Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Management's Discussion and Analysis

of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations is intended to help investors understand our business, results of operations, liquidity and capital resources and should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (the "Quarterly Report"). This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions, described under the section titled "Risk Factors" and elsewhere in this Quarterly Report. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those which are not within our control. See "Special Note Regarding Forward-Looking Statements."

Overview

Launched in 2021, we are a technology-enabled, fast-growing, coastal specialty insurer. We focus on profitable underwriting of single family, condominium and commercial residential policies in the P&C industry in coastal states along the Atlantic seaboard through our insurance subsidiary, Slide Insurance Company ("SIC"). SIC is licensed in Florida and South Carolina. In February 2025, we acquired an additional insurance subsidiary, Slide Specialty Insurance Company ("Slide Specialty"), which is licensed in New York, New Jersey, Rhode Island and South Carolina. We utilize our differentiated technology and data-driven approach to focus on market opportunities that are underserved by other insurance companies. We acquire policies both from inorganic block acquisitions and subsequent renewals, as well as new business sales through a combination of independent agents and our direct-to-consumer ("DTC") channel, through which we sell our insurance products directly to end consumers, without the use of retailers, brokers, agents or other intermediaries. We do not depend on any one key product or product line within the coastal specialty homeowners and commercial residential insurance market. We control all aspects of our value chain, including technology, underwriting, actuarial, distribution, claims and risk management which allows us to maximize profitability while maintaining disciplined underwriting standards.

Our goal is to deliver long-term value for stockholders by focusing on underserved, coastal specialty markets where market capacity is limited and demand for insurance products is high. Coastal specialty market demand for insurance products has increased over the last few years as the larger, national insurance carriers have reduced their underwriting capacity in such markets, creating a unique market opportunity for us to capitalize on the imbalance of supply and demand.

Key Components of Our Results of Operations

Revenue

Gross premiums written. Gross premiums written represent, with respect to a fiscal period, the sum of assumed premiums written from Citizens policy assumptions (net of opt-outs) plus direct premiums written (premiums from subsequent renewals of such Citizens policies and new and renewal policies written through independent agents and our DTC channel, net of any midterm cancellations), in each case prior to amounts ceded to reinsurers. Gross premiums written in any given fiscal period are affected by:

In 2026 we assumed 37,668 policies, representing approximately $83 million in assumed unearned premiums from Citizens. These policies carry no upfront acquisition costs and are captured in our current treaty year reinsurance program.

We believe recent legislative and regulatory changes, improvements in the data that is made available on Citizens policies and rate increases implemented by Citizens making pricing more comparable to what we charge for policies underwritten in other channels make the opportunity to assume policies from Citizens attractive.

Take-out opportunities, however, are subject to a number of market, timing and execution risks, and future take-out opportunities may or may not materialize.

Gross premiums earned. Gross premiums earned represent the portion of our gross premiums written earned during a fiscal period from assumed (including those assumed from Citizens), direct policies written and subsequent renewals of such policies. Gross premiums written associated with assumed policies from Citizens are earned ratably over the remaining term of the policy and gross premiums written associated with voluntary and renewal policies are earned ratably over the term of the policy. All such new and renewal policies currently have a term of 12 months from date of issuance.

Ceded premiums earned. Ceded premiums earned represent the earned portion of our gross premiums written ceded to reinsurers and other costs of our reinsurance during a fiscal period. We recognize the cost of our reinsurance program ratably over the term of the arrangement, which is typically 12 months. Our ceded premiums earned represent costs of reinsurance to cover losses from catastrophes that exceed the retention levels defined by our catastrophe excess of loss reinsurance contracts. The rates we pay for reinsurance are based primarily on policy exposures reflected in gross premiums earned.

Net premiums earned. Net premiums earned reflect gross premiums earned less ceded premiums earned during the fiscal period.

