Slide Insurance : Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

About this update from Slide Insurance Holdings, Inc.

Ite m 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. We have one reportable segment, insurance. See the below table for a summary of gross premiums written, policy fees, total revenue, combined ratio, return on equity, and return on tangible equity (1) for the three months ended March 31, 2026 and 2025 and the year ended December 31, 2025, and the total assets, shareholders' equity and tangible shareholders' equity (1 ) as of March 31, 2026 and December 31, 2025. Three Months Ended March 31, (in thousands) Year Ended December 31, 2025 (in thousands) 2026 2025 2025 Gross premiums written $ 414,792 $ 278,249 $ 1,795,516 Policy fees 2,590 1,534 8,243 Total revenue 389,283 281,593 1,155,901 Net income 139,527 92,503 443,958 Combined ratio 55.5 % 58.9 % 52.1 % Return on equity 12.5 % 19.2 % 57.4 % Return on tangible equity (1) 12.6 % 19.5 % 57.9 % March 31, 2026 (in thousands) December 31, 2025 (in thousands) Total Assets $ 2,882,360 $ 2,918,465 Shareholders' Equity 1,113,612 1,113,241 Tangible Shareholders' Equity (1) 1,110,979 1,110,539 (1) Non-GAAP financial measure. See " Results of Operations - Non-GAAP Financial Measures " for a reconciliation of tangible shareholder's equity to shareholder's equity and return on tangible equity to return on equity, the most directly comparable GAAP measure. 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: • Amount of premiums assumed from Citizens acquisitions; • Block acquisitions from other third-party insurers; • Renewals of existing policies; • New business submissions and binding of new submissions into effective policies; • Average premium of new and renewal policies; and • Premium rates on new and renewal policies. In Q1 2026 we assumed 28,783 policies, representing approximately $67 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, 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: • the occurrence, frequency and severity of claims associated with the particular types of insurance contracts that we write; • the reinsurance agreements we have in place at the time of a loss; • the mix of business written by us; • changes in the legal or regulatory environment related to the business we write; • trends in legal defense costs; and • inflation in the cost of claims including inflation related to wages, medical costs and building materials. 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 expressed on an annualized basis 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 expressed on an annualized basis 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 March 31, 2026 Compared to Three Months Ended March 31, 2025 The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, (in thousands) 2026 2025 Change % Change Gross premiums written $ 414,792 $ 278,249 $ 136,543 49.1 % Change in unearned premiums 66,194 72,642 (6,448 ) (8.9 )% Gross premiums earned 480,986 350,891 130,095 37.1 % Ceded premiums earned (115,103 ) (84,850 ) (30,253 ) 35.7 % Net premiums earned 365,883 266,041 99,842 37.5 % Net investment income 20,118 13,807 6,311 45.7 % Policy fees 2,590 1,534 1,056 68.8 % Other income 692 211 481 228.0 % Total revenue $ 389,283 $ 281,593 $ 107,690 38.2 % Losses and loss adjustment expenses incurred, net 111,073 83,761 27,312 32.6 % Policy acquisition and other underwriting expenses 44,125 28,572 15,553 54.4 % General and administrative expenses 46,173 41,378 4,795 11.6 % Interest expense 852 934 (82 ) (8.8 )% Depreciation expense 1,315 1,146 169 14.7 % Amortization expense 69 1,895 (1,826 ) (96.4 )% Total expense $ 203,607 $ 157,686 $ 45,921 29.1 % Net income before income tax expense $ 185,676 $ 123,907 $ 61,769 49.9 % Income tax expense 46,149 31,404 14,745 47.0 % Net income $ 139,527 $ 92,503 $ 47,024 50.8 % Loss ratio 30.4 % 31.5 % (1.1 )% Expense ratio 25.1 % 27.4 % (2.3 )% Combined ratio 55.5 % 58.9 % (3.4 )% Policy acquisition expense ratio 12.1 % 10.7 % 1.4 % Debt to capitalization ratio 2.8 % 6.6 % (3.8 )% Return on equity 12.5 % 19.2 % (6.7 )% Return on tangible equity (1) 12.6 % 19.5 % (6.9 )% (1) Non-GAAP financial measure. 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. Revenue Gross premiums written. Gross premiums written increased to $414.8 million for the three months ended March 31, 2026 from $278.2 million for the three months ended March 31, 2025. The increase in net premiums written was driven by growth of voluntary new business, renewals of previously acquired Citizens policies, and further Citizens acquisitions. Our policies in force as of March 31, 2026 were 509,928, compared to 348,029 as of March 31, 2025, a 46.2% increase year-over-year. Our average premium per residential policy decreased from $3,641 at March 31, 2026 compared to $3,933 at March 31, 2025 as a result of a decrease in average premium of Citizens policies assumed. Additionally, our average premium per commercial residential policy was $100,307 at March 31, 2026. Gross premiums earned . Gross premiums earned increased to $481.0 million for the three months ended March 31, 