Heritage Insurance Holdings, Inc.
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
HRTG$33.22-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001598665-25-000076
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001193125-26-214067
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 140 current paragraphs.
69 unchanged; 38 reworded; 32 added; 72 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
The Supplemental Information table below provides insight on our personal lines, commercial lines, and other business by providing policy count, premiums-in-force and total insured value for those product lines.
Current report
In continuing to implement these three strategic initiatives, we plan to target the following profitability initiatives in 2026:
Current report
Target geographies open for new business, while closely managing risk and exposure
Current report
Enhance data driven analytics using AI and other technology tools.
Current report
Act as opportunities emerge which will continue our diversification and expansion over the next several years
Current report
Expand our relationship with reinsurance partners to expand capacity, manage volatility while pursuing growth
Current report
We have a solid, consistent panel of reinsurance partners that provide reinsurance capacity at competitive pricing and sufficient levels to support our growth objectives. Additionally, we may leverage our captive reinsurer to assume risks from our insurance company affiliates.
Current report
First quarter ended 2026 net income was $36.5 million or $1.19 per diluted share, compared to net income of $30.5 million or $0.99 per diluted share in the prior year quarter, primarily driven by higher investment income and a reduction in losses, partly offset by higher general and administrative expenses. The reduction in losses is attributable to a slightly lower net attritional loss ratio resulting from the positive impact of rate actions, underwriting actions, and targeted exposure management taken over the last several years, which continue to favorably impact results, as well as lower weather losses. Additionally, favorable prior year loss development increased from the prior year quarter. Policy acquisition costs were lower from the prior year quarter by 1.0%, driven mostly by lower costs associated with premium processing. General and administrative costs increased 4.4% from the prior year quarter driven primarily by human capital costs, with the net general and administrative expense ratio at 12.5% compared to 11.9% for the prior year quarter.
Current report
Gross premiums written of $346.7 million were down 2.6% from $356.0 million in the prior year quarter, primarily driven by a reduction in commercial residential business which was partly offset by higher gross premiums written for personal lines business. The Florida commercial residential market has become increasingly competitive and management is committed to maintaining adequate margins; as such Heritage will only write business that meets our underwriting and pricing standards. Management is also leveraging the expertise of our commercial residential team to expand this product to other states, the most recent of which is Hawaii. Overall, management believes we have achieved rate adequacy in over 90% of our territories and each of those territories were open for new business as of March 31, 2026. Our catastrophe excess of loss program this year will be completed with higher coverage than previously purchased but also at risk adjusted cost decreases. To the extent our cost of doing business decreases, our policyholders would benefit with reduced pricing, while we maintain adequate margins.
Current report
Gross premiums earned were $353.6 million, consistent with $353.8 million earned in the prior year quarter, as commercial residential business declined due to the market conditions described above, but were largely offset by higher gross premiums earned for the personal residential business.
Current report
Net premiums earned were $199.7 million, consistent with $200.0 million earned in the prior year quarter, given a small reduction in gross premiums earned described above, with relatively flat ceded premiums for the quarter.
Current report
Losses and loss adjustments expenses incurred of $91.6 million, a 7.9% improvement from $99.4 million in the prior year quarter. The decrease primarily stems from lower catastrophe losses and lower attritional losses, as well as higher favorable net loss development. Net weather and catastrophe losses for the current year quarter were $36.7 million, a decrease of $6.8 million from $43.5 million in the prior year quarter. Net losses in the current year quarter include non-hurricane catastrophe losses of $24.4 million from winter storms in the northeast, a decrease of $7.3 million compared to $31.8 million of non-hurricane catastrophe losses from the California wildfires in the prior year quarter. Other weather losses totaled $12.3 million, an increase of $600,000 from the prior year quarter amount of $11.7 million. Net favorable net loss development was $8.2 million in the current year quarter compared to net favorable development of $7.8 million in the prior year quarter. The favorable development is largely driven by the positive impacts of legislative changes and claims handling improvements which benefited prior accident year losses.
Current report
Ceded premium ratio was 43.5%, the same as the prior year quarter.
Current report
Net loss ratio was 45.9%, a 3.8 point improvement from 49.7% in the same quarter last year, driven by lower net losses and LAE as described above and relatively flat net premiums earned.
Current report
Net expense ratio was 35.2%, a 0.4 point increase from the prior year quarter amount of 34.8%, driven by primarily by an increase in human capital related expenses, partly offset by lower policy acquisition costs.
Current report
*NM - Not Meaningful
Current report
Gross premiums written were $346.7 million, down 2.6% from $356.0 million in the prior year quarter, primarily driven by a reduction in commercial residential business which was partly offset by higher gross premiums written for personal lines business. The Florida commercial residential business has become increasingly competitive, and our commitment to maintaining acceptable margins and our underwriting standards remains intact. However, to the extent that reinsurance and loss costs decrease, premiums charged to policyholders could decrease while maintaining adequate margins. Management believes we have achieved rate adequacy in over 90% of our territories and each of those territories were open for new business as of March 31, 2026.
Current report
Premiums-in-force were $1.427 billion as of first quarter 2026, a decrease of 0.4% compared to $1.432 billion as of first quarter 2025, driven mostly by a reduction of commercial residential in-force premium driven by competitive pressures as described above.
Current report
Gross premiums earned of $353.6 million were down 0.1% from $353.8 million in the prior year quarter, reflecting a reduction in commercial residential business driven by competitive pressures as described above, which was mostly offset by higher gross premiums earned for the personal residential business.
Current report
Ceded premiums were $153.9 million in first quarter 2026, relatively flat from $153.8 million in the prior year quarter.
Current report
Net premiums earned were $199.7 million in first quarter 2026, down 0.2% from $200.0 million in the prior year quarter driven by a small reduction in gross premiums earned and relatively flat ceded premiums as described above.
Current report
Total expenses were $161.8 million in first quarter 2026, an improvement of 4.3% compared to $169.1 million in the prior year quarter. As described below, a reduction of losses and LAE is the primary driver, coupled with a small decrease in policy acquisition costs, and partly offset by higher general and administrative expenses.
Current report
Policy acquisition costs were $45.3 million in first quarter 2026, down 1.0% from $45.8 million in the prior year quarter. The decrease is primarily attributable to lower policy and membership fees due to systems efficiencies, which was partly offset by higher agent commission and less ceding commission.
