Mount Logan Capital : March 22, 2023 - Mount Logan Capital Inc. Reports 2022 Annual Results; Declares Shareholder Distribution

FOR IMMEDIATE RELEASE

Mount Logan Capital Inc.

Announces Fourth Quarter and Full Year 2022 Financial Results

Increased Total Revenue in both the Asset Management and Insurance Segments, Increased Fee Related

Earnings, Signed an Agreement for an Additional Acquisition following Year-End 2022

Declares Quarterly Distribution of C$0.02 Per Common Share in the First Quarter of 2023, Marking the

Fourteenth Consecutive Quarter of a Shareholder Distribution

TORONTO, March 22, 2023 - Mount Logan Capital Inc. (NEO: MLC) (the "Company" or "Mount Logan") announced today its financial results for the fourth quarter and full year ended December 31, 2022. All amounts are stated in United States dollars, unless otherwise indicated.

Fourth Quarter 2022 Highlights

• Total revenue for the asset management segment of the Company of $2.7 million, an increase of $1.0 million as compared to $1.7 million for the third quarter of 2022. This increase is primarily related to increase in management and servicing fees resulting from equity earnings from Opportunistic Credit Interval Fund ("OCIF").
• Total revenue for the insurance segment of the Company of $23.9 million, an increase of $17.5 million as compared to $6.4 million for the third quarter of 2022. The increase in total revenue for the insurance segment of the Company is primarily due to the net unrealized capital gains driven by a change in market interest rates when compared to net unrealized capital losses in the prior quarter.
• Obtained a $7.5 million loan to support growth of Ability Insurance company, helping Ability grow investment assets to $884.6 million, an increase of $50.0 million as compared to $833.6 million of investment assets in the third quarter of 2022.
• Obtained a receipt for its final short form base shelf prospectus filed with the securities commissions or similar authorities in each province of Canada, enabling the Company to offer and issue up to C$45 million of common shares, subscription receipts, warrants and units, or any combination thereof.
• Invested an additional $4.0 million into OCIF through the Company's wholly-owned subsidiary Mount Logan Management LLC ("ML Management"). The Company launched and completed a seed investment in OCIF on April 29, 2022, a closed- ended, diversified retail fund with a niche opportunistic investment strategy.

Full Year 2022 Milestones

• Fee Related Earnings ("FRE") for the asset management segment of the Company was $5.9 million, an increase of $1.8 million as compared to $4.1 million in fiscal 2021.
• Total revenue for the asset management segment of the Company was $9.4 million, an increase of $0.6 million as compared to $8.8 million for fiscal 2021. The year-over-yearincrease is primarily related to the increases seen in management and servicing fees.

• Fee Related Earnings ("FRE") for the insurance segment of the Company was $14.2 million, an increase of $15.2 million as compared to ($1.0) million in fiscal 2021.
• Total revenue for the insurance segment of the Company of $21.6 million, an increase of $18.8 million as compared to $2.8 million for fiscal 2021. The comparative increase is largely due to the fact that fiscal year 2021 figures only cover the period from acquisition of Ability by the Company on October 29, 2021 to December 31, 2021.
• Entered into an asset purchase agreement to acquire the right and interests of Garrison Laurel Funding LP and Garrison Bluebird Funding LP on January 1, 2022. This transaction, entered alongside ML Management, strategically positions the Company's platform to grow the assets it manages.
• Entered a strategic arrangement to provide sub-advisory services to a fund in the United States on August 17, 2022 that provides credit-relatedinvestment opportunities to retail investors, further growing our asset management fee base.
• Closed on a reinsurance agreement of multi-year guaranteed annuities ("MYGA") policies for up to $150.0 million on April 1, 2022.
• Closed on an additional reinsurance agreement of MYGA policies for up to $100.0 million on July 1, 2022.

Subsequent Events

• On January 31, 2023, entered into a membership interest and asset purchase agreement to acquire all of the membership interests of Ovation Fund Management II LLC ("Ovation") and certain assets from Ovation Partners, LP (the "Ovation Advisor"), a Texas-based specialty-financefocused asset manager. Pursuant to the agreement, Mount Logan Management would become the investment advisor to the platform, which is focused on investments in commercial lending, real estate lending, consumer finance and litigation finance. In conjunction with the closing of this transaction, which remains subject to the satisfaction of the applicable closing conditions, Mount Logan expects to establish an office in Austin, TX and retain the existing Ovation team, further bolstering its presence in the United States and adding a roster of talented and dedicated professionals to its team.
• Declared a shareholder distribution in the amount of C$0.02 per common share for the first quarter of 2023, payable on April 14, 2023 to shareholders of record at the close of business on April 4, 2023. This cash dividend marks the fourteenth 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.

Management Commentary

• Ted Goldthorpe, Chief Executive Officer and Chairman of Mount Logan stated, "We are excited about the progress made in 2022 as our strategic positioning of Mount Logan across the asset management and insurance solutions verticals produces results. Revenues in our asset management division were up significantly and improved performance across our managed portfolios is supporting growth in fee-related earnings despite challenging market conditions. On the insurance solutions side, Ability continued to strengthen its team and infrastructure as we ramped- up reinsurance activities of fixed annuities, growing total assets. We look forward to continuing the progress made into 2023."

