MERCURY GENERAL CORP
For the period ended Dec 31, 2025. Filed Feb 17, 2026.
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FY2025 · Filed Feb 17, 2026
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Financial Statement Schedules
SCHEDULE I
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
DECEMBER 31, 2025
| Type of Investment | Cost | Fair Value | Amounts in theBalance Sheet |
|---|---|---|---|
| (Amounts in thousands) | |||
| Fixed maturity securities: | |||
| U.S. government bonds | $21,436 | $21,546 | $21,546 |
| Municipal securities | 3,533,295 | 3,538,473 | 3,538,473 |
| Mortgage-backed securities | 303,314 | 297,381 | 297,381 |
| Corporate securities | 747,723 | 751,602 | 751,602 |
| Collateralized loan obligations | 733,034 | 722,794 | 722,794 |
| Other asset-backed securities | 110,924 | 98,455 | 98,455 |
| Total fixed maturity securities | 5,449,726 | 5,430,251 | 5,430,251 |
| Equity securities: | |||
| Common stock | 557,738 | 679,594 | 679,594 |
| Non-redeemable preferred stock | 52,206 | 38,761 | 38,761 |
| Private equity funds measured at net asset value (1) | 118,516 | 94,432 | 94,432 |
| Total equity securities | 728,460 | 812,787 | 812,787 |
| Short-term investments | 336,978 | 336,992 | 336,992 |
| Total investments | $6,515,164 | $6,580,030 | $6,580,030 |
(1)The fair value is measured using the NAV practical expedient. See Note 4. Fair Value Measurements of the Notes to Consolidated Financial Statements for additional information.
SCHEDULE I, Continued
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
DECEMBER 31, 2024
| Type of Investment | Cost | Fair Value | Amounts in theBalance Sheet |
|---|---|---|---|
| (Amounts in thousands) | |||
| Fixed maturity securities: | |||
| U.S. government bonds | $94,102 | $93,837 | $93,837 |
| Municipal securities | 3,018,428 | 2,987,054 | 2,987,054 |
| Mortgage-backed securities | 271,444 | 259,421 | 259,421 |
| Corporate securities | 863,323 | 841,715 | 841,715 |
| Collateralized loan obligations | 623,817 | 626,255 | 626,255 |
| Other asset-backed securities | 111,344 | 105,096 | 105,096 |
| Total fixed maturity securities | 4,982,458 | 4,913,378 | 4,913,378 |
| Equity securities: | |||
| Common stock | 634,821 | 741,369 | 741,369 |
| Non-redeemable preferred stock | 52,206 | 42,603 | 42,603 |
| Private equity funds measured at net asset value (1) | 108,041 | 95,203 | 95,203 |
| Total equity securities | 795,068 | 879,175 | 879,175 |
| Short-term investments | 283,792 | 283,817 | 283,817 |
| Total investments | $6,061,318 | $6,076,370 | $6,076,370 |
(1)The fair value is measured using the NAV practical expedient. See Note 4. Fair Value Measurements of the Notes to Consolidated Financial Statements for additional information.
SCHEDULE II
BALANCE SHEETS
| December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| (Amounts in thousands) | ||
| ASSETS | ||
| Investments, at fair value: | ||
| Equity securities (cost $17,551; $17,551) | $36,393 | $29,387 |
| Short-term investments (cost $82; $78) | 82 | 78 |
| Investment in subsidiaries | 2,886,667 | 2,476,777 |
| Total investments | 2,923,142 | 2,506,242 |
| Cash | 77,416 | 19,316 |
| Accrued investment income | 12 | 12 |
| Amounts receivable from affiliates | 432 | 17,037 |
| Income tax receivable from affiliates | 46,046 | 30,859 |
| Other assets | 1,037 | 1,233 |
| Total assets | $3,048,085 | $2,574,699 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Notes payable | $574,527 | $574,128 |
| Accounts payable and accrued expenses | 381 | — |
| Amounts payable to affiliates | — | 14,274 |
| Income tax payable to affiliates | 15,634 | 9,874 |
| Current income taxes | 28,875 | 19,195 |
| Deferred income taxes | 5,948 | 4,837 |
| Other liabilities | 5,445 | 5,867 |
| Total liabilities | 630,810 | 628,175 |
| Commitments and contingencies | ||
| Shareholders’ equity: | ||
| Common stock | 99,699 | 99,699 |
| Retained earnings | 2,317,576 | 1,846,825 |
| Total shareholders’ equity | 2,417,275 | 1,946,524 |
| Total liabilities and shareholders’ equity | $3,048,085 | $2,574,699 |