2026 from $350.9 million for the three months ended March 31, 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 March 31, 2026 and 2025 were approximately $115.1 million and $84.9 million, respectively, representing 23.9% and 24.2%, respectively, of gross premiums earned. The $30.3 million increase was primarily attributable to increased catastrophe reinsurance costs in line with growth in policies in force. Net premiums earned. Net premiums earned increased to $365.9 million for the three months ended March 31, 2026 from $266.0 million for the three months ended March 31, 2025. The increase in net premiums earned in the comparable periods was primarily attributable to increased assumptions of policies from Citizens and increased renewals of existing 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 $20.1 million for the three months ended March 31, 2026 from $13.8 million for the three months ended March 31, 2025, which was attributable to an increase in investable assets. Our average investable assets increased to $2,345 million for the three months ended March 31, 2026 from $1,307 million for the three months ended March 31, 2025. Policy fees. Policy fees increased to $2.6 million for the three months ended March 31, 2026 from $1.5 million for the three months ended March 31, 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 March 31, 2026 from $0.2 million for the three months ended March 31, 2025. The increase in other income was primarily attributable to an increase in service fee revenue. Total revenue. Total revenue increased to $389.3 million for the three months ended March 31, 2026 from $281.6 million for the three months ended March 31, 2025. The increase in total revenue was due primarily to an increase in net premiums earned primarily attributable to increased assumptions of policies from Citizens and increased renewals of existing policies. Expenses Losses and loss adjustment expenses incurred, net. Losses and loss adjustment expenses incurred, net increased to $111.1 million for the three months ended March 31, 2026 from $83.8 million for the three months ended March 31, 2025. There were no incurred losses from named storms during the three months ended March 31, 2026 and 2025. The increase in net losses and loss adjustment expenses incurred was primarily driven by the increase in policies in force partially offset by lower catastrophe losses for the period ending March 31, 2026 versus March 31, 2025. Policy acquisition and other underwriting expenses. Policy acquisition and other underwriting expenses for the three months ended March 31, 2026 and 2025 were approximately $44.1 million and $28.6 million, respectively, representing 12.6% and 10.7% 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 March 31, 2026 and 2025 were approximately $46.2 million and $41.4 million, respectively, representing 12.1% and 15.6%, respectively, of net premiums earned. The increase was due primarily to the growth in staffing to support the Company's increased policies in force. Personnel count increased to 558 at March 31, 2026 from 392 at March 31, 2025. Interest expense. Interest expense decreased slightly for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was due primarily to the decrease in outstanding debt. Depreciation expense. Depreciation expense for the three months ended March 31, 2026 and 2025 was $1.3 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 March 31, 2026 and 2025 was $0.1 million and $1.9 million, respectively, representing 0.0% and 0.7%, respectively, of net premiums earned. The decrease was due primarily to intangible assets being fully amortized at the end of 2025. Income tax expense. Income tax expense was $46.1 million and $31.4 million for the three months ended March 31, 2026 and 2025, respectively. Our effective tax rate for each of the three months ended March 31, 2026 and 2025 was 24.9% and 25.4%, 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 30.4% for the three months ended March 31, 2026 from 31.5% for the three months ended March 31, 2025, primarily due to a decrease in catastrophe losses. Expense ratio . Our expense ratio decreased to 25.1% for the three months ended March 31, 2026 from 27.4% for the three months ended March 31, 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 at the end of 2025. Combined ratio. Our combined ratio decreased to 55.5% for the three months ended March 31, 2026 from 58.9% for the three months ended March 31, 2025, primarily due to a decrease in catastrophe losses, 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 at the end of 2025. Policy acquisition expense ratio . Our policy acquisition expense ratio increased to 12.1% for the three months ended March 31, 2026 from 10.7% for the three months ended March 31, 2025, primarily due to increased renewal policies from prior year assumed Citizens' policies, resulting in increased policy acquisition costs in 2026. Debt to capitalization ratio . Our debt to capitalization ratio decreased to 2.8% for the three months ended March 31, 2026 from 6.6% for the three months ended March 31, 2025, primarily as a result of growth in retained earnings from net income. Return on equity. Our return on equity decreased to 12.5% for the three months ended March 31, 2026 from 19.2% for the three months ended March 31, 2025, as a result of growth in equity due to retained earnings from net income. 