Current report
First quarter ended 2026 net income was $36.5 million or $1.19 per diluted share, compared to net income of $30.5 million or $0.99 per diluted share in the prior year quarter, primarily driven by higher investment income and a reduction in losses, partly offset by higher general and administrative expenses. The reduction in losses is attributable to a slightly lower attritional loss ratio resulting from the positive impact of rate actions, underwriting actions, and targeted exposure management taken over the last several years, which continue to favorably impact results, as well as lower weather losses. Additionally, favorable prior year loss development increased from the prior year quarter. Policy acquisition costs were relatively flat and general and administrative costs increased 4.4% driven primarily by human capital costs, with the net general and administrative expense ratio relatively flat compared to the prior year quarter
Current report
Interest expense, net was $1.8 million in the first quarter of 2026, slightly lower than $2.4 million for the prior year quarter, driven by lower interest rates on a lower amount of debt outstanding.
Current report
The ceded premium ratio was 43.5% in first quarter 2026, the same as the prior year quarter.
Current report
The net expense ratio was 35.2%, up 0.3 points from the prior year quarter amount of 34.8%, primarily driven by a slightly higher net general and administrative expense ratio, partly offset by a lower policy acquisition cost ratio.
Current report
Cash and cash equivalents were $517.1 million as of March 31, 2026, a decrease of $42.2 million from $559.3 million as of December 31, 2025. The decrease was primarily driven by $10.0 million of cash used for the repurchase of 370,484 shares of common stock and the reallocation of $28.0 million of cash into bond investments.
Current report
At March 31, 2026, prepaid reinsurance premium decreased by $112.4 million to $194.6 million from $307.0 million at December 31, 2025. The decrease was primarily driven by payment of reinsurance deposit premiums during the first quarter of 2026.
Current report
At March 31, 2026, reinsurance payable decreased by $159.3 million to $73.5 million from $232.8 million at December 31, 2025, driven by quarterly deposit premium payments made during the quarter.
Current report
Total shareholders’ equity increased $15.1 million to $520.4 million at March 31, 2026 from $505.3 million at December 31, 2025, primarily reflecting net income for the quarter, partially offset by an increase in accumulated other comprehensive loss due to higher unrealized losses, a reduction in additional paid‑in capital related to surrendered restricted stock for tax withholdings, and common stock repurchases.
Current report
Net cash used in financing activities was $19.9 million for the three months ended March 31, 2026, compared to $21.7 million for the comparable period in 2025. The change was primarily driven by the repurchase of common stock of $10.0 million and the surrender of restricted stock to satisfy tax withholding obligations of $8.9 million. By comparison, cash used in financing activities during the 2025 period primarily reflected repayments of the FHLB‑ATL loan and term note agreement totaling $21.6 million.
Removed paragraphs (72)
Previous report
The Supplemental Information table below demonstrates the distribution of our portfolio by providing policy count, premiums-in-force, and TIV for Florida and all other states as of September 30, 2025 and comparing those metrics to September 30, 2024.
Previous report
The policy count reduction from the prior year quarter of 9.4% was driven by exposure management goals associated with the profitability initiatives described below. The underwriting and rate adequacy objectives were met and given the Company's achievement of rate adequacy in a majority of our territories, the Company is expanding and open for new business in nearly all territories.
Previous report
These three initiatives will remain in place while we also expand our strategy to include our 2025 initiatives.
Previous report
Strategic Initiatives for 2025
Previous report
•Re-opening profitable geographies and allocating capital to sustain profits and margins on a measured basis.
Previous report
•Continued data driven analytics.
Previous report
Our industry had experienced significantly higher reinsurance costs and more constrained availability for catastrophe excess of loss reinsurance in 2022 and 2023. For the 2024 hurricane season, the supply of catastrophe excess of loss reinsurance for the Company was ample and pricing began to moderate. For the 2025 hurricane season, we observed increased reinsurance supply at competitive pricing as the reinsurance market continues to stabilize and improve.
Previous report
•Third quarter 2025 net income was $50.4 million or $1.63 per diluted share, compared to net income of $8.2 million or $0.27 per diluted share in the prior year quarter, primarily driven by a significant reduction in losses and loss adjustment expenses and a reduction in operating expenses. Rate changes and organic growth in select geographies resulted in growth of 6.4% in gross written premiums and 2.2% of gross premiums earned. Investment income was relatively flat despite a larger investment portfolio due to the interest rate environment. Losses and LAE decreased by 42.5% primarily from lower weather losses. Policy acquisition costs decreased 6.9%, driven by higher ceding commission which was partially offset by an increase in agent commissions driven by higher written premiums. General and administrative costs increased 3.6% driven primarily due to system related costs.
Previous report
•Gross premiums written of $333.2 million were up 6.4% from $313.0 million in the prior year quarter, reflecting both rate actions and growth of new business as rate adequate territories were opened for new business. This was partly offset by a reduction in commercial residential business, driven by competitive market conditions.
Previous report
•Gross premiums earned were $362.0 million, up 2.2% from $354.2 million in the prior year quarter, reflecting higher gross premiums written over the last twelve months primarily from rating actions.
Previous report
•Net premiums earned were $195.1 million, down 1.9% from $198.8 million in the prior year quarter, driven by higher ceded premium in the quarter which offset higher gross premiums earned. The increase in ceded premiums is driven primarily by a $4.0 million reinstatement premium for Hurricane Ian and an increase in the northeast quota share program as premium subject to that program grew from the prior year quarter. This led to an increase in the ceded premium ratio to 46.1%, up 2.2 points from 43.9% in the prior year quarter.
Previous report
•Net loss ratio decreased to 38.3%, a 27.1 point improvement from 65.4% in the same quarter last year, reflecting significantly lower net losses and LAE. Net weather losses for the current year quarter were $13.8 million, a decrease of $49.2 million from $63.0 million in the prior year quarter. There were no catastrophe losses in the current quarter compared to $48.7 million in the prior year quarter. The reduction in weather losses was coupled with favorable reserve development compared to the prior year quarter. Favorable net loss development was $5.0 million in the current year quarter compared to adverse development of $6.3 million in the prior year quarter.
Previous report
•The net expense ratio was 34.6%, a 0.6 point improvement from the prior year quarter amount of 35.2%, driven primarily by a decrease in policy acquisition costs. The reduction in policy acquisition costs was driven primarily by higher ceding commission income associated with both a larger amount of premium ceded under the net quota share program and a higher ceding commission rate driven by favorable loss experience for that program. This resulted in a 1.2% reduction in policy acquisition costs which was partly offset by a 0.6 point increase in the net general and administrative expense ratio.