Net investment income. Net investment income represents interest earned from cash, cash equivalents, restricted cash, restricted cash and cash equivalents fixed-maturity securities, money market accounts and other investments and the realized gains or losses from the sale of investments. Factors affecting net investment income include the size of our investment portfolio and the yield generated by the underlying investments in our investment portfolio.

Policy fees. Florida law allows insurers to charge policyholders a $25 policy fee on each policy written. Policy fees represent such upfront policy fees. These fees are not subject to refund, and accordingly we recognize policy fees as income immediately when collected in accordance with ASC 606, which coincides with the completion of our service obligation when the policy is issued.

Other income. Other income represents all pay-plan fees and commission income earned by our retail agency subsidiary that sells on behalf of non-affiliated carriers. We charge pay-plan fees to policyholders that pay their premium in more than one installment and record the fees as income when collected.

Expenses

Losses and loss adjustment expenses incurred, net. Losses and loss adjustment expenses incurred, net reflect losses paid, expenses paid to resolve claims, such as fees paid to adjusters, attorneys and investigators, and changes in our reserves for unpaid losses and loss adjustment expenses incurred, net during the fiscal period, in each case net of losses ceded to reinsurers. Our reserves for unpaid losses and loss adjustment expenses incurred, net represent the estimated ultimate cost of resolving all reported claims plus all losses we incurred related to insured events that we assume have occurred as of the reporting date, but that policyholders have not yet reported to us (which are commonly referred to as "incurred but not reported," or "IBNR"). We estimate our reserves for unpaid losses using individual case-based estimates for reported claims and actuarial estimates for IBNR losses. We continually review and adjust our estimated losses as necessary based on industry development trends, our evolving claims experience and new information obtained. If our unpaid losses and loss adjustment expenses incurred, net are considered deficient or redundant, we increase or decrease the liability in the period in which we identify the difference and reflect the change in our current period results of operations.

In general, our losses and loss adjustment expense reserves ("LAE") are affected by:

Losses and LAE are based on actual paid losses and expenses, as well as an actuarial analysis of the estimated losses, including losses incurred during the period and changes in estimates from prior periods. Losses and LAE may be paid out over a period of years.

Policy acquisition and other underwriting expenses. Policy acquisition and other underwriting expenses consist of the following items: (i) commissions paid to outside agents at the time of policy issuance, (ii) premium taxes and (iii) inspection fees. We recognize policy acquisition and other underwriting expenses ratably over the term of the underlying policy. Until renewed, policies assumed from Citizens have no associated policy acquisition and other underwriting expenses.

General and administrative expenses. General and administrative expenses include compensation and related benefits, professional fees, office lease and related expenses, information system expenses, corporate insurance, and other general and administrative costs.

Interest expense. Interest expense consists of interest paid on our commercial loans and Credit Facility (as defined below), amortization of debt issuance costs, net settlements of interest rate swaps, and changes in market value of interest rate swaps.

Depreciation expense. Depreciation expense includes depreciation of property and equipment, including software developed for internal use.

Amortization expense. Amortization expense includes amortization of renewal rights and other intangible assets.

Other operating expense. Other operating expense includes other miscellaneous expenses.

Income tax expense. Income tax expense generally consists of income taxes payable by our subsidiaries that are taxed as corporations. We were incorporated as a corporation in the state of Delaware on March 2, 2021. As a corporation, we are subject to typical corporate U.S. federal and state income tax rates which we expect to result in a statutory tax rate of approximately 25% under current tax law.

Key Metrics & Ratios

We discuss certain key financial and operating metrics, described below, which provide useful information about our business and the operational factors underlying our financial performance.

Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses incurred, net to net premiums earned.

Policy acquisition expense ratio, expressed as a percentage, is the ratio of policy acquisition expenses and other underwriting expenses to net premiums earned.

Expense ratio, expressed as a percentage, is the ratio of policy acquisition and other underwriting expenses, general and administrative expenses, and other operating expense to net premiums earned.

Combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.

Debt to capitalization ratio is the ratio, expressed as a percentage, of total outstanding debt to total capitalization.

