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Subsequent Events

• Declared a shareholder distribution in the amount of C$0.02 per common share for the quarter ended March 31, 2025, payable on June 2, 2025 to shareholders of record at the close of business on May 27, 2025. This cash dividend marks the twenty-third consecutive quarter of the Company issuing a C$0.02 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.

• A preliminary joint proxy statement/prospectus was filed with the United States Securities and Exchange Commission (the “SEC”) for the previously announced merger of Mount Logan with 180 Degree Capital Corp. (Nasdaq: TURN) (“180 Degree Capital”), in an all-stock transaction (the “Business Combination”). The surviving entity is expected to be a Delaware corporation operating as New Mount Logan listed on Nasdaq under the symbol “MLCI”. As required under U.S. federal securities laws and related rules and regulations, the joint proxy statement/prospectus included Mount Logan’s audited financial statements for the years ended December 31, 2024 and 2023 prepared in accordance with U.S. Generally Accepted Accounting Principles. In connection with the Business Combination, shareholders of Mount Logan will receive proportionate ownership of New Mount Logan determined by reference to Mount Logan’s transaction equity value at signing, subject to certain pre-closing adjustments, relative to 180 Degree Capital's Net Asset Value ("NAV") at closing. Shareholders holding approximately 26% of the outstanding shares of Mount Logan and approximately 20% of the outstanding shares of 180 Degree Capital signed voting agreements supporting the Business Combination, and an additional 8% of Mount Logan and 7% of 180 Degree Capital shareholders, respectively, have provided written non-binding indications of support for the Business Combination.

• Portman Ridge Finance Corporation (Nasdaq: PTMN) and Logan Ridge Finance Corporation (Nasdaq: LRFC) merger remains subject to the receipt of certain shareholder approvals and the satisfaction of other closing conditions. Mount Logan currently earns management fees from LRFC and has a minority stake in PTMN’s manager, Sierra Crest Investment Management.
  

Management Commentary

• Ted Goldthorpe, Chief Executive Officer and Chairman of Mount Logan stated, “We are pleased to report our first quarter 2025 results, reflecting the continued earnings power of our asset management and insurance platforms. While AUM growth slowed in Q1 2025, consistent with broader macro challenges, we demonstrated our ability to generate strong, positive Fee Related Earnings on the asset management segment, and Spread Related Earnings in the insurance platform, providing a solid foundation for momentum in 2025. Our managed funds demonstrated performance resilience and low volatility as compared to the public credit and equity markets, which we view as a testament to our focus on private credit assets. Looking ahead, we see ample opportunities to drive AUM growth across our core managed vehicles, enact operational improvements and efficiencies, while also advancing strategic priorities to scale the business through reinvestment across our segments and accretive acquisition opportunities, which includes our recently announced transactions with 180 Degree Capital and Runway, which we believe will be significant catalysts for long-term growth and investment into our business.”
  

Selected Financial Highlights

• Total Capital of the Company was $144.9 million as at March 31, 2025, a decrease of $5.4 million as compared to December 31, 2024. Total capital consists of debt obligations and total shareholders’ equity.

• Consolidated net income (loss) before taxes was $(13.7) million for the first quarter of 2025, a decrease of $26.8 million from $13.1 million in the first quarter of 2024. The decrease was primarily attributable to the increase in net insurance finance expenses, decrease in net investment income and increase in general, administrative and other expenses under the insurance segment, as well as an increase in corporate transaction costs under the asset management segment related to the Business Combination when compared to the first quarter of 2024.

• Basic Earnings (loss) per share (“EPS”) was ($0.48) for the first quarter of 2025, a decrease of $0.99 from $0.51 for the first quarter of 2024.

• Adjusted basic EPS was ($0.29) for the first quarter of 2025, a decrease of $0.83 from $0.54 for the first quarter of 2024.