Previous report
Total revenue was $212.5 million, a 0.3% improvement compared to $211.9 million in the prior year quarter. The increase primarily stems from an increase in net realized gains on debt securities and other investments, which included a gain on the sale of investment property, net of costs and commission expenses as well as an increase in other revenue primarily related to fee income from our surplus lines business, which was offset by a slight decrease in net premiums earned.
Previous report
Gross premiums written of $333.2 million grew 6.4% from $313.0 million in the prior year quarter, reflecting both rate actions and growth of new business as rate adequate territories were opened for new business. This was partly offset by a reduction in commercial residential business, driven by competitive market conditions.
Previous report
Premiums-in-force were $1.44 billion as of third quarter 2025, an increase of 1.0% compared to $1.43 billion as of third quarter 2024, driven by rate actions taken while concurrently, TIV decreased by 2.2%.
Previous report
Gross premiums earned were $362.0 million, a 2.2% improvement from $354.2 million in the prior year quarter, reflecting higher gross premiums written over the last twelve months.
Previous report
Ceded premiums were $167.0 million in third quarter 2025, up by 7.4% from $155.4 million in the prior year quarter. The increase in ceded premiums is driven primarily by a $4.0 million reinstatement premium for Hurricane Ian during the third quarter of 2025 and an increase in the northeast quota share program as premium subject to that program grew from the prior year quarter. The result was an increase in the ceded premium ratio to 46.1%, up 2.2 points from 43.9% in the prior year quarter. To the extent the ultimate losses for Hurricanes Ian or Milton change, reinstatement premiums will correspondingly change.
Previous report
Net premiums earned were $195.1 million in third quarter 2025, down 1.9% from $198.8 million in the prior year quarter, driven by higher ceded premium in the quarter which offset higher gross premiums earned as described above.
Previous report
Expenses
Previous report
Total expenses were $142.3 million in third quarter 2025, a 28.9% improvement compared to $200.1 million in the prior year quarter. As described below, losses and LAE declined, policy acquisition costs declined, and general and administrative expenses increased.
Previous report
Losses and LAE incurred were $74.8 million in third quarter 2025, a 42.5% improvement from $130.0 million in the prior year quarter. The decrease primarily stems from lower weather losses and favorable net loss development. We experienced no catastrophe losses during the third quarter of 2025 as compared to $48.7 million in the prior year quarter. Other weather losses were down to $13.8 million for the third quarter of 2025 compared to the prior year quarter amount of $14.3 million. Net favorable prior year loss development was $5.0 million for the third quarter of 2025 compared to net unfavorable loss development of $6.3 million for the prior year quarter.
Previous report
Policy acquisition costs were $45.2 million in third quarter 2025, a 6.9% improvement from $48.5 million in the prior year quarter. The decrease is primarily attributable to higher ceding commission earned on the net quota share reinsurance contract, the income of which offsets other policy acquisition costs. Higher ceding commission income was associated with both a larger amount of premium ceded under the net quota share program and a higher ceding commission rate driven by favorable loss experience for that program.
Previous report
Income
Previous report
Third quarter 2025 net income was $50.4 million or $1.63 per diluted share, compared to net income of $8.2 million or $0.27 per diluted share in the prior year quarter, primarily driven by a significant reduction in losses and LAE and a reduction in operating expenses. Losses and LAE decreased by 42.5%, driven primarily from lower weather losses and favorable net loss development. Policy acquisition costs decreased 6.9%, driven by an increase in ceding commission on the net quota share reinsurance contract, which offsets higher costs that vary with gross premiums written. General and administrative costs increased 3.6% driven primarily by systems costs, with the net general and administrative expense ratio 0.6 points higher than the prior year quarter.
Previous report
Interest expense, net was $1.9 million in the third quarter of 2025, a $0.9 million decrease from $2.8 million for the prior year quarter, driven by the reduction in debt obligations and a lower interest rate environment.
Previous report
The ceded premium ratio was 46.1% in third quarter 2025, up 2.2 point from 43.9% in the prior year quarter, primarily driven by a $4.0 million reinstatement premium related to Hurricane Ian and higher ceded premium on the net quota share contract driven by growth in premiums associated with that contract.
Previous report
The net expense ratio was 34.6%, a 0.6 point improvement from the prior year quarter amount of 35.2%, primarily driven by higher ceding commission income which lowered the net policy acquisition costs ratio. This was partly offset by a higher net general and administrative expense ratio.
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Results of Operations
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Revenue
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Total revenue
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Gross premiums written
Previous report
Gross premiums written were $1.1 billion for the nine months ended September 30, 2025, a 0.5% improvement from $1.09 billion in the prior year period primarily reflecting rating actions and deployment of our managed growth initiative. Exposure management initiatives from prior years were completed. We experienced a reduction of written premium for commercial residential business, primarily driven by competitive market conditions.
Previous report
Premiums-in-force were $1.44 billion as of third quarter 2025, a 1.0% improvement compared to $1.43 billion as of third quarter 2024, driven by rate actions taken, use of inflation guard, and growth in new business written, while concurrently, TIV decreased by 2.2%.
Previous report
Gross premiums earned
Previous report
Gross premiums earned were $1.07 billion for the nine month period ended September 30, 2025, a 2.3% improvement from $1.05 billion in the prior year period. Rating actions and use of inflation guard contributed to this increase, which was partly offset by reductions in the southeast associated with previous exposure management actions and a reduction for the commercial residential business driven by competitive market condition.
Previous report
Ceded premiums
Previous report
Ceded premiums were $477.9 million for the nine month period ended September 30, 2025, up 0.2% from $477.1 million in the prior year period. The increase relates primarily to the net quota share program where subject premium for 2025 was higher than subject premium for 2024, thereby driving up ceded premium in 2025. The increase associated with the net quota share program was partly offset by lower reinstatement premium for Hurricane Ian. For the nine months ended September 30, 2025, total reinstatement premium was $2.6 million compared to $18.7 million for the nine months ended September 30, 2024. To the extent the ultimate losses for Hurricanes Ian or Milton change, reinstatement premiums may correspondingly fluctuate.
Previous report
Net premiums earned
Previous report
Net premiums earned were $591.5 million for the nine month period ended September 30, 2025, a 4.0% improvement from $568.6 million in the prior year period. The increase primarily stems from growth in gross premiums earned as described above.
Showing the first 40 of 72 passages. Open the source sections for the rest.
