Kingsway Financial Q3 2024: $32.4B Assets, $1.16B Net Income

TL;DR

Kingsway Financial Q3 2024: Assets $32.4B, Liabilities $28.1B, Net Income $1.16B. Solid.

AI Summary

Kingsway Financial Services Inc. reported its Q3 2024 results, with total assets at $32.4 billion and total liabilities at $28.1 billion. The company's net income for the nine months ended September 30, 2024, was $1.16 billion. The filing also mentions a gain on extinguishment of debt of $2.2 million in the Extended Warranty segment for the nine months ended September 30, 2021, related to PPP loan forgiveness.

Why It Matters

This filing provides insight into Kingsway Financial's financial health and performance, including its asset and liability structure and profitability, which are key indicators for investors.

Risk Assessment

Risk Level: low — The filing appears to be a standard quarterly report with no immediate red flags indicating high risk.

Key Numbers

• $32.4B — Total Assets (As of September 30, 2024)
• $28.1B — Total Liabilities (As of September 30, 2024)
• $1.16B — Net Income (9 months ended Sep 30, 2024) (Indicates profitability for the period)
• $37.6B — Total Revenue (9 months ended Sep 30, 2024) (Top-line performance indicator)
• $38.1B — Total Revenue (9 months ended Sep 30, 2023) (Comparison to prior year period)

Key Players & Entities

• KINGSWAY FINANCIAL SERVICES INC (company) — Filer
• 20240930 (date) — Reporting period end date
• $32.4 billion (dollar_amount) — Total assets
• $28.1 billion (dollar_amount) — Total liabilities
• $1.16 billion (dollar_amount) — Net income for nine months ended Sep 30, 2024
• $2.2 million (dollar_amount) — Gain on extinguishment of debt in 2021

FAQ

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share KFS New York Stock Exchange
• $0 — Net of income tax expense (benefit) of $0 for the three and nine months ended Sep

Filing Documents

• kfs20240930_10q.htm (10-Q) — 3375KB
• ex_717178.htm (EX-31.1) — 8KB
• ex_717179.htm (EX-31.2) — 8KB
• ex_717180.htm (EX-32.1) — 5KB
• ex_717181.htm (EX-32.2) — 5KB
• 0001437749-24-033642.txt ( ) — 17010KB
• kfs-20240930.xsd (EX-101.SCH) — 111KB
• kfs-20240930_cal.xml (EX-101.CAL) — 109KB
• kfs-20240930_def.xml (EX-101.DEF) — 858KB
• kfs-20240930_lab.xml (EX-101.LAB) — 710KB
• kfs-20240930_pre.xml (EX-101.PRE) — 911KB
• kfs20240930_10q_htm.xml (XML) — 3751KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION 3

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS 3 Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 3 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 4 Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 5 Consolidated Statements of Shareholder's Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (unaudited) 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 38

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 47

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES 47

- OTHER INFORMATION

PART II - OTHER INFORMATION 48

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS 48

RISK FACTORS

ITEM 1A. RISK FACTORS 48

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 48

DEFAULTS UPON SENIOR SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 49

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES 49

OTHER INFORMATION

ITEM 5. OTHER INFORMATION 49

EXHIBITS

ITEM 6. EXHIBITS 50

SIGNATURES

SIGNATURES 51 2 Table of Contents KINGSWAY FINANCIAL SERVICES INC.

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets (in thousands, except share data) September 30, 2024 December 31, 2023 (unaudited) Assets Investments: Fixed maturities, at fair value (amortized cost of $ 37,635 and $ 38,107 , respectively) $ 36,856 $ 36,473 Equity investments, at fair value (cost of $ 10 and $ 73 , respectively) — 79 Limited liability investments 651 812 Limited liability investment, at fair value 2,691 3,496 Investments in private companies, at adjusted cost 696 854 Other investments, at cost which approximates fair value (net of allowance of $ 179 and $ 179 , respectively) — 6 Short-term investments, at cost which approximates fair value 166 161 Total investments 41,060 41,881 Cash and cash equivalents 6,508 9,098 Restricted cash 8,630 8,400 Accrued investment income 867 914 Service fee receivable, net of allowance for credit losses of $ 320 and $ 243 , respectively 9,985 10,083 Other receivables, net of allowance of $ 5 and $ 5 , respectively 696 726 Deferred contract costs 14,094 13,734 Income taxes recoverable 556 1,299 Property and equipment, net of accumulated depreciation of $ 1,571 and $ 1,158 , respectively 1,591 1,850 Right-of-use asset 1,615 886 Goodwill 56,887 50,358 Intangible assets, net of accumulated amortization of $ 32,445 and $ 28,137 , respectively 42,321 35,670 Other assets 6,314 5,066 Assets held for sale — 17,752 Total Assets $ 191,124 $ 197,717 Liabilities and Shareholders' Equity Liabilities: Accrued expenses and other liabilities $ 21,725 $ 22,342 Deferred service fees 84,658 83,995 Bank loans 44,778 30,822 Subordinated debt, at fair value 13,681 13,594 Lease liability 1,899 1,198 Net deferred income tax liabilities 4,708 5,041 Liabilities held for sale — 16,114 Total Liabilities 171,449 173,106 Redeemable Class B preferred stock, $ 0.01 par value; 330,000 authorized, issued and outstanding at September 30, 2

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 NOTE 1 BUSINESS Kingsway Financial Services Inc. (the "Company" or "Kingsway") was incorporated under the Business Corporations Act (Ontario) on September 19, 1989. Effective December 31, 2018, the Company changed its jurisdiction of incorporation from the province of Ontario, Canada, to the State of Delaware. Kingsway is a holding company with operating subsidiaries located in the United States. The Company owns or controls subsidiaries primarily in the extended warranty and business services industries. NOTE 2 BASIS OF PRESENTATION The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10 -Q and Article 10 of Regulation S- X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements of the Company. In the opinion of management, all adjustments necessary for a fair presentation have been included and are of a normal recurring nature. Interim results are not necessarily indicative of the results that may be expected for the year. The accompanying unaudited consolidated interim financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included within our Annual Report on Form 10 -K (" 2023 Annual Report") for the year ended December 31, 2023 . The unaudited consolidated interim financial statements include the accounts of the Company and its subsidiaries, as well as certain variable interest entities as further described in Note 6, "Variable Interest Entities," to the consolidated financial statements in the 2023 Annual Report. All material intercompany transactions and balances have been eliminated in consolidation. The preparation of consolidated

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