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 equit y, 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: Three Months Ended March 31, (in thousands) Year Ended December 31, 2026 2025 2025 Numerator: Net Income $ 139,527 $ 92,503 $ 443,958 Denominator: Average shareholders' equity 1,113,427 482,804 773,200 Less: Average goodwill and other intangible assets (2,668 ) (9,348 ) (6,499 ) Average tangible shareholders' equity 1,110,759 473,456 766,701 Return on tangible equity 12.6 % 19.5 % 57.9 % Return on equity 12.5 % 19.2 % 57.4 % Our return on tangible equity decreased to 12.6% for the three months ended March 31, 2026 from 19.5% for the three months ended March 31, 2025, as a result of growth in equity due to an increase in retained earnings from net income. 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 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 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 $124.1 million and $113.9 million as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026 and December 31, 2025, SIC's statutory-basis surplus totaled $484.1 million and $417.9 million, meeting the minimum surplus requirements. As of March 31, 2026 and December 31, 2025, we had $1.700 billion and $1.683 billion, respectively, in cash, cash equivalents and restricted cash, 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 $263.3 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, and restricted cash balance and cash generated from operations, should be sufficient to meet our working capital requirements and other capital expenditures for the next twelve months. 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. Three Months Ended March 31, (in thousands) 2026 2025 Change % Change Cash Flows provided by (used in): Operating activities 289,488 96,812 192,676 199.0 % Investing activities (134,067 ) 11,768 (145,835 ) (1239.3 )% Financing activities (137,988 ) (1,499 ) (136,489 ) 9105.3 % Net increase in cash, cash equivalents and restricted cash 17,433 107,081 (89,648 ) (83.7 )% For the three months ended March 31, 2026, cash flows provided by operating activities was $289.5 million, an increase of $192.7 million from the three months ended March 31, 2025, driven by an increase in net income and change in certain balance sheet accounts. For the three months ended March 31, 2026, cash flows used in investing activities was $134.1 million, a decrease of $145.8 million from cash provided by investing activities for the three months ended March 31, 2025, driven by the increased purchases of fixed-maturity securities available-for-sale. For the three months ended March 31, 2026, cash flows used in financing activities was $138.0 million, a decrease of $136.5 million from the three months ended March 31, 2025, driven by the repurchase and retirement of common stock through the repurchase program. Credit Facility On June 25, 2024, we entered into an amended and restated credit agreement with Regions Bank for a $10.0 million revolving credit facility, which was increased to $45.0 million pursuant to the accordion feature on March 20, 2025, a term loan in an aggregate principal amount of $40.0 million and one or more delayed draw term loans in an aggregate principal amount not to exceed $125.0 million (together, the "Credit Facility"). The Credit Facility contains covenants that, among other things, restrict our ability to make certain restricted payments, incur additional debt, engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates, change our business or make investments and require us to comply with certain financial covenants. Pursuant to the terms of the Credit Facility, we may from time to time establish one or more additional term loans subject to certain conditions precedent contained therein. The Credit Facility is guaranteed by certain of our subsidiaries and is secured by certain of our cash and deposit account balances. The Credit Facility matures on June 25, 2029. At March 31, 2026, the Company had no borrowings outstanding under the revolving credit facility and an outstanding balance of $36.0 million on the term loan. At March 31, 2026, the Company was in compliance with all required covenants and had available borrowing capacity of $170.0 million. 