Reworded paragraphs (38)
Previous wording
We are a super-regional property and casualty insurance holding company that primarily provides personal and commercial residential insurance products across our multi-state footprint. We provide personal residential insurance in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia and commercial residential insurance in Florida, New Jersey, and New York. We provide personal residential insurance in Florida and South Carolina on both an admitted and non-admitted basis and in California on a non-admitted basis. As a vertically integrated insurer, we control or manage substantially all aspects of risk management, underwriting, claims processing and adjusting, actuarial rate making and reserving, customer service, and distribution. Our financial strength ratings are important to us in establishing our competitive position and can impact our ability to write policies.
Current wording
We are a super-regional property and casualty insurance holding company that primarily provides personal and commercial residential insurance products across our multi-state footprint. We provide personal residential insurance in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia and commercial residential insurance in Florida, Hawaii, New Jersey, and New York. We provide personal residential insurance in Florida, Hawaii, and South Carolina on both an admitted and non-admitted basis and in California on a non-admitted basis only. As a vertically integrated insurer, we control or manage substantially all aspects of risk management, underwriting, claims processing and adjusting, actuarial rate making and reserving, customer service, and distribution. Our financial strength ratings are important to us in establishing our competitive position and can impact our ability to write policies.
Previous wording
We continue to monitor the effects of general changes in economic and market conditions on our business. As a result of general inflationary pressures, we have experienced, and may continue to experience, increased cost of materials and labor needed for repairs and to otherwise remediate claims throughout all states in which we conduct business. We mitigate the impact of inflation by implementation of rate increases and the use of inflation guard, which ensures appropriate replacement cost values for our business to reflect the inflationary impact on costs to repair properties. Use of inflation guard impacts both premium and total insured value ("TIV"). To the extent that reinsurance costs rise, we may seek to recoup the cost of reinsurance in future rate filings as well as mitigate the cost through exposure management.
Current wording
We continue to monitor the effects of general changes in economic and market conditions on our business. As a result of general inflationary pressures, we have experienced, and may continue to experience, increased cost of materials and labor needed for repairs and to otherwise remediate claims throughout all states in which we conduct business. We mitigate the impact of inflation by implementation of rate increases and the use of inflation guard, which ensures appropriate replacement cost values for our business to reflect the inflationary impact on costs to repair properties. Use of inflation guard impacts both premium and total insured value ("TIV"). Rising reinsurance costs may be mitigated through exposure management as well as recouping the cost of reinsurance in future rate filings.
Previous wording
The Company has focused on three main strategic initiatives over the past few years aimed at achieving consistent, long-term quarterly earnings and driving shareholder value, which include:
Current wording
The Company has focused on three main strategic initiatives aimed at achieving consistent long-term quarterly earnings and driving shareholder value, including:
Previous wording
•Maintaining a balanced and diversified portfolio.
Current wording
Targeting a balanced and diversified portfolio
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•Persistent underwriting discipline and focus on rate adequacy.
Current wording
Continue persistent underwriting discipline and focus on rate adequacy while driving prudent top line growth
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•Enhancing customer service and claims capabilities.
Current wording
Continue the refinement of customer service and claims capabilities.
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•Leveraging infrastructure and capabilities to foster future growth.
Current wording
Leverage infrastructure and capabilities to foster further growth, which includes our plan to enter the State of Texas on an excess and surplus lines basis
Previous wording
We address reinsurance and loss costs trends in the property insurance sector through rates and inflation guard factors which resulted in an increase in the average premium per policy of 11.5% for the quarter ended September 30, 2025 as compared to the prior year quarter. The higher average premium is driven by rate changes, inclusion of inflation guard, and by the mix of business written. We experienced intentional growth of our commercial residential business during 2024, with in-force premium in that line of business decreasing during 2025, driven primarily by competitive market conditions. New rates, which are subject to approval by our regulators, become effective when a policy is written or renewed, and the premium is earned pro rata over the policy period of one year. As a result of this timing, it can take up to twenty-four months for the complete impact of a rate change to be fully earned in our financial statements. For that reason, we account for inflation in our rate indications and filings with our regulators.
Current wording
We address reinsurance and loss cost trends in the property insurance sector through rates and inflation guard factors. Over the last several years, we have filed and been approved by state regulators for rate increases to achieve rate adequacy. Our rates are now adequate in over 90% of our territories, which are currently open for new business. We experienced intentional growth of our commercial residential business during 2025, with in-force premium in that line of business decreasing in the first quarter of 2026, driven primarily by competitive market conditions. To the extent that reinsurance and loss cost trends decline, our rates may be adjusted downward in the future. New rates, which are subject to approval by our regulators, become effective when a policy is written or renewed, and the premium is earned pro rata over the policy period of one year. As a result of this timing, it can take up to twenty-four months for the complete impact of a rate change to be fully earned and impact our financial statements.
Previous wording
We invest in data analytics, using software and experienced personnel, to continuously evaluate our underwriting criteria and manage exposure to catastrophe and other losses. Our retention has remained steady in the range of near 90%,which we believe is driven in large part due to our strong agency relationships and focus on policyholder service level. While we believe our rates are generally competitive with private market insurers operating in our space, we are focused on maintaining rate adequacy throughout our book of business as we continue to prudently grow our business.
Current wording
We invest in data analytics, using software and experienced personnel, to continuously evaluate our underwriting criteria and manage exposure to catastrophe and other losses. Our policy retention has remained consistent in the upper 80’s to low 90’s. While we believe our rates are generally competitive with private market insurers operating in our space, we are focused on prudent growth in 2026 while managing exposure and ensuring rate adequacy throughout our book of business as well as providing high levels of customer service to our agents and policyholders.
Previous wording
We continue to experience rising inflation in the form of increased labor and material costs, which drive up claim costs throughout all states in which we conduct business. However, inflation is increasing at a lower rate than what we have experienced in the last several years. We will make adjustment for increasing or decreasing inflation as we see fluctuations. Florida personal lines claim costs associated with litigated claims have decreased over the last several years due to favorable legislation aimed to curtail claims abuse. The special legislative session of December 2022 included a number of additional provisions aimed at driving down claims abuses and stabilizing the Florida property insurance market. The legislation appears to have achieved its intended impact and has improved our outlook on conducting business in Florida.
