Greetings and welcome to the Tiptree Inc., Full Year 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Sandra Bell, CFO for Tiptree. Thank you, Ms. Bell. You may begin.

Good morning, everyone, and welcome to our 2016 earnings call. I am joined today by our Executive Chairman, Michael Barnes; and CEO, Jonathan Ilany. We have posted the earnings release and presentation on our Web site at tiptreeinc.com. Our remarks today are qualified in their entirety by the disclaimers on Page 1 of the presentation. Prior to turning the call over to Michael, I just want to highlight a few of the key disclosures. This presentation supplements our SEC filings and is provided solely for information purposes. Throughout the presentation, there are forward-looking statements. Our businesses are subject to risks and uncertainties which are outlined in our SEC filings, and which could impact our expectations of future results. Except as required by the securities laws, we undertake no obligation to update any forward-looking statements. We also use non-GAAP measures which we believe provide additional information about our business and are useful to investors. As these measures are not GAAP, they should not be used as a substitute for GAAP disclosures. The appendix provides a reconciliation of each of these measures to their GAAP equivalent. Lastly in the fourth quarter, we realigned our principal investment formerly reported in the Corporate segment into the new reportable segment which better aligns with the company's operating strategy. Those recaps were made for the years ended 2016, 2015, and 2014. With that, let me turn the call over to Michael who will begin on Page 3 of the presentation.

Thanks, Sandra. Good morning and thank you for joining our earnings call today. 2016 was a strong year for Tiptree. On a consolidated basis, total revenues grew 29% year-over-year, while generating 32.3 million of net income and 78.9 million of adjusted EBITDA. Tiptree's as exchanged book value per share ended at $10.14, which combined with dividends resulted in a total return for the year of 15.1%. Over nearly a decade of operations, we have successfully transformed Tiptree strategy away from an opportunistic asset investor to a long-term owner of operating company. Our primary focus this past year was continuing to build a company that can generate a high portion of stable and repeatable earnings. With regard to our insurance business in 2016, we took steps to leverage our investment experience to differentiate Fortegra's operations by combining strong underwriting results with higher yielding investment income. We acquired Fortegra because we found the financial characteristic of the specialty insurance sector to be attractive, particularly the ability of insurers to receive premiums upfront and pay claims later. As the net written premium volume increases, we are able to retain incremental premiums which can be invested to generate attractive risk adjusted return. For 2016, our investment portfolio grew to 352 million. A 31% increase from 2015. The return improved from 2.5% in 2015 to 8% in 2016, primarily driven by an increased allocation to higher yielding investment. As we look forward, our focus will be grow underwriting profits through increased net written premiums in warranty and specialty business at an attractive combined ratio and continuing to invest the excess premium flow. Our asset management business improved significantly in 2016, contributing pretax earnings of 25.3 million compared to a loss of 6.8 million in 2015. Fee earning assets under management remained steady at 1.9 billion as we issued our seventh CLO, which partially offset roll-off [ph] from our older vintage CLOs. In January 2017, we took steps to reduce our capital exposure to CLO equity by selling our sub-notes in Telos 5 for a gain over year-end values and a potential 2017 tax benefit. Our senior living business continues to grow in 2016. We completed five acquisitions for 106 million and increased revenues for year to 61 million while NOI margins continue to expand. Our senior housing pipeline remains strong and we anticipate continued growth through acquisition and further NOI improvements at existing properties. We are pleased with the financial results over this past year. Each of our companies is contributing. And we are optimistic that we will continue to see growth in our core operating businesses into 2017. With that, I will hand it back to Sandra who will discuss the financials in more detail.