Return on equity represents net income as a percentage of average beginning and ending shareholders' equity during the period.

Return on tangible equity is a non-GAAP financial measure. We define tangible shareholders' equity as shareholders' equity less goodwill and other intangible assets. We define return on tangible equity as net income as a percentage of average beginning and ending tangible shareholders' equity during the period. We regularly evaluate acquisition opportunities and have historically made acquisitions that affect shareholders' equity. We use return on tangible equity as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial

information useful insight into our results of operations and our underlying business performance. "See "Results of Operations - Non-GAAP Financial Measures" for a reconciliation of return on tangible equity to return on equity, the most directly comparable GAAP measure.

Results of Operations

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025:

Revenue

Gross premiums written. Gross premiums written increased to $508.0 million for the three months ended June 30, 2026 from $435.4 million for the three months ended June 30, 2025. The increase in net premiums written was driven by growth of voluntary new business, and renewals of previously acquired Citizens policies.

Our policies in force as of June 30, 2026 were 509,075, compared to 348,439 as of June 30, 2025, a 46.1% increase year-over-year. Our average premium per residential policy decreased from $3,614 at June 30, 2026 compared to $3,964 at June 30, 2025 as a result of a decrease in average premium of Citizens policies assumed. Additionally, our average premium per commercial residential policy was $99,515 at June 30, 2026 and $110,575 at June 30, 2025.

Gross premiums earned. Gross premiums earned increased to $486.1 million for the three months ended June 30, 2026 from $338.7 million for the three months ended June 30, 2025. The increase was driven primarily by the earnings resulting from strong premium production across the portfolio including prior years Citizen acquisitions.

Ceded premiums earned. Ceded premiums for the three months ended June 30, 2026 and 2025 were approximately $125.5 million and $94.8 million, respectively, representing 25.8% and 28.0%, respectively, of gross premiums earned. The $30.7 million increase was primarily attributable to increased catastrophe reinsurance costs in line with growth of the portfolio.

Net premiums earned. Net premiums earned increased to $360.6 million for the three months ended June 30, 2026 from $243.9 million for the three months ended June 30, 2025. The increase and year-over-year growth were directly driven by earnings growth from previous increase in voluntary homeowners and Citizens acquired policies, offset by higher reinsurance costs directly related to the growth of the portfolio.

Net investment income. Net investment income, inclusive of realized investment gains and losses, increased to $22.2 million for the three months ended June 30, 2026 from $15.0 million for the three months ended June 30, 2025, which was attributable to an increase in investable assets. Our average investable assets increased to $2,535 million for the three months ended June 30, 2026 from $1,613 million for the three months ended June 30, 2025.

Policy fees. Policy fees increased to $3.3 million for the three months ended June 30, 2026 from $2.5 million for the three months ended June 30, 2025. The increase in policy fees was primarily attributable to increased renewals of existing policies.

Other income. Other income increased to $0.7 million for the three months ended June 30, 2026 from $0.3 million for the three months ended June 30, 2025. The increase in other income was primarily attributable to an increase in service fee revenue.

Total revenue. Total revenue increased to $386.8 million for the three months ended June 30, 2026 from $261.6 million for the three months ended June 30, 2025. The increase and year-over-year growth were directly driven by earnings growth from previous increase in voluntary homeowners and Citizens acquired policies.

Expenses

Losses and loss adjustment expenses incurred, net. Losses and loss adjustment expenses incurred, net increased to $108.7 million for the three months ended June 30, 2026 from $91.4 million for the three months ended June 30, 2025. There were no incurred losses from named storms during the three months ended June 30, 2026 and 2025. The increase in net losses and loss adjustment expenses incurred was primarily driven by the growth of the portfolio partially offset by lower overall loss experience for the period ending June 30, 2026 versus June 30, 2025.

