Kingsway Announces Second Quarter 2016 Results

TORONTO, July 22, 2016

Management Comments
Larry G. Swets, Jr., President and Chief Executive Officer, stated, "Kingsway continued to move forward on a number of growth initiatives throughout the first half of 2016 that are consistent with our long-term strategy of creating value through strategic investments, acquisitions and financings.  In the second quarter, we announced, and this week successfully closed, the acquisition of CMC Industries, Inc., which we view as the beginning of building a portfolio of real estate with strong tenants that will allow the Company to deploy its balance sheet and deferred tax assets at minimal risk.  We also restructured our existing Insurance Services segment with the acquisition of Argo Management Group and appointment of John T. ("JT") Fitzgerald.  JT is leading the Company's warranty businesses, where we are beginning to ramp up our expansion efforts and expect to see profitable growth."

Mr. Swets continued, "We also were very pleased to close this week 1347 Capital Corp.'s business combination with Limbach Holdings LLC, a commercial mechanical engineering and construction contractor.  Limbach is run by a strong management team led by CEO Charlie Bacon and has outperformed its peers in the non-residential construction market.  The process through which Limbach came public was challenging, but we were pleased to work through a solution that provides the necessary capital for the company to grow while retaining substantial upside potential for Kingsway and its shareholders.  We look forward to working closely with Charlie and his team in the coming years." 

Company Appoints Steve Harrison as Executive Vice President of its Insurance Management Team
Mr. Swets concluded, "We have continued to evaluate how to better take advantage of our traditional insurance business and were fortunate to have Steve Harrison join our insurance management team as Executive Vice President to help manage this operation.  He has successfully run profitable insurance businesses for over four decades and shares our view that the Company can achieve considerable improvements in its underwriting results."

Mr. Harrison has over 42 years of experience in the insurance industry.  Among his previous experiences, Mr. Harrison was the President and co-founder of USAuto Insurance Company, Inc. in 1995, which merged and went public in 2004 as First Acceptance Corporation (FAC).  Prior to that, he was the President of Harrison Brothers Insurance Agency, Inc., writing all lines of insurance from 1974 to 1995.  Mr. Harrison was the recipient of the 2007 Ernst & Young Entrepreneur of the Year Award.

Operating Results
The Company reported net loss attributable to common shareholders of $0.6 million, or $0.03 per diluted share, in the second quarter of 2016, compared to net income attributable to common shareholders of $1.8 million, or $0.09 per diluted share, in the second quarter of 2015. 

For the six months ended June 30, 2016, Kingsway reported net loss attributable to common shareholders of $2.1 million, or $0.11 per diluted share, compared to a net income attributable to common shareholders of $3.9 million, or $0.20 per diluted share, in the prior year period.