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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly period ended
September 30,
2025
OR
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission File Number:
001-33549
Tiptree Inc.
(Exact name of Registrant as Specified in Its Charter)
Maryland
38-3754322
( State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
660 Steamboat Road
,
2nd Floor
Greenwich
,
Connecticut
06830
(Address of principal executive offices)
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (
212
)
446-1400
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common stock, par value $0.001 per share
TIPT
The Nasdaq Stock Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated filer
☐
Accelerated filer
☒
Non-Accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes
☐
No
☒
As of October 28, 2025
, there were
37,823,734
shares, par value $0.001, of the registrant’s common stock outstanding.
Except for the historical information included and incorporated by reference in this Quarterly Report on Form 10-Q, the information included and incorporated by reference herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations, our strategic plans and objectives, government legislation and the Merger. When we use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions, we intend to identify forward-looking statements.
Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, in this Quarterly Report on Form 10-Q and in our other public filings with the SEC.
The factors described herein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the applicable law, we undertake no obligation to update any forward-looking statements.
Among various events, risks, uncertainties or factors that could cause actual results to differ materially is the proposed Merger and the failure to consummate the Merger in a timely manner or at all; potential litigation relating to the proposed Merger, disruptions from the proposed Merger that may harm Tiptree's business, including current plans and operations and potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed Merger. See "Risk Factors" beginning on Part II. Item 1A for additional risk factors related to the Merger.
Market and Industry Data
Certain market data and industry data included in this Quarterly Report on Form 10-Q were obtained from reports of governmental agencies and industry publications and surveys. We believe the data from third-party sources to be reliable based upon our management’s knowledge of the industry, but have not independently verified such data and as such, make no guarantees as to its accuracy, completeness or timeliness.
Note to Reader
In reading this Quarterly Report on Form 10-Q, references to:
“2017 Notes” means our insurance subsidiaries’ 8.50% Fixed Rate Resetting Junior Subordinated Notes due in October 2057.
“2024 Notes” means our insurance subsidiaries’ 9.25% Fixed Rate Resetting Junior Subordinated Notes due in November 2064.
“A.M. Best” means A.M. Best Company, Inc.
“E&S” means excess and surplus.
“EBITDA” means earnings before interest, taxes, depreciation and amortization.
“EBITDAR” means earnings before interest, taxes, depreciation and amortization, and restructuring or rent costs.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fannie Mae” means Federal National Mortgage Association.
“Fortegra” or “The Fortegra Group” means The Fortegra Group, Inc. and its subsidiaries.
“Fortegra Additional Warrants” means the additional warrants issued to Warburg and Tiptree Holdings to acquire Fortegra Common Stock.
“Fortegra Additional Warrants (Warburg)” means the Fortegra Additional Warrants issued to Warburg.
“Fortegra Common Stock” means the common stock of Fortegra.
“Fortegra Plan” means the 2022 Equity Incentive Plan of Fortegra.
“Fortegra Preferred Stock” means the 5,333,333 shares of Series A Preferred Stock of Fortegra issued to Warburg.
“Fortegra Warrants” means the warrants to purchase shares of Fortegra Common Stock.
“Fortress” means Fortress Credit Corp., as administrative agent, collateral agent and lead arranger, and affiliates of Fortress that are lenders under the Credit Agreement among the Company, Fortress and the lenders party thereto.
“Freddie Mac” means Federal Home Loan Mortgage Corporation.
“GAAP” means U.S. generally accepted accounting principles.
“Ginnie Mae” means Government National Mortgage Association.
“Merger” means the series of transactions pursuant to the Merger Agreement whereby Purchaser will acquire Fortegra for a purchase price of $1.65 billion in cash (subject to certain adjustments set forth in the Merger Agreement) and Merger Sub will merge with and into Fortegra, with Fortegra being the surviving corporation, and as a result of which Purchaser shall be the sole stockholder of Fortegra.
“Merger Agreement” means that certain Agreement and Plan of Merger, dated September 26, 2025, by and among Tiptree, Fortegra, DB Insurance Co., Ltd. (“Purchaser”) and a subsidiary of Purchaser (“Merger Sub”) to be incorporated in Delaware following the date of the Merger Agreement and prior to the closing of the Merger.
“NAIC” means the National Association of Insurance Commissioners.
“Reliance” means Reliance First Capital, LLC.
“Securities Act” means the Securities Act of 1933, as amended.
“SOFR” means the Secured Overnight Financing Rate.
“Tiptree”, the “Company”, “we”, “its”, “us” and “our” means, unless otherwise indicated by the context, Tiptree Inc. and its consolidated subsidiaries.
“Tiptree Advisors” means collectively: Tiptree Advisors Holdings, L.P., Tiptree Advisors, LLC, Tiptree GP Holdings, LLC and Tiptree Holdings GP, LLC.
“Tiptree Holdings” means Tiptree Holdings LLC.
“Transition Services Agreement” means the Amended and Restated Transition Services Agreement between Tiptree Advisors and Tiptree Inc., effective as of January 1, 2019.
“Warburg” means WP Falcon Aggregator, L.P., a Delaware limited partnership affiliated with funds advised or managed by Warburg Pincus LLC.
“WP Transaction” means the $200 million strategic investment in Fortegra by Warburg.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
(1) Organization
Tiptree Inc. (together with its consolidated subsidiaries, collectively, T
iptree, the Company, or we) is a Maryland Corporation that was incorporated on March 19, 2007. Tiptree’s common stock trades on the Nasdaq Capital Market under the symbol “TIPT.” Tiptree is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. We classify our business into
two
reportable segments: Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable segments and other business activities, as Tiptree Capital.
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. See Note (15) Stockholders' Equity for additional information.
On September 26, 2025, Tiptree entered into an Agreement and Plan of Merger (the “
Merger Agreement
”) with DB Insurance Co., Ltd., incorporated and existing under the laws of the Republic of Korea (“
Purchaser
”), and Fortegra, a Delaware corporation and subsidiary of Tiptree. A subsidiary of Purchaser (“
Merger Sub
”) to be incorporated in Delaware following the date of the Merger Agreement and prior to the closing of the merger (the “
Closing
”) will, upon its formation, execute a joinder to the Merger Agreement and thereby become a party thereto.
Pursuant to the Merger Agreement, Purchaser will acquire Fortegra for a purchase price of $
1.65
billion in cash (subject to certain adjustments set forth in the Merger Agreement) and Merger Sub will merge with and into Fortegra, with Fortegra being the surviving corporation (the “
Merger
”), and as a result of which Purchaser shall be the sole stockholder of Fortegra. The purchase price will be reduced by certain categories of payments made by Fortegra after June 30, 2025 and at or prior to the Closing (“
Leakage
”), except for certain categories of agreed permitted Leakage (“
Permitted Leakage
”). Leakage includes payments for, among other categories, specified transaction expenses, certain dividends or distributions to related parties, payments to related parties for equity or securities redemptions, returns of capital, and other specified categories of payments or liabilities. Permitted Leakage includes payments reserved for in the financial statements of Fortegra, requested or consented to by Purchaser, and other specified categories of payments or liabilities. Purchaser’s recovery for Leakage that is not adjusted for at the Closing is limited to a leakage reserve holdback account. If the Closing has not occurred on or before June 1, 2026, the $
1.65
billion purchase price will be increased by a profit sharing fee which shall accrue on such price from June 1, 2026 through the Closing at a rate of
10
% per annum.
The Merger Agreement contains customary representations and warranties made by each of the parties. The parties have also agreed to various covenants in the Merger Agreement, including agreements by Fortegra to conduct its business in the ordinary course of business in all material respects and in compliance with applicable law and to use commercially reasonable efforts to maintain and preserve substantially intact its present business organization and significant business relationships and goodwill.
Tiptree is also subject to customary “no-shop” restrictions on its ability to solicit acquisition proposals from third parties (including acquisition proposals relating to the sale of all or a significant portion of Fortegra or its assets) and to provide information to, and participate in discussions and engage in negotiations with, third parties regarding any acquisition proposals. Tiptree may, under certain specified circumstances, provide information to, and participate in discussions and engage in negotiations with, third parties with respect to an acquisition proposal if the board of directors of Tiptree has determined in good faith (after consultation with its outside legal counsel and financial advisors) that such alternative acquisition proposal constitutes or would reasonably be expected to lead to or result in a Superior Proposal (as defined in the Merger Agreement). 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, 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
$
49,500
.
The Merger Agreement also provides that Tiptree will call a special stockholder meeting and take customary steps, including mailing a proxy statement to Tiptree’s stockholders, in order to obtain stockholder approval of the Merger.
The Merger is anticipated to close in mid-2026. The Closing is subject to certain conditions, including (i) Tiptree stockholder approval, (ii) Fortegra stockholder approval, (iii) regulatory approval, including certain Form A filings and other insurance regulatory approvals in certain foreign jurisdictions, clearance by the Committee on Foreign Investment in the United States and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iv) the continued accuracy of the representations and warranties of the parties (subject to specified materiality standards), (v) performance of each party’s obligations under the Merger Agreement in all material respects and (vi) the absence of a material adverse effect with respect to Fortegra.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
(2) Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements of Tiptree have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and include the accounts of the Company and its subsidiaries. The condensed consolidated financial statements are presented in U.S. dollars, the main operating currency of the Company. The unaudited condensed consolidated financial statements presented herein should be read in conjunction with the annual audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. In the opinion of management, the accompanying unaudited interim financial information reflects all adjustments, including normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations, comprehensive income and cash flows for each of the interim periods presented. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending on December 31, 2025.
Non-controlling interests (NCI) on the condensed consolidated balance sheets represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than Tiptree. Accounts and transactions between consolidated entities have been eliminated.
Recent Accounting Standards
Recently Adopted Accounting Pronouncements
During the
nine months ended September 30, 2025, there were no accounting standards adopted by the Company.
Recently Issued Accounting Pronouncements, Not Yet Adopted
Accounting
Standard Update
Description
Adoption Date
Impact on Financial Statements
2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures
The amendments in this update enhance the transparency and decision usefulness of income tax disclosures. Investors, lenders, creditors, and other allocators of capital (collectively, “investors”) indicated that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1) understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows.
The amendments in this update are effective for annual periods beginning after December 15, 2024.
The Company expects to adopt this guidance when required, which will enhance our income tax disclosures.
2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity:
1. Disclose the amounts of relevant expense and within which expense caption the relevant expense is presented on the face of the income statement within continuing operations.
2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements.
3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.
4. Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.
The amendments in this update are effective for annual reporting periods beginning after December 15, 2026.
The Company expects to adopt this guidance when required, with minimal impact to our financials and disclosures.
The amendments in this update provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.
The amendments in this update are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within
The Company expects to adopt this guidance when required, with minimal impact to our financials and disclosures.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
those annual reporting periods.
2025-06, Intangibles Goodwill and Other Internal-Use Software (Subtopic 350-40)
The amendments in this update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”).
The amendments in this update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods.
The Company expects to adopt this guidance when required, with minimal impact to our financials and disclosures.
(3)
Operating Segment Data
Tiptree is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Tiptree’s principal operating subsidiary, Fortegra, is a provider of specialty insurance, service contract products and related service solutions. Based on the quantitative analysis performed related to Accounting Standard Codification (ASC) 280, Segment Reporting, our reportable segments are Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, comprised of our Mortgage reportable segment and our non-reportable operating segments and other business activities, as Tiptree Capital. Corporate activities include holding company interest expense, employee compensation and benefits, and other expenses.
For the nine months ended September 30, 2025 and 2024, the Chief Operating Decision Maker (CODM) was the Executive Committee of the Company, comprised of the Executive Chairman and Chief Executive Officer. The CODM uses Income (loss) before taxes and other information provided in tables below to allocate resources and assess performance. Our reportable segments’ income or loss is reported before income taxes and non-controlling interests. Segment results incorporate the revenues and expenses of these subsidiaries since they commenced operations or were acquired. Intercompany transactions are eliminated.
Descriptions of our Insurance reportable segment and Tiptree Capital, including our Mortgage reportable segment, are as follows:
Insurance
operations are conducted through Fortegra, which is a leading provider of specialty insurance products and related services. Fortegra designs, markets and underwrites specialty property and casualty insurance products incorporating value-added coverages and services for select target markets or niches. Fortegra’s products and services include niche commercial and personal lines, service contracts, and other insurance services.
Tiptree Capital:
Mortgage
operations are conducted through Reliance. The Company’s mortgage business originates loans for sale to institutional investors, including GSEs and FHA/VA and services loans on behalf of Fannie Mae, Freddie Mac, and Ginnie Mae.
Other
includes our asset manager, Tiptree Advisors, other investments, and our maritime shipping operations for prior year periods.
The tables below present the components of total assets, revenue, expense and income (loss) before taxes for our reportable segments and other business activities for the following periods:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The Company conducts its operations primarily in the U.S. with
5.6
%
and
4.4
%
of total revenues generated overseas for the three months ended September 30, 2025 and 2024
, respectively, and
5.0
%
and
4.6
%
of total revenues generated overseas for the nine months ended September 30, 2025 and 2024
, respectively.