Policy acquisition and other underwriting expenses. Policy acquisition and other underwriting expenses for the three months ended June 30, 2026 and 2025 were approximately $42.3 million and $32.1 million, respectively, representing 11.7% and 13.2% of net premiums earned, respectively. The increase was primarily attributable to increased renewal policies from prior year assumed Citizens' policies, resulting in increased policy acquisition costs in 2026.

General and administrative expenses. General and administrative expenses for the three months ended June 30, 2026 and 2025 were approximately $55.0 million and $37.9 million, respectively, representing 15.3% and 15.6%, respectively, of net premiums earned. The increase was due primarily to the growth in staffing and technology to support the Company's strategic growth initiative. Personnel count increased to 627 at June 30, 2026 from 422 at June 30, 2025.

Interest expense. Interest expense increased slightly for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was due primarily to the increase in debt financing costs.

Depreciation expense. Depreciation expense for the three months ended June 30, 2026 and 2025 was $1.4 million and $1.1 million, respectively. The increase was due primarily to depreciation of capitalized costs of internal-use software projects that were put into production in 2025.

Amortization expense. Amortization expense for the three months ended June 30, 2026 and 2025 was $0.0 million and $1.9 million, respectively, representing 0.0% and 0.8%, respectively, of net premiums earned. The decrease was due primarily to intangible assets being fully amortized.

Income tax expense. Income tax expense was $43.6 million and $26.2 million for the three months ended June 30, 2026 and 2025 respectively. Our effective tax rate for each of the three months ended June 30, 2026 and 2025 was 24.4% and 27.2%, respectively. The decrease in our effective tax rate was primarily due to the favorable treatment of stock options.

Ratios

Loss ratio. Our loss ratio decreased to 30.2% for the three months ended June 30, 2026 from 37.4% for the three months ended June 30, 2025, primarily due to a decrease in overall loss experience.

Expense ratio. Our expense ratio decreased to 27.4% for the three months ended June 30, 2026 from 30.0% for the three months ended June 30, 2025, primarily due to scaling impact in net earned premium growth with more moderate operating expense growth and a reduction in amortization expense as intangible assets were fully amortized.

Combined ratio. Our combined ratio decreased to 57.6% for the three months ended June 30, 2026 from 67.4% for the three months ended June 30, 2025, primarily due to a decrease in overall loss experience, and scaling impact in net earned premium growth with more moderate operating expense growth.

Policy acquisition expense ratio. Our policy acquisition expense ratio decreased to 11.7% for the three months ended June 30, 2026 from 13.2% for the three months ended June 30, 2025, primarily due to scaling impact in net earned premium growth with more moderate policy acquisition expense growth.

Debt to capitalization ratio. Our debt to capitalization ratio decreased to 2.4% for the three months ended June 30, 2026 from 4.0% for the three months ended June 30, 2025, primarily as a result of growth in retained earnings from net income.

Return on equity. Our return on equity increased to 11.7% for the three months ended June 30, 2026 from 10.0% for the three months ended June 30, 2025, primarily due to the IPO proceeds.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:

Revenue

Gross premiums written. Gross premiums written increased to $922.8 million for the six months ended June 30, 2026 from $713.6 million for the six months ended June 30, 2025. The increase in net premiums written was driven by growth of voluntary new business, and renewals of previously acquired Citizens policies.

Our policies in force as of June 30, 2026 were 509,075, compared to 348,439 as of June 30, 2025, a 46.1% increase year-over-year. Our average premium per residential policy decreased from $3,614 at June 30, 2026 compared to $3,964 at June 30, 2025 as a result of a decrease in average premium of Citizens policies assumed. Additionally, our average premium per commercial residential policy was $99,515 at June 30, 2026 and $110,575 at June 30, 2025.

Gross premiums earned. Gross premiums earned increased to $967.1 million for the six months ended June 30, 2026 from $689.5 million for the six months ended June 30, 2025. The increase was driven primarily by the earnings resulting from strong premium production across the portfolio including prior years Citizen acquisitions.