Current wording
We may experience rising inflation in the form of increased labor and material costs, which drive up claim costs throughout all states in which we conduct business. However, inflation is increasing at a lower rate than what we have experienced in the last several years. We adjust for changes in inflation by increasing or decreasing the inflation factor used in our pricing. Florida personal lines claim costs associated with litigated claims have decreased over the last several years due to favorable legislation aimed to curtail claims abuse and stabilize the Florida property insurance market. This has had the intended impact and has resulted in better margins and better rates for Florida policyholders. Accordingly, we have a positive outlook for Florida and the other rate adequate states.
Previous wording
•Net combined ratio of 72.9% improved 27.7 points from 100.6% in the prior year quarter, driven by primarily by a lower net loss ratio as well as a lower net expense ratio as described above.
Current wording
Net combined ratio of 81.0% improved 3.5 points from 84.5% in the prior year quarter, driven by a lower net loss ratio, partly offset by a higher net expense ratio as described above.
Previous wording
Net investment income was $9.7 million in third quarter 2025, relatively flat from $9.8 million in the prior year quarter, primarily due to lower yields on money market accounts in the current interest rate environment, despite higher invested asset balances. We continue to manage our investment portfolio, while maintaining a conservative portfolio with high quality investments and duration liability matched.
Current wording
Net investment income increased to $9.9 million, a 15.1% increase from $8.6 million in the first quarter of 2025, driven mostly by a higher balance of invested assets. We continue to manage our investment portfolio, while maintaining a conservative portfolio with high quality investments and duration liability matched.
Previous wording
•The effective tax rate was 26.2% compared to 9.4% in the prior year quarter. We calculate the provision for income taxes during interim reporting periods by applying an estimate of the effective tax rate for the full year. The effective tax rate for the prior year quarter was favorably impacted by updated estimates used in the quarterly tax provision as well as the benefit of interest income on a previous year's income tax refund, which lowered income tax expense for the prior year quarter. The effective tax rate can fluctuate throughout the year as estimates used in each quarterly tax provision are updated with additional information.
Current wording
The effective tax rate was 25.6% compared to 23.8% in the prior year first quarter. We calculate the provision for income taxes during interim reporting periods by applying an estimate of the effective tax rate for the full year. The effective tax rate is 1.8 points higher than the prior year quarter. The effective tax rate can fluctuate throughout the year as income changes and estimates used in each quarterly tax provision are updated with additional information.
Previous wording
Total revenue was $632.0 million for the nine months ended September 30, 2025, a 4.2% improvement compared to $606.7 million in the prior year period. The increase primarily stems from higher net premiums earned as described below.
Current wording
Total revenue was $212.7 million, up 0.5% compared to $211.5 million in the prior year quarter. The increase primarily stems from higher net investment income as described below.
Previous wording
•Net investment income was $9.7 million, relatively flat from the prior year quarter, due to a lower interest rate environment for our sweep accounts and money market funds, despite higher invested assets. We continue to manage our investment portfolio, while maintaining a conservative portfolio with high quality investments and duration liability matched.
Current wording
Net investment income was $9.9 million a 15.1% increase from $8.6 million for the first quarter of 2025. The increase is primarily due to higher cash and invested assets balances which are moving out on the yield curve, which was partly offset by lower yields on money market funds and our bank sweep accounts as a result of the current interest rate environment. We continue to manage our investment portfolio, while maintaining a conservative portfolio with high quality investments and duration liability matched.
Previous wording
Losses and LAE incurred were $249.8 million for the nine month period ended September 30, 2025, a 26.1% improvement from $338.0 million in the prior year period. The decrease primarily stems from lower weather and attritional losses and favorable net loss development. Net weather and catastrophe losses for the accident period ended September 30, 2025 were $69.8 million, a decrease from $101.1 million in the prior year period. There were no catastrophe losses in the current year period compared to $48.7 million in the prior year period. Other weather losses totaled $69.8 million, an increase from the prior year period amount of $52.4 million. Net favorable prior year loss development was $15.1 million for the nine months of 2025 compared to net unfavorable loss development of $21.6 million for the prior year period.
Current wording
Losses and LAE incurred were $91.6 million in first quarter 2026, down 7.9% from $99.4 million in the prior year quarter. The decrease primarily stems from lower catastrophe losses and lower attritional losses, as well as higher favorable net loss development. Net weather and catastrophe losses for the current accident quarter were $36.7 million, a decrease from $43.5 million in the prior year quarter. Catastrophe losses were $24.4 million compared to $31.8 million in the prior year quarter. Other weather losses totaled $12.3 million, an increase of $600,000 from the prior year quarter amount of $11.7 million. Net favorable prior year loss development was $8.2 million for the first quarter of 2026 compared to net favorable loss development of $7.8 million for the prior year quarter.
Previous wording
General and administrative expenses were $22.3 million in third quarter 2025, up 3.6% from $21.6 million in the prior year quarter. The increase was driven largely by higher systems related costs.
Current wording
General and administrative expenses were $24.9 million in first quarter 2026, up 4.4% from $23.9 million in the prior year quarter. The increase was driven largely by higher human capital related costs.
Previous wording
Income tax expense was $17.9 million in third quarter 2025 compared to $0.8 million in the prior year quarter. The effective tax rate for the current year quarter was 26.2% compared to 9.4% in the prior year quarter. We calculate the provision for income taxes during interim reporting periods by applying an estimate of the effective tax rate for the full year. The effective tax rate for the prior year quarter was favorably impacted by updated estimates used in the quarterly tax provision as well as the benefit of interest income on a previous year's income tax refund, which lowered income tax expense for the prior year quarter. The effective tax rate can fluctuate throughout the year as estimates used in each quarterly tax provision are updated with additional information.
Current wording
The income tax expense was $12.6 million in first quarter 2026 compared to $9.5 million in the prior year quarter, with the higher provision in the current quarter driven by higher pre-tax earnings compared to the prior year quarter. The effective tax rate for the current year quarter was 25.6% compared to 23.8% in the prior year quarter, an increase of 1.8 points. We calculate the provision for income taxes during interim reporting periods by applying an estimate of the effective tax rate for the full year. The effective tax rate can fluctuate throughout the year as estimates used in the quarterly tax provision are updated with additional information.
Previous wording
The net combined ratio was 72.9% in third quarter 2025, a 27.7 point improvement from 100.6% in the prior year quarter. The decrease primarily stems from a lower net loss and LAE ratio and lower net expense ratio as described below.
Current wording
The net combined ratio was 81.0% in first quarter 2026, a 3.5 point improvement from 84.5% in the prior year quarter. The decrease primarily stems from a lower net loss and LAE ratio, partly offset by a higher expense ratio, as described below.