Results of Operations by Segment

^{(1)    Insurance Revenue line item is presented net of insurance service expenses and net expenses from reinsurance contracts held.
(2)    Transaction costs are related to business acquisitions and strategic initiatives transacted by the Company.
(3)    Acquisition integration costs are consulting and administration services fees related to integrating a business into the Company. Acquisition integration costs are recorded in general, administrative and other expenses.
(4)    Non-cash items include amortization and impairment of acquisition-related intangible assets and impairment of goodwill, if any.}

Asset Management

Total Revenue – Asset Management

($ in Thousands)

Fee Related Earnings (“FRE”)

FRE is a non-IFRS financial measure used to assess the asset management segment’s generation of profits from revenues that are measured and received on a recurring basis and are not dependent on future realization events. The Company calculates FRE, and reconciles FRE to net income from its asset management activities, as follows:

($ in Thousands)

^{(1)    Includes add-back of management fees paid to ML Management.}

^{(2)    Represents net income for asset management, as presented in the interim Consolidated Statement of Comprehensive Income (Loss).}

^{(3)    Includes unrealized gains or losses on the debt warrants.}

^{(1)    Includes add-back of management fees paid to ML Management.}

^{(2)    Represents net income for asset management, as presented across the interim Consolidated Statements of Comprehensive Income (Loss).}

^{(3)    Includes unrealized gains or losses on the debt warrants.}

Insurance

Total Revenue – Insurance

($ in Thousands)

Spread Related Earnings (“SRE”)

The Company uses SRE to assess the performance of the insurance segment, excluding the impact of certain market volatility and other one-time, non-core components of insurance segment income (loss). Excluded items under SRE are investment gains (losses), effects of discount rates and other financial variables on the value of insurance obligations (which is a component of “net insurance finance income/(expense)”), other income and certain general, administrative & other expenses. The Company believes this measure is useful to securityholders as it provides additional insight into the underlying economics of the insurance segment, as further discussed below.

For the insurance segment, SRE equals the sum of (i) the net investment income on the insurance segment’s net invested assets (excluding investment income earned on funds held under reinsurance contracts) less (ii) cost of funds (as described below) and (iii) certain operating expenses.

Cost of funds includes the impact of interest accretion on insurance and investment contract liabilities and amortization of losses recognized for new insurance contracts that are deemed onerous at initial recognition. It also includes experience adjustments which represents the difference between actual and expected cashflows and includes the impact of certain changes to non-financial assumptions.

The Company reconciles SRE to net income (loss) before tax from its insurance segment activities, as follows:

^{(1)    Includes add-back of management fees paid by Ability to ML Management.}

^{(2)    Represents net income before tax for the insurance segment, as presented in the annual Consolidated Statement of Comprehensive Income (Loss).}

^{(3)    Excludes net (gains) losses from investment activities on assets retained by the Company under funds withheld arrangement with Front Street Re and Vista.}

^{(4)    Represents non-operating income.}

^{(5)    Includes the impact of changes in interest rates and other financials assumptions and excludes interest accretion on insurance contract liabilities and reinsurance contract assets.}

^{(6)    Represents the unamortized portion of future interest accretion and ceded commissions paid at the time of issue of new MYGA insurance contracts. Future interest accretion and ceded commissions are amortized over the average duration of MYGA contracts reinsured which aligns with the recognition of insurance service revenue. Loss on onerous contracts are part of Insurance service expense.}

^{(7)    Represents certain costs incurred by the insurance segment for purposes of IFRS reporting but not the day to day operations of the insurance company.}

The following table presents SRE, the performance measure of the insurance segment:

($ in Thousands)

^{(1)    Excludes net investment income from investment activities on assets retained by the Company under funds withheld arrangement with Front Street Re and Vista Life and Casualty Reinsurance Company (“Vista”).}

Spread related earnings ("SRE") was $7.8 million for the trailing twelve months ended March 31, 2025 compared with $9.5 million for the trailing twelve months ended March 31, 2024, a decrease of $1.7 million. SRE decreased year over year due to higher cost of funds, partially offset by increased investment income and lower other operating expenses. Cost of funds increased primarily due to unfavorable impact of $1.8 million as a result of in-force update to LTC business (Guardian block) whereas the trailing twelve months ended March 31, 2024 had a favorable in-force impact of $4.8 million to LTC business (Medico block). Investment income increased primarily due to an increase in total insurance investment assets as a result of new multi-year guaranteed annuity (“MYGA”) business and improvement in yield across the investment portfolio. Other operating expenses decreased as a result of efforts to reduce overall operating cost.

