changes in business mix and swing rate commission structures. The operating expense ratio remained consistent at 14.0%.

Return on Average Equity

Return on average equity was 19.6% for the three months ended September 30, 2025, as compared to 24.3% for the prior year period, with the decrease driven by the higher average stockholders' equity, partially offset by improved combined ratio and higher investment gains.

Adjusted Net Income (before NCI) and Adjusted Return on Average Equity - Non-GAAP

For the three months ended September 30, 2025, adjusted net income (before NCI) and adjusted return on average equity were $49.5 million and 26.3%, respectively, as compared to $40.0 million and 27.7%, respectively, for the three months ended September 30, 2024.

Results of Operations - Nine Months Ended September 30, 2025 compared to 2024

($ in thousands)

(1) Net income was $115.9 million for the nine months ended September 30, 2025 compared to $99.6 million for the nine months ended September 30, 2024.

(2) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues - Nine Months Ended September 30, 2025 compared to 2024

For the nine months ended September 30, 2025, total revenues increased 1.8%, to $1.5 billion, as compared to $1.5 billion for the nine months ended September 30, 2024. Earned premiums, net of $1.1 billion increased $24.0 million, or 2.2%, driven by growth in specialty E&S and admitted insurance lines. Earned premiums assumed from other insurance companies were $433.1 million, or 38.4% of the total, compared to $430.6 million, or 39.0% of the total, in the prior year period. As it expands to new geographies and expands product offerings, the Company works to obtain necessary licenses and intends to write this business directly upon obtaining necessary licenses. The Company views direct written and assumed business as having similar characteristics. For the presented periods, earned premiums, net, did not include any significant regional geographic concentrations. Service and administrative fees of $290.0 million decreased by 7.0% driven by decrease in warranty and consumer goods service contract revenues in U.S. and Europe. Ceding commissions of $10.7 million decreased by $0.9 million, or 7.5%. Other revenues decreased by $8.0 million, or 25.5%, driven by decreases in interest income on cash equivalents and premium finance product offerings.

For the nine months ended September 30, 2025, net investment income was $29.6 million as compared to $22.3 million in the prior year period, an increase of $7.4 million driven by increased yields on investments and increased allocation to fixed income securities compared to cash equivalents, partially offset by $5.7 million of incentive fees related to realized and unrealized gains on equities and alternatives securities. Net realized and unrealized gains were $33.3 million, compared to net realized and unrealized gains of $7.6 million in the prior year period, primarily driven by the change in fair value of equity securities and other investments carried at fair value. Unrealized gains on AFS securities impacting OCI for the nine months ended September 30, 2025 were $25.8 million, driven by positive fair value adjustments on U.S. Treasury securities and obligations of U.S. government authorities and agencies, corporate bonds and other investments.

Expenses - Nine Months Ended September 30, 2025 compared to 2024

For the nine months ended September 30, 2025, net losses and loss adjustment expenses were $570.1 million, member benefit claims were $83.0 million and commission expense was $437.0 million, as compared to $556.6 million, $88.5 million, and $484.2 million, respectively, for the nine months ended September 30, 2024. The increase in net losses and loss adjustment expenses was $13.6 million, or 2.4%, was in line with the increase in earned premiums, net. During the nine months ended September 30, 2025 and 2024, the Company experienced favorable prior year development of $7.1 million and unfavorable prior year development of $0.6 million, respectively, primarily as a result of lower-than-expected claims in its commercial lines of business. The decrease in member benefit claims of $5.5 million, or 6.2%, was in line with decrease in service and administrative fees, partially offset by higher replacement costs and labor rates. Commission expense decreased by $47.2 million, or 9.8%, driven by impacts from sliding scale commission structures.

For the nine months ended September 30, 2025, employee compensation and benefits were $115.9 million and other expenses were $110.5 million, as compared to $100.9 million and $87.1 million, respectively, for the nine months ended September 30, 2024. Employee compensation and benefits increased by $15.0 million, or 14.9%, driven by investments in human capital associated with growth in E&S, admitted and services lines and increased stock-based compensation expense. Other expenses increased by $23.4 million, or 26.9%, driven by a change in fair value of the Fortegra Additional Warrant liability of $17.6 million, in comparison to $6.0 million in nine months ended September 30, 2024. Included in other expenses were $7.9 million of deal-related expenses in the 2025 period, compared to $3.5 million of expenses related to legal and other expenses associated with preparation of the registration statement for the withdrawn Fortegra initial public offering in February 2024.

For the nine months ended September 30, 2025, interest expense was $25.6 million as compared to $22.3 million for the nine months ended September 30, 2024. On November 7, 2024, Fortegra issued 150.0 million of 9.25% Fixed Rate Resetting Junior Subordinated Notes due November 2064. The proceeds of the 2024 Notes were used to repay outstanding indebtedness under Fortegra’s credit agreement, for insurance company growth capital and general corporate purposes. The increase in interest expense of $3.3 million, or 14.6%, was primarily driven by the issuance of the new debt.

For the nine months ended September 30, 2025, depreciation and amortization expense was $13.8 million as compared to $14.9 million in 2024. Intangible amortization for the 2025 and 2024 periods is related to purchase accounting associated with acquisitions of Fortegra in 2014 and additional services businesses from 2019 to 2023.