(4) Investments
The following table presents the Company’s investments related to insurance operations and other Tiptree investing activities, measured at fair value as of the following periods:
As of September 30, 2025
Tiptree Capital
Insurance
Mortgage
Other
Total
Available for sale securities, at fair value, net of allowance for credit losses
$
1,265,621
$
—
$
39,782
$
1,305,403
Loans, at fair value
8,209
82,213
—
90,422
Equity securities
165,965
—
5,708
171,673
Other investments
49,454
3,586
461
53,501
Total investments
$
1,489,249
$
85,799
$
45,951
$
1,620,999
As of December 31, 2024
Tiptree Capital
Insurance
Mortgage
Other
Total
Available for sale securities, at fair value, net of allowance for credit losses
$
1,097,057
$
—
$
10,872
$
1,107,929
Loans, at fair value
10,272
71,058
—
81,330
Equity securities
104,468
—
4,152
108,620
Other investments
49,983
3,101
—
53,084
Total investments
$
1,261,780
$
74,159
$
15,024
$
1,350,963
Available for Sale Securities, at fair value
A majority of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of
September 30, 2025 and December 31, 2024 are held by subsidiaries in the insurance segment. The following tables present the Company’s investments in AFS securities:
As of September 30, 2025
Amortized cost
Allowance for credit losses
(1)
Gross
unrealized gains
Gross
unrealized losses
Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
329,195
$
—
$
874
$
(
21,222
)
$
308,847
Obligations of state and political subdivisions
17,481
(
1
)
33
(
1,833
)
15,680
Corporate securities
818,685
(
713
)
10,230
(
1,731
)
826,471
Asset backed securities
91,956
(
74
)
215
(
1,338
)
90,759
Certificates of deposit
1,151
—
—
—
1,151
Obligations of foreign governments
62,092
—
529
(
126
)
62,495
Total
$
1,320,560
$
(
788
)
$
11,881
$
(
26,250
)
$
1,305,403
As of December 31, 2024
Amortized cost
Allowance for credit losses
(1)
Gross
unrealized gains
Gross
unrealized losses
Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
426,002
$
—
$
611
$
(
30,970
)
$
395,643
Obligations of state and political subdivisions
41,593
(
1
)
—
(
2,917
)
38,675
Corporate securities
605,517
(
3,157
)
3,177
(
7,403
)
598,134
Asset backed securities
25,455
(
68
)
4
(
2,531
)
22,860
Certificates of deposit
1,145
—
—
—
1,145
Obligations of foreign governments
51,857
(
1
)
—
(
384
)
51,472
Total
$
1,151,569
$
(
3,227
)
$
3,792
$
(
44,205
)
$
1,107,929
(1)
Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in net realized and unrealized gains (losses) as a credit loss on AFS securities. Amount excludes unrealized losses relating to non-credit factors.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The amortized cost and fair values of AFS securities, by contractual maturity date, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
As of
September 30, 2025
December 31, 2024
Amortized cost
Fair value
Amortized cost
Fair value
Due in one year or less
$
187,121
$
188,158
$
250,036
$
249,392
Due after one year through five years
532,945
535,899
438,322
430,597
Due after five years through ten years
306,925
308,184
223,969
201,948
Due after ten years
201,613
182,403
213,787
203,132
Asset backed securities
91,956
90,759
25,455
22,860
Total
$
1,320,560
$
1,305,403
$
1,151,569
$
1,107,929
The following tables present the gross unrealized losses on AFS securities by length of time that individual AFS securities have been in a continuous unrealized loss position for less than twelve months, and twelve months or greater and do not have an allowance for credit losses:
As of September 30, 2025
Less Than or Equal to One Year
More Than One Year
Fair value
Gross
unrealized losses
# of Securities
(1)
Fair value
Gross unrealized losses
# of Securities
(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
37,639
$
(
277
)
43
$
171,813
$
(
20,945
)
469
Obligations of state and political subdivisions
—
—
—
14,326
(
1,833
)
30
Corporate securities
226,482
(
902
)
365
18,524
(
829
)
51
Asset backed securities
47,205
(
153
)
113
11,394
(
1,185
)
92
Obligations of foreign governments
17,328
(
57
)
2
1,314
(
69
)
5
Total
$
328,654
$
(
1,389
)
523
$
217,371
$
(
24,861
)
647
As of December 31, 2024
Less Than or Equal to One Year
More Than One Year
Fair value
Gross
unrealized losses
# of Securities
(1)
Fair value
Gross unrealized losses
# of Securities
(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
118,269
$
(
4,359
)
612
$
176,083
$
(
26,611
)
570
Obligations of state and political subdivisions
5,856
(
77
)
147
31,769
(
2,840
)
96
Corporate securities
293,224
(
2,156
)
958
103,002
(
5,247
)
385
Asset backed securities
—
—
—
21,756
(
2,531
)
130
Obligations of foreign governments
48,346
(
266
)
15
1,273
(
118
)
6
Total
$
465,695
$
(
6,858
)
1,732
$
333,883
$
(
37,347
)
1,187
(1)
Presented in whole numbers.
Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities that were in an unrealized loss position as of September 30, 2025 until full recovery of their amortized cost basis.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The table below presents a roll-forward of the activity in the allowance for credit losses on AFS securities by type for the following periods:
Obligations of state and political subdivisions
Corporate securities
Asset backed securities
Obligations of foreign governments
Total
Balance at December 31, 2023
$
(
1
)
$
(
73
)
$
(
10
)
$
—
$
(
84
)
(Increase) in allowance for credit losses
—
(
47
)
(
122
)
—
(
169
)
Additions for AFS securities purchased with credit deterioration during the year
—
(
380
)
—
—
(
380
)
Reduction in credit losses due to AFS securities sold during the year
—
2
—
—
2
Gains from recoveries of amounts previously written off
—
20
1
—
21
Balance at September 30, 2024
$
(
1
)
$
(
478
)
$
(
131
)
$
—
$
(
610
)
Balance at December 31, 2024
$
(
1
)
$
(
3,157
)
$
(
68
)
$
(
1
)
$
(
3,227
)
(Increase) in allowance for credit losses
—
(
87
)
—
—
(
87
)
Additions for AFS securities purchased with credit deterioration during the year
—
(
315
)
(
67
)
—
(
382
)
Reduction in credit losses due to AFS securities sold during the year
—
581
54
1
636
Gains from recoveries of amounts previously written off
—
2,265
7
—
2,272
Balance at September 30, 2025
$
(
1
)
$
(
713
)
$
(
74
)
$
—
$
(
788
)
The Company applies a discounted cash flow model, based on assumptions and model outputs provided by an investment management company, in determining its lifetime expected credit losses on AFS securities. This includes determining the present value of expected future cash flows discounted at the book yield of the security.
The table below presents the amount of gains from recoveries (credit losses, including Current Expected Credit Losses (CECL)) on AFS securities recorded by the Company for the following period:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Net gains from recoveries (credit losses) on AFS securities
$
(
64
)
$
316
$
2,439
$
(
526
)
Pursuant to certain statutory licensing requirements, the Company has deposited
$
18,682
of invested assets in insurance department safekeeping accounts as of September 30, 2025
. The Company also has deposited invested assets in custody accounts pursuant to certain reinsurance agreements. The Company cannot remove or replace investments in such safekeeping and custody accounts without prior approval of the regulatory authority or contractual party, as applicable.
The following table presents the Company’s restricted investments included in the Company’s AFS securities:
As of
September 30,
2025
December 31,
2024
Fair value of restricted investments
$
34,634
$
45,483
The following table presents additional information on the Company’s AFS securities for the following periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Purchases of AFS securities
$
472,080
$
182,430
$
759,584
$
471,202
Proceeds from maturities, calls and prepayments of AFS securities
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The following table presents the gross realized gains and gross realized losses from sales and redemptions of AFS securities:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Gross realized gains
$
1,978
$
220
$
4,221
$
360
Gross realized (losses)
(
1,913
)
(
277
)
(
4,744
)
(
510
)
Total net realized gains (losses) from investment sales and redemptions
$
65
$
(
57
)
$
(
523
)
$
(
150
)
Loans, at fair value
The following table presents the Company’s investments in loans measured at fair value and the Company’s investments in loans measured at fair value pledged as collateral:
As of September 30, 2025
As of December 31, 2024
Fair value
Unpaid principal balance (UPB)
Fair value exceeds / (below) UPB
Pledged as collateral
Fair value
Unpaid principal balance (UPB)
Fair value exceeds / (below) UPB
Pledged as collateral
Insurance:
Corporate loans
(1)
$
8,209
$
12,927
$
(
4,718
)
$
—
$
10,272
$
12,927
$
(
2,655
)
$
—
Mortgage:
Mortgage loans held for sale
(2)
82,213
79,906
2,307
81,930
71,058
70,074
984
70,361
Total loans, at fair value
$
90,422
$
92,833
$
(
2,411
)
$
81,930
$
81,330
$
83,001
$
(
1,671
)
$
70,361
(1)
The cost basis of Corporate loans was approximately
$
12,927
at September 30, 2025 and December 31, 2024.
(2)
As of September 30, 2025, there wa
s
one
mortgage loan held for sale that was 90 days or more past due. As of December 31, 2024
, there were
three
mortgage loans held for sale that were 90 days or more past due.
Equity Securities
Equity securities consist mainly of publicly traded common and preferred stocks and exchange traded funds.
The following table presents information on the cost and fair value of the Company’s equity securities related to Insurance and Tiptree Capital as of the following periods:
As of September 30, 2025
Insurance
Tiptree Capital - Other
Total
Cost
Fair Value
Cost
Fair Value
Cost
Fair Value
Exchange traded funds
$
40
$
42
$
—
$
—
$
40
$
42
Other equity securities
145,729
165,923
7,464
5,708
153,193
171,631
Total equity securities
$
145,769
$
165,965
$
7,464
$
5,708
$
153,233
$
171,673
As of December 31, 2024
Insurance
Tiptree Capital - Other
Total
Cost
Fair Value
Cost
Fair Value
Cost
Fair Value
Exchange traded funds
$
4,997
$
5,075
$
—
$
—
$
4,997
$
5,075
Other equity securities
100,738
99,393
4,967
4,152
105,705
103,545
Total equity securities
$
105,735
$
104,468
$
4,967
$
4,152
$
110,702
$
108,620
Other Investments
The following table contains information regarding the Company’s other investments, measured at fair value, as of the following periods:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
As of December 31, 2024
Tiptree Capital
Insurance
Mortgage
Other
Total
Corporate bonds
(1)
$
3,331
$
—
$
—
$
3,331
Debentures
25,320
—
—
25,320
Investment in credit fund
21,332
—
—
21,332
Other
—
3,101
—
3,101
Total other investments
$
49,983
$
3,101
$
—
$
53,084
(1)
As of September 30, 2025
, there were
no
corporate
bonds
held. The cost basis of corporate bonds was
$
3,139
as of December 31, 2024
.
Net Investment Income - Insurance
Net investment income represents investment income and expense from investments related to insurance operations as disclosed within net investment income on the condensed consolidated statements of operations.
The following table presents the components of net investment income by source of income:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Interest:
AFS securities
$
11,819
$
8,431
$
35,634
$
21,894
Loans, at fair value
16
22
47
77
Other investments
1,167
2,035
3,329
5,157
Dividends from equity securities
2,609
412
3,338
684
Subtotal
15,611
10,900
42,348
27,812
Less: investment expenses
8,214
1,789
12,717
5,562
Net investment income
$
7,397
$
9,111
$
29,631
$
22,250
Other Investment Income - Tiptree Capital
Other investment income represents revenue from non-insurance activities as disclosed within other revenue on the condensed consolidated statements of operations, see Note (14) Other Revenue and Other Expenses.
The following tables present the components of other investment income by type:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
Net Realized and Unrealized Gains (Losses)
The following table presents the components of net realized and unrealized gains (losses) recorded on the condensed consolidated statements of operations. Net unrealized gains (losses) on AFS securities are included within other comprehensive income (loss) (OCI), net of tax, and, as such, are not included in this table. Net realized and unrealized gains (losses) on non-investment related financial assets and liabilities are included below:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Net realized gains (losses)
Insurance:
Reclass of unrealized gains (losses) on AFS securities from OCI
$
65
$
(
58
)
$
(
523
)
$
(
151
)
Net realized gains (losses) on loans
—
—
—
58
Net realized gains (losses) on equity securities
(1)
12,152
20
11,251
(
22,023
)
Net realized gains (losses) on corporate bonds
(
20
)
70
(
20
)
2,870
Other
—
89
73
(
872
)
Tiptree Capital
Mortgage:
Net realized gains (losses) on loans
13,083
13,553
35,581
35,305
Other
(
1,513
)
(
1,048
)
(
1,794
)
(
1,294
)
Other:
Net realized gains on vessel sales
—
—
50
—
Net realized gains (losses) on equity securities
(1)
—
—
—
(
98,529
)
Total net realized gains (losses)
$
23,767
$
12,626
$
44,618
$
(
84,636
)
Net unrealized gains (losses)
Insurance:
Net change in unrealized gains (losses) on loans
$
(
150
)
$
(
123
)
$
(
2,063
)
$
(
247
)
Net gains from recoveries (credit losses) on AFS securities
(
64
)
316
2,439
(
526
)
Net unrealized gains (losses) on equity securities held at period end
17,781
1,287
16,996
7,436
Reclass of unrealized (gains) losses from prior periods for equity securities sold
(1)
(
5,548
)
—
4,462
22,567
Other
545
617
695
(
1,530
)
Tiptree Capital
Mortgage:
Net change in unrealized gains (losses) on loans
361
332
1,324
(
103
)
Other
(
2,088
)
(
3,975
)
(
5,626
)
(
4,246
)
Other:
Net unrealized gains (losses) on equity securities held at period end
274
(
965
)
(
942
)
(
687
)
Reclass of unrealized (gains) losses from prior periods for equity securities sold
(1)
—
—
—
100,289
Other
1
(
1,799
)
451
(
1,799
)
Total net unrealized gains (losses)
11,112
(
4,310
)
17,736
121,154
Total net realized and unrealized gains (losses)
$
34,879
$
8,316
$
62,354
$
36,518
(1)
On April 15, 2024, the Company sold its
16.98
million shares of Invesque for $
625
of proceeds resulting in a realized loss of $
134,204
.