SRE as a percentage of average net invested assets was 1.3% for the trailing twelve months ended March 31, 2025 compared with 1.7% for the trailing twelve months ended March 31, 2024.

Liquidity and Capital Resources

As of March 31, 2025, the asset management segment had $77.8 million (par value) of borrowings outstanding, of which $33.8 million had a fixed rate and $44.0 million had a floating rate. As of March 31, 2025, the insurance segment had $17.3 million (par value) of borrowings outstanding, of which $14.3 million had a fixed rate and $3.0 million had a floating rate. Liquid assets, including high-quality assets that are marketable, can be pledged as security for borrowings, and can be converted to cash in a time frame that meets liquidity and funding requirements. As of March 31, 2025 and December 31, 2024, the total liquid assets of the Company were as follows:

($ in Thousands)

The Company defines working capital as the sum of cash, restricted cash, investments that mature within one year of the reporting date, management fees receivable, receivables for investments sold, accrued interest and dividend receivables, and premium receivables, less the sum of debt obligations, payables for investments purchased, amounts due to affiliates, reinsurance liabilities, and other liabilities that are payable within one year of the reporting date.

As at March 31, 2025, the Company had working capital of $218.8 million, reflecting current assets of $241.7 million, offset by current liabilities of $22.9 million, as compared with working capital of $231.2 million as at December 31, 2024, reflecting current assets of $245.3 million, offset by current liabilities of $14.1 million. The decrease in working capital was primarily attributable to the decrease in cash within the asset management business combined with the increase in accrued expenses across asset management and insurance.

Interest Rate Risk

The Company has obligations to policyholders and other debt obligations that expose it to interest rate risk. The Company also owns debt assets and interest rate swaps that are exposed to interest rate risk. The fair value of these obligations and assets may change if base rate changes in interest rates occur.

The following table summarizes the potential impact on net assets of hypothetical base rate changes in interest rates assuming a parallel shift in the yield curve, with all other variables remaining constant.

^{(1)    Losses are presented in brackets and gains are presented as positive numbers.}

Actual results may differ significantly from this sensitivity analysis. As such, the sensitivities should only be viewed as directional estimates of the underlying sensitivities for the respective factors based on the assumptions outlined above.

Conference Call

The Company will hold a conference call on Friday, May 16, 2025 at 11:00 a.m. Eastern Time to discuss the first quarter 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 our Company’s website www.mountlogancapital.ca in the ‘Investor Relations’ section under “Events”.

Canada Dial-in Toll Free: 1-833-950-0062
US Dial-in Toll Free: 1-833-470-1428
International Dial-ins
Access Code: 813165

About Mount Logan Capital Inc.

Mount Logan Capital Inc. is an alternative asset management and insurance solutions 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 LLC (“ML Management”) and Ability Insurance Company (“Ability”), respectively. Mount Logan 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.

ML Management was organized in 2020 as a Delaware limited liability company and is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. The primary business of ML Management is to provide investment management services to (i) privately offered investment funds exempt from registration under the Investment Company Act of 1940, as amended (the “1940 Act”) advised by ML Management, (ii) a non-diversified closed end management investment company that has elected to be regulated as a business development company, (iii) Ability, and (iv) non-diversified closed-end management investment companies registered under the 1940 Act that operate as interval funds. ML Management also acts as the collateral manager to collateralized loan obligations backed by debt obligations and similar assets.

Ability is a Nebraska domiciled insurer and reinsurer of long-term care policies and annuity products acquired by Mount Logan in the fourth quarter of fiscal year 2021. Ability is also no longer insuring or re-insuring new long-term care risk.

