Tiptree Reports 2016 Results

• Revenues of $567.2 million for 2016, up 29.4% from $438.5 million
  for 2015.
• Income from continuing operations of $32.3 million for 2016, an
  increase of $46.1 million from 2015.
• Net income attributable to Class A stockholders of $25.3 million
  for 2016, an increase of $19.5 million from 2015.
• Adjusted EBITDA¹ of $78.9 million for
  2016, up 35.1% from $58.4 million for 2015.
• Book value per share, as exchanged¹ of
  $10.14, up 13.9% compared to $8.90 as of December 31, 2015.
• Declared dividend of $0.03 per share to Class A stockholders of
  record on March 27, 2017 with a payment date of April 3, 2017.

NEW YORK–(BUSINESS WIRE)–Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), which operates
in the specialty insurance, asset management, senior living and
specialty finance industries, today announced its financial results for
the year ended December 31, 2016.

Summary Consolidated Statements of Operations (2)
($ in millions, except for per share information)					Year Ended December 31,
GAAP:					2016				2015
Total revenues					$	567.2			$	438.5
Income (loss) from continuing operations					$	32.3			$	(13.8	)
Net income attributable to Class A common stockholders					$	25.3			$	5.8
Diluted earnings per share					$	0.78			$	0.17
Cash dividends paid per common share					$	0.10			$	0.10
Non-GAAP: (1)
Adjusted EBITDA					$	78.9			$	58.4
Book Value per share, as exchanged					$	10.14			$	8.90

(1)			For a reconciliation to U.S. GAAP, see “Non-GAAP Financial Measures” below.
(2)			Revenues of $40.5 million, net income of $7.0 million and gain on sale of $15.6 million attributable to PFG for the year ended December 31, 2015 are included in Discontinued operations, net.

Earnings Conference Call

Tiptree will host a conference call on Tuesday, March 14, 2017 at 10:00
a.m. Eastern Time to discuss its full year 2016 financial results. A
copy of our investor presentation, to be used during the conference
call, as well as this press release, will be available in the Investor
Relations section of the Company’s website, located at www.tiptreeinc.com.

The conference call will be available via live or archived webcast at http://www.investors.tiptreeinc.com.
To listen to a live broadcast, go to the site at least 15 minutes prior
to the scheduled start time in order to register, download and install
any necessary audio software. To participate in the telephone conference
call, please dial 1-877-407-4018 (domestic) or 1-201-689-8471
(international). Please dial in at least five minutes prior to the start
time.

A replay of the call will be available from Tuesday, March 14, 2017 at
1:00 p.m. Eastern Time, until midnight Eastern on Tuesday, March 21,
2017. To listen to the replay, please dial 1-844-512-2921 (domestic) or
1-412-317-6671 (international), Passcode: 13656479.

2016 Financial Overview

Consolidated Highlights

• Specialty insurance operations produced gross written premiums of $708
  million, up 3.3%, while maintaining strong underwriting performance.
  The investment portfolio grew to $352.3 million of net investments⁽¹⁾
  and yielded a 8.0% average annualized return⁽¹⁾.
• Our asset management operations contributed $25.3 million of pre-tax
  profits, up from a loss of $6.8 million in 2015, with fee-earning AUM
  remaining steady at $1.9 billion.
• Senior living operations completed five acquisitions for $106 million,
  bringing total aggregate purchase price of Care’s portfolio to $338.4
  million. Revenues were $60.7 million in 2016, up 31.7% from prior year
  while expanding margins at existing properties.
• Mortgage originations in the specialty finance sector were $1.9
  billion, a 49.1% increase from 2015.
• The Company returned $47.8 million to shareholders through $43.8
  million of share buy-backs and $4.0 million of dividends.

(1)			For a reconciliation to U.S. GAAP, see “Non-GAAP Financial Measures” below.

Consolidated Results

For the year ended December 31, 2016, the Company reported revenues of
$567.2 million, an increase of $128.7 million or 29.4% from the year
ended December 31, 2015. The primary drivers of the increase in revenues
were improvements in earned premiums, service and administrative fees
and investment income in our specialty insurance segment, increases in
management incentive fees and returns on associated investments in our
asset management segment, improvement in rental income attributable to
acquisitions of senior housing properties and increased mortgage volume.