(5) Notes and Accounts Receivable, net
The following table presents the total notes and accounts receivable, net:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The following table presents the components of policy and contract benefits, including the effect of reinsurance on losses and loss adjustment expenses (LAE) incurred:
Direct
Amount
Ceded to
Other
Companies
Assumed from
Other
Companies
Net Amount
Percentage of
Amount -
Assumed to
Net
Three Months Ended September 30, 2025
Losses and LAE Incurred
Life insurance
$
10,368
$
6,060
$
(
3
)
$
4,305
(
0.1
)%
Accident and health insurance
6,688
5,110
18
1,596
1.1
%
Property and liability insurance
278,628
173,796
81,669
186,501
43.8
%
Total losses and LAE incurred
$
295,684
$
184,966
$
81,684
$
192,402
42.5
%
Member benefit claims
(1)
24,928
Total policy and contract benefits
$
217,330
Three Months Ended September 30, 2024
Losses and LAE Incurred
Life insurance
$
10,251
$
6,078
$
5
$
4,178
0.1
%
Accident and health insurance
6,463
5,060
550
1,953
28.2
%
Property and liability insurance
218,525
134,038
85,314
169,801
50.2
%
Total losses and LAE incurred
$
235,239
$
145,176
$
85,869
$
175,932
48.8
%
Member benefit claims
(1)
27,510
Total policy and contract benefits
$
203,442
Nine Months Ended September 30, 2025
Losses and LAE Incurred
Life insurance
$
30,121
$
17,960
$
(
1
)
$
12,160
(
0.0
)%
Accident and health insurance
16,497
12,891
6,434
10,040
64.1
%
Property and liability insurance
791,494
527,354
283,781
547,921
51.8
%
Total losses and LAE incurred
$
838,112
$
558,205
$
290,214
$
570,121
50.9
%
Member benefit claims
(1)
82,994
Total policy and contract benefits
$
653,115
Nine Months Ended September 30, 2024
Losses and LAE Incurred
Life insurance
$
32,746
$
18,308
$
(
16
)
$
14,422
(
0.1
)%
Accident and health insurance
17,355
12,027
11,035
16,363
67.4
%
Property and liability insurance
648,751
376,720
253,755
525,786
48.3
%
Total losses and LAE incurred
$
698,852
$
407,055
$
264,774
$
556,571
47.6
%
Member benefit claims
(1)
88,510
Total policy and contract benefits
$
645,081
(1)
Member benefit claims are not covered by reinsurance.
The following table presents the components of the reinsurance recoverable:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The following table presents the components of prepaid reinsurance premiums:
As of
September 30,
2025
December 31,
2024
Prepaid reinsurance premiums:
Life insurance
(1)
$
74,864
$
71,427
Accident and health insurance
(1)
70,878
72,840
Property and liability insurance
955,223
901,986
Total prepaid reinsurance premiums
$
1,100,965
$
1,046,253
(1)
Including policyholder account balances ceded.
The following table presents the aggregate amount included in reinsurance receivables that is comprised of the three largest receivable balances from non-affiliated reinsurers:
As of
September 30,
2025
Total of the three largest receivable balances from non-affiliated reinsurers
$
340,084
As of September 30, 2025, the non-affiliated reinsurers from whom our insurance business has the largest receivable balances were: Accident Fund Insurance Company of America (AM Best Rating: A rated), Allianz Reinsurance America, Inc. (AM Best Rating: A+ rated), and Ferian Re, LTD (AM Best Rating: Not Rated). Receivable balances from authorized reinsurers, such as the Allianz companies noted above, do not require collateral based on the authorized status of the parties. Receivable balances from unauthorized reinsurers are collateralized by assets on hand, assets held in trust accounts, and/or letters of credit. The Company monitors collateral values, authorization status, financial statements and A.M. Best ratings of its reinsurers periodically. As of September 30, 2025
, the Company does not believe there is a risk of loss due to the concentration of credit risk in the reinsurance program given the related collateralization or reinsurer A.M. Best rating.
(7) Goodwill and Intangible Assets, net
The following table presents identifiable finite and indefinite-lived intangible assets, accumulated amortization, and goodwill by operating segment and/or reporting unit, as appropriate:
As of September 30, 2025
As of December 31, 2024
Insurance
Other
Total
Insurance
Other
Total
Finite-Lived Intangible Assets:
Customer relationships
$
164,034
$
—
$
164,034
$
162,520
$
—
$
162,520
Accumulated amortization
(
96,211
)
—
(
96,211
)
(
87,610
)
—
(
87,610
)
Trade names
16,317
800
17,117
16,202
800
17,002
Accumulated amortization
(
10,785
)
(
800
)
(
11,585
)
(
9,869
)
(
760
)
(
10,629
)
Software licensing
17,864
640
18,504
17,238
640
17,878
Accumulated amortization
(
11,394
)
(
640
)
(
12,034
)
(
10,705
)
(
640
)
(
11,345
)
Insurance policies and contracts acquired
36,500
—
36,500
36,500
—
36,500
Accumulated amortization
(
36,500
)
—
(
36,500
)
(
36,500
)
—
(
36,500
)
Other
1,115
—
1,115
1,081
—
1,081
Accumulated amortization
(
1,029
)
—
(
1,029
)
(
799
)
—
(
799
)
Total finite-lived intangible assets
79,911
—
79,911
88,058
40
88,098
Indefinite-Lived Intangible Assets:
(1)
Insurance licensing agreements
13,761
—
13,761
13,761
—
13,761
Other
—
—
—
—
1,000
1,000
Total indefinite-lived intangible assets
13,761
—
13,761
13,761
1,000
14,761
Total intangible assets, net
$
93,672
$
—
$
93,672
$
101,819
$
1,040
$
102,859
Goodwill
206,094
1,708
207,802
204,998
1,708
206,706
Total goodwill and intangible assets, net
$
299,766
$
1,708
$
301,474
$
306,817
$
2,748
$
309,565
(1)
Impairment tests are performed at least annually on indefinite-lived intangible assets
.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
Goodwill
The following table presents the activity in goodwill, by operating segment and/or reporting unit, as appropriate, and includes the adjustments made to the balance of goodwill to reflect the effect of the final valuation adjustments made for acquisitions, as well as the reduction to any goodwill attributable to impairment related charges:
Insurance
Other
Total
Balance at December 31, 2024
$
204,998
$
1,708
$
206,706
Foreign currency translation and other
1,096
—
1,096
Balance at September 30, 2025
$
206,094
$
1,708
$
207,802
The Company conducts annual impairment tests of its goodwill as of October 1. For the three and nine months ended September 30, 2025 and 2024,
no
impairments were recorded on the Company’s goodwill.
Intangible Assets, net
The following table presents the activity, by operating segment and/or reporting unit, as appropriate, in finite and indefinite-lived other intangible assets and includes the adjustments made to the balance to reflect the effect of any final valuation adjustments made for acquisitions, as well as any reduction attributable to impairment-related charges:
Insurance
Other
Total
Balance at December 31, 2024
$
101,819
$
1,040
$
102,859
Amortization expense
(
10,047
)
(
40
)
(
10,087
)
Foreign currency translation and other
1,900
—
1,900
Disposal of intangible assets
—
(
1,000
)
(
1,000
)
Balance at September 30, 2025
$
93,672
$
—
$
93,672
The following table presents the amortization expense on finite-lived intangible assets for the following periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Amortization expense on intangible assets
$
3,362
$
3,879
$
10,087
$
11,617
For the nine months ended September 30, 2025 and 2024
,
no
impairments were recorded on the Company’s intangible assets.
The following table presents the amortization expense on finite-lived intangible assets for the next five years and thereafter by operating segment and/or reporting unit, as appropriate:
As of September 30, 2025
Insurance
(1)
Total
Remainder of 2025
$
3,273
$
3,273
2026
10,894
10,894
2027
9,543
9,543
2028
8,341
8,341
2029
7,291
7,291
2030 and thereafter
38,811
38,811
Total
$
78,153
$
78,153
(1)
Does not include foreign currency translation adjustment of
$
1,758
as of September 30, 2025
.
(8)
Derivative Financial Instruments and Hedging
The
Company selectively utilizes derivative financial instruments as part of its overall investment and hedging activities. Derivative contracts are subject to additional risk that can result in a loss of all or part of an investment. The Company’s derivative activities are primarily to manage underlying credit risk, market risk, interest rate risk and currency exchange rate risk. In addition, the Company is also subject to counterparty risk should its counterparties fail to meet the contract terms. Derivative assets are reported in other
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
investments.
Derivative liabilities are reported within
other liabilities and accrued expenses
. Derivatives for our mortgage business are primarily comprised of interest rate lock commitments (IRLCs), forward delivery contracts, and TBA mortgage-backed securities.
Interest Rate Lock Commitments
The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position. Our mortgage origination subsidiary issues IRLCs to their customers, which are carried at estimated fair value on the Company’s condensed consolidated balance sheets. The estimated fair values of these commitments are generally calculated by reference to the value of the underlying loan associated with the IRLC net of costs to produce and an expected pull through assumption. The fair values of these commitments generally fall under Level 3 in the fair value hierarchy.
Forward Delivery Contracts and TBA Mortgage-Backed Securities
Our mortgage origination subsidiary manages their exposure by entering into forward delivery commitments with loan investors. For loans not locked with investors under a forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates. The fair values of TBA mortgage-backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.
The remaining derivatives are generally comprised of a combination of swaps, currency forwards and options, which are generally classified as Level 2 in the fair value hierarchy. In addition, the Fortegra Additional Warrant (Warburg) is a derivative liability and classified as Level 3 in the fair value hierarchy. See Note (15) Stockholders' Equity for additional information regarding the Fortegra Additional Warrant.
The following table presents the gross notional and fair value amounts of derivatives (on a gross basis) categorized by underlying risk:
As of September 30, 2025
As of December 31, 2024
Notional
values
Asset
derivatives
Liability
derivatives
Notional
values
Asset
derivatives
Liability
derivatives
Interest rate lock commitments
$
117,415
$
3,189
$
—
$
105,898
$
2,257
$
—
Forward delivery contracts
47,900
149
70
26,090
33
54
TBA mortgage-backed securities
233,050
248
215
133,200
811
115
Fortegra Additional Warrants (Warburg)
(1)
—
—
28,518
—
—
10,958
Total
$
398,365
$
3,586
$
28,803
$
265,188
$
3,101
$
11,127
(1)
See Note (15) Stockholders' Equity for additional information.
(9) Debt, net
The following table presents the balance of the Company’s debt obligations, net of discounts and deferred financing costs for our corporate and asset based debt. Asset based debt is generally recourse only to specific assets and related cash flows.
As of September 30, 2025
Corporate debt
Insurance
Mortgage
Corporate
Total
Secured revolving credit agreements
(1)
$
55,000
$
—
$
—
$
55,000
Secured term credit agreement (SOFR +
5.25
%)
(2)
—
—
74,438
74,438
8.50
% Junior subordinated notes
125,000
—
—
125,000
9.25
% Junior subordinated notes
150,000
—
—
150,000
Total corporate debt
330,000
—
74,438
404,438
Asset based debt
Asset based revolving financing (SOFR +
2.75
%)
41,287
—
—
41,287
Residential mortgage warehouse borrowings (
1.75
% to
3.30
% over SOFR)
(4)(5)
Residential mortgage warehouse borrowings (
1.75
% to
3.30
% over SOFR)
(4)(5)
—
68,394
—
68,394
Total asset based debt
63,699
68,394
—
132,093
Total debt, face value
373,699
68,394
—
442,093
Unamortized deferred financing costs
(
14,957
)
(
47
)
—
(
15,004
)
Total debt, net
$
358,742
$
68,347
$
—
$
427,089
(1)
The secured credit agreements include separate tranches with multiple rate structures that are adjustable based on Fortegra’s senior leverage ratio, which as of September 30, 2025 and December 31, 2024
was SOFR +
1.50
%.
(2)
The $
75,000
Corporate debt is a secured term credit agreement at
5.25
% over the one month SOFR rate, with a floor of
1.00
%.
(3)
Previously based on 3-month LIBOR, moved to SOFR plus the tenor spread adjustment of
0.26
%, in accordance with the Adjustable Interest Rate (LIBOR) Act of 2021.
(4)
As of September 30, 2025
, included (i) a $
50,000
line of credit at
1.75
%,
2.00
% and
2.50
% over the one month SOFR rate, (ii) a $
25,000
line of credit at
1.75
% over the one month SOFR rate, with a floor of
2.75
%, (iii) a $
30,000
line of credit at
1.875
% over the one month SOFR rate and (iv) a $
10,000
line of credit at
3.30
% over the one month SOFR rate. As of
December 31, 2024
, included (i) a $
50,000
line of credit at
1.75
%,
2.00
% and
2.50
% over the one month SOFR rate, and (ii) a $
25,000
line of credit at
1.75
% over the one month SOFR rate, with a floor of
2.75
%. (iii) a $
30,000
line of credit at
1.875
% over the one month SOFR rate and (iv) a $
10,000
line of credit at
3.30
% over the one month SOFR rate.