Gross Written Premiums and Premium Equivalents (1)

The below table shows gross written premiums and premium equivalents by business mix for the nine months ended September 30, 2025 and 2024:

($ in thousands)

(1) The total gross written premiums and premium equivalents of $2,520.6 million and $2,216.3 million for the nine months ended September 30, 2025 and 2024, respectively, were comprised of gross written premiums of $1,895.6 million and $1,603.9 million, plus assumed premiums of $409.8 million and $328.7 million, plus gross service and administrative fee additions of $215.1 million and $283.7 million, respectively. See Note (6) Reinsurance Recoverable and Prepaid Reinsurance Premiums and Note (12) Revenue from Contracts with Customers within the respective periods for more information.

Total gross written premiums and premium equivalents for the nine months ended September 30, 2025 were $2.5 billion, representing an increase of $304.2 million, or 13.7%, as compared to the prior year period. The increase was driven by a combination of factors including expanding Fortegra’s distribution partner network, and growing E&S insurance lines. E&S premiums were $1.1 billion for the nine months ended September 30, 2025 compared to $869.8 million in the prior year period, a 24.4% increase. For the nine months ended September 30, 2025, Insurance increased by $372.9 million, or 19.3%, driven primarily by growth in property and short-tail, general liability and contractual liability, and European lines, partially offset by decline in professional liability and personal lines. For the nine months ended September 30, 2025, Services decreased by $68.6 million, or 24.2%, driven by lower volume in consumer goods and vehicle service contracts.

Net written premiums

($ in thousands)

Net written premiums for the nine months ended September 30, 2025 were $1.2 billion, representing an increase of $109.8 million, or 10.2%, as compared to the prior year period, consistent with growth in gross written premiums. For the nine months ended September 30, 2025, commercial lines increased by $132.1 million, or 13.9%, driven by growth in E&S and specialty admitted business. For the nine months ended September 30, 2025, personal lines decreased by $22.2 million, or 18.2%, driven by declines in personal credit and auto insurance lines. Property and short-tail lines represented $430.7 million, or 36.4%, of the total net written premiums for the nine months ended September 30, 2025 compared to $368.8 million, or 34.4%, for the prior year period. Property and short-tail net written premiums were diversified by geographic location, exposure and risk type with substantial reinsurance protection.

Combined Ratio

The combined ratio was 88.5% for the nine months ended September 30, 2025, compared to 90.2% for the prior year period, reflecting the consistent underwriting performance and scalability of the Company’s operating platform. The underwriting ratio was 74.5%, a decrease of 2.9 percentage points from the prior year period, which consists of a loss ratio of 47.0%, compared to 46.3% in the prior year period, and an acquisition ratio of 27.5%, compared to 31.1% in the prior year period. The increase in loss ratio was driven by changes in business mix towards commercial lines and increases in repair and labor costs on vehicle service contracts compared to prior year period, which was offset by the decline in acquisition ratio as a result of changes in business mix and impacts from swing rate commission structures. The operating expense ratio increased 1.2 percentage points to 14.0%, as compared to 12.8% in the prior year period, driven by our continued investment in growing our E&S business.

Return on Average Equity

Return on average equity was 22.2% for the nine months ended September 30, 2025, as compared to 25.1% for the nine months ended September 30, 2024, with the decrease driven by slower revenue growth, partially offset by improvement of the combined ratio.

Adjusted Net Income (before NCI) and Adjusted Return on Average Equity - Non-GAAP

For the nine months ended September 30, 2025, adjusted net income (before NCI) and adjusted return on average equity were $135.2 million and 25.7%, respectively, as compared to $114.5 million and 28.8%, respectively, for the nine months ended September 30, 2024. The improvement of adjusted net income (before NCI) was driven by the improved combined ratio, in addition to improvements in net investment income.

Tiptree Capital

Tiptree Capital consists of our Mortgage segment, which includes the operating results of Reliance, our mortgage business, and Tiptree Capital - Other, which consists of our other non-insurance operating businesses and investments.

Mortgage

Through our Mortgage operating subsidiary, Reliance, we originate, sell, securitize and service one-to-four-family, residential mortgage loans, comprised of conforming mortgage loans, Federal Housing Administration (“FHA”), Veterans Administration (“VA”), United States Department of Agriculture (“USDA”), and to a lesser extent, non-agency jumbo prime.

We are an approved seller/servicer for Fannie Mae and Freddie Mac. We are also an approved issuer and servicer for Ginnie Mae. We originate residential mortgage loans through our retail distribution channel (directly to consumers) in 39 states and the District of Columbia as of September 30, 2025.

Components of our Results of Operations

Revenues

Net Realized and Unrealized Gains (Losses) include gains on sale of mortgage loans and the fair value adjustment in mortgage servicing rights. Gains on the sale of mortgage loans represent the difference between the selling price and carrying value of loans sold and are recognized upon settlement. Such gains also include the changes in fair value of loans held for sale and loan-related hedges and derivatives. We transfer the risk of loss or default to the loan purchaser, however, in some cases we are required to indemnify purchasers for losses related to non-compliance with borrowers’ creditworthiness and collateral requirements. Because of this, we recognize gains on sale net of required indemnification and premium recapture reserves. The fair value adjustment on mortgage servicing rights represents fair value adjustments considering estimated prepayments and other factors associated with changes in interest rates, plus actual run-off in the servicing portfolio. We report these adjustments separate from servicing income and servicing expense.

Other Revenue includes loan origination fees, interest income, and mortgage servicing income. Loan origination fees are earned as mortgage loans are funded. Servicing fees are earned over the life of the loan. Interest income includes interest earned on loans held for sale and interest income on bank balances and short-term investments.