For the year ended December 31, 2016, income from continuing operations
was $32.3 million compared to a loss of $13.8 million in 2015. The key
drivers of the $46.2 million increase were improved profitability in our
specialty insurance segment driven by higher revenues and investment
income, increased profits from our asset management segment as a result
of incentive fees and CLO subordinated note returns, increased rental
income in our senior living operations, and increases in mortgage volume
and margins due to improving market conditions. This increased income
was partially offset by higher corporate expenses from increased
performance related incentive compensation and costs associated with our
effort to improve our controls and financial reporting infrastructure.
Additionally, a tax benefit of $4.0 million was recognized in the first
quarter 2016, which was driven by the tax reorganization effective
January 1, 2016. A discussion of the changes in revenues, expenses and
net income is presented below and in more detail in our segment analysis.

For the year ended December 31, 2016 net income available to Class A
common shareholders was $25.3 million, an increase of $19.5 million, or
338.1% from the prior year period. The key drivers of net income
available to Class A common shareholders were the same factors which
impacted the positive year-over-year change in income from continuing
operations, and which were partially offset by the loss of the $22.6
million of earnings from discontinued operations recorded in the year
ended December 31, 2015, which included the one-time net gain on the
sale of PFG of $15.6 million.

Adjusted EBITDA – Non-GAAP

Management uses Adjusted EBITDA and book value per share, as exchanged
as measurements of operating performance which are non-GAAP measures.
Management believes that use of Adjusted EBITDA provides supplemental
information useful to investors as it is frequently used by the
financial community to analyze financial performance, and to analyze a
company’s ability to service its debt and to facilitate comparison among
companies. Adjusted EBITDA is also used in determining incentive
compensation for the Company’s executive officers. Adjusted EBITDA is
not a measurement of financial performance or liquidity under GAAP and
should not be considered as an alternative or substitute for GAAP net
income. Book value per share, as exchanged assumes full exchange of the
limited partners units of TFP for Tiptree Class A common stock.
Management believes that use of this financial measure provides
supplemental information useful to investors as it is frequently used by
the financial community to analyze company growth on a relative per
share basis.

Total Adjusted EBITDA for the year ended December 31, 2016 was $78.9
million compared to $58.4 million for 2015, an increase of $20.5 million
or 35.1%. The key drivers of the change in Adjusted EBITDA were the same
as those which impacted our income from continuing operations, and which
were partially offset by the loss of $32.5 million of Adjusted EBITDA in
the year ended December 31, 2015 related to discontinued operations. See
“Non-GAAP Reconciliations” below for a reconciliation to GAAP net income.

Results by Segment

				Year Ended December 31,
($ in thousands, unaudited)				Revenues									Pre-tax income (loss)
				2016				2015					2016				2015
Specialty insurance				$	394,170			$	330,888				$	46,804			$	32,012
Asset management				13,114				6,770					25,264				(6,753		)
Senior living				60,731				46,128					(5,824		)		(9,535		)
Specialty finance				95,431				54,999					8,170				6,265
Corporate and other				3,708				(326		)			(31,098		)		(34,428		)
Total				$	567,154			$	438,459				$	43,316			$	(12,439	)

Effective December 31, 2016, Tiptree realigned the principal investments
formerly reported in the corporate and other segment into their new
reportable segments to align with the Company’s operating strategy. The
table above reflects the credit and equity investments contributed to
our insurance subsidiary in the specialty insurance segment and the CLO
subordinated notes and related warehouse income in the asset management
segment for the years ended December 31, 2016 and 2015.

Adjusted EBITDA by Segment – Non-GAAP ⁽¹⁾

($ in thousands, unaudited)					Year Ended December 31,
					2016				2015
Specialty insurance					$	60,526			$	43,349
Asset management					25,264				(6,753		)
Senior living					10,469				6,590
Specialty finance					10,513				5,895
Corporate and other					(27,856		)		(23,164		)
Adjusted EBITDA from Continuing Operations					$	78,916			$	25,917
Discontinued Operations					—				32,502
Total Adjusted EBITDA					$	78,916			$	58,419

(1)			For further information relating to the Company’s segment Adjusted EBITDA, including a reconciliation to GAAP pre-tax income, see“—Non-GAAP Reconciliations” below.