Previous wording
The net loss and LAE ratio was 38.3% in third quarter 2025, a 27.1 point improvement from 65.4% in the prior year quarter, reflecting a significant decrease in net losses and LAE as described above.
Current wording
The net loss and LAE ratio was 45.9% in first quarter 2026, a 3.8 point improvement from 49.7% in the prior year quarter, driven by a reduction in net losses and LAE as described above.
Previous wording
At September 30, 2025, fixed income securities increased by $45.3 million to $700.8 million from $655.6 million at December 31, 2024. The increase primarily relates to purchases of fixed income securities in longer duration to lock in interest rates.
Current wording
At March 31, 2026, fixed income securities increased by $38.1 million to $751.4 million from $713.2 million at December 31, 2025. The increase primarily relates to the allocation of $28.0 million to purchase debt securities with a longer duration to lock in interest rates.
Previous wording
At September 30, 2025, reinsurance recoverable on paid and unpaid claims decreased by $360.7 million to $379.5 million from $740.2 million at December 31, 2024. The decrease was primarily driven by reinsurance reimbursements collected during the nine months ended September 30, 2025, primarily associated with claims payments for Hurricanes Ian and Milton as well as a reduction in ultimate losses for certain catastrophic events which reduced reinsurance recoverable on unpaid claims as claims developed favorably during 2025.
Current wording
At March 31, 2026, reinsurance recoverable on paid and unpaid claims decreased by $57.4 million to $261.2 million from $318.6 million at December 31, 2025. The decrease was primarily driven by reinsurance reimbursements collected during the first quarter of 2026, primarily associated with claims payments for Hurricanes Ian and Milton as well as a reduction in ultimate losses for certain catastrophic events which reduced reinsurance recoverable on unpaid claims as claims developed favorably.
Previous wording
At September 30, 2025, unpaid losses and loss adjustment expenses decreased by $393.3 million to $649.6 million from $1.04 billion at December 31, 2024. This amount represents unpaid loss and loss adjustment expenses excluding any reinsurance recoveries. The decrease was primarily due to payment of claims for Hurricanes Milton and Ian during the nine months ended 2025, as well as a reduction in ultimate losses for certain catastrophic events as claims developed favorably during 2025.
Current wording
At March 31, 2026, unpaid losses and loss adjustment expenses decreased by $35.4 million to $544.0 million from $579.5 million at December 31, 2025. This amount represents unpaid loss and loss adjustment expenses excluding any reinsurance recoveries. The decrease was primarily due to payment of claims for Hurricanes Milton and Ian during first quarter 2025, as well as a reduction in ultimate losses for certain catastrophic events as claims developed favorably.
Previous wording
Our principal sources of liquidity include cash flows generated from operations, existing cash and cash equivalents, our marketable securities balances and borrowings available under our Credit Facilities. As of September 30, 2025, we had $560.4 million of cash and cash equivalents and $703.4 million in investments, compared to $452.7 million and $663.4 million, respectively, as of December 31, 2024. As described above, the increase in cash and cash equivalents was primarily a result of net cash provided by operations, which was held in money market funds for liquidity.
Current wording
Our principal sources of liquidity include cash flows generated from operations, existing cash and cash equivalents, our marketable securities balances and borrowings available under our Credit Facilities. As of March 31, 2026, we had $517.1 million of cash and cash equivalents and $753.7 million in investments, compared to $559.3 million and $715.6 million, respectively, as of December 31, 2025. As described above, the decrease in cash and cash equivalents was primarily due to the pay down on other debt, and strategic investment of funds into longer duration fixed income securities to lock in current interest rates.
Previous wording
Net cash provided by operating activities was $168.4 million for the nine months ended September 30, 2025 compared to net cash provided by operating activities of $143.2 million for the comparable period in 2024. The increase in cash provided by operating activities relates primarily to timing of cash flows associated with premium collection, claim and reinsurance payments as well as reinsurance reimbursements during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Current wording
Net cash provided by operating activities was $24.9 million for the three months ended March 31, 2026 compared to net cash provided by operating activities of $837,000 for the comparable period in 2025. The increase in cash provided by operating activities relates primarily to timing of cash flows associated with claim and reinsurance payments as well as reinsurance reimbursements during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Previous wording
Net cash used in investing activities for the nine months ended September 30, 2025 was $21.1 million as compared to net cash used in investing activities of $93.8 million for the comparable period in 2024. The change in cash used in investing activities relates primarily to timing of investment maturities and use of proceeds as well as availability of existing cash to invest in longer duration fixed income securities to lock in current interest rates, as well as proceeds from the sale of investment property, net of costs and commission expenses.
Current wording
Net cash used in investing activities for the three months ended March 31, 2026 was $44.3 million as compared to net cash used in investing activities of $3.5 million for the comparable period in 2025. The change in cash used in investing activities relates primarily to timing of investment maturities and re-investment of proceeds as well as availability of existing cash to invest in longer duration fixed income securities to lock in current interest rates.
Previous wording
The Amended and Restated Credit Agreement provides for senior secured credit facilities in the aggregate principal amount of up to $200.0 million, consisting of (1) a five-year senior secured term loan facility in an aggregate principal amount of $75 million with a maturity of July 2030 (the “Term Loan Facility”), (2) a $75 million committed delayed draw term loan that may be advanced to finance specified permitted acquisitions and investments with a maturity of July 2030 (the “Delayed Draw Term Loan Facility”) and (3) a five-year senior secured revolving credit facility in an aggregate principal amount of $50 million (inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the revolving credit facility and a sublimit for swingline loans equal to the lesser of $25 million and the unused amount of the revolving credit facility) (the “Revolving Credit Facility” and together with the Term Loan Facility and the Delayed Draw Term Loan Facility, the “Credit Facilities”).
Current wording
The Amended and Restated Credit Agreement provides for senior secured credit facilities in the aggregate principal amount of up to $200.0 million, consisting of (1) a five-year senior secured term loan facility in an aggregate principal amount of $75 million with a maturity of July 2030 (the “Term Loan Facility”), (2) a $75 million committed delayed draw term loan that may be advanced to finance specified permitted acquisitions and investments with a maturity of July 2030 (the “Delayed Draw Term Loan Facility”) and (3) a senior secured revolving credit facility in an aggregate principal amount of $50 million with a maturity of July 2030 (inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the revolving credit facility and a sublimit for swingline loans equal to the lesser of $25 million and the unused amount of the revolving credit facility) (the “Revolving Credit Facility” and together with the Term Loan Facility and the Delayed Draw Term Loan Facility, the “Credit Facilities”).