Expenses

Employee Compensation and Benefits includes salaries, commissions, benefits, bonuses, other incentive compensation and related taxes for employees. Commissions expense for sales staff generally varies with loan origination volumes.

Interest Expense represents borrowing costs under warehouse and other credit facilities used primarily to fund loan originations. Amortization of deferred financing costs, including commitment fees, is included in interest expense.

Depreciation is mainly associated with furniture, fixtures and equipment. Amortization is primarily associated with a trade name and internally developed software.

Other Expenses include loan origination expenses, namely, leads, appraisals, credit reporting and licensing fees, general and administrative expenses, including office rent, insurance, legal, consulting and payroll processing expenses, and servicing expense.

The following tables present the Mortgage segment results for the following periods:

Results of Operations

($ in thousands)

(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues - Three and Nine Months Ended September 30, 2025 compared to 2024

For the three months ended September 30, 2025, $252.1 million of loans were funded, compared to $255.8 million for 2024, a decrease of $3.7 million, or 1.4%. Gain on sale margins remained consistent at 4.8% for the three months ended September 30, 2025 and 2024.

For the nine months ended September 30, 2025, $705.7 million of loans were funded, compared to $693.1 million for the prior year period, an increase of $12.6 million, or 1.8%. Gain on sale margins decreased to 4.7% for the nine months ended September 30, 2025, as compared to 4.8% for the nine months ended September 30, 2024.

Net realized and unrealized gains for the three months ended September 30, 2025 were $9.8 million, compared to $8.9 million for 2024, an increase of $1.0 million, or 11.1%. Net realized and unrealized gains for the nine months ended September 30, 2025 were $29.5 million, compared to $29.7 million in the prior year period, a decrease of $0.2 million, or 0.6%. The primary driver of decreased gain on sale revenues for the nine months ended September 30, 2025 was the negative fair value adjustment in mortgage servicing rights of $1.3 million in 2025 compared to a negative fair value adjustment of $0.4 million in the prior year period.

Other revenue for the three months ended September 30, 2025 was $6.3 million, compared to $6.0 million in the prior year period, an increase of $0.3 million, or 4.9%. Other revenue for the nine months ended September 30, 2025 was $18.1 million, compared to $17.0 million in the prior year period, an increase of $1.1 million, or 6.4%. The increase was driven by higher loan servicing income and higher loan origination fees. As of September 30, 2025, the mortgage servicing asset was $40.6 million, a decrease from $42.6 million as of December 31, 2024.

Expenses - Three and Nine Months Ended September 30, 2025 compared to 2024

For the three months ended September 30, 2025, employee compensation and benefits were $9.9 million, compared to $9.1 million in 2024, an increase of $0.8 million, or 8.7%. For the nine months ended September 30, 2025, employee compensation and benefits were $29.1 million, compared to $27.7 million in the prior year period, an increase of $1.3 million, or 4.8%.

For the three months ended September 30, 2025, interest expense was $0.3 million, a decrease of $0.1 million, or 21.5%. For the nine months ended September 30, 2025, interest expense was at $1.0 million, compared to $1.6 million in prior year period. The decreases in both periods were driven by lower interest rates.

For the three months ended September 30, 2025, other expenses were $5.6 million, compared to $5.4 million in 2024, with the $0.3 million increase driven by increased loan origination expenses, including marketing costs. For the nine months ended September 30, 2025, other expenses $17.0 million, compared to $15.8 million in the prior year period, an increase of $1.2 million, with the increase driven by a higher mortgage operational expenses.

Income (loss) before taxes - Three and Nine Months Ended September 30, 2025 compared to 2024

Income before taxes for the three months ended September 30, 2025 was $0.2 million, compared to loss before taxes of $0.1 million in 2024. The income before taxes for the nine months ended September 30, 2025 was $0.2 million, compared to income before taxes of $1.2 million in the prior year period. The decrease for the nine months ended September 30, 2025 was driven by negative fair value adjustment in mortgage servicing rights, partially offset by higher servicing fees.

Tiptree Capital - Other

The following tables present a summary of Tiptree Capital - Other results for the following periods:

Results of Operations

($ in thousands)

61

(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues - Three and Nine Months Ended September 30, 2025 compared to 2024

Tiptree Capital - Other earns revenues primarily from net interest income and realized and unrealized gains and losses on the Company’s investment holdings (including Invesque until the sale in April 2024).

Revenues for the three months ended September 30, 2025 were $1.5 million compared to $(1.5) million in the prior year period. Revenues for the nine months ended September 30, 2025 were $2.7 million compared to $2.9 million for 2024. The decrease for the year was driven by lower interest income on cash and cash equivalents and U.S. Treasury securities recorded in other income.

Income (loss) before taxes - Three and Nine Months Ended September 30, 2025 compared to 2024

The income before taxes from Tiptree Capital - Other for the three months ended September 30, 2025 was $1.4 million, compared to the loss before taxes of $2.6 million in 2024. The loss before taxes from Tiptree Capital - Other for the nine months ended September 30, 2025 was $1.8 million, compared to the income before taxes of $0.6 million in the prior year period driven by the increased other expenses.

Adjusted net income - Non-GAAP (1)

Adjusted net income from Tiptree Capital - Other for the three months ended September 30, 2025 was $0.8 million, compared to adjusted net income of $42.0 thousand in 2024. Adjusted net loss for the nine months ended September 30, 2025 was $8.0 thousand, compared to the adjusted net income of $0.9 million in 2024, with the decrease driven by increased other expenses, and lower interest income on cash and cash equivalents and U.S. Treasury securities recorded in other income.