About Tiptree

Tiptree Inc. (NASDAQ:TIPT) is focused on enhancing shareholder value by
generating consistent growth and profitability at its operating
companies. The Company’s consolidated subsidiaries currently operate in
the following businesses – specialty insurance, asset management, senior
living and specialty finance. For more information about Tiptree visit www.tiptreeinc.com.

Forward-Looking Statements

This release contains “forward-looking statements” which involve risks,
uncertainties and contingencies, many of which are beyond the Company’s
control, which may cause actual results, performance, or achievements to
differ materially from anticipated results, performance, or
achievements. All statements contained in this release that are not
clearly historical in nature are forward-looking, and the words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,”
“plan,” “project,” “should,” “target,” “will,” or similar expressions
are intended to identify forward-looking statements. Such
forward-looking statements include, but are not limited to, statements
about the Company’s plans, objectives, expectations and intentions. The
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 forecast 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 the Company’s Annual Report on Form
10-K, and as described in the Company’s other filings with the
Securities and Exchange Commission. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
to the date of this release. The factors described therein 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 federal securities
laws, we undertake no obligation to update any forward-looking
statements.

Tiptree Inc. Consolidated Balance Sheet
				As of December 31,
				2016				2015
Assets
Investments:
Available for sale securities, at fair value				$	146,171			$	184,703
Loans, at fair value				373,089				394,395
Loans at amortized cost, net				113,838				52,531
Equity securities, trading, at fair value				48,612				12,727
Real estate, net				309,423				206,158
Other investments				25,467				31,524
Total investments				1,016,600				882,038
Cash and cash equivalents				63,010				69,400
Restricted cash				24,472				18,778
Notes and accounts receivable, net				157,500				136,808
Reinsurance receivables				296,234				352,926
Deferred acquisition costs				126,608				57,858
Goodwill and intangible assets, net				178,245				186,107
Other assets				37,886				62,243
Assets of consolidated CLOs				989,495				728,812
Total assets				$	2,890,050			$	2,494,970
Liabilities and Stockholders’ Equity
Liabilities
Debt, net				$	793,009			$	666,952
Unearned premiums				414,960				389,699
Policy liabilities and unpaid claims				103,391				80,663
Deferred revenue				52,254				63,081
Reinsurance payable				70,588				65,840
Other liabilities and accrued expenses				133,735				132,725
Liabilities of consolidated CLOs				931,969				698,316
Total liabilities				$	2,499,906			$	2,097,276
Commitments and contingencies (see Note 22)
Stockholders’ Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding				$	—			$	—
Common stock – Class A: $0.001 par value, 200,000,000 shares authorized, 34,983,616 and 34,899,833 shares issued and outstanding, respectively				35				35
Common stock – Class B: $0.001 par value, 50,000,000 shares authorized, 8,049,029 and 8,049,029 shares issued and outstanding, respectively				8				8
Additional paid-in capital				297,391				297,063
Accumulated other comprehensive income (loss), net of tax				555				(111		)
Retained earnings				37,974				15,845
Class A common stock held by subsidiaries, 6,596,000 and 0 shares, respectively				(42,524		)		—
Class B common stock held by subsidiaries, 8,049,029 and 0 shares, respectively				(8		)		—
Total Tiptree Inc. stockholders’ equity				293,431				312,840
Non-controlling interests (including $76,077 and $69,278 attributable to Tiptree Financial Partners, L.P., respectively)				96,713				84,854
Total stockholders’ equity				390,144				397,694
Total liabilities and stockholders’ equity				$	2,890,050			$	2,494,970