Ceded premiums earned. Ceded premiums for the six months ended June 30, 2026 and 2025 were approximately $240.6 million and $179.6 million, respectively, representing 24.9% and 26.1%, respectively, of gross premiums earned. The $60.9 million increase was primarily attributable to increased catastrophe reinsurance costs in line with growth of the portfolio.

Net premiums earned. Net premiums earned increased to $726.5 million for the six months ended June 30, 2026 from $509.9 million for the six months ended June 30, 2025. The increase and year-over-year growth were directly driven by earnings growth from previous increase in voluntary homeowners and Citizens acquired policies, offset by higher reinsurance costs directly related to the growth of the portfolio.

Net investment income. Net investment income, inclusive of realized investment gains and losses, increased to $42.3 million for the six months ended June 30, 2026 from $28.8 million for the six months ended June 30, 2025, which was attributable to an increase in investable assets. Our average investable assets increased to $2,395 million for the six months ended June 30, 2026 from $1,564 million for the six months ended June 30, 2025.

Policy fees. Policy fees increased to $6.0 million for the six months ended June 30, 2026 from $4.0 million for the six months ended June 30, 2025. The increase in policy fees was primarily attributable to increased renewals of existing policies.

Other income. Other income increased to $1.3 million for the six months ended June 30, 2026 from $0.5 million for the six months ended June 30, 2025. The increase in other income was primarily attributable to an increase in service fee revenue.

Total revenue. Total revenue increased to $776.1 million for the six months ended June 30, 2026 from $543.2 million for the six months ended June 30, 2025. The increase and year-over-year growth were directly driven by earnings growth from previous increase in voluntary homeowners and Citizens acquired policies

Expenses

Losses and loss adjustment expenses incurred, net. Losses and loss adjustment expenses incurred, net increased to $219.8 million for the six months ended June 30, 2026 from $175.1 million for the six months ended June 30, 2025. There were no incurred losses from named storms during the six months ended June 30, 2026 and 2025. The increase in net losses and loss adjustment expenses incurred was primarily driven by the increase in the growth of the portfolio partially offset by lower overall loss experience for the period ending June 30, 2026 versus June 30, 2025.

Policy acquisition and other underwriting expenses. Policy acquisition and other underwriting expenses for the six months ended June 30, 2026 and 2025 were approximately $86.4 million and $60.7 million, respectively, representing 11.9% and 11.9% of net premiums earned, respectively. The increase was primarily attributable to increased renewal policies from prior year assumed Citizens' policies, resulting in increased policy acquisition costs in 2026.

General and administrative expenses. General and administrative expenses for the six months ended June 30, 2026 and 2025 were approximately $101.2 million and $79.3 million, respectively, representing 13.9% and 15.6%, respectively, of net premiums earned. The increase was due primarily to the growth in staffing and technology to support the Company's strategic growth initiatives. Personnel count increased to 627 at June 30, 2026 from 422 at June 30, 2025.

Interest expense. Interest expense decreased slightly for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was due primarily to the decrease in outstanding debt, offset by higher debt issuance costs.

Depreciation expense. Depreciation expense for the six months ended June 30, 2026 and 2025 was $2.7 million and $2.3 million, respectively. The increase was due primarily to depreciation of capitalized costs of internal-use software projects that were put into production in 2025.

Amortization expense. Amortization expense for the six months ended June 30, 2026 and 2025 was $0.1 million and $3.7 million, respectively, representing 0.0% and 0.7%, respectively, of net premiums earned. The decrease was due primarily to intangible assets being fully amortized.

Income tax expense. Income tax expense was $89.8 million and $57.6 million for the six months ended June 30, 2026 and 2025, respectively. Our effective tax rate for each of the six months ended June 30, 2026 and 2025 was 24.9% and 26.2%, respectively. The decrease in our effective tax rate was primarily due to the favorable treatment of stock options.

Ratios

Loss ratio. Our loss ratio decreased to 30.3% for the six months ended June 30, 2026 from 34.3% for the six months ended June 30, 2025, primarily due to a decrease in overall loss experience.