Selected Financial Highlights

• Reported net income available to holders of common shares for fiscal 2022 was $18.2 million. This compares to reported net income of $28.7 million for fiscal 2021. This decrease in reported net income reflects the impact of the non-cash change in insurance contract liabilities and reinsurance assets.
• Adjusted net income available to holders of common shares for fiscal 2022 was $12.6 million. This compares to reported net income of $32.9 million for fiscal 2021. Adjusted net income (loss) in the current and prior year periods excludes transaction costs, acquisition-related costs (including integration costs), and amortization of acquisition- related intangible assets for the asset management segment and certain market-related impacts and experience-

related items for the insurance segment. This decrease in adjusted net income reflects the impact of the non-cash change in insurance contract liabilities and reinsurance assets.

• Reported return on equity ("ROE") and adjusted ROE was 21% and 15%, respectively, for fiscal 2022, compared with 55% and 63%, respectively, for fiscal 2021. Reported and adjusted ROE decreased in 2022, primarily due to lower net income and non-cash change in insurance contract liabilities and reinsurance assets and higher common equity.
• Total Capital for fiscal 2022 was $159.0 million as compared to $132.0 for fiscal 2021. Total capital consists of debt obligations and total shareholders' equity.
• Basic Earnings per share ("EPS") was $0.82 for fiscal 2022, a decrease of $0.73 from $1.55 for fiscal 2021. The decrease in EPS stats across basic and adjusted presentation is largely due to investing activities including the non-cash change in insurance contract liabilities and reinsurance assets.
• Adjusted basic EPS was $0.57 for fiscal 2022, a decrease of $1.20 from $1.77 for fiscal 2021.

Results of Operations by Segment

($ in Thousands)
Years ended December 31		2022				2021			2020
Reported Results (1)
Asset management
Revenue	$	9,419		$	8,772		$	3,499
Expenses		13,119				11,515			5,157
Net income (loss) - asset management		(3,700)			(2,743)		(1,658)
Insurance
Revenue		21,641				2,807			-
Expenses		(695)			(30,810)		-
Net income (loss) - insurance		22,336				33,617			-
Income before income taxes		18,636				30,874			(1,658)
Provision for income taxes		(430)			(2,144)		(1,147)
Net income (loss)		18,206				28,730			(2,805)
Basic EPS	$	0.82		$	1.55		$	(0.24)
Diluted EPS	$	0.81		$	1.54		$	(0.24)
Adjusting Items
Asset management
Transaction costs (2)		(185)			(1,977)		(765)
Acquisition integration costs (3)		(1,875)			(1,448)		-
Non-cash items (4)		(559	)			(787)		(95)
Impact of adjusting items on expenses		(2,619)				(4,212)			(860)
Insurance
Unrealized gain (loss) on investments classified as FVTPL (5)		(46,122)			(356)		-
Impact of adjusting items on revenue		(46,122)			(356)		-
Direct impact of interest rates and equity markets on the valuation of
insurance contracts		41,029				356			-
Impacts of investment activity on the valuation of insurance contract liabilities		13,894				34,644			-
Assumption update		(611)			-		-
Impact of adjusting items on expenses		54,312				35,000			-
Adjusted Results
Asset management
Revenue	$	9,419		$	8,772		$	3,499
Expenses		10,500				7,303			4,297
Net income (loss) - asset management		(1,081)			1,469			(798)
Insurance
Revenue		67,763				2,807			-
Expenses		53,617				(30,810)		-
Net income (loss) - insurance		14,146				33,617			-
Income before income taxes		13,065				35,086			(798)
Provision for income taxes		(430)			(2,144)		(1,147)
Net income (loss)		12,635				32,942			(1,945)
Basic EPS	$	0.57		$	1.77		$	(0.17)
Diluted EPS	$	0.56			$	1.77		$	(0.17)

1. Certain comparative figures have been reclassified to conform with the current year's presentation, including the reclassification of "Net realized and unrealized gain (loss)" to "Revenue".
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-cashitems include amortization of acquisition-related intangible assets and impairment of goodwill, if any.
5. Reflects unrealized gains and losses on the investment portfolio during the period, net of investment held as collateral under the funds withheld or modified coinsurance ("Modco") reinsurance agreements. This represents an adjustment made to arrive at a non-IFRS financial measure.

Asset Management

Total Revenue - Asset Management

($ In Thousands)
Years ended December 31,		2022				2021
Management and servicing fees	$	7,196	$	4,741
Interest income		1,225				3,179
Dividend income		276				187
Net gains (losses) from investment activities		722				665
Total revenue - asset management	$	9,419			$	8,772

Fee Related Earnings ("FRE")

Fee related earnings ("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 Corporation calculates FRE, and reconciles FRE to net income from its asset management activities, as follows:

($ in Thousands)
Years ended December 31,		2022				2021
Net income (loss) and comprehensive income (loss)	$	18,206			$	28,730
Adjustment to net income (loss) and comprehensive income (loss):
Total revenue - insurance (1)		(21,641)			(2,807)
Total expenses - insurance		(695)			(30,810)
Net income - asset management (2)		(4,130)				(4,887)
Adjustments to non-fee generating asset management business and other recurring revenue
stream:
Management fee from Ability		2,356				314
Interest income		(138)			(2,164)
Dividend income		(276)			(187)
Net gains (losses) from investment activities		(722)			(665)
Administration fees		782				1,140
Transaction costs		185				1,977
Amortization of intangible assets		559				787
Interest and other credit facility expenses		3,564				2,807
General, administrative and other		3,650				3,229
Income tax (expense) benefit - asset management		29				1,717
Fee Related Earnings	$	5,859			$	4,068

1. Includes add-back of management fees paid to ML Management. On October 29, 2021, the Company completed the acquisition of Ability and ML Management has been engaged as an investment adviser for a portion of Ability's assets.
2. Represents net for asset income management operating segment.