Tiptree Inc. Consolidated Statements of Operations
				Year Ended December 31,
				2016				2015				2014
Revenues:
Earned premiums, net				229,436				166,265				12,827
Service and administrative fees				109,348				106,525				8,657
Ceding commissions				24,784				43,217				3,737
Net investment income				12,981				5,455				279
Net realized and unrealized gains (losses)				87,300				31,275				14,509
Rental and related revenue				59,636				45,372				20,242
Other income				43,669				40,350				20,062
Total revenues				567,154				438,459				80,313
Expenses:
Policy and contract benefits				106,784				86,312				5,829
Commission expense				147,253				105,751				4,287
Employee compensation and benefits				139,612				107,810				32,540
Interest expense				29,701				23,491				12,541
Depreciation and amortization				28,468				45,124				11,945
Other expenses				92,274				75,521				31,908
Total expenses				544,092				444,009				99,050
Results of consolidated CLOs:
Income attributable to consolidated CLOs				53,577				23,613				64,681
Expenses attributable to consolidated CLOs				33,323				30,502				45,156
Net income (loss) attributable to consolidated CLOs				20,254				(6,889		)		19,525
Income (loss) before taxes from continuing operations				43,316				(12,439		)		788
Less: provision (benefit) for income taxes				10,978				1,377				4,141
Income (loss) from continuing operations				32,338				(13,816		)		(3,353		)
Discontinued operations:
Income from discontinued operations, net				—				6,999				7,937
Gain on sale of discontinued operations, net				—				15,619				—
Discontinued operations, net				—				22,618				7,937
Net income (loss) before non-controlling interests				32,338				8,802				4,584
Less: net income (loss) attributable to non-controlling interests – Tiptree Financial Partners, L.P.				6,432				2,630				6,790
Less: net income (loss) attributable to non-controlling interests – Other				586				393				(496		)
Net income (loss) attributable to Tiptree Inc. Class A common stockholders				$	25,320			$	5,779			$	(1,710	)
Net income (loss) per Class A common share:
Basic, continuing operations, net				$	0.79			$	(0.26	)		$	(0.31	)
Basic, discontinued operations, net				—				0.43				0.21
Basic earnings per share				0.79				0.17				(0.10		)
Diluted, continuing operations, net				0.78				(0.26		)		(0.31		)
Diluted, discontinued operations, net				—				0.43				0.21
Diluted earnings per share				$	0.78			$	0.17			$	(0.10	)
Weighted average number of Class A common shares:
Basic				31,721,449				33,202,681				16,771,980
Diluted				31,766,674				33,202,681				16,771,980

Tiptree Inc. Non-GAAP Financial Measures (Unaudited, in thousands)   Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA   The Company defines EBITDA as GAAP net income of the Company adjusted to add consolidated interest expense, consolidated income taxes and consolidated depreciation and amortization expense as presented in its financial statements and Adjusted EBITDA as EBITDA adjusted to (i) subtract interest expense on asset-specific debt incurred in the ordinary course of its subsidiaries’ business operations, (ii) adjust for the effect of purchase accounting, (iii) add back significant acquisition related costs, (iv) adjust for significant relocation costs and (v) any significant one-time expenses.

Reconciliation from GAAP net income to Non-GAAP financial measures – EBITDA and Adjusted EBITDA
($ in thousands, unaudited)				Year Ended December 31,
				2016				2015
Net income (loss) available to Class A common stockholders				$	25,320			$	5,779
Add: net (loss) income attributable to noncontrolling interests				7,018				3,023
Less: net income from discontinued operations				—				22,618
Income (loss) from Continuing Operations of the Company				$	32,338			$	(13,816	)
Consolidated interest expense				29,701				23,491
Consolidated income taxes				10,978				1,377
Consolidated depreciation and amortization expense				28,468				45,124
EBITDA from Continuing Operations				$	101,485			$	56,176
Consolidated non-corporate and non-acquisition related interest expense(1)				(19,183		)		(11,861		)
Effects of Purchase Accounting (2)				(5,054		)		(24,166		)
Non-cash fair value adjustments (3)				2,693				(1,300		)
Significant acquisition expenses (4)				711				1,859
Separation expense adjustments (5)				(1,736		)		5,209
Adjusted EBITDA from Continuing Operations of the Company				$	78,916			$	25,917
Income from Discontinued Operations of the Company				$	—			$	22,618
Consolidated interest expense				—				5,226
Consolidated income taxes				—				3,796
Consolidated depreciation and amortization expense				—				862
Adjusted EBITDA from Discontinued Operations of the Company				$	—			$	32,502
Adjusted EBITDA of the Company				$	78,916			$	58,419

(1)		The consolidated non-corporate and non-acquisition related interest expense is subtracted from EBITDA to arrive at Adjusted EBITDA. This includes interest expense associated with asset-specific debt at subsidiaries in the specialty insurance, asset management, senior living and specialty finance segments.
(2)		Following the purchase accounting adjustments, current period expenses associated with deferred costs were more favorably stated and current period income associated with deferred revenues were less favorably stated. Thus, the purchase accounting effect related to Fortegra increased EBITDA above what the historical basis of accounting would have generated. The impact of this purchase accounting adjustments have been reversed to reflect an adjusted EBITDA without such purchase accounting effect.
(3)		For our senior living segment, Adjusted EBITDA excludes the impact of the change of fair value of interest rate swaps hedging the debt at the property level. For Reliance, Adjusted EBITDA excludes the impact of changes in contingent earn-outs.
(4)		Acquisition costs include legal, taxes, banker fees and other costs associated with senior living acquisitions in 2016 and 2015 and the Fortegra acquisition in 2014.
(5)		Consists of payments pursuant to a separation agreement, dated as of November 10, 2015.

