TIPTREE INC

For the period ended Mar 31, 2024. Filed May 1, 2024.

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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Mar 31, 2024 · Filed May 1, 2024

TIPT$17.62-0.2%Stored close · as of Nov 10, 2026

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Contents

(5) 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 March 31, 2024
	Tiptree Capital
	Insurance	Mortgage	Other	Total
Available for sale securities, at fair value, net of allowance for credit losses	$750,352	$—	$30,844	$781,196
Loans, at fair value	9,094	59,945	—	69,039
Equity securities	44,557	—	13,857	58,414
Other investments	87,116	3,477	396	90,989
Total investments	$891,119	$63,422	$45,097	$999,638

	As of December 31, 2023
	Tiptree Capital
	Insurance	Mortgage	Other	Total
Available for sale securities, at fair value, net of allowance for credit losses	$772,135	$—	$30,474	$802,609
Loans, at fair value	11,218	58,338	—	69,556
Equity securities	27,113	—	41,195	68,308
Other investments	106,760	3,931	397	111,088
Total investments	$917,226	$62,269	$72,066	$1,051,561

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 March 31, 2024 and December 31, 2023 are held by subsidiaries in the insurance segment. The following tables present the Company's investments in AFS securities:

	As of March 31, 2024
	Amortized cost	Allowance for credit losses(1)	Grossunrealized gains	Grossunrealized losses	Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$391,919	$—	$517	$(30,255)	$362,181
Obligations of state and political subdivisions	47,812	(1)	12	(3,373)	44,450
Corporate securities	353,137	(179)	1,580	(9,372)	345,166
Asset backed securities	28,480	(26)	1	(2,970)	25,485
Certificates of deposit	1,724	—	—	—	1,724
Obligations of foreign governments	2,343	—	—	(153)	2,190
Total	$825,415	$(206)	$2,110	$(46,123)	$781,196

	As of December 31, 2023
	Amortized cost	Allowance for credit losses(1)	Grossunrealized gains	Grossunrealized losses	Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$496,731	$—	$515	$(27,161)	$470,085
Obligations of state and political subdivisions	48,762	(1)	51	(3,353)	45,459
Corporate securities	260,961	(73)	2,445	(8,735)	254,598
Asset backed securities	29,275	(10)	3	(3,082)	26,186
Certificates of deposit	1,724	—	—	—	1,724
Obligations of foreign governments	4,705	—	—	(148)	4,557
Total	$842,158	$(84)	$3,014	$(42,479)	$802,609

(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.

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
	March 31, 2024		December 31, 2023
	Amortized cost	Fair value	Amortized cost	Fair value
Due in one year or less	$108,527	$108,140	$247,613	$246,489
Due after one year through five years	392,641	379,819	318,763	307,423
Due after five years through ten years	99,063	86,232	46,377	39,221
Due after ten years	196,704	181,520	200,130	183,290
Asset backed securities	28,480	25,485	29,275	26,186
Total	$825,415	$781,196	$842,158	$802,609

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 March 31, 2024
Less Than or Equal to One Year · More Than One Year
	Fair value	Grossunrealized 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	$84,327	$(1,554)	229	$215,186	$(28,701)	605
Obligations of state and political subdivisions	9,623	(72)	34	31,423	(3,301)	108
Corporate securities	128,540	(908)	420	121,738	(8,464)	448
Asset backed securities	—	—	—	24,386	(2,970)	139
Obligations of foreign governments	—	—	—	1,245	(153)	6
Total	$222,490	$(2,534)	683	$393,978	$(43,589)	1,306

	As of December 31, 2023
Less Than or Equal to One Year · More Than One Year
	Fair value	Grossunrealized 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	$109,011	$(6,522)	459	$185,950	$(20,639)	480
Obligations of state and political subdivisions	537	(53)	43	39,319	(3,300)	131
Corporate securities	83,747	(4,881)	868	57,679	(3,854)	148
Asset backed securities	2,187	(259)	54	23,999	(2,823)	129
Obligations of foreign governments	2,904	—	3	1,653	(148)	7
Total	$198,386	$(11,715)	1,427	$308,600	$(30,764)	895

(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 March 31, 2024 until full recovery of their amortized cost basis.

The table below presents a roll-forward of the activity in the allowance for credit losses on AFS securities by type as of March 31, 2024:

	Obligations of state and political subdivisions	Corporate securities	Asset backed securities	Obligations of foreign governments	Total
Balance at December 31, 2022	$(3)	$(183)	$(1)	$(3)	$(190)
(Increase) in allowance for credit losses	—	(34)	—	—	(34)
Gains from recoveries of amounts previously written off	1	79	—	—	80
Balance at March 31, 2023	$(2)	$(138)	$(1)	$(3)	$(144)
Balance at December 31, 2023	$(1)	$(73)	$(10)	$—	$(84)
(Increase) in allowance for credit losses	—	(61)	(16)	—	(77)
Additions for AFS securities purchased with credit deterioration during the year	—	(52)	—	—	(52)
Reduction in credit losses due to AFS securities sold during the year	—	1	—	—	1
Gains from recoveries of amounts previously written off	—	6	—	—	6
Balance at March 31, 2024	$(1)	$(179)	$(26)	$—	$(206)

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) on AFS securities recorded by the Company for the following period:

	Three Months Ended March 31,
	2024	2023
Net gains from recoveries (credit losses) on AFS securities	$(122)	$46

Pursuant to certain reinsurance agreements and statutory licensing requirements, the Company has deposited invested assets in custody accounts or insurance department safekeeping accounts. The Company cannot remove or replace investments in regulatory deposit accounts without prior approval of the contractual party or regulatory authority, as applicable. The following table presents the Company's restricted investments included in the Company's AFS securities:

	As of
	March 31, 2024	December 31, 2023
Fair value of restricted investments in trust pursuant to reinsurance agreements	$72,340	$49,735
Fair value of restricted investments for special deposits required by state insurance departments	16,696	16,694
Total fair value of restricted investments	$89,036	$66,429

The following table presents additional information on the Company’s AFS securities:

	Three Months Ended March 31,
	2024	2023
Purchases of AFS securities	$167,933	$207,812
Proceeds from maturities, calls and prepayments of AFS securities	$170,427	$18,170
Gross proceeds from sales of AFS securities	$14,812	$1,557

The following table presents the gross realized gains and gross realized losses from sales and redemptions of AFS securities:

	Three Months Ended March 31,
	2024	2023
Gross realized (losses)	(116)	(365)
Total net realized gains (losses) from investment sales and redemptions	$(116)	$(365)

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 March 31, 2024				As of December 31, 2023
	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)	$9,094	$12,671	$(3,577)	$—	$11,218	$14,671	$(3,453)	$—
Mortgage:
Mortgage loans held for sale (2)	59,945	58,533	1,412	59,239	58,338	56,481	1,857	57,248
Total loans, at fair value	$69,039	$71,204	$(2,165)	$59,239	$69,556	$71,152	$(1,596)	$57,248

(1)The cost basis of Corporate loans was approximately $12,671 and $14,671 at March 31, 2024 and December 31, 2023, respectively.

(2)As of March 31, 2024, there were three mortgage loans held for sale that were 90 days or more past due. As of December 31, 2023, 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 fixed income exchange traded funds. Included within the equity securities balance are 16.98 million shares of Invesque as of March 31, 2024 and December 31, 2023, for which the Company has elected to apply the fair value option. 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 March 31, 2024
	Insurance		Tiptree Capital - Other		Total
	Cost	Fair Value	Cost	Fair Value	Cost	Fair Value
Invesque	$23,339	$108	$111,490	$517	$134,829	$625
Fixed income exchange traded funds	40	41	—	—	40	41
Other equity securities	38,641	44,408	9,953	13,340	48,594	57,748
Total equity securities	$62,020	$44,557	$121,443	$13,857	$183,463	$58,414

	As of December 31, 2023
	Insurance		Tiptree Capital - Other		Total
	Cost	Fair Value	Cost	Fair Value	Cost	Fair Value
Invesque	$23,339	$719	$111,490	$3,442	$134,829	$4,161
Fixed income exchange traded funds	1,339	1,349	—	—	1,339	1,349
Other equity securities	22,741	25,045	29,942	37,753	52,683	62,798
Total equity securities	$47,419	$27,113	$141,432	$41,195	$188,851	$68,308

Other Investments

The following table contains information regarding the Company’s other investments as of the following periods:

	As of March 31, 2024
	Tiptree Capital
	Insurance	Mortgage	Other	Total
Corporate bonds, at fair value (1)	$40,625	$—	$—	$40,625
Debentures	28,462	—	—	28,462
Investment in credit fund	18,014	—	—	18,014
Other	15	3,477	396	3,888
Total other investments	$87,116	$3,477	$396	$90,989

	As of December 31, 2023
	Tiptree Capital
	Insurance	Mortgage	Other	Total
Corporate bonds, at fair value (1)	$62,081	$—	$—	$62,081
Debentures	25,648	—	—	25,648
Investment in credit fund	11,830	—	—	11,830
Other	7,201	3,931	397	11,529
Total other investments	$106,760	$3,931	$397	$111,088

(1)The cost basis of corporate bonds was $39,378 and $59,315 as of March 31, 2024 and December 31, 2023, respectively.

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 March 31,
	2024	2023
Interest:
AFS securities	$6,611	$4,288
Loans, at fair value	40	125
Other investments	1,861	2,075
Dividends from equity securities	86	42
Subtotal	8,598	6,530
Less: investment expenses	1,840	1,421
Net investment income	$6,758	$5,109

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 (15) Other Revenue and Other Expenses. The following tables present the components of other investment income by type:

	Three Months Ended March 31,
	2024	2023
Interest income from Loans, at fair value	$816	$610
Loan fee income	4,381	3,844
Other	1,019	316
Other investment income	$6,216	$4,770

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 March 31,
	2024	2023
Net realized gains (losses)
Insurance:
Reclass of unrealized gains (losses) on AFS securities from OCI	$(116)	$(365)
Net gains from recoveries (credit losses) on AFS securities	(122)	46
Net realized gains (losses) on loans	58	2
Net realized gains (losses) on equity securities	1,188	(854)
Net realized gains (losses) on corporate bonds	2,435	(975)
Other	(963)	(398)
Tiptree Capital
Mortgage:
Net realized gains (losses) on loans	10,823	9,671
Other	159	383
Other:
Net realized gains (losses) on equity securities	9,490	—

Net unrealized gains (losses)
Total net realized gains (losses)	$22,952	$7,510
Insurance:
Net change in unrealized gains (losses) on loans	$(124)	$(2,158)
Net unrealized gains (losses) on equity securities held at period end	3,022	(379)
Reclass of unrealized (gains) losses from prior periods for equity securities sold	(53)	(14)
Other	(2,506)	488
Tiptree Capital
Mortgage:
Net change in unrealized gains (losses) on loans	(445)	548
Other	127	(3,496)
Other:
Net unrealized gains (losses) on equity securities held at period end	(959)	(322)
Reclass of unrealized (gains) losses from prior periods for equity securities sold	(6,390)	—
Total net unrealized gains (losses)	(7,328)	(5,333)
Total net realized and unrealized gains (losses)	$15,624	$2,177

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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.