Expense ratio. Our expense ratio decreased to 26.2% for the six months ended June 30, 2026 from 28.6% for the six months ended June 30, 2025, primarily due to scaling impact in net earned premium growth with more moderate operating expense growth and a reduction in amortization expense as intangible assets were fully amortized.

Combined ratio. Our combined ratio decreased to 56.5% for the six months ended June 30, 2026 from 62.9% for the six months ended June 30, 2025, primarily due to a decrease in overall loss experience, scaling impact in net earned premium growth with more moderate operating expense growth and a reduction in amortization expense as intangible assets were fully amortized.

Policy acquisition expense ratio. Our policy acquisition expense ratio remained consistent at 11.9% for the six months ended June 30, 2026 and 2025.

Debt to capitalization ratio. Our debt to capitalization ratio decreased to 2.4% for the six months ended June 30, 2026 from 4.0% for the six months ended June 30, 2025, primarily as a result of growth in retained earnings from net income.

Return on equity. Our return on equity decreased to 23.8% for the six months ended June 30, 2026 from 25.0% for the six months ended June 30, 2025, as a result of growth in equity due to retained earnings from net income, offset by the IPO proceeds.

Non-GAAP Financial Measures

We present our results of operations in a way that we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance. Some of the measurements are not required by, or presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") under SEC rules and regulations. We refer to these measures as "non-GAAP financial measures." For example, in this Quarterly Report, we present tangible shareholders' equity and return on tangible equity, which are a non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. We believe that non-GAAP financial measures, which may be defined and calculated differently by other companies, help explain and enhance the understanding of our results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of our non-GAAP financial measures to the most comparable GAAP figures, for the periods presented follows:

Return on tangible equity

The following table sets forth a reconciliation of return on tangible equity to return on equity, the most directly comparable GAAP measure:

Our return on tangible equity increased to 11.7% for the three months ended June 30, 2026 from 10.1% for the three months ended June 30, 2025, primarily due to the IPO proceeds.

Our return on tangible equity decreased to 23.8% for the six months ended June 30, 2026 from 25.3% for the six months ended June 30, 2025, as a result of growth in equity due to an increase in retained earnings from net income, offset by the IPO proceeds.

Liquidity and Capital Resources

We are organized as a Delaware holding company with our operations primarily conducted by our wholly owned insurance company subsidiaries, SIC (domiciled in the State of Florida), Slide Specialty (domiciled in the State of Rhode Island), Slide Reinsurance Holdings, LLC (a holding company which owns 100% of shares of segregated cell T104 of White Rock Insurance (SAC) LTD.) and our services companies Slide MGA, LLC, Clegg Insurance Advisors, LLC D/B/A Homefront, STAT Claims Co., and Trusted Mitigation Contractors.

We may receive cash through (i) capital contributions or issuance of equity and debt securities, (ii) dividends from our insurance company subsidiaries and (iii) distributions from our services companies. We may use these proceeds to contribute funds to our insurance company subsidiaries to support growth, pay dividends, pay taxes, or for other corporate purposes.

SIC and SSIC can only pay dividends to us out of its available and accumulated surplus funds, which are derived from realized net operating profits on its business and net unrealized capital gains.

No dividends were paid by SIC or SSIC in 2026 and 2025.

Florida Statute Section 624.408 requires SIC to maintain a minimum level of surplus of not less than the greater of 10% of its total liabilities, or $15.0 million. Based on this requirement, SIC was required to maintain capital and surplus of $130.9 million and $113.9 million as of June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026 and December 31, 2025, SIC's statutory-basis surplus totaled $520.4 million and $417.9 million, meeting the minimum surplus requirements.

As of June 30, 2026 and December 31, 2025, we had $1.821 billion and $1.683 billion, respectively, in cash, cash equivalents, restricted cash and cash equivalents, which primarily consisted of cash, money market accounts and US Treasury bills. We intend to maintain substantial cash or cash-equivalent balances during hurricane season to meet seasonal liquidity needs relating to potential catastrophic losses. However, in the event of a failure of the financial institution, there is a chance we may be unable to access such funds and may incur a loss to the extent such balance exceeds the FDIC insurance limits, which could have a negative impact on our liquidity and financial condition.