(5)
The weighted average coupon rate for residential mortgage warehouse borrowings was
6.02
% and
6.25
% at
September 30, 2025 and December 31, 2024
, respectively.
The following table presents the amount of interest expense the Company incurred on its debt for the following periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Interest expense - corporate debt
$
9,334
$
5,602
$
27,518
$
17,491
Interest expense - asset based debt
1,356
2,012
4,394
6,428
Total interest expense on debt
$
10,690
$
7,614
$
31,912
$
23,919
The following table presents the contractual principal payments and future maturities of the unpaid principal balance on the Company’s debt for the following periods:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The following narrative is a summary of certain terms of our debt agreements for the nine months ended September 30, 2025:
Corporate Debt
Secured Revolving Credit Agreements
As of September 30, 2025 and December 31, 2024, a total of
$
55,000
and
$
0
, respectively, was outstanding under the revolving line of credit. The maximum borrowing capacity under the agreements as of September 30, 2025 was
$
200,000
.
Secured Term Credit Agreement
On February 7, 2025, Tiptree Holdings, a subsidiary of Tiptree Inc., entered in
to a $
75,000
senior secured credit facility due February 7, 2028. Interest is paid monthly, at an interest rate of SOFR plus
5.25
%, with quarterly princi
pal payments at an amount equal to
0.25
% of the aggregate original principal.
Preferred Trust Securities
On June 20, 2007, a subsidiary of Fortegra issue
d $
35,000
of preferred trust securities due June 15, 2037. Interest is payable quarterly at an interest rate of SOFR plus
4.10
% plus a spread adjustment (previously, LIBOR plus
4.10
%). The Company redeemed the preferred trust securities, at the full outstanding principal amount, $
35,000
, and unpaid interes
t, $
771
, on March 17, 2025.
Junior Subordinated Notes
On October 16, 2017, a subsidiary of Fortegra issue
d $
125,000
of
8.50
% Fixed Rate Resetting Junior Subordinated Notes due October 2057 (the “2017 Notes”). Substantially all of the net proceeds were used to repay the existing secured credit agreement at that time, which was terminated thereafter. Beginning on October 15, 2027, the Company may redeem the 2017 Notes at par plus accrued and unpaid interest.
On November 7, 2024, Fortegra issued $
150,000
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.
Asset Based Debt
Asset Based Revolving Financing
As of September 30, 2025 and December 31, 2024, a total of
$
41,287
and
$
63,699
, respectively, was outstanding under the borrowing related to our premium finance offerings in our insurance business.
Residential Mortgage Warehouse Borrowings
As of September 30, 2025
, our mortgage business had
three
warehouse lines of credit with
three
separate lending partners totaling
$
105,000
of borrowing capacity. The
$
50,000
line of credit matures in August 2026, the
$
25,000
line of credit matures in June 2026, and the
$
30,000
line of credit matures in February 2026.
As of September 30, 2025 and December 31, 2024, a total of
$
78,377
and
$
68,394
, respectively, was outstanding under such financing agreements.
Mortgage Servicing Rights (MSR) Line of Credit
As of September 30, 2025, our mortgage business had a MSR line of c
redit with borrowing capacity of $
9,205
at
3.30
% over SOFR, with
no
borrowings outstanding at the end of the period.
(10)
Fair Value of Financial Instruments
The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs to the extent possible to measure a financial instrument’s fair value. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability, and are affected by the type of product, whether the product is traded on an active exchange or in the secondary market, as well as current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair value is estimated by applying the hierarchy discussed in Note (2) Summary of Significant Accounting Policies of our Annual Report on Form 10-K which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy.
The Company’s fair value measurements are based primarily on a market approach, which utilizes prices and other relevant information generated by market transactions involving identical or comparable financial instruments. Sources of inputs to the market approach include third-party pricing services, independent broker quotations and pricing matrices. Management analyzes the third-party valuation methodologies and its related inputs to perform assessments to determine the appropriate level within the fair value hierarchy and to assess reliability of values. Further, management has a process in place to review all changes in fair value that occurred during each measurement period. Any discrepancies or unusual observations are followed through to resolution through the source of the pricing as well as utilizing comparisons, if applicable, to alternate pricing sources.
The Company utilizes observable and unobservable inputs within its valuation methodologies. Observable inputs may include: benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. In addition, specific issuer information and other market data is used. Broker quotes are obtained from sources recognized to be market participants. Unobservable inputs may include: expected cash flow streams, default rates, supply and demand considerations and market volatility.
Available for Sale Securities, at fair value
The fair values of AFS securities are based on prices provided by an independent pricing service and a third-party investment manager. The Company obtains an understanding of the methods, models and inputs used by the independent pricing service and the third-party investment manager by analyzing the investment manager-provided pricing report.
The following details the methods and assumptions used to estimate the fair value of each class of AFS securities and the applicable level each security falls within the fair value hierarchy:
U.S. Treasury Securities, Obligations of U.S. Government Authorities and Agencies, Obligations of State and Political Subdivisions, Corporate Securities, Asset Backed Securities, and Obligations of Foreign Governments:
Fair values were obtained from an independent pricing service and a third-party investment manager. The prices provided by the independent pricing service and third-party investment manager are based on quoted market prices, when available, non-binding broker quotes, or matrix pricing and fall under Level 2 or Level 3 in the fair value hierarchy.
Certificates of Deposit:
The estimated fair value of certificates of deposit approximate carrying value and fall under Level 1 of the fair value hierarchy.
Equity Securities
The fair values of publicly traded common and preferred equity securities and exchange traded funds (“ETFs”) are obtained from market value quotations provided by an independent pricing service and fall under Level 1 in the fair value hierarchy. The fair values of non-publicly traded common and preferred stocks are based on prices derived from multiples of comparable public companies and fall under Level 3 in the fair value hierarchy.
Loans, at fair value
Corporate Loans
: These loans are comprised of middle market loans and bank loans and are generally classified under either Level 2 or Level 3 in the fair value hierarchy. To determine fair value, the Company uses quoted prices, including those provided from pricing vendors, which provide coverage of secondary market participants, where available. The values represent a composite of mark-to-market bid/offer prices. In certain circumstances, the Company will make its own determination of fair value of loans based on internal models and other unobservable inputs.
Mortgage Loans Held for Sale
: Mortgage loans held for sale are generally classified under Level 2 in the fair value hierarchy and fair value is based upon forward sales contracts with third-party investors, including estimated loan costs.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
Derivative Assets and Liabilities
Derivatives for our mortgage business are primarily comprised of IRLCs, forward delivery contracts and TBA mortgage-backed securities. The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position. Our mortgage origination subsidiaries issue IRLCs to their customers, which are carried at estimated fair value on the Company’s condensed consolidated balance sheets. The estimated fair values of these commitments are generally calculated by reference to the value of the underlying loan associated with the IRLC net of costs to produce and an expected pull through assumption. The fair values of these commitments generally fall under Level 3 in the fair value hierarchy. Our mortgage origination subsidiaries manage their exposure by entering into forward delivery commitments with loan investors. For loans not locked with investors under a forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates. The fair values of TBA mortgage-backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.
The remaining derivatives are generally comprised of a combination of swaps, currency forwards and options, which are generally classified as Level 2 in the fair value hierarchy. In addition, the Fortegra Additional Warrants (Warburg) are a derivative liability and classified as Level 3 in the fair value hierarchy. See Note (15) Stockholders' Equity for additional information regarding the Fortegra Additional Warrants.
Corporate Bonds
Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is based on quoted market prices. We perform internal price verification procedures to ensure that the prices provided are reasonable.
Securities Sold, Not Yet Purchased
Securities sold, not yet purchased are generally classified under Level 1 or Level 2 in the fair value hierarchy, based on the leveling of the securities sold short, and fair value is provided by a third-party investment manager, based on quoted market prices. We perform internal price verification procedures monthly to ensure that the prices provided are reasonable.
Mortgage Servicing Rights
Mortgage servicing rights are classified under Level 3 in the fair value hierarchy and fair value is provided by a third-party valuation service. Various observable and unobservable inputs are used to determine fair value, including discount rate, cost to service and weighted average prepayment speed.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
Transfers between Level 2 and 3 were a result of subjecting third-party pricing on assets to various liquidity, depth, bid-ask spread and benchmarking criteria as well as assessing the availability of observable inputs affecting their fair valuation.
The following table presents additional information about assets that are measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value for the following periods:
Nine Months Ended
September 30,
2025
2024
Balance at January 1,
$
63,335
$
61,565
Net realized and unrealized gains or losses included in:
Earnings
(
2,651
)
1,333
OCI
—
75
Origination of IRLCs
34,098
31,100
Purchases
5,435
—
Distributions
(
142
)
(
1,910
)
Conversions to mortgage loans held for sale
(
33,166
)
(
31,435
)
Balance at September 30,
$
66,909
$
60,728
Changes in unrealized gains (losses) included in earnings related to assets still held at period end
$
(
2,982
)
$
1,333
Changes in unrealized gains (losses) included in OCI related to assets still held at period end
$
—
$
75
The following table presents the range and weighted average (WA) used to develop significant unobservable inputs for the fair value measurements of Level 3 assets and liabilities:
As of
As of
September 30,
2025
December 31,
2024
September 30,
2025
December 31,
2024
Assets
Fair value
Valuation
technique
Unobservable
input(s)
Range
WA
(1)
Range
WA
(1)
IRLCs
$
3,189
$
2,257
Internal model
Pull through rate
45
%
to
95
%
63
%
45
%
to
95
%
60
%
Mortgage
Discount rate
9
%
to
14
%
10
%
10
%
to
15
%
11
%
servicing
40,597
42,611
External
Cost to service
$
65
to
$
3,000
$
129
$
65
to
$
3,000
$
133
rights
model
Prepayment
speed
3
%
to
82
%
11
%
3
%
to
87
%
9
%
Equity securities
9,298
8,185
Internal model
Forecast EBITDAR
$
1,422,000
to
$
1,604,000
N/A
$
1,422,000
to
$
1,604,000
N/A
Corporate loans
8,209
10,272
External model
Bid marks
$
63
to
$
65
$
64
$
78
to
$
81
$
80
Commercial real
estate loan
5,616
—
Cash Flow
model
Forecast cash
flow
$
20,000
to
$
25,000
$
23,640
$
—
to
$
—
$
—
Total
$
66,909
$
63,325
Liabilities
Equity value
N/A
to
N/A
$
1,623,000
N/A
to
N/A
$
1,172,000
Fortegra Additional
Time until liquidation
N/A
to
N/A
0.6
years
N/A
to
N/A
3.5
years
Warrants (Warburg)
$
28,518
$
10,958
External
Model
Discount rate
3
%
to
5
%
4.2
%
3
%
to
5
%
3.4
%
Implied Equity
Volatility
N/A
to
N/A
N/A
40
%
to
50
%
45
%
Contingent consideration
1,896
1,779
Cash Flow model
Forecast Cash EBITDA
$
2,500
to
$
4,000
N/A
$
2,500
to
$
4,000
N/A
payable
Forecast Underwriting EBITDA
$
—
to
$
2,000
N/A
$
—
to
$
2,000
N/A
Total
$
30,414
$
12,737
(1)
Unobservable inputs were weighted by the relative fair value of the instruments.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The following table presents the carrying amounts and estimated fair values of financial assets and liabilities that are not recorded at fair value and their respective levels within the fair value hierarchy:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
Debentures:
Since
interest rates on debentures are at current market rates for similar credit risks, the carrying amount approximates fair value. These values are net of allowance for doubtful accounts. See Note (4) Investments.
Notes Receivable, net:
To the extent that carrying amounts differ from fair value, fair value is determined based on contractual cash flows discounted at market rates for similar credits. Categorized under Level 2 in the fair value hierarchy. See Note (5) Notes and Accounts Receivable, net.
Debt:
The carrying value, which approximates fair value of floating rate debt, represents the total debt balance at face value excluding the unamortized discount. The fair value of the Junior subordinated notes is determined based on dealer quotes. Categorized under Level 3 in the fair value hierarchy.
Additionally, the following financial assets and liabilities on the condensed consolidated balance sheets are not carried at fair value, but whose carrying amounts approximate their fair value:
Cash and Cash Equivalents:
The carrying amounts of cash and cash equivalents are carried at cost which approximates fair value. Categorized under Level 1 in the fair value hierarchy.
Accounts and Premiums Receivable, net, Retrospective Commissions Receivable and Other Receivables:
The carrying amounts approximate fair value since no interest rate is charged on these short duration assets. Categorized under Level 2 in the fair value hierarchy. See Note (5) Notes and Accounts Receivable, net.
Due from Brokers, Dealers, and Trustees and Due to Brokers, Dealers and Trustees:
The carrying amounts are included in other assets and other liabilities and accrued expenses and approximate their fair value due to their short term nature. Categorized under Level 2 in the fair value hierarchy.
(11) Liability for Unpaid Claims and Claim Adjustment Expenses
Roll forward of Claim Liability
The following table presents the activity in the net liability for unpaid losses and allocated loss adjustment expenses of short duration contracts for the following periods:
Nine Months Ended
September 30,
2025
2024
Policy liabilities and unpaid claims balance as of January 1,
$
1,298,081
$
844,848
Less: liabilities of policy-holder account balances, gross
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The following schedule reconciles the total amount of losses incurred on short duration contracts per the table above to the amount of total losses incurred as presented in the condensed consolidated statements of operations, excluding the amount for member benefit claims:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Short duration incurred
$
191,463
$
175,845
$
566,726
$
555,680
Other lines incurred
(
5
)
(
83
)
(
83
)
(
26
)
Unallocated loss adjustment expenses
944
170
3,478
917
Total losses incurred
$
192,402
$
175,932
$
570,121
$
556,571
During the nine months ended September 30, 2025, the Company experienced favorable prior year development of
$
7,106
, primarily driven by lower-than-expected losses in its commercial and personal property lines of business.