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 March 31, 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 March 31, 2026: Payments Due by Period Total Less Than One Year One Year to Less Than Three Years Three Years to Less Than Five Years More Than Five Years Debt securities and credit agreements $ 35,000 $ 4,500 $ 8,500 $ 22,000 $ - Interest payable (1) 6,400 1,761 3,863 776 - Operating lease obligations 10,452 1,725 4,999 3,728 - Total $ 51,852 $ 7,986 $ 17,362 $ 26,504 $ - 1) Interest on the Credit Facility is calculated using 7.09% in effect at March 31, 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 March 31, 2026, stockholders' equity was $1,113.6 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 March 31, 2026, the majority of our investments, or $714.6 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 $1,217.6 million and a restricted cash balance of $482.8 million as of March 31, 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 balance of $481.8 million as of December 31, 2025. As of March 31, 2026, and December 31, 2025, the amortized cost and fair value on available for sale securities were as follows: As of March 31, 2026 Fixed Maturity Securities: Amortized Cost Fair Value % of Total Fair Value ($ in thousands) Obligations of the U.S. Treasury and U.S. Government agencies $ 172,630 $ 173,408 24.2 % Obligations of state and political subdivisions 223,641 225,182 31.4 % Corporate securities 241,109 241,151 33.7 % Asset-backed securities 76,772 76,296 10.7 % Total available for sale investments $ 714,152 $ 716,037 100 % As of December 31, 2025 Fixed Maturity Securities: Amortized Cost Fair Value % of Total Fair Value ($ in thousands) Obligations of the U.S. Treasury and U.S. Government agencies $ 155,600 $ 157,575 26.7 % Obligations of state and political subdivisions 203,485 207,274 35.1 % Corporate securities 171,501 175,007 29.7 % Asset-backed securities 49,536 49,864 8.5 % Total available for sale investments $ 580,122 $ 589,720 100.0 % The following tables provide the credit quality of available for sale investments as of March 31, 2026 and December 31, 2025: As of March 31, 2026 Rating: Amortized Cost Fair Value % of Total Fair Value ($ in thousands) AAA $ 67,578 $ 67,804 9.5 % AA+ 289,777 290,462 40.6 % AA 59,756 60,077 8.4 % AA- 42,098 42,507 5.9 % A+ 47,440 47,462 6.6 % A 55,808 55,635 7.8 % A- 47,044 47,023 6.6 % BBB+ 52,091 52,660 7.3 % BBB 45,169 44,971 6.3 % BBB- 5,962 5,965 0.8 % Not Rated 1,429 1,471 0.2 % Total available for sale investments $ 714,152 $ 716,037 100.0 % As of December 31, 2025 Rating: Amortized Cost Fair Value % of Total Fair Value ($ in thousands) AAA $ 55,471 $ 56,321 9.6 % AA+ 242,675 245,780 41.7 % AA 56,183 57,084 9.7 % AA- 40,755 41,733 7.1 % A+ 34,234 34,815 5.9 % A 37,219 37,755 6.4 % A- 31,055 31,712 5.4 % BBB+ 42,157 43,334 7.3 % BBB 35,257 35,935 6.1 % BBB- 3,694 3,772 0.6 % Not Rated 1,420 1,480 0.2 % Total available for sale investments $ 580,122 $ 589,720 100 % The amortized cost and fair value of our available for sale investments in fixed maturity securities summarized by contractual maturity as of March 31, 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. As of March 31, 2026 Amortized Cost Fair Value % of Total Fair Value ($ in thousands) Due in one year or less $ 49,006 $ 49,166 6.9 % Due after one year through five years 324,938 328,561 45.9 % Due after five years through 10 years 239,871 238,817 33.3 % Due after 10 years 100,337 99,493 13.9 % Total available for sale investments $ 714,152 $ 716,037 100.0 % As of December 31, 2025 Amortized Cost Fair Value % of Total Fair Value ($ in thousands) Due in one year or less $ 48,155 $ 48,353 8.2 % Due after one year through five years 303,205 309,550 52.5 % Due after five years through 10 years 165,622 168,346 28.5 % Due after 10 years 63,140 63,471 10.8 % Total available for sale investments $ 580,122 $ 589,720 100 % 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: • our limited operating history, which make our business and future prospects difficult to evaluate; • whether our "Slide" brand becomes as widely known as incumbents' brands or becomes tarnished; • the impact of macroeconomic conditions, including declining consumer confidence, inflation, high unemployment and the read of recession; • the success of the Company's underwriting and profitability initiatives; • failure to establish accurate reserves, failure to adjust claims accurately, the denial of claims or our failure to accurately and timely pay claims; • ability to expand within the United States and additional costs and risks we will be subject to as a result; • intense competition in the segments of the insurance industry in which we operate; • if reinsurance is unavailable at current levels and prices, and the counterparty risk we are subject to as a result; • examinations we are periodically subject to by our state insurance regulators, which could result in adverse examination findings and necessitate remedial actions; • the historically cyclical nature of the insurance business, including the market for homeowners and commercial residential insurance, which may result in us experiencing periods with excess underwriting capacity and unfavorable premium rates; • weather conditions (including severity and frequency of storms, hurricanes, tornadoes, wildfires and hail); • the highly regulated environment we operate in and the variety of complex federal and state laws and regulations we are subject to; and • significantly increased costs we will incur and substantial management time we will devote as a result of operating as a public company. 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.

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