Thank you, Michael. On page four, we highlight the improvement in our financial performance versus prior year. In 2016, diluted earnings for Class A share was $0.78. Our as exchanged book value per share grew to $10.14. The key drivers of our improvement in book value are the growth in earnings net of 4 million of dividend paid and the benefit of 43.8 million of shares repurchased at an average 30% discount to book value. The total number of class A and class B shares outstanding now stands at 36.4 million, which represents 369 million of book value and 526 million of total enterprise value. In 2017, we will face headwinds related to book value per share. We currently have an outstanding option issued in 2007 that within the money as of year end and expires in June of this year. Within this strike price, the option is exercised with diluted book value per share by approximately $0.19. On page five, we have laid out the components of our 2016 operating performance by segment. In total, pretax income from continuing operations was 43.3 million, up 55.7 million from the prior year, and adjusted EBITDA with 78.9 million, an increase of 20.5 million or 35%. Our Specialty Insurance segment contributed 60.5 million of adjusted EBITDA which was up over the prior year, driven by growth in net written premium and improved investment income. Of the total 2016 adjusted EBITDA in this segment, 24.6 million was from investment income. Of that amount, unrealized gains on equities and loans were 10 million. We expect net investment income to be a significant contributor to our financial result over the long term. A significant portion will be repeatable interest in dividend, but some will continue to be more volatile to realize and unrealized gains and…

So, to summarize, we are pleased with our 2016 performance; our financial results improved, a higher portion of our earnings are now stable and repeatable, and we return to significant amount of capital to our shareholders. We believe Tiptree is well-positioned as a result of the changes implemented over the past two years. Our insurance business is investing and growing net written premiums in warranty and other specialty products, and we expect to leverage Tiptree's investment experience to increase net investment income over the long-term as we go float while maintaining our underwriting standards. Our asset management business is stable, and we are focused on growing AUM through other fund vehicles or managed accounts over the coming years. Our senior living business is making further acquisitions, and continues to increase revenue and NOI. Third party expenses at Corporate should decline over time, now their infrastructure is established and our controls and processes are in place. Our Board has approved a 20% increase in the dividend to $0.03 per share, which is payable in the first quarter. We believe our efforts to better position the company for growth or to increase clarity and transparency in our financial reporting should allow investors to better understand Tiptree's intrinsic value. With that, we would like to open the line for questions.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Andrew Cowen with Badge Investment Partners. Please proceed with your question.

Hi, everyone.

Hi, Andrew. How are you?

Good, how are you? Great quarter, great year, guys, congratulations. Just a couple of questions; so the -- nice seeing the float grow, is that the pace that you would expect the float to grow, given the underwriting pace you are at right now?

Sandra, why don't I let you take that?

Okay. Andrew, one of the things that drove float this year was the acquisition of the Reinsurance Book from London by Fortegra's Reinsurance this February [ph]. So it grew at slightly larger pace than we would expect to happen organically. Having said that, we continue to look at opportunities to assume other potential books if they need our underwriting standards.

Got it.

And Andrew, I just would add that, for growing float is an important part of our future business plan and we see just bringing together our investment experience, and then, separately running a profitable insurance-related business and warranty business with I think a fantastic combined ratio. We see that as a great business model that we're going to continue to expand.

Oh yes, absolutely. I mean that combined ratio is very attractive as well. Congratulations for that. The next question relates to the CLOs, so you reduced your CLO investments down to $41 million, how much of that remaining $41 million do you have to hold for regulatory purposes?

Zero, we're not required to hold the CLO equity for any reason. We'll make strategic decisions on each investments and besides increase on price as well kind of future expected cash flow, as to whether we are going to sell or not, I'll state generally, these are current objectives to look to decrease our levered exposure to corporate credit in the current market. That's part of why we just announced the reduction in our CLO equity, and so, I'd say that's something you should expect to see as we go forward.

Okay, sounds good. And then lastly, I think the amount of depreciation you guys have taken in total between the VOBA and the depreciation in real estate has been fairly material. Just the VOBA issues does seem to be going away, and they are what they are; obviously the insurance business has been gaining value rather than depreciating, but related to the real estate, of that accumulated depreciation of $38 million, how much of that do you think is depreciation, you know, that would be matched by like a CapEx amount that you have to invest back into the properties?