Previous wording
Term Loan Facility. The principal amount of the term loan facility under the Prior Credit Agreement amortized in quarterly installments, which began with the close of the fiscal quarter ending March 31, 2019, in an amount equal to $1.9 million per quarter, payable quarterly, decreasing to $875,000 per quarter commencing with the quarter ending December 31, 2021, and increasing to $2.4 million per quarter commencing with the quarter ending December 31, 2022, with the remaining balance payable at maturity, which was July 28, 2026, but was refinanced in full in connection with the Amended and Restated Credit Agreement. The principal amount of the Term Loan Facility under the Amended and Restated Credit Facility amortizes in quarterly installments beginning with the close of the fiscal quarter ending December 31, 2025, in an amount equal to $937,500 per quarter, payable quarterly, and increasing to approximately $1.4 million per quarter commencing with the quarter ending September 30, 2028, with the remaining balance payable at maturity. As amended, the Term Loan Facility matures on July 22, 2030. As of September 30, 2025, there was $75.0 million in aggregate principal amount outstanding under the Term Loan Facility and as of December 31, 2024, there was $70.1 million in aggregate principal outstanding under the term loan facility under the Prior Credit Agreement.
Current wording
Term Loan Facility. The principal amount of the Term Loan Facility under the Amended and Restated Credit Facility amortizes in quarterly installments beginning with the close of the fiscal quarter ending December 31, 2025, in an amount equal to $937,500 per quarter, payable quarterly, and increasing to approximately $1.4 million per quarter commencing with the quarter ending
Previous wording
Revolving Credit Facility. The Revolving Credit Facility allows for borrowings of up to $50 million inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the Revolving Credit Facility and a sublimit for swingline loans equal to the lesser of $25.0 million and the unused amount of the Revolving Credit Facility. At December 31, 2024, the outstanding balance under the revolving credit facility under the Prior Credit Agreement was $10.0 million, which amount was repaid in connection with the Amended and Restated Credit Agreement. During 2024, the Company secured letters of credit in aggregate of $24.4 million with a maturity date of March 16, 2025. As of December 31, 2024, the letters of credit remained outstanding and there were no draws as of such date. There were no draws on the letters of credit during 2025, which were cancelled effective on their maturity date of March 16, 2025. At July 22, 2025, the outstanding balance under the revolving credit facility under the Prior Credit Agreement was $10.0 million, which was repaid in connection with the Amendment and Restated Credit Agreement. At September 30, 2025, the Company had no outstanding letters of credit issued from the Revolving Credit Facility.
Current wording
Revolving Credit Facility. The Revolving Credit Facility allows for borrowings of up to $50 million inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the Revolving Credit Facility and a sublimit for swingline loans equal to the lesser of $25.0 million and the unused amount of the Revolving Credit Facility. Immediately prior to entering into the Amended and Restated Credit Agreement the outstanding balance under the revolving credit facility under the Prior Credit Agreement was $10.0 million, which amount was repaid in connection with the Amended and Restated Credit Agreement. During 2024, the Company secured letters of credit in aggregate of $24.4 million with a maturity date of March 16, 2025. There were no draws on the letters of credit during 2025, which were cancelled effective on their maturity date of March 16, 2025. On December 3, 2025, the Company secured letters of credit in aggregate of $32.0 million with a maturity date of March 31, 2026, with no draws as of December 31, 2025. At March 31, 2026, the Company had $25.0 million in outstanding letters of credit issued from the Revolving Credit Facility and paid $198,823 of letter of credit issuance fees.
Previous wording
At our option, borrowings under the Credit Facilities, as amended bear interest at rates equal to either (1) a rate determined by reference to SOFR, plus an applicable margin (described below) or (2) a base rate determined by reference to the highest of (a) the “prime rate” of Regions Bank, (b) the federal funds rate plus 0.50%, and (c) the adjusted term SOFR in effect on such day for an interest period of one month plus 1.00%, plus an applicable margin (described below).
Current wording
At our option, borrowings under the Credit Facilities, bear interest at rates equal to either (1) a rate determined by reference to SOFR, plus an applicable margin (described below) or (2) a base rate determined by reference to the highest of (a) the “prime rate” of Regions Bank, (b) the federal funds rate plus 0.50%, and (c) the adjusted term SOFR in effect on such day for an interest period of one month plus 1.00%, plus an applicable margin (described below).
Previous wording
The applicable margin for loans under the Credit Facilities, as amended, varies from 2.50% per annum to 3.00% per annum (for SOFR loans) and 1.50% to 2.00% per annum (for base rate loans) based on our consolidated leverage ratio ranging from less than or equal to 1-to-1 to greater than 1.5-to-1. Interest payments with respect to the Credit Facilities are required either on a quarterly basis (for base rate loans) or at the end of each interest period (for SOFR loans) or, if the duration of the applicable interest period exceeds three months, then every three months. As of September 30, 2025, the borrowings under the Term Loan Facility were accruing interest at a rate of 6.816% per annum, respectively.
Current wording
The applicable margin for loans under the Credit Facilities varies from 2.50% per annum to 3.00% per annum (for SOFR loans) and 1.50% to 2.00% per annum (for base rate loans) based on our consolidated leverage ratio ranging from less than or equal to 1-to-1 to greater than 1.5-to-1. Interest payments with respect to the Credit Facilities are required either on a quarterly basis (for base rate loans) or at the end of each interest period (for SOFR loans) or, if the duration of the applicable interest period exceeds three months, then every three months. As of March 31, 2026, the borrowings under the Term Loan Facility were accruing interest at a rate of 6.173% per annum.
Previous wording
In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, we are required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by our consolidated leverage ratio.
Current wording
In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, we are required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by our consolidated leverage ratio. As of March 31, 2026, the Company paid in commitment fees in aggregate of $76,946 as it relates to the unused portion of the Revolving Credit Facility.
Previous wording
We may prepay the loans under the Credit Facilities, in whole or in part, at any time without premium or penalty, subject to certain conditions including minimum amounts and reimbursement of certain costs in the case of prepayments of SOFR loans. In addition, we are required to prepay the loan under the Term Loan Facility with the proceeds from certain financing transactions, involuntary dispositions or asset sales (subject, in the case of asset sales, to reinvestment rights).