During the nine months ended September 30, 2024, the Company experienced unfavorable prior year development of
$
646
, primarily driven by higher-than expected claims paid development in our commercial lines of business.
Management considers the prior year development for each of these years to be insignificant when considered in the context of our annual earned premiums, net as well as our net losses and loss adjustment expenses and member benefit claims expenses. We analyze our development on a quarterly basis and given the short duration nature of our products, favorable or adverse development emerges quickly and allows for timely reserve strengthening, if necessary, or modifications to our product pricing or offerings.
The favorable prior year development of
$
7,106
in the nine months ended September 30, 2025 represented
4.4
%
of our insurance business income before taxes of
$
160,421
and
1.1
%
of the opening net liability for losses and loss adjustment expenses of
$
658,210
, as of January 1, 2025.
The unfavorable prior year development of
$
646
in the nine months ended September 30, 2024 represented
0.5
%
of our insurance business income before taxes of
$
135,270
and
0.2
%
of the opening net liability for losses and loss adjustment expenses of
$
393,455
, as of January 1, 2024.
Based upon our internal analysis and our review of the statement of actuarial opinions provided by our actuarial consultants, we believe that the amounts recorded for policy liabilities and unpaid claims reasonably represent the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.
(12) Revenue from Contracts with Customers
The Company’s revenues from insurance and contractual and liability insurance operations are primarily accounted for under Financial Services-Insurance (ASC 944) that are not within the scope of Revenue for Contracts with Customers (ASC 606). The Company’s remaining revenues that are within the scope of ASC 606 are primarily comprised of revenues from contracts with customers for monthly membership dues for motor clubs, monthly administration fees for services provided for premiums, claims and reinsurance processing revenues, vehicle service contracts, vessel related revenue and revenues for household goods and appliances service contracts (collectively, remaining contracts).
The following table presents the disaggregated amounts of revenue from contracts with customers by product type for the following periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Service and Administrative Fees:
Service contract revenue
$
69,479
$
70,882
$
212,598
$
227,884
Motor club revenue
9,112
10,565
28,093
33,202
Other
667
1,341
2,700
3,128
Revenue from contracts with customers
$
79,258
$
82,788
$
243,391
$
264,214
Service and Administrative Fees
Service and administrative fees are generated from non-insurance programs including warranty service contracts, motor clubs and other services. Service and administrative fees are recognized consistent with the earnings recognition pattern of the underlying policies, debt cancellation contracts and motor club memberships being administered, using pro rata, Rule of 78’s, modified Rule of 78’s, or other
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
methods as appropriate for the contract. Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.
Management reviews the financial results under each significant contract on a monthly basis. Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined to be probable.
We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of September 30, 2025.
The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied.
The following table presents the activity in the deferred assets and liabilities related to revenue from contracts with customers for the following period:
January 1, 2025
September 30, 2025
Beginning balance
Additions
Amortization
Ending balance
Deferred acquisition costs
Service and Administrative Fees:
Service contract revenue
$
211,406
$
65,276
$
69,330
$
207,352
Motor club revenue
12,904
21,199
21,998
12,105
Total
$
224,310
$
86,475
$
91,328
$
219,457
Deferred revenue
Service and Administrative Fees:
Service contract revenue
$
617,633
$
185,373
$
212,598
$
590,408
Motor club revenue
16,746
27,031
28,093
15,684
Other
—
2,692
2,692
—
Total
$
634,379
$
215,096
$
243,383
$
606,092
For the periods presente
d,
no
write-offs for unrec
overable deferred acquisition costs and deferred revenue were recognized.
(13) Other Assets and Other Liabilities and Accrued Expenses
Other Assets
The following table presents the components of other assets as reported in the condensed consolidated balance sheets:
As of
September 30, 2025
December 31, 2024
Accrued investment income
$
13,919
$
12,415
Loans eligible for repurchase
54,370
56,279
Mortgage servicing rights
40,597
42,611
Right of use assets - operating leases
(1)
27,549
27,816
Income tax receivable
2,340
1,976
Furniture, fixtures and equipment, net
26,722
27,321
Due from broker/trustee
100
28,327
Prepaid expenses
12,241
12,481
Other
3,359
4,632
Total other assets
$
181,197
$
213,858
(1)
See Note (19) Commitments and Contingencies for additional information.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The following table presents the depreciation expense related to furniture, fixtures and equipment for the following periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Depreciation expense related to furniture, fixtures and equipment
$
1,897
$
1,516
$
4,977
$
4,637
Other Liabilities and Accrued Expenses
The following table presents the components of other liabilities and accrued expenses as reported in the condensed consolidated balance sheets:
As of
September 30, 2025
December 31, 2024
Accounts payable and accrued expenses
$
114,808
$
83,287
Loans eligible for repurchase liability
54,370
56,279
Deferred tax liabilities, net
220,449
170,802
Operating lease liabilities
(1)
35,220
36,588
Commissions payable
3,401
7,066
Derivative liabilities
28,803
11,127
Due to broker/trustee
11,061
2,693
Other
38,364
40,083
Total other liabilities and accrued expenses
$
506,476
$
407,925
(1)
See Note (19) Commitments and Contingencies for additional information.
(14) Other Revenue and Other Expenses
Other Revenue
The following table presents the components of other revenue as reported in the condensed consolidated statement of operations.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Other investment income
(1)
$
6,949
$
6,885
$
20,070
$
19,389
Financing interest income
3,977
4,967
12,214
13,978
Other
(2)
3,915
6,509
12,326
18,627
Total other revenue
$
14,841
$
18,361
$
44,610
$
51,994
(1)
See Note (4) Investments for the components of Other investment income.
(2)
Includes
$
3,300
and
$
6,150
for the three months ended September 30, 2025 and 2024, respectively, and
$
11,192
and
$
17,439
for the nine months ended September 30, 2025 and 2024
, respectively, related to Insurance.
Other Expenses
The following table presents the components of other expenses as reported in the condensed consolidated statement of operations:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
(15) Stockholders' Equity
Stock Repurchases
The Board of Directors authorized the Company to make repurchases of up to $
20,000
of shares of the Company’s outstanding common stock in the aggregate, at the discretion of the Company’s Executive Committee. There were
no
shares repurchased during the
nine months ended September 30, 2025. As of September 30, 2025
, the remaining repurchase authorization was $
11,945
.
Dividends
The Company declared cash dividends per share for the following periods presented below:
Dividends per share for the
Nine Months Ended
September 30,
2025
2024
First quarter
$
0.06
$
0.06
Second quarter
0.06
0.06
Third quarter
0.06
0.06
Total cash dividends declared
$
0.18
$
0.18
Fortegra Non-Controlling Interests
On June 21, 2022, the Company closed the WP Transaction. On that date, Fortegra converted to a Delaware corporation and Warburg made a $
200,000
investment in Fortegra in exchange for Fortegra Common Stock, Fortegra Preferred Stock, Fortegra Warrants and Fortegra Additional Warrants. Also, in connection with the closing of the WP Transaction, Tiptree was issued Fortegra Additional Warrants, and management’s interests in LOTS Intermediate were exchanged for interests in Fortegra.
In March and April 2024, Tiptree, Warburg and Fortegra independent directors
contributed $
30,044
, $
9,889
and $
67
, respectively, to Fortegra in exchange for Fortegra Common Stock. 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.
Fortegra Preferred Stock
The face amount of the Fortegra Preferred Stock is $
80,000
. Dividends are cumulative and accrue at a rate of
8
% per annum, compounding quarterly. Any quarterly dividend may be paid in cash, at Fortegra’s option. For the
nine months ended September 30, 2025 and 2024, cash dividends declared were
$
4,787
and
$
4,804
, respectively.
Warburg has the option to convert, at any time, its shares of Fortegra Preferred Stock into shares of Fortegra Common Stock at an initial conversion premium of
33
% to
Warburg’s initial investment valuation (the “Fortegra Preferred Stock Conversion Price”). The Fortegra Preferred Stock Conversion Price is adjusted for any Fortegra Common Stock splits, dividends, extraordinary dividends and similar transactions. All of the Fortegra Preferred Stock will automatically convert into shares of Fortegra Common Stock at the Fortegra Preferred Stock Conversion Price upon the closing of a qualifying initial public offering, subject to a
five year
make-whole provision. Upon conversion, the Fortegra Preferred Stock would result in Warburg owning an additiona
l
6.3
% interest in Fortegra, for a total as converted ownership of
24.0
% (including its ownership of Fortegra Common Stock).
Fortegra Warrants
The Fortegra Warrants have a
seven-year
term and an exercise premium of
33
% to Warburg’s initial investment valuation (the “Fortegra Warrant Exercise Price”). The Fortegra Warrant Exercise Price will be reduced by any Fortegra Common Stock cash dividends made by Fortegra and adjusted for stock splits, common stock dividends, extraordinary dividends and similar transactions. The Fortegra Warrants, if exercised with cash, would result in Warburg owning an additional
3.7
% interest in Fortegra.
Fortegra Additional Warrants
The Fortegra Additional Warrants issued to both Warburg and Tiptree have a
seven-year
term and an exercise price of $
0.01
per share of Fortegra Common Stock. The Fortegra Additional Warrants issued to Warburg will be forfeited based on Warburg achieving an all-in return on its investment in excess of
23
%, as measured primarily by Fortegra’s Common Stock price. The Fortegra Additional Warrants issued to Warburg are classified as liabilities, at fair value. The Fortegra Additional Warrants issued to Tiptree will vest based on Warburg achieving an all-in return on its investment in excess of
30
%,
as measured primarily by Fortegra’s Common Stock price.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The
number of shares of Fortegra Common Stock issuable to Warburg or Tiptree with respect to the Fortegra Additional Warrants is subject to adjustment for Fortegra Common Stock splits, stock or cash dividends and similar transactions. The Fortegra Additional Warrants are exercisable from the earlier of a transaction that results in Warburg having sold
50
% of its Fortegra Common Stock or the fifth anniversary of the closing date. The maximum number of shares issued to Warburg or Tiptree, if exercised with cash, would be an additional
1.7
% interest in Fortegra on an as converted basis (including its ownership of Fortegra Common and Preferred Stock). As of September 30, 2025, the estimated fair value of the Fortegra Additional Warrants (WP) was $
28,518
based on the expected Merger proceeds and estimated closing date in
2026
.
The following table presents the components of non-controlling interests as reported in the condensed consolidated balance sheets:
As of
September 30, 2025
December 31, 2024
Fortegra preferred interests
$
77,679
$
77,679
Fortegra common interests
158,565
121,394
Total non-controlling interests
$
236,244
$
199,073
Statutory Reporting and Insurance Company Subsidiaries Dividend Restrictions
The Company’s U.S. insurance subsidiaries prepare financial statements in accordance with Statutory Accounting Principles (SAP) prescribed or permitted by the insurance departments of their states of domicile. Prescribed SAP includes the Accounting Practices and Procedures Manual of the NAIC as well as state laws, regulations and administrative rules.
Statutory Capital and Surplus
The Company’s insurance company subsidiaries must maintain minimum amounts of statutory capital and surplus as required by regulatory authorities, including the NAIC; their capital and surplus levels exceeded respective minimum requirements as of September 30, 2025 and December 31, 2024.
Under the NAIC Risk-Based Capital Act of 1995, a company’s Risk-Based Capital (RBC) is calculated by applying certain risk factors to various asset, claim and reserve items. If a company's adjusted surplus falls below calculated RBC thresholds, regulatory intervention or oversight is required. The Company’s U.S. domiciled insurance company subsidiaries' RBC levels, as calculated in accordance with the NAIC’s RBC instructions, exceeded all RBC thresholds as of September 30, 2025 and December 31, 2024.
The Company also has a foreign insurance subsidiary that is not subject to SAP. The statutory capital and surplus amounts and statutory net income presented above do not include the foreign insurance subsidiary in accordance with SAP.
Statutory Dividends
The Company’s U.S. domiciled insurance company subsidiaries may pay dividends to the Company, subject to statutory restrictions. Payments in excess of statutory restrictions (extraordinary dividends) to the Company are permitted only with prior approval of the insurance department of the applicable state of domicile. The Company eliminates all dividends from its subsidiaries in the condensed consolidated financial statements.
There were
no
dividends paid to the Company by its U.S. domiciled insurance company subsidiaries for the
nine months ended September 30, 2025 and 2024
.
The combined amount available for ordinary dividends of the Company's U.S. domiciled insurance company subsidiaries for the following periods:
As of
September 30, 2025
December 31, 2024
Amount available for ordinary dividends of the Company's insurance company subsidiaries
$
71,030
$
78,614
The following table presents the dividends paid to the Company by its insurance company subsidiaries for the following periods:
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
At September 30, 2025, the maximum amount of dividends that our U.S. domiciled insurance company subsidiaries could pay under applicable laws and regulations without regulatory approval was approximately
$
71,030
.
The Company may seek regulatory approval to pay dividends in excess of this permitted amount, but there can be no assurance that the Company would receive regulatory approval if sought.
(16) Accumulated Other Comprehensive Income (Loss) (AOCI)
The following table presents the activity of AFS securities in AOCI, net of tax, for the following periods:
Unrealized gains (losses) on available for sale securities
Foreign currency translation adjustment
Total AOCI
Amount attributable to non-controlling interests
Total AOCI to Tiptree Inc.