Corporate

The following table presents a summary of corporate results for the following periods:

Results of Operations

($ in thousands)

Corporate expenses include expenses of the holding company for employee compensation and benefits, interest expense, and public company and other expenses. Corporate employee compensation and benefits includes the expense of management, legal and accounting staff. Other expenses primarily consisted of audit and professional fees, insurance, office rent and other related expenses.

Employee compensation and benefits, including incentive compensation expense, were $26.4 million for the nine months ended September 30, 2025, compared to $22.4 million for the prior year period, driven by the increase in accrued incentive compensation expense and one-time expenses associated with reduction in workforce. Of the incentive compensation expense in the nine months ended September 30, 2025, $5.3 million was stock-based compensation expense, compared to $7.2 million in 2024. The interest expense was $5.3 million for the nine months ended September 30, 2025. As of September 30, 2025, the outstanding borrowing on the facility was $74.4 million compared to no outstanding borrowings in 2024. Other expenses increased to $9.8 million for the nine months ended September 30, 2025 as compared to the prior year period driven primarily by deal-related expenses.

Provision for Income Taxes

The total income tax expense of $22.7 million and $16.3 million for the three months ended September 30, 2025 and 2024, respectively, is reflected as a component of net income (loss). For the three months ended September 30, 2025 and 2024, the Company’s effective tax rate was equal to 59.2% and 44.4%, respectively, with both significantly higher than the U.S. statutory income tax rate of 21.0%, primarily due to the impact of outside basis deferred taxes on Tiptree’s investment in Fortegra.

The total income tax expense of $56.7 million and $48.8 million for the nine months ended September 30, 2025 and 2024, respectively, is reflected as components of net income (loss). For the nine months ended September 30, 2025 and 2024, the Company’s effective tax rate was equal to 48.7% and 45.6%, respectively, with both significantly higher than the U.S. statutory income tax rate of 21.0%, primarily due to the impact of outside basis deferred taxes on Tiptree’s investment in Fortegra.

On April 15, 2024, the Company sold its 16.98 million shares of Invesque for $0.6 million of proceeds resulting in a capital loss carryforward for tax purposes of approximately $106.8 million.

Tiptree owns less than 80% of Fortegra and is required to record deferred taxes on the outside basis on its investment in Fortegra. This deferred tax liability represents the tax that would be due, before consideration of loss carryforwards, if Tiptree were to sell all of its Fortegra stock at its carrying value on Tiptree’s balance sheet. As of September 30, 2025, the deferred tax liability relating to Fortegra was $109.2 million, which was an increased of $24.5 million from the year ended December 31, 2024, of which $5.7 million of expense was recorded in OCI, and $18.8 million of expense was recorded as a provision for income taxes. As of September 30, 2024, the deferred tax liability relating to Fortegra was $81.5 million, which was an increased of $19.8 million from the year ended December 31, 2023, of which $3.1 million of expense was recorded in OCI, and $16.7 million of expense was recorded as a provision for income taxes. Excluding the impact of these deferred taxes, the effective tax rates for the nine months ended September 30, 2025 and 2024 were 32.5% and 29.9%, respectively.

Balance Sheet Information

Tiptree’s total assets were $6.4 billion as of September 30, 2025, compared to $5.7 billion as of December 31, 2024. The $721.5 million increase in assets is primarily attributable to the growth in the Insurance segment.

Total stockholders’ equity was $741.4 million as of September 30, 2025, compared to $656.8 million as of December 31, 2024, with the increase primarily driven by comprehensive income for the nine months ended September 30, 2025. As of September 30, 2025, there were 37,820,120 shares of common stock outstanding as compared to 37,255,838 shares as of December 31, 2024, with the increase driven by the vesting of share-based incentive compensation and exercise of options.

As of September 30, 2025, Fortegra was owned approximately 78.9% by Tiptree Holdings, 17.6% by Warburg and 3.5% by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and management options, and the conversion of outstanding preferred stock.

The following table is a summary of certain balance sheet information:

($ in thousands)

(1) Included in Corporate equity is the deferred tax liability on the outside basis on Tiptree’s investment in Fortegra of $109.2 million as of September 30, 2025.

NON-GAAP MEASURES AND RECONCILIATIONS

Non-GAAP Reconciliations

In addition to GAAP results, we also use the non-GAAP financial measures adjusted net income and adjusted return on average equity as measures of operating performance and as part of our resource and capital allocation process, to assess comparative returns on invested capital. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and to compare relative performance among comparable companies. Adjusted net income and adjusted return on average equity are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for earned premiums, net income or any other measure derived in accordance with GAAP.

Adjusted Net Income — Non-GAAP

We define adjusted net income as income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses) and intangibles amortization associated with purchase accounting, all of which is reduced for non-controlling interests. The calculation of adjusted net income excludes net realized and unrealized gains (losses) that relate to investments or assets rather than business operations. Adjusted net income should not be viewed as a substitute for income before taxes calculated in accordance with GAAP, and other companies may define adjusted net income differently. Adjusted net income (before NCI) is presented before the impacts of non-controlling interests.

