Kingsway Corporation · NYSE:KWY
Kingsway — Kingsway Financial Services — Investor Presentation (May 2014)
19 slides from Kingsway's investor presentation, May 29, 2014
Slide 1: Kingsway Financial Services Inc. Investor Presentation May 2014
KINGSWAY FINANCIAL SERVICES INC. INVESTOR PRESENTATION MAY 2014
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements related to our future growth, trends in our operating companies' businesses and industries and our financial and operational results and performance that are based on management’s current expectations, forecasts and ass
Slide 3: Value Building Philosophy
VALUE BUILDING PHILOSOPHY 3 Compounding capital in the long‐term with investments/acquisitions/financings that offer asymmetric risk/reward potential with a margin of safety supported by private market values
Slide 4: Kingsway Is a Merchant Bank
KINGSWAY IS A MERCHANT BANK Kingsway At-A-Glance Ticker KFS (NYSE), KFS.TO (TSX) Stock Price $6.45 NYSE (as of 5/27/2014) Shares Outstanding 16.4 million Market Cap $106 million (as of 5/27/2014) US Headquarters Itasca, Illinois Sector/Industry Financial, insurance 4 Kingsway is a merchant bank wi
Slide 5: Understanding Kingsway's History
UNDERSTANDING KINGSWAY’S HISTORY 5 AFH completed U.S. IPO in February 2013 Acquired Trinity Warranty Solutions in May 2013 Closed rights offering for $13.1 million in gross proceeds in September 2013 Previous management and board replaced Multi-year plan to shed assets and streamline ops
Slide 6: How We Think About Building Value
HOW WE THINK ABOUT BUILDING VALUE Concentration on insurance companies, which provide unique investment vehicles to compound and leverage investment results Focus on a 15-30 year perspective when creating/building value, while recognizing short- and near-term realities Consider upside and downside p
Slide 7: Kingsway's Businesses
KINGSWAY’S BUSINESSES 7 Type of Business Business Attributes Traditional Insurance Warranty Insurance Services Risk-Taking Fee for Service Fee plus Profit Share * PIH (Nasdaq: PIH) IPO in April 2014; KFS currently owns approximately 30% *
Slide 8: Insurance Underwriting – NSA Business
INSURANCE UNDERWRITING – NSA BUSINESS 8 Mendota is a non-standard automobile (“NSA”) insurance carrier; current management has substantially repositioned the business relative to prior strategic direction Previous NSA View on Premium Kingsway wrote total NSA premium of $350 million in 33 states at
Slide 9: Insurance Services
INSURANCE SERVICES IWS Acquisition Corporation (“IWS”) Kingsway acquired in November 2012 in a highly structured transaction for total consideration consisting of cash, future contingent payments and common equity in a newly formed entity Providing after-market vehicle protection services sinc
Slide 10: Case Study: 1347 Property Insurance Holdings
CASE STUDY: 1347 PROPERTY INSURANCE HOLDINGS 1347 Property Insurance Holdings (“PIH”) is a holding company that owns an admitted property and casualty insurance company based in Louisiana PIH completed a successful U.S. IPO in April 2014 and trades on the Nasdaq stock exchange under the symbol P
Slide 11: Case Study: Atlas Financial Holdings
CASE STUDY: ATLAS FINANCIAL HOLDINGS Atlas Financial Holdings, Inc. (“Atlas” or “AFH”) is a combination of former Kingsway units American Country Insurance Company and American Service Insurance Company, Inc. Commercial auto insurance in the U.S. Niche markets of taxi/limo/para-transit Atlas
Slide 12: 1347 Capital LLC
1347 CAPITAL LLC Identifies and targets specialty insurance businesses and special situation investments for acquisition or financing with a goal of managing, improving, and growing to create value for Kingsway’s shareholders Principals of 1347 Capital LLC have been active in public and private
Slide 13: Management / Alignment of Interests
MANAGEMENT / ALIGNMENT OF INTERESTS Dedicated and experienced management team and Board of Directors has transformed the Company Meaningful stake (approximately 37% including restricted shares) Invested approximately $7 million over the past 12 months in private placement and rights offering Lar
Slide 14: Key Takeaways
KEY TAKEAWAYS Kingsway provides an opportunity to invest in a diverse pool of insurance assets and insurance-related businesses led by experienced leadership team with a history of success Through our merchant bank platform, we have the opportunity to capitalize on changing markets through a var
Slide 15: Contact Us
CONTACT US Investor Relations The Equity Group Carolyne Y. Sohn csohn@equityny.com Adam Prior aprior@equityny.com 15 KINGSWAY FINANCIAL SERVICES INC. INVESTOR PRESENTATION MAY 2014
Slide 16: Summary Financials
SUMMARY FINANCIALS Consolidated Select Statements of Operations Items (Unaudited) (in 000s except per share data) Three months ended March 31, 2014 2013 Net Premiums Earned $31,920 $28,068 Service Fee and Commission Income $14,724 $13,124 Investment Income $413 $580 Total Revenues $49,167 $42,581 Lo
Slide 17: Summary Financials
SUMMARY FINANCIALS Consolidated Select Statements of Operations Items (in 000s except per share data) Three months ended December 31, (unaudited) Years ended December 31, (audited) 2013 2012 2013 2012 Net Premiums Earned $27,202 $28,184 $109,608 $114,937 Service Fee and Commission Income $12,211 $10
Slide 18: Balance Sheet
BALANCE SHEET Consolidated Select Balance Sheet Items (in 000s) Assets 3/31/2014 (unaudited) 12/31/2013 (audited) Total Investments $68,540 $69,195 Cash and Cash Equivalents $72,080 $98,589 Receivables $60,337 $55,144 Total Assets $300,625 $324,639 Liabilities & Equity Total Unpaid Loss/Loss Adjustm
Slide 19: Investment Portfolio
INVESTMENT PORTFOLIO Designed to preserve capital, maximize after-tax investment income, maintain liquidity and minimize risk As of March 31, 2014, 100% of the Company’s fixed maturity portfolio was rated investment grade 95.1% have contractual maturities of <5 years 93.2% rated A or better
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