Segment EBITDA and Adjusted EBITDA from continuing operations
($ in thousands)			Specialty insurance								Asset management								Senior living								Specialty finance								Corporate and other								Total
			2016				2015				2016				2015				2016				2015				2016				2015				2016				2015				2016				2015
Pre-tax income/(loss)			$	46,804			$	32,012			$	25,264			$	(6,753	)		$	(5,824	)		$	(9,535	)		$	8,170			$	6,265			$	(31,098	)		$	(34,428	)		$	43,316			$	(12,439	)
Add back:
Interest expense				9,244				6,968				746				539				8,691				6,796				6,290				3,558				4,730				5,630				29,701				23,491
Depreciation and amortization expenses				13,184				29,673				—				—				14,166				14,546				870				760				248				145				28,468				45,124
Segment EBITDA			$	69,232			$	68,653			$	26,010			$	(6,214	)		$	17,033			$	11,807			$	15,330			$	10,583			$	(26,120	)		$	(28,653	)		$	101,485			$	56,176
EBITDA adjustments:
Asset-specific debt interest				(3,652	)			(1,138	)			(746	)			(539	)			(8,691	)			(6,796	)			(6,094	)			(3,388	)			—				—				(19,183	)			(11,861	)
Effects of purchase accounting				(5,054	)			(24,166	)			—				—				—				—				—				—				—				—				(5,054	)			(24,166	)
Non-cash fair value adjustments				—				—				—				—				1,416				—				1,277				(1,300	)			—				—				2,693				(1,300	)
Significant acquisition expenses				—				—				—				—				711				1,579				—				—				—				280				711				1,859
Separation expenses				—				—				—				—				—				—				—				—				(1,736	)			5,209				(1,736	)			5,209
Segment Adjusted EBITDA			$	60,526			$	43,349			$	25,264			$	(6,753	)		$	10,469			$	6,590			$	10,513			$	5,895			$	(27,856	)		$	(23,164	)		$	78,916			$	25,917

Non-GAAP Financial Measures – Book value per
share, as exchanged

Book value per share, as exchanged assumes full exchange of the limited
partners units of TFP for Tiptree Class A common stock. Management
believes the use of this financial measure provides supplemental
information useful to investors as it 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, for the fiscal years ended December 31, 2016 and 2015.

				Year ended December 31,
($ in thousands, unaudited, except per share information)				2016			2015
Total stockholders’ equity				$	390,144		$	397,694
Less non-controlling interest – other				20,636			15,576
Total stockholders equity, net of non-controlling interests – other				$	369,508		$	382,118
Total Class A shares outstanding (1)				28,388			34,900
Total Class B shares outstanding				8,049			8,049
Total shares outstanding				36,437			42,949
Book value per share, as exchanged				$	10.14		$	8.90

(1)		As of December 31, 2016, excludes 6,596,000 shares of Class A common stock held by subsidiaries of the Company. See Note 24—Earnings per Share, in the Form 10-K for December 31, 2016, for further discussion of potential dilution from warrants.

Non-GAAP Financial Measures – Specialty
Insurance Investment Portfolio

In managing our investment portfolio we analyze net investments and net
portfolio income, which are non-GAAP measures. Our presentation of net
investments equals total investments plus cash and cash equivalents
minus asset based financing of investments. Our presentation of net
portfolio income equals net investment income plus realized and
unrealized gains and losses and minus interest expense associated with
asset based financing of investments. Net investments and net portfolio
income are used to calculate average annualized yield, which management
uses to analyze the profitability of our investment portfolio.
Management believes this information is useful since it allows investors
to evaluate the performance of our investment portfolio based on the
capital at risk and on a non-consolidated basis.

Contacts

Tiptree Inc.
Investor Relations, 212-446-1400
ir@tiptreeinc.com

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