SCHEDULE II, Continued
STATEMENTS OF OPERATIONS
| Year Ended December 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| (Amounts in thousands) | |||
| Revenues: | |||
| Net investment income | $2,116 | $2,187 | $2,998 |
| Net realized investment gains | 7,056 | 3,046 | 1,431 |
| Total revenues | 9,172 | 5,233 | 4,429 |
| Expenses: | |||
| Other operating expenses | 2,758 | 2,535 | 2,526 |
| Interest | 28,582 | 30,697 | 24,129 |
| Total expenses | 31,340 | 33,232 | 26,655 |
| Loss before income taxes and equity in net income of subsidiaries | (22,168) | (27,999) | (22,226) |
| Income tax benefit | (3,372) | (3,386) | (4,379) |
| Loss before equity in net income of subsidiaries | (18,796) | (24,613) | (17,847) |
| Equity in net income of subsidiaries | 559,890 | 492,566 | 114,183 |
| Net income | $541,094 | $467,953 | $96,336 |
SCHEDULE II, Continued
STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| (Amounts in thousands) | |||
| Cash flows from operating activities: | |||
| Net cash used in by operating activities | $(21,562) | $(28,137) | $(14,703) |
| Cash flows from investing activities: | |||
| Capital contribution to subsidiaries | — | (165) | (150,000) |
| Distributions received from special purpose entities | — | 300 | 6,210 |
| Dividends received from subsidiaries | 150,000 | 100,000 | — |
| Fixed maturity securities available for sale in nature | |||
| Sales | — | 5,000 | — |
| Calls or maturities | — | 5,000 | 955 |
| Equity securities available for sale in nature | |||
| Purchases | — | (2,399) | (1,172) |
| Sales | — | 4,057 | 25,848 |
| (Increase) decrease in short-term investments | (4) | 493 | 26,481 |
| Other, net | 9 | 43 | 183 |
| Net cash provided by (used in) investing activities | 150,005 | 112,329 | (91,495) |
| Cash flows from financing activities: | |||
| Dividends paid to shareholders | (70,343) | (70,326) | (70,322) |
| Proceeds from stock options exercised | — | 752 | — |
| Proceeds from bank loan | — | — | 175,000 |
| Net cash (used in) provided by financing activities | (70,343) | (69,574) | 104,678 |
| Net increase (decrease) in cash | 58,100 | 14,618 | (1,520) |
| Cash: | |||
| Beginning of year | 19,316 | 4,698 | 6,218 |
| End of year | $77,416 | $19,316 | $4,698 |
| SUPPLEMENTAL CASH FLOW DISCLOSURE | |||
| Interest paid | $28,121 | $30,009 | $22,959 |
| Income taxes (refunded) paid, net | |||
| U.S. federal | $(35,616) | $(10,865) | $1,591 |
| U.S. state and local | |||
| California | 294 | 3,616 | 16 |
| Other | 277 | 174 | 23 |
| 571 | 3,790 | 39 | |
| Foreign | — | — | — |
| Total income taxes (refunded) paid, net | $(35,045) | $(7,075) | $1,630 |
NOTES TO CONDENSED FINANCIAL INFORMATION
The accompanying condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in this report.
Distributions received from Special Purpose Investment Vehicles
From time to time, the Company forms special purpose investment vehicles to facilitate its investment activities involving derivative instruments such as total return swaps, or limited partnerships such as private equity funds. At December 31, 2025, the Company had three such special purpose investment vehicles: Fannette Funding LLC, Animas Funding LLC, and Upper Animas Holdings LLC. These special purpose investment vehicles are consolidated into the Company. Creditors have no recourse against the Company in the event of default by these special purpose investment vehicles. The Company had no implied or unfunded commitments to these entities at December 31, 2025 and 2024. The Company's financial or other support provided to these entities and its loss exposure are limited to its collateral and original investment. Mercury General received distributions of $0.0 million, $0.3 million, and $6.2 million in 2025, 2024, and 2023, respectively, from these special purpose investment vehicles.
Dividends received from Subsidiaries
Dividends of $150 million, $100 million and $0 were received by Mercury General from its 100% owned insurance subsidiaries in 2025, 2024 and 2023, respectively, and were recorded as a reduction to investment in subsidiaries.
