Mr. Ted Goldthorpe reports

MOUNT LOGAN CAPITAL INC. ANNOUNCES FOURTH QUARTER AND FISCAL 2023 FINANCIAL RESULTS

Mount Logan Capital Inc. has released its financial results for the fourth quarter and fiscal year ended Dec. 31, 2023. All amounts are stated in U.S. dollars, unless otherwise indicated. The financial results have been adjusted for the adoption of international financial reporting standard 17 (Insurance Contracts), which became effective Jan. 1, 2023.

Fourth quarter 2023 highlights:

• Total revenue for the asset management segment of the company of $3.7-million, an increase of $1.1-million, as compared with the fourth quarter of 2022. The increase is primarily attributable to growth in fees attributable to the inclusion of Ovation management and incentive fees, increase in CLO fees, growth in the Opportunistic Credit Interval Fund, and other subadvisory activities of Mount Logan. Fourth quarter asset management revenues exclude $1.3-million of management fees associated with Mount Logan's management of the assets of Ability Insurance Company, a wholly owned subsidiary of the company, during the fourth quarter of 2023, which increased by 82 per cent, as compared with the fourth quarter 2022 of $700,000.
• Fee-related earnings for the asset management segment of the company were $2.6-million for the three months ended Dec. 31, 2023, an increase of $800,000, compared with the fourth quarter of 2022 of $1.8-million primarily driven by the previously mentioned revenue improvements.
• Total net investment income for the insurance segment was $19.3-million for the three months ended Dec. 31, 2023, an increase of $2.6-million, compared with the fourth quarter of 2022, driven by an increase in total insurance investment assets and improvements in yield across the investment portfolio attributable to deployment of capital in a higher rate environment.

Full-year milestones:

• Total revenue for the asset management segment of the company was $11.8-million, an increase of $2.5-million, as compared with $9.3-million in fiscal 2022, largely due to the acquisition of Ovation in the third quarter of 2023, and previously mentioned growth in fees generated across Mount Logan's managed investment vehicles. Fiscal 2023 management revenues exclude the $4.2-million attributable to managing a significant portion of Ability's assets during fiscal 2023, which increased by 80 per cent, as compared with management fees in respect of Ability of $2.4-million in fiscal 2022.
• FRE for the asset management segment of the company was $6.3-million, flat as compared with $6.3-million in fiscal 2022, which reflects the increase of revenues, offset by one-time expenses in respect of growth investments, which management expects will decrease in fiscal 2024 for the asset management segment.
• The company achieved a 9.2-per-cent yield on the insurance investment portfolio for fiscal 2023, which was up from 6.2 per cent, as compared with fiscal 2022, which reflects continuing portfolio and capital optimization across the insurance solutions portfolio alongside the benefit of higher base rates.
• Ability's total assets managed by Mount Logan increased to $537.1-million for fiscal 2023, up $200.2-million, from fiscal 2022 managed assets of $336.9-million. The increase in managed assets supported the increased management fees paid by Ability of $4.2-million to Mount Logan Management LLC, a wholly owned subsidiary of the company. The company finished fiscal 2023 with $1.0-billion in total investment assets at Ability, up $124-million or 14 per cent, from fiscal 2022 investment assets of $884.6-million.
• Book value of the insurance segment ended 2023 at $66.5-million, an increase of $2.8-million, as compared with $63.7-million for fiscal 2022.

Subsequent events:

• The company is pleased to announce that Nikita Klassen has been appointed by the company's board of directors as the new chief financial officer and corporate secretary of the company, effective March 31, 2024. Ms. Klassen currently serves as the senior controller of the company, and has over 14 years of experience in the financial service industry, including roles as director, accounting policy, at Silicon Valley Bank; vice-president, Securities and Exchange Commission reporting and accounting policy, at Galaxy Digital; and director, global accounting policy and advisory, at American Express. Ms. Klassen has also previously provided audit and consulting services in various roles over a six-year career at PricewaterhouseCoopers LLP. Ms. Klassen holds a bachelor of commerce (honours) degree from the Asper School of Business at the University of Manitoba and is a chartered professional accountant (Canada).
• Chief financial officer and corporate secretary Jason Roos communicated his plans to resign from his roles at Mount Logan, as well as his other roles at B.C. Partners Advisors LP, effective March 31, 2024. Mr. Roos's decision is not related to any disagreement relating to the company's accounting, strategy, management, operations, policies, regulatory matters or practices (financial or otherwise). Mr. Roos will continue to support the executive team in an advisory capacity for an extended period of time.
• The company declared a shareholder distribution in the amount of two Canadian cents per common share for the year ended Dec. 31, 2023, payable on April 2, 2024, to shareholders of record at the close of business on March 25, 2024. This cash dividend marks the 18th consecutive quarter of the company issuing a two-Canadian-cent distribution to its shareholders. This dividend is designated by the company as an eligible dividend for the purpose of the Income Tax Act (Canada) and any similar provincial or territorial legislation. An enhanced dividend tax credit applies to eligible dividends paid to Canadian residents.
• The company announced the completion of an $18.8-million capital raise and opportunistic refinancing, representing an important milestone for the business, as it simplifies Mount Logan's capital structure at an attractive fixed rate over the next eight years. A total of $13.6-million of the net proceeds of the offering were used to repay all existing indebtedness at Lind Bridge LP, a wholly owned subsidiary of Mount Logan, which had previously been raised to support direct growth investment into Ability. The balance of the proceeds of the offering will be used for general corporate purposes, primarily supporting the company's working capital position and paying outstanding transaction fees and expenses.
• Ability amended its reinsurance agreement, effective Jan. 10, 2024, with Atlantic Coast Life Insurance Company and with Sentinel Security Life Insurance Company, pursuant to which Ability will assume a 20-per-cent quota share co-insurance of premium of multiyear guaranteed annuity policies issued and approved on or after Oct. 1, 2023.

Management commentary:

• Ted Goldthorpe, chief executive officer and chairman of Mount Logan, stated: "As we close out 2023, we are seeing strong earnings momentum across both the asset management and insurance solutions segments of the company. Top-line performance for the asset management segment of the company and net investment income for the insurance segment of the company saw impressive growth throughout the year and, we believe, is a leading indicator of our expectations for 2024."

Selected financial highlights:

• Total capital of the company, consisting of both debt borrowings and equity, as at Dec. 31, 2023, was $129.5-million, an increase of $10.5-million from Dec. 31, 2022. Total capital consists of debt obligations and total shareholders equity.
• Basic earnings per share were (69 cents) for the fiscal year ended Dec. 31, 2023, a decrease of ($2.87) from $2.18 for the 2022 fiscal year. The decrease in EPS resulted primarily from a decrease in the net insurance finance income in 2023 fiscal year compared with the 2022 fiscal year. The decrease in net insurance finance income in the 2023 fiscal year was attributable to changes in risk-adjusted market interest rates.
• Adjusted basic EPS was (44 cents) for the 2023 fiscal year, a decrease of ($2.74) from $2.30 for the 2022 fiscal year.

Conference call

The company will hold a conference call on Friday, March 15, 2024, at 10 a.m. Eastern Time, to discuss the fourth quarter and fiscal 2023 financial results. Shareholders, prospective shareholders and analysts are welcome to listen to the call. To join the call, please use the dial-in information below. A recording of the conference call will be available on the company's website in the investor relations section under events.

Dial-in toll-free:  1-833-470-1428

International dial-in:  1-404-975-4839

Access code:  493580

About Mount Logan Capital Inc.

Mount Logan is an alternative asset management and insurance solution company that is focused on public and private debt securities in the North American market and the reinsurance of annuity products, primarily through its wholly owned subsidiaries Mount Logan Management and Ability, respectively. The company also actively sources, evaluates, underwrites, manages, monitors and primarily invests in loans, debt securities and other credit-oriented instruments that present attractive risk-adjusted returns and present low risk of principal impairment through the credit cycle.

Ability is a Nebraska domiciled insurer and reinsurer of long-term-care policies acquired by Mount Logan in the fourth quarter of fiscal year 2021. Ability is unique in the insurance industry in that its long-term-care portfolio's morbidity risk has been largely reinsured to third parties, and Ability is no longer insuring or reinsuring new long-term-care risk.

We seek Safe Harbor.