Balance at December 31, 2023
$
(
32,145
)
$
(
98
)
$
(
32,243
)
$
6,170
$
(
26,073
)
Other comprehensive income (losses) before reclassifications
9,308
5,241
14,549
(
3,764
)
10,785
Amounts reclassified from AOCI
117
—
117
—
117
OCI
9,425
5,241
14,666
(
3,764
)
10,902
Balance at September 30, 2024
$
(
22,720
)
$
5,143
$
(
17,577
)
$
2,406
$
(
15,171
)
Balance at December 31, 2024
$
(
32,266
)
$
(
2,529
)
$
(
34,795
)
$
7,045
$
(
27,750
)
Other comprehensive income (losses) before reclassifications
13,795
13,051
26,846
(
7,256
)
19,590
Amounts reclassified from AOCI
404
—
404
—
404
OCI
14,199
13,051
27,250
(
7,256
)
19,994
Balance at September 30, 2025
$
(
18,067
)
$
10,522
$
(
7,545
)
$
(
211
)
$
(
7,756
)
The following table presents the reclassification adjustments out of AOCI included in net income and the impacted line items on the condensed consolidated statement of operations for the following periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Affected line item in consolidated statements
Components of AOCI
2025
2024
2025
2024
of operations
Unrealized gains (losses) on available for sale securities
$
65
$
(
57
)
$
(
523
)
$
(
150
)
Net realized and unrealized gains (losses)
Related tax (expense) benefit
(
15
)
9
119
33
Provision for income tax
Net of tax
$
50
$
(
48
)
$
(
404
)
$
(
117
)
(17) Stock Based Compensation
Tiptree Equity Plans
The table below summarizes changes to the issuances under the Company’s 2017 Omnibus Incentive Equity Plan for the periods indicated, excluding awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock:
2017 Equity Plan
Number of shares
Available for issuance as of December 31, 2024
756,984
RSU, stock and option awards granted
(
292,428
)
Available for issuance as of September 30, 2025
464,556
Restricted Stock Units (RSUs) and Stock Awards
The Company values RSUs at their grant-date fair value as measured by Tiptree’s common stock price. Generally, the Tiptree RSUs vest and become non-forfeitable either (i) after the third anniversary, or (ii) with respect to one-third of Tiptree shares granted on each of the first, second and third year anniversaries of the grant date. RSU awards are expensed using the straight-line method over the
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
requisite service period. The RSUs include a retirement provision and are amortized over the lesser of the service condition or expected retirement date.
Stock awards issued as director compensation are deemed to be granted and immediately vested upon issuance. On February 25, 2025, the Company issued Messrs. Barnes and Ilany
60,813
and
151,778
shares of the Company's common stock, respectively, as part of their compensation for 2024 performance.
The following table presents changes to the issuances of RSUs under the 2017 Omnibus Incentive Equity Plan for the periods indicated:
Number of
shares issuable
Weighted average
grant date
fair value
Unvested units as of December 31, 2024
287,684
$
15.22
Granted
292,428
21.43
Vested
(
362,094
)
18.39
Unvested units as of September 30, 2025
(1)
218,018
$
18.64
(1)
Includes
76,930
,
70,866
and
70,222
shares that vest in 2026, 2027 and 2028, respectively.
The following tables present the detail of the granted and vested RSUs and Stock Awards for the periods indicated:
Nine Months Ended September 30,
Nine Months Ended September 30,
Granted
2025
2024
Vested
2025
2024
Directors
9,615
13,309
Directors
9,615
13,309
Employees
282,813
78,360
Employees
352,479
31,470
Total Granted
292,428
91,669
Total Vested
362,094
44,779
Taxes
(
117,764
)
(
11,395
)
Net Vested
244,330
33,384
Tiptree Senior Management Incentive Plan
On August 4, 2021, a total of
3,500,000
Performance Restricted Stock Units (PRSUs) were awarded to members of the Company’s senior management. An additional
350,000
PRSUs were awarded on October 14, 2022. The PRSUs have a
10-year
term and are subject to the recipient’s continuous service and a market requirement. A portion of the PRSUs will generally vest upon the achievement of each of
five
Tiptree share price target milestones ranging from $
15
to $
60
, adjusted for dividends paid, within
five
pre-established determination periods (subject to a catch-up vesting mechanism) occurring on the second, fourth, sixth, eighth and tenth anniversaries of the grant date. In November 2021 and October 2024, the first and second tranches of the PRSUs vested, resulting in a net issuance of
215,583
and
462,766
shares, respectively, of Tiptree common stock.
On January 1, 2024, Tiptree granted
1,420,833
PRSUs to members of the Company’s senior management. The PRSUs will generally vest upon achievement of a $
70
Tiptree share price target (adjusted for dividends paid) prior to the tenth anniversary of the date of grant, subject to the Grantee’s continued employment with Tiptree.
As of September 30, 2025,
4,520,833
PRSUs were unvested.
The below table illustrates the aggregate number of PRSUs that will vest upon the achievement of each Tiptree share price target. Such price targets are adjusted down for cumulative dividends paid by the Company since grant (e.g., the next share price target is $
28.89
as adjusted for cumulative dividends paid to date).
Original Tiptree Share Price Target
Number of PRSUs that Vest
$
30
775,000
$
45
1,033,333
$
60
1,291,667
$
70
1,420,833
Upon vesting, the Company will issue shares, or if shares are not available under the 2017 Equity Plan, then the Company may in its sole discretion instead deliver cash equal to the fair market value of the underlying shares. The fair value of the PRSUs was estimated using a Black-Scholes-Merton option pricing formula embedded within a Monte Carlo model used to simulate the future stock prices of the Company, which assumes that the market requirement is achieved. The historical volatility was computed based on historical daily returns of the Company’s stock price simulated over the performance period using a lookback period of 1
0 years
. The valuation was done under a risk-neutral framework using the 10-year zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the reporting date. The quarterly dividend rates in effect as of the reporting date are used to calculate a spot dividend yield for use in the model.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
The following table presents the assumptions used to measure the fair value of the PRSUs as of the respective grant date, or June 7, 2022, when the original tranches were converted to equity awards.
Valuation Input
June 2022
October 2022
January 2024
Historical volatility
38.75
%
39.23
%
39.10
%
Risk-free rate
3.04
%
3.95
%
3.80
%
Dividend yield
1.45
%
1.44
%
1.05
%
Cost of equity
11.72
%
14.19
%
13.65
%
Expected term (years)
6.0
5.9
5.5
Stock Option Awards
Between 2016 and 2020, option awards were granted to the Executive Committee with an exercise price equal to the fair market value of our common stock on the date of grant. The option awards have a
10-year
term and are subject to the recipient’s continuous service, a market requirement, and vest one third on each of the
three
,
four
, and
five-year
anniversaries of the grant date. As of
September 30, 2025
, the market requirement for all outstanding options has been achieved. There were
no
stock option awards granted from 2021 to
September 30, 2025.
The following table presents the Company’s stock option activity for the current period:
Options
outstanding
Weighted average
exercise price
(in dollars per
stock option)
Weighted
average grant
date value (in
dollars per
stock option)
Options
exercisable
Balance, December 31, 2024
1,583,873
$
6.51
$
2.25
1,442,114
Balance, September 30, 2025
910,130
$
6.61
$
2.25
910,130
Weighted average remaining contractual term at September 30, 2025 (in years)
3.6
Subsidiary Equity Plans
Certain of the Company’s subsidiaries have established incentive plans under which they are authorized to issue equity of those subsidiaries to certain of their employees. Such awards are accounted for as equity unless otherwise noted. These awards are subject to performance-vesting criteria based on the performance of the subsidiary (performance vesting awards) and time-vesting subject to continued employment (time vesting awards). The Company has the option, but not the obligation to settle the exchange right in cash.
Fortegra Equity Incentive Plan
Fortegra adopted the 2022 Equity Incentive Plan (“Fortegra Plan”) on June 21, 2022, and further amended on January 18, 2024, which permits the grant of RSUs, stock based awards and options up to
11.0
% of Fortegra Common Stock (assuming conversion of the Fortegra Preferred Stock), of which the substantial majority is expected to be delivered in options. The general purpose of the Fortegra Plan is to attract, motivate and retain selected employees of Fortegra, to provide them with incentives and rewards for performance and to better align their interests with those of Fortegra’s stockholders. Unless otherwise extended, the Fortegra Plan terminates automatically on June 21, 2032. The awards under the Fortegra Plan are not exchangeable for Tiptree common stock.
As of September 30, 2025
, unvested time vesting RSUs represented
0.2
% and unvested time and performance vesting options represented
3.5
%
of Fortegra Common Stock (in each case, assuming conversion of the Fortegra Preferred Stock). The RSUs include a retirement provision and are amortized over the lesser of the service condition or expected retirement date. The time vested options vest in equal parts over
five years
with the first tranche vested and exercised in 2024. The performance vested options vest based on specific internal rate of return targets determined at the time of a change of control of Fortegra or sale by Warburg of more than
50
% of its Fortegra securities (on an as converted basis) acquired in 2022. A majority of these time and performance options must be exercised in the calendar year they vest and shall be deemed automatically exercised if not otherwise done so by December 31 of the calendar year in which they vest. The fair value option grants were estimated on the date of grant using a Black-Scholes Merton option pricing formula embedded within a Monte Carlo model used to simulate the future value of Fortegra Common Stock, which assumes the market requirement is achieved. Key assumptions used in the model were a historical volatility of
45.0
%, a risk free rate of
3.7
%,
no
dividend yield and an expected term of
4.2
years.
In
2023, Fortegra granted performance based restricted stock units (Fortegra PRSUs) that vest based on the achievement of specified gross written premium volume targets and underwriting ratios for selected specialty insurance lines written in 2024. Upon vesting, the
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
Fortegra
PRSUs entitle recipients to participate in an aggregate pool of between
$
5,000
and $
20,000
payable in shares of Fortegra. The Fortegra PRSUs are accounted for as liability awards with one-third of the award pool vested and issued in September 2025 and two-thirds of the pool remain unvested as of
September 30, 2025.
The following table presents changes to the issuances of subsidiary awards under the subsidiary incentive plans for the periods indicated:
Grant date fair value of
equity shares issuable
Unvested balance as of December 31, 2024
$
19,112
Granted
6,915
Vested
(
8,307
)
Forfeited
(
831
)
Unvested balance as of September 30, 2025
$
16,889
Stock Based Compensation Expense
The following table presents total stock based compensation expense and the related income tax benefit recognized on the condensed consolidated statements of operations:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Employee compensation and benefits
$
5,554
$
5,898
$
16,892
$
13,012
Director compensation
75
70
222
208
Income tax benefit
(
1,722
)
(
1,253
)
(
3,125
)
(
2,776
)
Net stock based compensation expense
$
3,907
$
4,715
$
13,988
$
10,444
Additional information on total non-vested stock based compensation is as follows:
As of September 30, 2025
Subsidiary
Stock options
Restricted stock
awards and RSUs
Performance Restricted
Stock Units
Unrecognized compensation cost related to non-vested awards
(1)
$
13,319
$
930
$
10,601
Weighted - average recognition period (in years)
1.4
1.0
1.0
(1)
Includes unrecognized compensation cost
of $
13,319
related to stock options and
$
2,985
re
lated to PRSUs at The Fortegra Group.
(18) Income Taxes
The following table presents the Company’s provision (benefit) for income taxes reflected as a component of income (loss):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Total income tax expense (benefit)
$
22,666
$
16,308
$
56,656
$
48,799
Effective tax rate (ETR)
59.2
%
(1)
44.4
%
(1)
48.7
%
(1)
45.6
%
(1)
(1)
Higher than the U.S. federal statutory income tax rate of
21
% primarily due to the impact of outside basis deferred taxes on Tiptree’s investment in Fortegra and other discrete items.
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.
For the three months ended September 30, 2025, the deferred tax liability relating to Fortegra increased by
$
7,258
, of which
$
1,101
of expense was recorded in OCI, and
$
6,157
of expense was recorded as a provision for income taxes. For the three months ended September 30, 2024, the deferred tax liability relating to Fortegra increased by
$
9,913
, of which
$
4,006
of expense was recorded in OCI, and
$
5,907
of expense was recorded as a provision for income taxes. Excluding the impact of these deferred taxes, the effective tax rates for the three months ended September 30, 2025 and 2024 were
43.1
%
and
28.2
%
, respectively.
For the nine months ended September 30, 2025, the deferred tax liability relating to Fortegra increased by
$
24,538
, of which
$
5,721
of expense was recorded in OCI, and
$
18,817
of expense was recorded as a provision for income taxes. For the nine months ended
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
September 30, 2024, the deferred tax liability relating to Fortegra increased by
$
19,844
, of which
$
3,115
of expense was recorded in OCI, and
$
16,729
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.
The Organization for Economic Cooperation and Development (“OECD”) has introduced a framework to implement a global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. Many aspects of Pillar Two were effective in 2024 and other aspects will be effective in 2025. While it is uncertain whether the U.S. will adopt Pillar Two, certain countries in which the Company operates have adopted legislation and other countries are in the process of introducing legislation to implement Pillar Two. While we do not expect Pillar Two to have a material impact on the Company, our analysis is ongoing as the OECD releases additional guidance and countries implement additional legislation.
“An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14,” commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was enacted into law in the U.S on July 4, 2025. The OBBBA permanently extended parts of the Tax Cuts and Jobs Act, updated international tax rules, and restored certain business tax benefits. Its provisions take effect between 2025 and 2027.