We present adjustments for amortization associated with acquired intangible assets. The intangible assets were recorded as part of purchase accounting in connection with Tiptree’s acquisition of Fortegra Financial in 2014, and additional services businesses from 2019 to 2024. The intangible assets acquired contribute to overall revenue generation, and the respective purchase accounting adjustments will continue to occur in future periods until such intangible assets are fully amortized in accordance with the respective amortization periods required by GAAP.

Adjusted Return on Average Equity — Non-GAAP

We define adjusted return on average equity as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See “—Adjusted Net Income—Non-GAAP” above. Adjusted return on average equity should not be viewed as a substitute for return on average equity calculated in accordance with GAAP, and other companies may define adjusted return on average equity differently.

($ in thousands)

($ in thousands)

64

($ in thousands)

($ in thousands)

(1) Net realized and unrealized gains (losses) added back in Adjusted net income excludes net realized and unrealized gains (losses) from the mortgage segment and unrealized gains (losses) on mortgage servicing rights.

(2) Specifically associated with acquisition purchase accounting. See Note (7) Goodwill and Intangible Assets, net, for the period ended September 30, 2025.

(3) For the three and nine months ended September 30, 2025 and 2024, included in other expenses were expenses related to legal, banker and other expenses including expenses associated with preparation of the registration statement for the withdrawn Fortegra initial public offering in 2024, and $5.7 million of incentive fees related to realized and unrealized gains on equities and alternatives securities in 2025 periods.

(4) For the three and nine months ended September 30, 2025 and 2024, non-cash fair-value adjustments represent a change in fair value of the Fortegra Additional Warrant liability.

(5) For the three and nine months ended September 30, 2025 and 2024, included in the adjustment is an add-back of $5.9 million and $18.6 million, respectively, and $5.9 million and $16.7 million, respectively, related to deferred tax expense from the WP Transaction.

(6) Tax on adjustments represents the tax applied to the total non-GAAP adjustments and includes adjustments for non-recurring or discrete tax impacts.

(7) Total Adjusted return on average equity after non-controlling interests was 22.9% and 24.8% for the three months ended September 30, 2025 and 2024, respectively, based on $28.8 million and $27.9 million of Adjusted net income over $502.6 million and $449.2 million of average Tiptree Inc. stockholders’ equity. Total Adjusted return on average equity after non-controlling interests was 21.9% and 22.1% for the nine months ended September 30, 2025 and 2024, respectively, based on $79.2 million and $72.8 million of Adjusted net income over $481.5 million and $439.4 million of average Tiptree Inc. stockholders’ equity.

Book Value per share - Non-GAAP

Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders’ equity and total shares outstanding, net of treasury shares.

($ in thousands, except per share information)

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity are unrestricted cash, cash equivalents and other liquid investments, the Tiptree Credit Agreement and distributions from operating subsidiaries, including income from our investment portfolio and sales of assets and investments. We intend to use our cash resources to continue to fund our operations and grow our businesses. We may seek additional sources of cash to fund acquisitions or investments. These additional sources of cash may take the form of debt or equity and may be at the parent, subsidiary or asset level. We are a holding company, and our liquidity needs are primarily for compensation, professional fees, office rent and insurance costs.

Our subsidiaries’ ability to generate sufficient net income and cash flows to make cash distributions will be subject to numerous business and other factors, including restrictions contained in agreements for the strategic investment by Warburg in Fortegra, our subsidiaries’ financing agreements, regulatory restrictions, availability of sufficient funds at such subsidiaries, general economic and business conditions, tax considerations, strategic plans, financial results and other factors such as target capital ratios and ratio levels anticipated by rating agencies to maintain or improve current ratings. We expect our cash and cash equivalents and distributions from operating subsidiaries, our subsidiaries’ access to financing, and sales of investments to be adequate to fund our operations for at least the next 12 months, as well as the long term.

As of September 30, 2025, cash and cash equivalents, excluding restricted cash, were $366.1 million, compared to $320.1 million as of December 31, 2024, an increase of $46.0 million, primarily driven by the issuance of debt at the holding company.

Our mortgage business relies on short term uncommitted sources of financing as a part of their normal course of operations. To date, we have been able to obtain and renew uncommitted warehouse credit facilities. If we were not able to obtain financing, then we may need to draw on other sources of liquidity to fund our mortgage business. See Note (9) Debt, net in the notes to our condensed consolidated financial statements for additional information regarding our insurance and mortgage borrowings.

We believe that cash flow from operations and the proceeds of the Merger will provide sufficient capital to continue to grow the business and fund interest on the outstanding debt, capital expenditures and other general corporate needs over the next several years. As we continue to expand our business, including by any acquisitions we may make, we may, in the future, require additional working capital for increased costs. For purposes of determining enterprise value, we consider corporate credit agreements and preferred trust securities, which we refer to as corporate debt, as corporate financing and associated interest expense is added back. The below table outlines this amount by debt outstanding and interest expense at the insurance company and corporate level.

Corporate Debt

($ in thousands)

On February 7, 2025, we entered into the Tiptree Credit Agreement, pursuant to which Tiptree Holdings borrowed $75.0 million to, among other things, fund working capital and general corporate purposes. The principal of, and all accrued and unpaid interest on, all loans under the Tiptree Credit Agreement will mature on February 7, 2028. We expect this credit agreement to be repaid from proceeds of the Merger.

As of September 30, 2025, a total of $55.0 million was outstanding under the revolving line of credit in Fortegra as compared to no outstanding borrowings under the revolving line of credit as of December 31, 2024. The maximum borrowing capacity under the agreements as of September 30, 2025 and 2024 was $200.0 million.