Andrew, in each of our real estate investments, there are certain reserves that decides to maintain property and for CapEx. So, in that, regard depreciation, we as Sandra stated in the content of the call, we view that in some ways it does not actively reflect the intrinsic value of the property, in real estate alone it's -- I think better bulk of depreciation and amortization that accumulated today. So, we see the property has being value based upon, I'd say, more traditional metric of NOI and cap rate. And so, that's how we'll look at intrinsic value, but to your point, we don't view all of the depreciation in the case of the real estate as "Deal." I think like all property some of it is depreciation, but quite frankly given the CapEx that we set aside to maintain property, we view the value of our properties as materially higher in intrinsic value than our carrying book value.

That's great. So, you've already set aside sort of maintenance CapEx and repair CapEx, stuff like that, so that $38 million you can almost completely add back to the value of the property?

All these add up to you.

From a book value perspective? Yes, well, and then there is book value and then there is cap rate which, you know, not necessarily same as well. Okay, well, that's what I have. So, congratulations again, guys.

Great. Thanks, Andrew.

Okay.

Thank you. [Operator Instructions] Our next question comes from the line of Darren Huber with Fintan Partners. Please proceed with your question.

Yes, hi. Thanks again, guys. I'm calling. I would like to know if you could -- sort of little more color on your decisions to decrease your corporate exposure.

No, our corporate credit exposure, that is what you are referring?

Yes, corporate credit. Yes. Sorry.

So, we have been in the CLO business for quite a while, and I guess, we view that business as the combination of both making investments in the levered credit equity portion of the CLO and warehouse, they goes along with creating CLOs, and that's one part of the business. The other part of the business has been the C-driven part of the business, where we would see those senior subordinate and performance fee. The objectives of the capital we've allocated to that business in the past has been to periodically sell down our exposure in the equity of the CLOs, and to reinvest that in new CLO. As retention rules have come online, and frankly as the yields of CLO equity have gotten to very low levels, we have to constantly re-evaluate our objectives, if wanting to re-invest and continue to grow CLOs as opposed to look for other ways to grow asset management mandates in the corporate credit phase, which we are doing. So, right now, and as we have described, we would prefer to be downsizing our exposure to levered corporate credit in the form of CLO equity, particularly given a phase of rebound in prices that occurred towards the end of last year and the beginning of this year. And to focus on creating more diversified asset management platforms to manage the accounts and corporate credit. So that's our objective.

Okay, that make sense. Great, thanks again.

Okay, thanks.

Thank you. And your next question comes from the line of John Sites with Wexford Capital. Please proceed with your question.

Nice year, congratulations.

Thanks, John.

Sandra, I have a question. I have to confess I wasn't paying as much attention as we should, but you mentioned that you have an option that if exercise could reduce the book value of your shares by -- remember, $0.19, can you go over what that option is, and do I have my numbers right and explain it a little bit?

Yes, certainly, John. In 2007, as part of the origination of Tiptree, there was an option granted to Tricadia, and [indiscernible] priced as original investors invested in Tiptree. And that option is in the money today, and expires in June. Absent any other factors positive or negative, if that option is exercised, given the strike price, you are correct in that; it would be a $0.19 dilution to book value per share. It does provide new liquidities and underlying liquidity to the marketplace, so that's a positive.

Okay. And if exercised, how much -- what does it provide to the company in terms of incremental liquidity?

Approximately $8 million.

And John, I'll just point out that that option is described in some detail on F-63 of our K that we just posted.

Okay. Great, thank you.

Okay, thanks, John.

Thank you. There are no further questions at this time. I would like to turn the call back over to Ms. Bell for closing remarks.

Thank you, Michelle, and thanks everyone for joining us today. If you have any additional questions, please feel free to reach out to me directly. We look forward to speaking with you again shortly after the first quarter results are in. This concludes our conference call.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.