Our insurance subsidiaries generate cash through premium collections, investment income and the sale or maturity of invested assets. We received net proceeds of approximately $263.5 million from the IPO proceeds. Our insurance subsidiaries use cash to pay reinsurance premiums, losses and loss adjustment expenses incurred, net, policy acquisition and other underwriting expenses, salaries and employee benefits and other expenses, as well as to purchase investments.

Although we can provide no assurances, we believe that our available cash, cash equivalents, restricted cash and cash equivalents balance and cash generated from operations, should be sufficient to meet our working capital requirements and other capital expenditures for the next twelve months, and thereafter for the foreseeable future.

Cash Flows

Our most significant source of cash is from premiums received from insureds, net of the related commission amount for the policies. Our most significant cash outflows are for claims that arise when a policyholder incurs an insured loss and for catastrophe excess of loss reinsurance. Because the payment of claims occurs after the receipt of the premium, often years later, we invest the cash in various investment securities that generally earn interest and dividends. The table below summarizes our net cash flow.

For the six months ended June 30, 2026, cash flows provided by operating activities was $590.0 million, an increase of $239.6 million from the six months ended June 30, 2025, driven by an increase in net income and change in certain balance sheet accounts. For the six months ended June 30, 2026, cash flows used in investing activities was $256.9 million, a decrease of $274.4 million from cash provided by investing activities for the six months ended June 30, 2025, driven by the increased purchases of fixed-maturity securities available-for-sale. For the six months ended June 30, 2026, cash flows used in financing activities was $194.9 million, a decrease of $452.9 million from the six months ended June 30, 2025, driven by the repurchase and retirement of common stock through the repurchase program and 2025 proceeds from the initial public offering.

Credit Facility

On June 25, 2024, the Company entered into an amended and restated credit agreement ("the Credit Agreement") with Regions Bank for (i) a $10 million revolving credit facility, which was amended to a $530.4 million revolving credit facility on July 27, 2026(ii) term loan in an aggregate principal amount of $40 million and (iii) one or more delayed draw term loans in an aggregate principal amount not to exceed $125 million (together, the "Credit Facility"), which was terminated under the amendment.

Under the terms of the Credit Facility, borrowings bear interest at an annual rate equal to the three-month Secured Overnight Financing Rate ("SOFR") based on the consolidated leverage ratio as defined in the agreement. The interest payment is due quarterly in arrears on the last business day of each quarter. The Credit Facility contains affirmative and negative covenants as well as customary events of default. In addition, the Company must comply with certain financial and non-financial covenants and agree to pay a fee equal to the product of the unused line fee rate and the average of the daily unused available credit balances of the revolving credit facility. The unused line fee rate is 0.5%. The Credit Facility matures on June 25, 2029.

The Credit Facility accrues interest at (i) for base rate loans, the highest of (a) the prime rate, (b) the federal funds rate, as in effect from time to time, plus 0.50% per annum, (c) the term secured overnight financing rate ("SOFR") in effect on such day for a forward-looking interest period of one month commencing on such day, plus 1.00% per annum, and (d) the floor of 0.00% per annum, in each case plus an applicable margin of (x) if the consolidated total leverage ratio, as defined in the Credit Facility, is less than 1.00:1.00, 2.25%, (y) if the consolidated total leverage ratio is greater than or equal to 1.00:1.00 but less than 1.50:1.00, 2.50% or (z) if the consolidated total leverage ratio is greater than or equal to 1.50:1.00, 2.75%, and (ii) for SOFR based loans, the rate per annum equal to the SOFR reference rate for a forward-looking tenor comparable to the then applicable or selected (as applicable) interest period, determined as of a periodic term

SOFR determination date, or the floor of 0.00% per annum, if applicable, plus an applicable margin of (x) if the consolidated total leverage ratio is less than 1.00:1.00, 3.25%, (y) if the consolidated total leverage ratio is greater than or equal to 1.00:1.00 but less than 1.50:1.00, 3.50% or (z) if the consolidated total leverage ratio is greater than or equal to 1.50:1.00, 3.75%.