On November 7, 2024, Fortegra issued $150.0 million of 9.25% Fixed Rate Resetting Junior Subordinated Notes due November 2064 (“the 2024 Notes”). The proceeds of the 2024 Notes were used to repay outstanding indebtedness under the Company’s credit agreement, for insurance company growth capital and general corporate purposes. Beginning on November 15, 2029, the Company may redeem the 2024 Notes at par plus accrued and unpaid interest.

Consolidated Comparison of Cash Flows

($ in thousands)

Operating Activities

Cash provided by operating activities was $123.4 million for the nine months ended September 30, 2025. In 2025, the primary sources of cash from operating activities included growth in insurance premiums written resulting in increases in policy liabilities and unpaid claims, and unearned premiums, which were offset by increases in accounts receivable, and reinsurance recoverables, and a decrease in deferred revenues.

Cash provided by operating activities was $170.8 million for the nine months ended September 30, 2024. In 2024, the primary sources of cash from operating activities included growth in insurance premiums written resulting in increases in policy liabilities and unpaid claims, deferred revenues and unearned premiums, which were partially offset by increases in accounts receivable and prepaid reinsurance premiums and decreases in reinsurance payables.

Investing Activities

Cash used in investing activities was $122.9 million for the nine months ended September 30, 2025. In 2025, the primary use of cash was the purchase of investments exceeding the proceeds from sales and maturities of investments, partially offset by proceeds from notes receivable exceeding the issuance of notes receivable.

Cash used in investing activities was $146.2 million for the nine months ended September 30, 2024. In 2024, the primary use of cash was the purchases of investments outpacing proceeds from sales and maturities, in addition to the issuance of notes receivable exceeding proceeds from notes receivable.

Financing Activities

Cash provided by financing activities was $58.1 million for the nine months ended September 30, 2025. In 2025, the cash provided was primarily proceeds from the senior secured credit facility at Tiptree Holdings in amount of $75.0 million, partially offset by the payment of common and preferred dividends.

Cash used in financing activities was $18.0 million for the nine months ended September 30, 2024. In 2024, the cash used was primarily repayments of corporate borrowings at Fortegra and the payment of common and preferred dividends, partially offset by a non-controlling interest contribution to Fortegra.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our financial statements in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Actual results could differ materially from those estimates. There have been no material changes to the critical accounting policies and estimates as discussed in Part II, Item 7A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Recently Adopted and Issued Accounting Standards

For a discussion of recently adopted and issued accounting standards, see the section “Recent Accounting Standards” in Note (2) Summary of Significant Accounting Policies of the notes to the accompanying condensed consolidated financial statements.

Our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 described our Quantitative and Qualitative Disclosures About Market Risk. There were no material changes to the assumptions or risks during the nine months ended September 30, 2025.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that material information is recorded, processed, summarized and reported accurately and on a timely basis. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d- 15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

For information regarding factors that could affect our Company, results of operations and financial condition, see the risk factors discussed under Part I, Item 1A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no material changes in those risk factors. The following risk factors are in addition to those set forth in our Annual Report on Form 10-K.

The announcement and pendency of the Merger and the other transactions contemplated by the Merger Agreement, whether or not completed, creates uncertainty about our future, which could have a material adverse effect on our business, financial condition and results of operations, including the Retained Business.

The announcement and pendency of the Merger and the other transactions contemplated by the Merger Agreement may adversely affect the trading price of Tiptree common stock, our business and our relationships with clients, customers and employees. Third parties may be unwilling to enter into material agreements with respect to our businesses that remain after the Merger (the "Retained Business") or may seek to change existing business relationships. New or existing customers and business partners may prefer to enter into agreements with our competitors who have not expressed an intention to sell their business because customers and business partners may perceive that such new relationships are likely to be more stable. Additionally, employees working in the Retained Business may become concerned about the future of the Retained Business, as applicable, and lose focus or seek other employment. In addition, while the completion of the Merger is pending, we may be unable to attract and retain key personnel and our management’s focus and attention and employee resources may be diverted from operational matters. The occurrence of any of these events, individually or in combination, could have a material adverse effect on our business, financial condition and results of operations. Additionally, we have incurred substantial transaction costs and diversion of management resources in connection with the Merger, and we will continue to do so until the final closing or termination of the Merger.

The Merger is subject to the Tiptree stockholder approval and other closing requirements, and may not be completed as anticipated, or at all.

The Merger may constitute a “transfer of assets” under Section 3-105 of the Maryland General Corporation Law, and we are therefore seeking the approval of the Merger and the other transactions contemplated by the Merger Agreement by our stockholders, which is a condition to the closing of the Merger. The regulatory approvals conditions in the Merger Agreement are also conditions to the obligation of the parties to consummate the Merger.

The total proceeds realized by Tiptree from the Merger are contingent upon receiving the Tiptree stockholder approval and satisfying other closing conditions as of the closing date. There can be no assurances that Tiptree will receive the Tiptree stockholder approval and satisfy the conditions to closing. Any delay in receiving the Tiptree stockholder approval and satisfying the other closing conditions may increase the risk that the Merger will be terminated pursuant to the terms of the Merger Agreement, or reduce the benefits that Tiptree expects to realize.

