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Kingsway Reports First Quarter Results

Stocks in this article: KFS

TORONTO, June 14, 2011 /PRNewswire/ - (TSX: KFS) (NYSE: KFS) Kingsway Financial Services Inc. ("Kingsway" or the "Company") today announced its financial results for the first quarter ended March 31, 2011. All amounts are in U.S. dollars unless indicated otherwise.

The Company reported a first quarter net loss of $18.4 million or loss of $0.35 per share diluted. The book value has decreased from $2.78 per share at December 31, 2010 to $2.47 per share at March 31, 2011. The Company also carries a valuation allowance, in the amount of $4.67 per share at March 31, 2011, against the deferred tax asset primarily related to its loss carryforwards.

The following are the highlights of the first quarter of 2011:

Major events

    -   Kingsway adopted International Financial Reporting Standards ("IFRS")
        commencing with the presentation of its unaudited consolidated
        financial statements as at and for the three months ended March 31,
        2011. Comparative results for 2010 have been restated to comply with

    -   On March 30, 2011, the Company closed the sale of its wholly owned
        subsidiary Hamilton Risk Management Company and its subsidiaries,
        including Kingsway Amigo Insurance Company, to Acadia Acquisition
        Partners, L.P. Kingsway will act as the general partner and hold a
        limited partnership investment.

Operational results

    -   Net loss of $8.4 million was recorded in the Underwriting segment for
        the first quarter.

    -   Net income of $1.0 million was recorded in the Agency and Non-
        underwriting segment for the first quarter.

    -   Net loss of $9.7 million was recorded in the Corporate and Other
        segment for the first quarter.

    -   An after-tax loss of $1.9 million (pre-tax loss of $2.3 million) was
        recorded on early settlement of a C$20.0 million receivable
        pertaining to the sale of wholly owned subsidiary Jevco Insurance
        Company ("Jevco") in March 2010.

    -   A gain of $0.6 million was recorded upon finalizing the accounting
        for the sale of American Service Insurance Company, Inc. ("American
        Service") and American Country Insurance Company ("American
        Country"), which closed on December 31, 2010.

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