Capitalization of Insurance Subsidiaries
Mercury General made capital contributions to its insurance subsidiaries of $0, $0.2 million and $150.0 million in 2025, 2024 and 2023, respectively. Mercury General did not receive any capital distribution from its insurance subsidiaries in 2025, 2024 and 2023.
Notes Payable
On March 8, 2017, Mercury General completed a public debt offering issuing $375 million of senior notes. The notes are unsecured senior obligations of Mercury General, with a 4.4% annual coupon payable on March 15 and September 15 of each year commencing September 15, 2017. These notes mature on March 15, 2027. The Company used the proceeds from the notes to pay off amounts outstanding under the existing loan and credit facilities and for general corporate purposes. Mercury General incurred debt issuance costs of approximately $3.4 million, inclusive of underwriters' fees. The notes were issued at a slight discount of 99.847% of par, resulting in the effective annualized interest rate, including debt issuance costs, of approximately 4.45%.
On March 31, 2021, the Company entered into an unsecured $75 million five-year revolving credit facility. On November 18, 2022, the Company entered into the First Amendment to this credit facility. The First Amendment extended the maturity date of the loan to November 16, 2026 from March 31, 2026 with possible further extension if certain conditions are met, increased the aggregate commitments by all the lenders to $200 million from $75 million, and replaced the LIBOR with the term SOFR. On November 30, 2023, the Company entered into the Second Amendment to this credit facility, which further increased the aggregate commitments by all the lenders to $250 million from $200 million. On November 22, 2024, the Company entered into the Third Amendment to this credit facility, which extended and fixed the maturity date of the loan to November 18, 2027. The interest rates on borrowings under the credit facility are based on the Company's debt to total capital ratio and range from Term SOFR plus 112.5 basis points when the ratio is under 20% to Term SOFR plus 150.0 basis points when the ratio is greater than or equal to 30%. Commitment fees for the undrawn portions of the credit facility range from 12.5 basis points when the ratio is under 20% to 22.5 basis points when the ratio is greater than or equal to 30%. The debt to total capital ratio is expressed as a percentage of (a) consolidated debt to (b) consolidated shareholders' equity plus consolidated debt. The Company's debt to total capital ratio was 19.2% at December 31, 2025, resulting in a 12.5 basis point commitment fee on any undrawn portion of the credit facility. As of February 17, 2026, a total of $200 million was drawn under this facility on a three-month revolving basis at an annual interest rate of approximately 5.09%, with $50 million available to be drawn. The Company contributed $150 million of the total amount drawn to the surplus of its consolidated insurance subsidiaries in 2023, and used the remainder for general corporate purposes.
Federal Income Taxes
The Company files a consolidated federal income tax return for the following entities:
| Mercury Casualty Company | Mercury Select Management Company, Inc. |
|---|---|
| Mercury Insurance Company | Mercury Insurance Services LLC |
| California Automobile Insurance Company | AIS Management LLC |
| California General Underwriters Insurance Company, Inc. | Auto Insurance Specialists LLC |
| Mercury Insurance Company of Illinois | PoliSeek AIS Insurance Solutions, Inc. |
| Mercury Insurance Company of Georgia | Animas Funding LLC |
| Mercury Indemnity Company of Georgia | Fannette Funding LLC |
| American Mercury Insurance Company | Mercury Plus Insurance Services LLC |
| Mercury Insurance Company of Texas | Mercury Information Technology Services LLC |
| Orion Indemnity Company | Upper Animas Holdings LLC |
| Mercury County Mutual Insurance Company | |
| Mercury Indemnity Company of America | |
The method of allocation between the companies is subject to an agreement approved by the Board of Directors. Allocation is based upon separate return calculations with current credit for net losses incurred by the insurance subsidiaries to the extent it can be used in the current consolidated return.
SCHEDULE IV
REINSURANCE
THREE YEARS ENDED DECEMBER 31,
Property and Liability Insurance Earned Premiums
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| (Amounts in thousands) | |||
| Direct amounts | $5,766,498 | $5,196,699 | $4,368,342 |
| Ceded to other companies | (287,032) | (136,698) | (109,445) |
| Assumed | 26,147 | 15,455 | 15,481 |
| Net amounts | $5,505,613 | $5,075,456 | $4,274,378 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.