The Merger Agreement provides certain termination rights to Purchaser and to Tiptree. If an adverse recommendation change by the board of directors of Tiptree (the "Tiptree Board") occurs prior to receipt of the Tiptree stockholder approval, Purchaser has the right to terminate the Merger Agreement. If Tiptree engages or participates in discussions or negotiations regarding an unsolicited superior proposal from a third party prior to receipt of the Tiptree stockholder approval, Tiptree has the right, under certain circumstances, to terminate the Merger Agreement and enter into a definitive transaction agreement providing for such superior proposal.

Tiptree will incur significant transaction costs in connection with the Merger.

Tiptree has incurred and is expected to continue to incur a number of non-recurring costs associated with the Merger. These costs have been, and will continue to be, substantial and, in certain cases, will be borne by Tiptree whether or not the Merger is completed. A substantial majority of non-recurring expenses will consist of transaction costs and include, among others, fees paid to legal and financial advisors. Any litigation that may result from the announcement, pendency or completion of the Merger has the potential to impose additional substantial expenses on Tiptree. If the Merger is not completed, Tiptree will have incurred substantial expenses for which no ultimate benefit will have been received. Tiptree has incurred out-of-pocket expenses in connection with the Merger for legal and accounting fees and financial printing and other costs and expenses, much of which will be incurred even if the Merger is not completed. If the board of directors of Tiptree has determined in good faith (after consultation with its outside legal counsel and financial advisors) that an acquisition proposal constitutes a Superior Proposal (as defined in the Merger Agreement), then Tiptree may terminate the Merger Agreement to enter into an agreement with respect to such Superior Proposal, subject to compliance with the procedures specified in the Merger Agreement and payment of a termination fee of $49.5 million.

Tiptree will have broad discretion in the use of the proceeds from the Merger and may use proceeds in ways that stockholders may not approve.

Tiptree will have broad discretion in the use of the net proceeds it receives from the Merger and may use proceeds in ways that some stockholders may not approve. Tiptree intends to use proceeds from the Merger for working capital and general corporate purposes, including to pay transaction expenses, to pay taxes on the transactions contemplated by the Merger Agreement, to repay existing debt of Tiptree, to engage in opportunistic stock repurchases and/or pay dividends, to purchase additional assets or businesses and/or for any other purpose that the Tiptree Board deems appropriate. Because of the number and variability of factors that will determine our use of the net proceeds from the Merger, their ultimate use may vary substantially from their currently intended use.

Tiptree management may not spend the net proceeds in ways that improve Tiptree’s results of operations or enhance the value of Tiptree common stock. The failure by Tiptree’s management to apply these funds effectively could result in financial losses that could have a material adverse effect on Tiptree’s business or cause the price of Tiptree common stock to decline. Tiptree management may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

Any Leakage will decrease the proceeds that Tiptree will receive in the Merger, and if there is Additional Leakage, Tiptree may not receive its pro rata portion of the Leakage Reserve Holdback Amount.

Any Leakage, including any Transaction Expenses but excluding Permitted Leakage (as defined in the Merger Agreement) that occurs after June 30, 2025, and at or prior to the closing will decrease the Aggregate Closing Purchase Price (as defined in the Merger Agreement) and therefore the proceeds that Tiptree will receive in the Merger. Moreover, if, following the closing, it is determined that there was Additional Leakage (as defined in the Merger Agreement), Tiptree may not receive its pro rata portion of the Leakage Reserve Holdback Amount (as defined in the Merger Agreement). Because Leakage is defined to include payments, liabilities or obligations of or by Fortegra and its subsidiaries, the amount of any Leakage may be influenced by factors outside of Tiptree’s control.

Tiptree does not expect to distribute cash to its stockholders in connection with the Merger, and any return to its stockholders is expected to come, if at all, only from potential increases in the price of Tiptree common stock.

Tiptree does not expect to distribute cash to its stockholders in connection with the Merger. The Tiptree Board has previously repurchased, and may from time to time repurchase, shares of Tiptree common stock and/or pay cash dividends. Factors that may impact our decisions regarding the method, timing and amount of a return of capital, if any, include economic and market conditions, our financial condition and operating results, cash requirements, capital requirements of our operating subsidiaries, legal requirements, regulatory constraints, investment opportunities at the time any such payment is considered, and other factors the Tiptree Board deems relevant. Furthermore, the specific timing and amount of any dividend payments are subject to declaration on future dates by the Tiptree Board in its sole discretion. There can be no assurances that we will complete any return of capital to our stockholders.

If the proposed Merger is not completed, we may explore other potential transactions, but alternatives may be less favorable to us.

Completion of the Merger will require significant time, attention, and resources of our senior management and others within Tiptree, potentially diverting their attention from other business opportunities that might benefit us. If the proposed Merger is not completed, Tiptree may explore other strategic alternatives with another party or parties. An alternative transaction may have terms that are less favorable to us than the terms of the proposed Merger, or we may be unable to reach agreement with any third-party on an alternate transaction that we would consider to be reasonable. Any future “transfer of assets” of Tiptree or other similar transaction may be subject to further stockholder approval, and there is no guarantee that Tiptree would be able to obtain such stockholder approval in favor of any such sale or other transaction.

The failure to complete the Merger may impact our business, financial condition and results of operations.

If the Merger is not completed for any reason, Tiptree’s business, financial condition and results of operations may be impacted. To the extent that the market price of Tiptree common stock reflects positive market assumptions that the Merger will be completed and the related benefits will be realized, the failure to complete the Merger may result in a decrease in the market value of Tiptree common stock and may impair Tiptree’s ability to achieve its objective of enhancing the value of its assets to Tiptree stockholders.