We do not expect these provisions to have a material impact on our financial statements.
(19) Commitments and Contingencies
The following table presents rent expense for the Company’s office leases recorded in other expenses on the condensed consolidated statements of operations for the following periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Rent expense for office leases
$
1,796
$
1,918
$
5,376
$
5,875
The Company entered into a sublease of its former corporate office space in December 2022. As a result of the sublease, future lease payments will be offset by $
1,842
annually from July 2023 through August 2029.
Litigation
The Company is a defendant in Mullins v. Southern Financial Life Insurance Co., a class action filed in February 2006, in Pike County Circuit Court in the Commonwealth of Kentucky on behalf of Kentucky consumers that purchased certain credit life and disability insurance coverage between 1997-2007. The action alleges violations of the Kentucky Consumer Protection Act (“KCPA”) and certain insurance statutes, common law fraud and breach of contract and the covenant of good faith and fair dealing. The plaintiffs seek compensatory and punitive damages, attorneys’ fees and interest.
Two classes were certified in June 2010: Subclass A includes class members who suffered a disability during the coverage period but allegedly received less than full disability benefits; Subclass B includes all class members whose loan termination date extended beyond the termination date of the credit disability coverage period.
In a series of orders issued in October 2022 on competing motions for partial summary judgment, the court found in favor of the plaintiffs as to the Subclass A breach of contract claim (the “Subclass A Order”) and, as to Subclass B, found that the Company was unjustly enriched to the extent the premium it collected exceeded the proportion of the premium for which the Company provided benefits coverage (the “Subclass B Order”). The court found in favor of the Company as to the plaintiffs’ claims for common law fraud and violation of Kentucky’s insurance statutes and ordered the plaintiffs’ Motion for Sanctions for Spoliation of Evidence held in abeyance. The Company has appealed the Subclass A Order and Subclass B Order and all interlocutory orders made final by entry of the Subclass A Order and Subclass B Order.
In December 2022, the court dismissed the plaintiffs’ KCPA claims as to both Subclass A Order and Subclass B Order. The court also dismissed the plaintiffs’ breach of covenant of good faith and fair dealing claim as to Subclass B Order but declined to dismiss such claim as to Subclass A Order pending resolution of the Company’s appeal.
In May 2024, the Commonwealth of Kentucky Court of Appeals disagreed with the court’s interpretation of the policies at issue and entered an order (the “Court of Appeals Order”) affirming in part, reversing in part, and remanding the Subclass A Order and Subclass B Order. In June 2024, the Company filed a Motion for Discretionary Review of the Court of Appeals Order in the Supreme Court of the Commonwealth of Kentucky.
In February 2025, the Supreme Court of the Commonwealth of Kentucky denied the Company’s Motion for Discretionary Review of the Court of Appeals’ May 2024 Order and proceedings recommenced in the Pike County Circuit Court. In June 2025, the Pike County
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
Circuit Court issued orders amending the Subclass A Order and Subclass B Order consistent with its reading of the Court of Appeals Order and declined to find at this time that members of Subclass B did not sustain any damages as a matter of law. A trial date has not been set.
The Company considers such litigation customary in the insurance industry. In management’s opinion, based on information available at this time, the ultimate resolution of such litigation, which it is vigorously defending, should not be materially adverse to the financial position of the Company. It should be noted that large punitive damage awards, bearing little relation to actual damages sustained by plaintiffs, have been awarded in certain states against other companies in the credit insurance business. At this time, the Company cannot estimate a range of loss that is reasonably possible.
The Company and its subsidiaries are parties to other legal proceedings in the ordinary course of business. Although the Company’s legal and financial liability with respect to such proceedings cannot be estimated with certainty, the Company does not believe that these proceedings, either individually or in the aggregate, are likely to have a material adverse effect on the Company’s financial position.
(20) Earnings Per Share
The Company calculates basic net income per share of common stock (common share) based on the weighted average number of common shares outstanding, which includes vested corporate RSUs. Unvested corporate RSUs have a non-forfeitable right to participate in dividends declared and paid on the Company’s common stock on an as vested basis and are therefore considered a participating security. The Company calculates basic earnings per share using the “two-class” method under which the income available to common stockholders is allocated to the unvested corporate RSUs.
Diluted net income attributable to common stockholders includes the effect of unvested subsidiaries’ RSUs, when dilutive. The assumed exercise of all potentially dilutive instruments is included in the diluted net income per common share calculation, if dilutive.
The following table presents a reconciliation of basic and diluted net income per common share for the following periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Net income (loss)
$
15,610
$
20,473
$
59,682
$
58,327
Less:
Net income (loss) attributable to non-controlling interests
9,189
8,558
28,666
24,511
Net income allocated to participating securities
37
92
181
270
Net income (loss) attributable to Tiptree Inc. common shares - basic
6,384
11,823
30,835
33,546
Effect of Dilutive Securities:
Securities of subsidiaries
(
1,548
)
(
956
)
(
4,766
)
(
2,374
)
Adjustments to income relating to exchangeable interests and contingent considerations, net of tax
1
2
4
7
Net income (loss) attributable to Tiptree Inc. common shares - diluted
$
4,837
$
10,869
$
26,073
$
31,179
Weighted average number of shares of common stock outstanding - basic
37,565,019
36,789,571
37,470,832
36,781,408
Weighted average number of incremental shares of common stock issuable from exchangeable interests and contingent considerations
1,018,728
1,028,920
1,080,137
1,003,229
Weighted average number of shares of common stock outstanding - diluted
38,583,747
37,818,491
38,550,969
37,784,637
Basic net income (loss) attributable to common shares
$
0.17
$
0.32
$
0.82
$
0.91
Diluted net income (loss) attributable to common shares
$
0.13
$
0.29
$
0.68
$
0.83
(21) Related Party Transactions
Tiptree Advisors is a related party of the Company because Tiptree Advisors is deemed to be controlled by Michael Barnes, the Company’s Executive Chairman. Tiptree Advisors manages investment portfolio accounts of Fortegra and certain of its subsidiaries under an investment advisory agreement (the IAA). The Company is invested in funds managed by Tiptree Advisors. The Company incurred
$
8,045
and
$
1,594
of management and incentive fees for the three months ended September 30, 2025 and 2024, respectively. The Company incurred
$
12,063
and
$
4,760
of management and incentive fees for the nine months ended September 30, 2025 and 2024, respectively.
For the nine months ended September 30, 2025
, the Company’s percentage of profits interest in Tiptree Advisors was
52.0
%.
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(in thousands, except share data)
Pursuant to the Transition Services Agreement, the Company and Tiptree Advisors have mutually agreed to provide certain services to one another. Payments under the Transition Services Agreement in the nine months ended September 30, 2025 and 2024 were not material.
Pursuant to a Partner Emeritus Agreement, the Company agreed to provide Mr. Inayatullah, a greater than
5
% stockholder of the Company, support services and reimburse Mr. Inayatullah for a portion of benefit expenses in exchange for advice and other consulting services as requested by the Company’s Executive Committee. Transactions related to the Partner Emeritus Agreement in the
nine months ended September 30, 2025 and 2024
were not material.
(22) Subsequent Events
On October 28, 2025, the Company’s board of directors declared a quarterly cash dividend of
$
0.06
per share to holders of common stock with a record date of November 17, 2025, and a payment date of November 24, 2025.
On
October 31, 2025
, Tiptree entered into a Purchase Agreement, dated as of October 31, 2025 (the "Purchase Agreement") by and among Carrington Holding Company, LLC, as buyer (the "Reliance Buyer"), Tiptree and Reliance Holdings LLC ("Holdings"), a wholly owned subsidiary of Tiptree, as sellers (the "Reliance Sellers") and Reliance First Capital, LLC, a wholly owned subsidiary of Holdings ("Reliance").
Pursuant to the Purchase Agreement, the Reliance Buyer will acquire from the Reliance Sellers, pursuant to the terms of the Purchase Agreement, all of the issued and outstanding membership interests of Reliance for an amount equal, in U.S. dollars, to the sum of (a) the product of (i) the Tangible Book Value (as defined in the Purchase Agreement) of Reliance as of the closing of the Reliance Transaction and (ii)
93.50
%; less (b) Transaction Expenses (as defined in the Purchase Agreement); less (c) Unpaid Taxes (as defined in the Purchase Agreement) (the "Reliance Transaction"). At the closing of the Reliance Transaction, the Reliance Buyer will pay, or cause to be paid, to the Reliance Sellers the Estimated Cash Payment (as defined in the Purchase Agreement), less an amount equal to the Purchase Price Adjustment Holdback Amount (as defined in the Purchase Agreement).
Item 2. Management’s Discussion and Analysis of Financia
l Condition and Results of Operations
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:
As of
September 30, 2025
Consideration
$
1,650,000
Less: transaction expenses
27,000
Net consideration
1,623,000
Tiptree diluted ownership of Fortegra
69.10
%
Fair value of consideration received
$
1,121,490
Estimated gain on disposal
$
448,679
•
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).
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)
Three Months Ended
September 30,
Nine Months Ended
September 30,
GAAP:
2025
2024
2025
2024
Total revenues
$
540,302
$
494,362
$
1,566,478
$
1,539,256
Net income (loss) attributable to common stockholders
$
6,421
$
11,915
$
31,016
$
33,816
Diluted earnings per share
$
0.13
$
0.29
$
0.68
$
0.83
Cash dividends paid per common share
$
0.06
$
0.06
$
0.18
$
0.18
Return on average equity
5.1
%
10.6
%
8.6
%
10.3
%
Non-GAAP:
(1)
Adjusted net income
$
28,764
$
27,872
$
79,223
$
72,827
Adjusted return on average equity
22.9
%
24.8
%
21.9
%
22.1
%
(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)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Net realized and unrealized gains (losses) - Invesque
(1)
$
—
$
—
$
—
$
(3,536
)
Net realized and unrealized gains (losses)
(2)
$
24,506
$
(2,423
)
$
31,542
$
9,964
(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)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Revenues:
Insurance
$
522,616
$
481,013
$
1,516,214
$
1,489,711
Mortgage
16,170
14,892
47,581
46,666
Tiptree Capital - other
1,516
(1,543
)
2,683
2,879
Corporate
—
—
—
—
Total revenues
$
540,302
$
494,362
$
1,566,478
$
1,539,256
Income (loss) before taxes:
Insurance
$
55,223
$
47,209
$
160,421
$
135,270
Mortgage
202
(89
)
230
1,192
Tiptree Capital - other
1,366
(2,603
)
(1,755
)
602
Corporate
(18,515
)
(7,736
)
(42,558
)
(29,938
)
Total income (loss) before taxes
$
38,276
$
36,781
$
116,338
$
107,126
Non-GAAP - Adjusted net income:
(1)
Insurance
$
39,067
$
31,728
$
106,794
$
90,744
Mortgage
556
1,359
1,183
1,231
Tiptree Capital - other
848
42
(8
)
870
Corporate
(11,707
)
(5,257
)
(28,746
)
(20,018
)
Total adjusted net income
$
28,764
$
27,872
$
79,223
$
72,827
(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.