Non-IFRS Financial Measures

This press release makes reference to certain non-IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS financial measures by providing further understanding of the Company’s results of operations from management’s perspective. The Company’s definitions of non-IFRS measures used in this press release may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can be identified by the expressions “seeks”, “expects”, “believes”, “estimates”, “will”, “target” and similar expressions. The forward-looking statements are not historical facts but reflect the current expectations of the Company regarding future results or events and are based on information currently available to it. Certain material factors and assumptions were applied in providing these forward-looking statements. The forward-looking statements discussed in this release include, but are not limited to, statements about the benefits of the closing of the acquisition of a minority interest in Runway as well as the proposed transaction involving the Company and 180 Degree Capital, including future financial and operating results, the Company’s and 180 Degree Capital’s plans, objectives, expectations and intentions, the expected timing and likelihood of completion of the proposed transaction, the regulatory environment in which the Company operates, and the results of, or outlook for, the Company’s operations or for the Canadian and U.S. economies, statements relating to the Company’s continued transition to an asset management and insurance platform business and the entering into of further strategic transactions to diversify the Company’s business and further grow recurring management fee and other income and increasing Ability’s assets; the Company’s plans to focus Ability’s business on the reinsurance of annuity products; the potential benefits of combining Mount Logan’s and Ovation’s platform including an increase in fee-related earnings as a result of the acquisition; the decrease in expenses in the asset management segment; the historical growth in the asset management segment and insurance segment being an indicator for future growth; the growth and scalability of the Company’s business the Company’s business strategy, model, approach and future activities; portfolio composition and size, asset management activities and related income, capital raising activities, future credit opportunities of the Company, portfolio realizations, the protection of stakeholder value; the expansion of the Company’s loan portfolio; synergies to be achieved by both the Company and Runway through the Company’s strategic minority investment in Runway; and the expansion of Mount Logan’s capabilities. All forward-looking statements in this press release are qualified by these cautionary statements. The Company believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, the Company can give no assurance that the actual results or developments will be realized by certain specified dates or at all. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including that the Company has a limited operating history with respect to an asset management oriented business model; Ability may not generate recurring asset management fees, increase its assets or strategically benefit the Company as expected; the expected synergies by combining the business of Mount Logan with the business of Ability may not be realized as expected; the risk that Ability may require a significant investment of capital and other resources in order to expand and grow the business; the Company does not have a record of operating an insurance solutions business and is subject to all the risks and uncertainties associated with a broadening of the Company’s business; ability to obtain the requisite Company and 180 Degree Capital shareholder approvals, as well as governmental and regulatory approvals required for the proposed transaction with 180 Degree Capital, the risk that an event, change or other circumstance could give rise to the termination of the proposed transaction with 180 Degree Capital, the risk that a condition to closing of the proposed transaction with 180 Degree Capital may not be satisfied, the risk of delays in completing the proposed transaction with 180 Degree Capital, the risk that the businesses of the Company and with 180 Degree Capital will not be integrated successfully, the risk that the expected synergies of the acquisition of Ovation may not be realized as expected and the matters discussed under “Risks Factors” in the most recently filed annual information form and management discussion and analysis for the Company. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by securities laws. These forward-looking statements are made as of the date of this press release.

This press release is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication of this release is not, and under no circumstances is it to be construed as, an offer to sell or an offer to purchase any securities in the Company or in any fund or other investment vehicle. This press release is not intended for U.S. persons. The Company’s shares are not and will not be registered under the U.S. Securities Act of 1933, as amended, and the Company is not and will not be registered under the U.S. Investment Company Act of 1940 (the “1940 Act”). U.S. persons are not permitted to purchase the Company’s shares absent an applicable exemption from registration under each of these Acts. In addition, the number of investors in the United States, or which are U.S. persons or purchasing for the account or benefit of U.S. persons, will be limited to such number as is required to comply with an available exemption from the registration requirements of the 1940 Act.

Contacts:
Mount Logan Capital Inc.

365 Bay Street, Suite 800
Toronto, ON M5H 2V1
info@mountlogancapital.ca

Nikita Klassen
Chief Financial Officer
Nikita.Klassen@mountlogancapital.ca

Scott Chan
Investor Relations
Scott.Chan@mountlogan.com

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¹The yield is calculated based on the net investment income less management fees paid to Mount Logan divided by the average of investments in financial assets for the current year and prior year.