Even if the Merger is completed, we cannot provide any assurances that we will realize the financial benefits we currently anticipate from the Merger.

We cannot provide any assurances that we will realize the financial benefits we currently anticipate from the Merger. Any failure to realize the financial benefits we currently anticipate from the Merger could have a material adverse impact on our future operating results and financial condition and could materially and adversely affect the trading price or trading volume of Tiptree common stock. Our results of operations currently are not, and may not be in the future even if the Merger and the other transactions contemplated by the Merger Agreement are consummated, sufficient to service our indebtedness and to fund our other expenditures, and we may not be able to obtain financing to meet these requirements. Even if the Merger and the other transactions contemplated by the Merger Agreement are consummated, if we experience a default under Tiptree’s existing credit agreement or instruments governing our future indebtedness, our business, financial condition and results of operations may be adversely impacted.

Tiptree also expects to recognize significant taxable gain upon completion of the Merger, which reflects expected treatment of the proposed Merger as a taxable sale of Fortegra common stock by Tiptree for U.S. federal income tax purposes.

After completion of the Merger, Tiptree’s future results of operations will be dependent solely on the Retained Business, Tiptree will have substantially fewer assets, Tiptree may be more susceptible to adverse events, and Tiptree may not be able to use the proceeds from the Merger as intended.

If the Merger is completed, Tiptree will no longer hold any Fortegra shares or have any interest in the future earnings or growth of Fortegra, and Tiptree’s future results of operations will be dependent solely on the Retained Business and differ materially from Tiptree’s previous results of operations. After completion of the Merger, Tiptree will be subject to concentration of the risks that affect our Retained Business and Tiptree will have substantially fewer assets and may experience significant decreases in earnings and cash flow and increases in operating costs or other expenses. Following the Merger, Tiptree will continue to be a public company with ongoing costs associated with public company operations, which will be a greater percentage of our revenues. The market price of Tiptree common stock may significantly decrease, and Tiptree common stock may be more susceptible to market fluctuations. In addition, if there are significant adverse changes in Tiptree’s business prospects, the industries in which Tiptree operates, or in market and economic conditions generally, Tiptree may not be able to use the proceeds from the Merger as currently intended because the proceeds may be required for operations or other needs that we do not currently anticipate. Any downturn in the Retained Business or future prospects following the closing of the Merger, or if Tiptree fails to bring overhead costs in line with our reduced operations following the closing of the Merger, could have a material adverse effect on Tiptree’s future operating results and financial condition and could materially and adversely affect the market price of Tiptree’s securities.

After completion of the Merger, the continuing costs and burdens associated with being a public company will constitute a much larger percentage of Tiptree’s revenues.

If the Merger is completed, Tiptree will remain a public company and will continue to be subject to the listing standards of the Nasdaq and SEC rules and regulations. While all public companies face the costs and burdens associated with being public companies, the costs and burden of being a public company will be a significant portion of Tiptree’s revenues, which will be reduced if the Merger is completed.

The opinion obtained by the Fortegra Board from Barclays and relied upon by the Tiptree Board does not and will not reflect changes in circumstances after the date of such opinion.

On September 24, 2025, Barclays Capital Inc. ("Barclays") rendered its oral opinion (which was subsequently confirmed in writing) to the Fortegra Board that, as of the date of its written opinion and based upon and subject to the qualifications, limitations, assumptions and other matters stated in its opinion, the aggregate consideration of $1.65 billion in cash in the Merger is fair, from a financial point of view, to holders of Fortegra common stock. Changes in the operations and prospects of Fortegra, including financial forecasts relating to Fortegra, general market and economic conditions and other factors, many of which may be beyond Tiptree’s control, and on which the opinion of Barclays was based, may alter Fortegra’s value and affect the conclusions reached in the opinion. Fortegra has not obtained, and does not expect to request, an updated opinion from Barclays. Barclays’ opinion does not speak to the time when the Merger will be completed or to any date other than the date of such opinion. As a result, the opinion does not and will not address the fairness, from a financial point of view, of the consideration to be received by holders of Fortegra common stock in connection with the Merger at the time the Merger is completed or at any time other than the time the opinion was rendered.

Securities class action and derivative lawsuits may be brought against Tiptree in connection with the Merger, which could result in substantial costs and may delay or prevent the Merger from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or other business combination agreements that could prevent or delay the completion of the Merger and result in significant costs to Tiptree, including any costs associated with the indemnification of directors and officers. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Tiptree’s liquidity and financial condition.

Lawsuits that may be brought against Tiptree or Tiptree’s directors could also seek, among other things, injunctive relief or other equitable relief, including a request to enjoin Tiptree from consummating the Merger. It is a condition to the completion of the

Merger that no temporary restraining order, preliminary or permanent injunction or other judgment or order, injunction, ruling, decision, assessment, award, administrative order, judicial decision or decree entered or issued by, or in agreement with, any governmental authority to which Fortegra or any of its Subsidiaries is a party or to which it is subject, issued by a court of competent jurisdiction that prevents the consummation of the transactions contemplated by the Merger Agreement has been issued and remains in effect, and no statute, rule, regulation or other law has been enacted, enforced or promulgated by any governmental authority which would restrain, enjoin or otherwise prohibit the consummation of the transactions contemplated by the Merger Agreement Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, that injunction may delay or prevent the Merger from being completed within the expected timeframe or at all, which may adversely affect Tiptree’s business, financial position and results of operation.