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)
Three Months Ended September 30,
2025
2024
Change
% Change
Revenues:
Earned premiums, net
$
383,881
$
359,496
$
24,385
6.8
%
Service and administrative fees
95,821
95,362
459
0.5
%
Ceding commissions
3,483
3,716
(233
)
(6.3
)%
Net investment income
7,397
9,111
(1,714
)
(18.8
)%
Net realized and unrealized gains (losses)
24,761
2,218
22,543
1016.4
%
Other revenue
7,273
11,110
(3,837
)
(34.5
)%
Total revenues
$
522,616
$
481,013
$
41,603
8.6
%
Expenses:
Net losses and loss adjustment expenses
$
192,402
$
175,932
$
16,470
9.4
%
Member benefit claims
24,928
27,510
(2,582
)
(9.4
)%
Commission expense
144,919
154,005
(9,086
)
(5.9
)%
Employee compensation and benefits
41,736
37,876
3,860
10.2
%
Interest expense
8,261
7,173
1,088
15.2
%
Depreciation and amortization
4,824
4,970
(146
)
(2.9
)%
Other expenses
50,323
26,338
23,985
91.1
%
Total expenses
$
467,393
$
433,804
$
33,589
7.7
%
Income (loss) before taxes
(1)
$
55,223
$
47,209
$
8,014
17.0
%
Key Performance Metrics:
Gross written premiums and premium equivalents
$
859,757
$
776,847
$
82,910
10.7
%
Net written premiums
$
396,672
$
389,273
$
7,399
1.9
%
Loss ratio
46.4
%
45.1
%
Acquisition ratio
26.9
%
31.1
%
Underwriting ratio
73.3
%
76.2
%
Operating expense ratio
14.0
%
14.0
%
Combined ratio
87.3
%
90.2
%
Return on average equity
19.6
%
24.3
%
Non-GAAP Financial Measures
(2)
:
Adjusted net income (before NCI)
$
49,543
$
40,042
$
9,501
23.7
%
Adjusted return on average equity
26.3
%
27.7
%
Adjusted net income
$
39,067
$
31,728
$
7,339
23.1
%
(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)
Three Months Ended September 30,
2025
2024
Property and short-tail
$
273,972
$
230,538
Contractual liability
91,359
84,279
General liability
123,698
86,368
Alternative risks
98,738
93,352
Professional liability
64,532
58,312
Europe
56,580
39,993
Commercial lines
$
708,879
$
592,842
Personal lines
88,249
88,198
Insurance
$
797,128
$
681,040
Auto and consumer goods warranty
51,883
83,415
Other services
10,746
12,392
Services
$
62,629
$
95,807
Total
$
859,757
$
776,847
(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 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)
Nine Months Ended September 30,
2025
2024
Change
% Change
Revenues:
Earned premiums, net
$
1,129,259
$
1,105,273
$
23,986
2.2
%
Service and administrative fees
289,966
311,696
(21,730
)
(7.0
)%
Ceding commissions
10,658
11,525
(867
)
(7.5
)%
Net investment income
29,631
22,250
7,381
33.2
%
Net realized and unrealized gains (losses)
33,310
7,582
25,728
339.3
%
Other revenue
23,390
31,385
(7,995
)
(25.5
)%
Total revenues
1,516,214
1,489,711
26,503
1.8
%
Expenses:
Net losses and loss adjustment expenses
$
570,121
$
556,571
$
13,550
2.4
%
Member benefit claims
82,994
88,510
(5,516
)
(6.2
)%
Commission expense
437,005
484,232
(47,227
)
(9.8
)%
Employee compensation and benefits
115,882
100,884
14,998
14.9
%
Interest expense
25,553
22,300
3,253
14.6
%
Depreciation and amortization
13,758
14,886
(1,128
)
(7.6
)%
Other expenses
110,480
87,058
23,422
26.9
%
Total expenses
1,355,793
1,354,441
1,352
0.1
%
Income (loss) before taxes
(1)
160,421
135,270
25,151
18.6
%
Key Performance Metrics:
Gross written premiums and premium equivalents
$
2,520,556
$
2,216,323
$
304,233
13.7
%
Net written premiums
$
1,183,167
$
1,073,321
$
109,846
10.2
%
Loss ratio
47.0
%
46.3
%
Acquisition ratio
27.5
%
31.1
%
Underwriting ratio
74.5
%
77.4
%
Operating expense ratio
14.0
%
12.8
%
Combined ratio
88.5
%
90.2
%
Return on average equity
22.2
%
25.1
%
Non-GAAP Financial Measures
(2)
:
Adjusted net income (before NCI)
$
135,191
$
114,491
$
20,700
18.1
%
Adjusted return on average equity
25.7
%
28.8
%
Adjusted net income
$
106,794
$
90,744
$
16,050
17.7
%
(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)
Nine Months Ended September 30,
2025
2024
Property and short-tail
$
798,488
$
601,191
Contractual liability
281,605
244,491
General liability
367,530
262,804
Alternative risks
269,757
256,590
Professional liability
185,751
196,642
Europe
161,667
119,663
Commercial lines
$
2,064,798
$
1,681,381
Personal lines
240,662
251,202
Insurance
$
2,305,460
$
1,932,583
Auto and consumer goods warranty
181,260
248,710
Other services
33,836
35,030
Services
$
215,096
$
283,740
Total
$
2,520,556
$
2,216,323
(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 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.
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)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Revenues:
Net realized and unrealized gains (losses)
$
9,843
$
8,862
$
29,485
$
29,662
Other revenue
6,327
6,030
18,096
17,004
Total revenues
$
16,170
$
14,892
$
47,581
$
46,666
Expenses:
Employee compensation and benefits
$
9,922
$
9,129
$
29,065
$
27,746
Interest expense
346
441
1,040
1,619
Depreciation and amortization
70
61
223
283
Other expenses
5,630
5,350
17,023
15,826
Total expenses
$
15,968
$
14,981
$
47,351
$
45,474
Income (loss) before taxes
$
202
$
(89
)
$
230
$
1,192
Key Performance Metrics:
Origination volumes
$
252,082
$
255,783
$
705,701
$
693,056
Gain on sale margins
4.8
%
4.8
%
4.7
%
4.8
%
Return on average equity
(0.8
)%
(0.4
)%
(0.1
)%
2.4
%
Non-GAAP Financial Measures
(1)
:
Adjusted net income
$
556
$
1,359
$
1,183
$
1,231
Adjusted return on average equity
4.0
%
10.2
%
2.8
%
3.1
%
(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:
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)
Three Months Ended
September 30,
Nine Months Ended September 30, 2025
2025
2024
2025
2024
Employee compensation and benefits
$
3,349
$
1,974
$
7,287
$
5,850
Employee incentive compensation expense
6,946
3,239
19,105
16,598
Interest expense
2,083
—
5,319
—
Depreciation and amortization
365
364
1,083
1,085
Other expenses
5,772
2,159
9,764
6,405
Total expenses
$
18,515
$
7,736
$
42,558
$
29,938
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 $656.8 million as of December 31, 2024, with the increase primarily driven by comprehensive income for the nine months ended September 30, 2025. As of September 30, 2025, there were 37,820,120 shares of common stock outstanding as compared to 37,255,838 shares as of December 31, 2024, with the increase driven by the vesting of share-based incentive compensation and exercise of options.
As of September 30, 2025, Fortegra was owned approximately 78.9% by Tiptree Holdings, 17.6% by Warburg and 3.5% by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and management options, and the conversion of outstanding preferred stock.
The following table is a summary of certain balance sheet information:
As of September 30, 2025
($ in thousands)
Tiptree Capital
Insurance
Mortgage
Other
Corporate
Total
Total assets
$
6,114,642
$
212,864
$
69,509
$
19,254
$
6,416,269
Corporate debt
$
330,000
$
—
$
—
$
74,438
$
404,438
Asset based debt
41,287
78,377
—
—
119,664
Tiptree Inc. stockholders’ equity
(1)
$
540,004
$
55,874
$
68,909
$
(159,613
)
$
505,174
Non-controlling interests:
Fortegra preferred interests
77,679
—
—
—
77,679
Common interests
158,565
—
—
—
158,565
Total stockholders’ equity
$
776,248
$
55,874
$
68,909
$
(159,613
)
$
741,418
(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.
Three Months Ended September 30, 2025
($ in thousands)
Tiptree Capital
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
55,223
$
202
$
1,366
$
(18,515
)
$
38,276
Less: Income tax (benefit) expense
(18,378
)
(314
)
(313
)
$
(3,661
)
(22,666
)
Less: Net realized and unrealized gains (losses)
(1)
(24,761
)
530
(275
)
—
(24,506
)
Plus: Intangibles amortization
(2)
3,362
—
—
—
3,362
Plus: Stock-based compensation expense
4,133
—
—
1,494
5,627
Plus: Non-recurring expenses
(3)
9,417
—
—
3,084
12,501
Plus: Non-cash fair value adjustments
(4)
16,967
—
—
—
16,967
Plus: Impact of tax deconsolidation of Fortegra
(5)
—
—
—
5,943
5,943
Less: Tax on adjustments
(6)
3,580
138
70
(52
)
3,736
Adjusted net income (before NCI)
$
49,543
$
556
$
848
$
(11,707
)
$
39,240
Less: Impact of non-controlling interests
(10,476
)
—
—
—
(10,476
)
Adjusted net income
$
39,067
$
556
$
848
$
(11,707
)
$
28,764
Adjusted net income (before NCI)
$
49,543
$
556
$
848
$
(11,707
)
$
39,240
Average stockholders’ equity
$
753,591
$
55,931
$
75,031
$
(152,159
)
$
732,394
Adjusted return on average equity
(7)
26.3
%
4.0
%
4.5
%
NM%
21.4
%
Three Months Ended September 30, 2024
($ in thousands)
Tiptree Capital
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
47,209
$
(89
)
$
(2,603
)
$
(7,736
)
$
36,781
Less: Income tax (benefit) expense
(12,114
)
32
104
(4,330
)
(16,308
)
Less: Net realized and unrealized gains (losses)
(1)
(2,218
)
1,877
2,764
—
2,423
Plus: Intangibles amortization
(2)
3,859
—
—
—
3,859
Plus: Stock-based compensation expense
4,195
—
—
1,762
5,957
Plus: Non-recurring expenses
(3)
119
—
—
—
119
Plus: Non-cash fair value adjustments
(4)
946
—
—
—
946
Plus: Impact of tax deconsolidation of Fortegra
(5)
Less: Net realized and unrealized gains (losses)
(1)
(33,310
)
1,327
441
—
(31,542
)
Plus: Intangibles amortization
(2)
10,047
—
—
—
10,047
Plus: Stock-based compensation expense
7,231
—
—
5,253
12,484
Plus: Non-recurring expenses
(3)
13,623
—
1,350
3,084
18,057
Plus: Non-cash fair value adjustments
(4)
17,560
—
—
—
17,560
Plus: Impact of tax deconsolidation of Fortegra
(5)
—
—
—
18,603
18,603
Less: Tax on adjustments
(6)
3,480
(91
)
598
(1,259
)
2,728
Adjusted net income (before NCI)
$
135,190
$
1,183
$
(8
)
$
(28,746
)
$
107,619
Less: Impact of non-controlling interests
(28,396
)
—
—
—
(28,396
)
Adjusted net income
$
106,794
$
1,183
$
(8
)
$
(28,746
)
$
79,223
Adjusted net income (before NCI)
$
135,190
$
1,183
$
(8
)
$
(28,746
)
$
107,619
Average stockholders’ equity
$
700,867
$
55,901
$
52,401
$
(110,074
)
$
699,095
Adjusted return on average equity
(7)
25.7
%
2.8
%
(0.0
)%
NM%
20.5
%
Nine Months Ended September 30, 2024
($ in thousands)
Tiptree Capital
Insurance
Mortgage
Other
Corporate
Total
Income (loss) before taxes
$
135,270
$
1,192
$
602
$
(29,938
)
$
107,126
Less: Income tax (benefit) expense
(35,604
)
(244
)
(704
)
(12,247
)
(48,799
)
Less: Net realized and unrealized gains (losses)
(1)
(7,582
)
428
726
—
(6,428
)
Plus: Intangibles amortization
(2)
11,557
—
—
—
11,557
Plus: Stock-based compensation expense
5,999
—
—
7,190
13,189
Plus: Non-recurring expenses
(3)
3,455
—
—
—
3,455
Plus: Non-cash fair value adjustments
(4)
6,018
—
—
—
6,018
Plus: Impact of tax deconsolidation of Fortegra
(5)
—
—
—
16,729
16,729
Less: Tax on adjustments
(6)
(4,622
)
(145
)
246
(1,752
)
(6,273
)
Adjusted net income (before NCI)
$
114,491
$
1,231
$
870
$
(20,018
)
$
96,574
Less: Impact of non-controlling interests
(23,747
)
—
—
—
(23,747
)
Adjusted net income
$
90,744
$
1,231
$
870
$
(20,018
)
$
72,827
Adjusted net income (before NCI)
$
114,491
$
1,231
$
870
$
(20,018
)
$
96,574
Average stockholders’ equity
$
529,486
$
52,771
$
91,263
$
(57,137
)
$
616,383
Adjusted return on average equity
(7)
28.8
%
3.1
%
1.3
%
NM%
20.9
%
(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.
Total stockholders’ equity, net of non-controlling interests
$
505,174
$
461,946
Total common shares outstanding
37,820
36,790
Book value per share
$
13.36
$
12.56
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)
Corporate Debt Outstanding as of
September 30,
Interest Expense For the Nine Months Ended September 30,
2025
2024
2025
2024
Insurance
$
330,000
$
260,000
$
22,199
$
17,491
Corporate
74,438
—
5,319
—
Total
$
404,438
$
260,000
$
27,518
$
17,491
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)
Nine Months Ended September 30,
2025
2024
Cash and cash equivalents provided by (used in):
Operating activities
$
123,366
$
170,799
Investing activities
(122,891
)
(146,198
)
Financing activities
58,051
(17,980
)
Effect of exchange rate changes on cash
4,770
5,188
Change in cash, cash equivalents and restricted cash
$
63,296
$
11,809
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.
Item 3. Quantitative and Qualitat
ive Disclosures About Market Risk
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.
Item 4. Con
trols and Procedures
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.
Our legal proceedings are discussed under the heading “Litigation” in Note (19) Commitments and Contingencies in the Notes to the condensed consolidated financial statements in this report.
Ite
m 1A. Risk Factors
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.
Item 2. Unr
egistered Sales of Equity Securities and Use of Proceeds
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Share repurchase activity for three months ended September 30, 2025 was as follows:
Period
Purchaser
Total
Number of
Shares
Purchased
(1)
Average
Price
Paid Per
Share
Total Number of Shares
Purchased as Part of
Publicly
Announced Plans or
Programs
Approximate Dollar Value
($ in thousands) of Shares That
May Yet Be Purchased
Under the Plans or
Programs
(1)
July 1, 2025 to July 31, 2025
Tiptree Inc.
—
$
—
—
August 1, 2025 to August 31, 2025
Tiptree Inc.
—
$
—
—
September 1, 2025 to September 30, 2025
Tiptree Inc.
—
$
—
—
Total
—
$
—
—
$
11,945
(1)
On November 2, 2020, the Board of Directors of Tiptree authorized Tiptree’s Executive Committee to repurchase up to $20 million of its outstanding common stock in the aggregate from time to time.
The Exhibits listed in the Index of Exhibits, which appears immediately following the signature page, is incorporated herein by reference and is filed as part of this Form 10-Q.
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024, (iv) the Condensed Consolidated Statements of Changes in Stockholders’ Equity for the periods ended September 30, 2025 and 2024, (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 and (vi) the Notes to the Condensed Consolidated Financial Statements.
Pursuant to the requirements of the Securities Exchange Act of 1934, Tiptree Inc. has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
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