Off-Balance Sheet Arrangement

At June 30, 2026, we do not maintain any off-balance sheet arrangements.

Seasonality of Our Business

Our insurance business is seasonal as hurricanes typically occur during the period from June 1 through November 30 each year. With our catastrophe reinsurance program effective on June 1 each year, any variation in the cost of our reinsurance, whether due to changes to reinsurance rates or changes in the total insured value of our policy base, will occur and be reflected in our financial results beginning June 1 of each year, subject to certain adjustments.

Contractual Obligations and Commitments

The following table illustrates our contractual obligations and commercial commitments by due date as of June 30, 2026:

(1) Interest on the Credit Facility is calculated using 6.9% in effect at June 30, 2026 with the assumption that interest rates remain flat over the remainder of the period that the Credit Facility is outstanding. At our option, we may prepay the Credit Facility, in whole or in part, without premium or penalty.

Financial Condition

Stockholders' Equity

As of June 30, 2026, stockholders' equity was $1,194.8 million. As of December 31, 2025, total stockholders' equity was $1,113.2 million. The increase was primarily due to increased retained earnings from net income offset by the repurchase and retirement of common stock through the repurchase program.

Investment Portfolio

Our primary investment objectives are to maintain liquidity, preserve capital and generate a stable level of investment income. We purchase securities that we believe are attractive on a relative value basis and seek to generate returns in excess of predetermined benchmarks. Our Board determines our investment guidelines in compliance with applicable regulatory restrictions on asset type, quality and concentration.

Our cash and invested assets consist of cash and cash equivalents, fixed maturity securities and equity securities. As of June 30, 2026, the majority of our investments, or $830.6 million, was comprised of fixed income securities rated BBB- or better. Our investments also include $7.0 million of other securities. In addition, we maintained a non-restricted cash and cash equivalent balance of $1,236.9 million and a restricted cash and cash equivalents balance of $584.2 million as of June 30, 2026.

As of December 31, 2025, the majority of our investments, or $588.2 million, was comprised of fixed income securities rated BBB- or better. Our investments also include $4.0 million of other securities. In addition, we maintained a non-restricted cash and cash equivalent balance of $1,201.2 million and a restricted cash and cash equivalents balance of $481.8 million as of December 31, 2025.

As of June 30, 2026, and December 31, 2025, the amortized cost and fair value on available for sale securities were as follows:

The following tables provide the credit quality of available for sale investments as of June 30, 2026 and December 31, 2025:

The amortized cost and fair value of our available for sale investments in fixed maturity securities summarized by contractual maturity as of June 30, 2026 and December 31, 2025 are displayed in the tables below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.

Critical Accounting Policies and Estimates

Our critical accounting policies are described in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

See discussion of recent accounting standards in Note 1 in the accompanying notes to the condensed consolidated financial statements for further details.

Emerging Growth Company Status

We are an emerging growth company, as defined in the JOBS Act. For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that

are not "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding advisory "say-on-pay" votes on executive compensation and stockholder advisory votes on golden parachute compensation.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes forward-looking statements within the meaning of the federal securities laws. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "aim," "estimates," "predicts," "potential" or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed in Part II, Item 1A "Risk Factors" in this Quarterly Report and in other reports we file with the SEC.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this Quarterly Report to conform our prior statements to actual results or revised expectations.

The following are some important factors that could cause our actual results to differ from our expectations in any forward-looking statements:

For further discussion of certain of these factors, see the risk factors disclosed in the section entitled "Risk Factors" in this Quarterly Report and in Form 10-K, as filed February 27, 2026.