Current wording
The Company may prepay the loans under the Credit Facilities, in whole or in part, at any time without premium or penalty, subject to certain conditions including minimum amounts and reimbursement of certain costs in the case of prepayments of SOFR loans. In addition, we are required to prepay the loan under the Term Loan Facility with the proceeds from certain financing transactions, involuntary dispositions or asset sales (subject, in the case of asset sales, to reinvestment rights).
Previous wording
The Credit Agreement contains, among other things, covenants, representations and warranties and events of default customary for facilities of this type. The Amended and Restated Credit Agreement requires the Company to maintain, as of each fiscal quarter (1) a maximum consolidated leverage ratio of 2.00 to 1.00, (2) a minimum consolidated fixed charge coverage ratio of 1.20 to 1.00 and (3) a minimum consolidated tangible net worth for the Company and its subsidiaries, which is required to be not less than the sum of 75% of consolidated tangible net worth measured as of the fiscal quarter ended September 30, 2025 plus 25% of positive consolidated net income (including its subsidiaries and regulated subsidiaries) plus the net cash proceeds of any equity transactions. Events of default include, among other events, (i) nonpayment of principal, interest, fees or other amounts; (ii) failure to perform or observe certain covenants set forth in the Credit Agreement; (iii) breach of any representation or warranty; (iv) cross-default to other indebtedness; (v) bankruptcy and insolvency defaults; (vi) monetary judgment defaults and material nonmonetary judgment defaults; (vii) customary ERISA defaults; (viii) a change of control of the Company; and (ix) failure to maintain specified catastrophe retentions in each of the Company’s regulated insurance subsidiaries or observe specified reinsurer concentration limits.
Current wording
The Amended and Restated Credit Agreement contains, among other things, covenants, representations and warranties and events of default customary for facilities of this type. The Amended and Restated Credit Agreement requires the Company to maintain, as of each fiscal quarter (1) a maximum consolidated leverage ratio of 2.00 to 1.00, (2) a minimum consolidated fixed charge coverage ratio of 1.20 to 1.00 and (3) a minimum consolidated tangible net worth for the Company and its subsidiaries, which is required to be not less than the sum of 75% of consolidated tangible net worth measured as of the fiscal quarter ended September 30, 2025 plus 25% of positive consolidated net income (including its subsidiaries and regulated subsidiaries) plus the net cash proceeds of any equity transactions. Events of default include, among other events, (i) nonpayment of principal, interest, fees or other amounts; (ii) failure to perform or observe certain covenants set forth in the Credit Agreement; (iii) breach of any representation or warranty; (iv) cross-default to other indebtedness; (v) bankruptcy and insolvency defaults; (vi) monetary judgment defaults and material nonmonetary judgment defaults; (vii) customary ERISA defaults; (viii) a change of control of the Company; and (ix) failure to maintain specified catastrophe retentions in each of the Company’s regulated insurance subsidiaries or observe specified reinsurer concentration limits.
Previous wording
The Company issued the Convertible Notes under an Indenture (the “Convertible Note Indenture”), dated August 16, 2017, by and among the Company, as issuer, the Notes Guarantor, as guarantor, the trustee party thereto (the “Trustee”).
Current wording
The Company issued the Convertible Notes under an Indenture (the “Convertible Note Indenture”), dated August 16, 2017, by and among the Company, as issuer, the Notes Guarantor, as guarantor, and the trustee party thereto (the “Trustee”).
Previous wording
Holders may convert their Convertible Notes at any time prior to the close of business on the business day immediately preceding February 1, 2037, other than during the period from, and including, February 1, 2022 to the close of business on the second business day immediately preceding August 5, 2022, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2017, if the closing sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the Convertible Notes in effect on each applicable trading day; (2) during the ten consecutive business-day period following any five consecutive trading-day period in which the trading price for the Convertible Notes for each such trading day was less than 98% of the closing sale price of the Company’s common stock on such date multiplied by the then-current conversion rate; (3) if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the third business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events.
Current wording
Holders may convert their Convertible Notes at any time prior to the close of business on the business day immediately preceding February 1, 2037, under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2017, if the closing sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the Convertible Notes in effect on each applicable trading day; (2) during the ten consecutive business-day period following any five consecutive trading-day period in which the trading price for the Convertible Notes for each such trading day was less than 98% of the closing sale price of the Company’s common stock on such date multiplied by the then-current conversion rate; (3) if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the third business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events.
Previous wording
During the period from and including February 1, 2022 to the close of business on the second business day immediately preceding August 5, 2022, and on or after February 1, 2037 until the close of business on the second business day immediately preceding August 1, 2037, holders may surrender their Convertible Notes for conversion at any time, regardless of the foregoing circumstances.
Current wording
On or after February 1, 2037 until the close of business on the second business day immediately preceding August 1, 2037, holders may surrender their Convertible Notes for conversion at any time, regardless of the foregoing circumstances.
Previous wording
In December 2018, our insurance subsidiary became a member of the Federal Home Loan Bank Des Moines ("FHLB-DM"). Membership in the FHLB-DM required an investment in FHLB-DM’s common stock which was purchased in December 2018 and valued at $133,200. In January 2024, the insurance subsidiary of the Company received a 4.23% fixed interest rate cash loan of $5.5 million from the FHLB-DM. Additionally, the transaction required the acquired FHLB-DM common stock and certain other investments to be pledged as collateral. As of September 30, 2025, the fair value of the collateralized securities was $4.2 million and the equity investment in FHLB-DM common stock was $316,300.
Current wording
In December 2018, another subsidiary became a member of the Federal Home Loan Bank Des Moines ("FHLB-DM"). Membership in the FHLB-DM required an investment in FHLB-DM’s common stock which was purchased in December 2018 and valued at $133,200. In January 2024, the insurance subsidiary of the Company received a 4.23% fixed interest rate cash loan of $5.5 million from the FHLB-DM. Additionally, the transaction required the acquired FHLB-DM common stock and certain other investments to be pledged as collateral. As of March 31, 2026, the fair value of the collateralized securities was $3.6 million and the equity investment in FHLB-DM common stock was $324,700.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
September 30, 2028, with the remaining balance payable at maturity in July 2030. As of March 31, 2026, there was $73.1 million in aggregate principal amount outstanding under the Term Loan Facility and as of December 31, 2025, there was $74.1 million in aggregate principal outstanding under the term loan facility under the Prior Credit Agreement.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Comparison of the nine months Ended September 30, 2025 and 2024
Previous report — wording carried elsewhere
Losses and loss adjustment expenses ("LAE")