# EDGAR Filing Document

**Accession Number:** 0001598665
**File Stem:** 0001193125-26-115451
**Filing Date:** 2026-3
**Character Count:** 224232
**Document Hash:** e59831d22cee9f1b7db81b519078ce7a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-115451.hdr.sgml**: 20260319

**ACCESSION NUMBER**: 0001193125-26-115451

**CONFORMED SUBMISSION TYPE**: 10-K/A

**PUBLIC DOCUMENT COUNT**: 138

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260319

**DATE AS OF CHANGE**: 20260319

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Heritage Insurance Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001598665
- **STANDARD INDUSTRIAL CLASSIFICATION:** FIRE, MARINE & CASUALTY INSURANCE [6331]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 455338504
- **STATE OF INCORPORATION:** DE

**FILING VALUES:**
- **FORM TYPE:** 10-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36462
- **FILM NUMBER:** 26773180

**BUSINESS ADDRESS:**
- **STREET 1:** 1401 N WESTSHORE BLVD
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33607
- **BUSINESS PHONE:** 7273627202

**MAIL ADDRESS:**
- **STREET 1:** 1401 N WESTSHORE BLVD
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33607

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Heritage Insurance Holdings, LLC
- **DATE OF NAME CHANGE:** 20140130

?xml version='1.0' encoding='ASCII'? 10-K/A

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM** 10-K/A

**(Amendment No. 1)**

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⌧ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the Year Ended** December 31**, 2025**

**OR**

□ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**Commission File Number** 001-36462

Heritage Insurance Holdings, Inc.

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---

| | |
|:---|:---|
| Delaware | 45-5338504 |
| **(STATE OF INCORPORATION)** | **(I.R.S. ID)** |

---

1401 N. Westshore Blvd.**,** Tampa**,** FL**,** 33607

**(**727**)** 362-7200

**Securities registered pursuant to Section 12(b) of the Act:** 

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| | | |
|:---|:---|:---|
| **<u>Title of Each Class</u>** | **<u>Trading Symbol(s)</u>** | &nbsp;&nbsp;**<u>Name of Each Exchange on Which Registered</u>** |
| Common Stock, par value $0.0001 per share | HRTG | New York Stock Exchange |

---

**Securities registered pursuant to Section 12(g) of the Act:**

**None**

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes □ No ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes □ No ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | □ | Accelerated filer | ⌧ |
| Non-accelerated filer | □ | Smaller reporting company | ⌧ |
| Emerging growth company | □ |  |  |

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ⌧

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. □

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes □ No ⌧

The aggregate market value of the Registrant's common stock held by non-affiliates was $665,737,361 on June 30, 2025, computed on the basis on the closing sale price of the Registrant's common stock on the New York Stock Exchange on that date. As of March 2, 2026, the number of shares outstanding of the Registrant's common stock was 30,720,918

**DOCUMENTS INCORPORATED BY REFERENCE**

Portions of the Registrant's Proxy Statement for its Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K, provided that if such Proxy Statement is not filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K, an amendment to this Form 10-K shall be filed no later than the end of such 120-day period.

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**EXPLANATORY NOTE** 

This Amendment No. 1 on Form 10-K/A (this "Amendment") amends the Company's Annual Report on Form 10-K for the year ended December 31, 2025, originally filed with the Securities and Exchange Commission (the "SEC") on March 12, 2026 (the "Original Filing"). The Amendment is being filed solely to add the date, which was inadvertently omitted from the Original Filing, of the Report of Independent Registered Public Accounting Firm of Plante & Moran, PLLC (the "Report"), which undated Report was included in the Original Filing. This Amendment includes Part II, Item 8 "Financial Statements and Supplementary Data" in its entirety and without change from the Original Filing other than the correction to include the signing date of the Report, and Part IV, Item 15 "Exhibits, Financial Statements Schedules" to include new certifications as described below. No other changes have been made to the Original Filing, whether to update the Original Filing to reflect events occurring subsequent to the filing of the Original Filing or otherwise. As required by Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Amendment includes new certifications by the Company's principal executive officer and principal financial officer, which are being filed as exhibits to this Amendment, including certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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**PART II**

**Item 8. Financial Statements and Supplementary Data**

**HERITAGE INSURANCE HOLDINGS, INC.**

**INDEX OF CONSOLIDATED FINANCIAL STATEMENTS** 

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| | |
|:---|:---|
|  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Report of Independent Registered Public Accounting Firm</u>](#report_of_independent_registered_p) (Plante & Moran, PLLC, Chicago, IL, PCAOB ID 166)  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024</u>](#consolidated_balance_sheets) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023</u>](#consolidated_statements_of_operations) | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2025, 2024 and 2023</u>](#consolidated_statements_of_changes) | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023</u>](#consolidated_statements_of_cash_flows) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Notes to Consolidated Financial Statements</u>](#notes_to_consolidated_financial_sta) | 9 |

---

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![img27236739_0.gif](img27236739_0.gif)

**Report of Independent Registered Public Accounting Firm**

To the Stockholders and Board of Directors

Heritage Insurance Holdings, Inc.

*Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting*

We have audited the accompanying consolidated balance sheets of Heritage Insurance Holdings, Inc. (the "Company") as of December 31, 2025 and 2024; the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2025; and the related notes and schedules (collectively referred to as the "financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025 based on criteria established in *Internal Control - Integrated Framework (2013)*issued by the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO framework").

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the COSO framework.

*Basis for Opinion*

The Company's management is responsible for these financial statements; maintaining effective internal control over financial reporting; and its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Management's Report on Internal Control over Financial Reporting." Our responsibility is to express an opinion on the Company's financial statements and an opinion on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the "PCAOB") and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

*Definition and Limitations of Internal Control Over Financial Reporting*

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are

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being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

*Critical Audit Matter*

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***Liability for Unpaid Losses and Loss Adjustment Expenses - Refer to Notes 1 and 13 to the Financial Statements***

*Critical Audit Matter Description*

The Company's estimated liability for unpaid losses and loss adjustment expense (LAE) totaled $579 million at December 31, 2025. The Company's reserve for unpaid losses and LAE represents the estimated ultimate cost of settling all claims incurred related to insured events that have occurred as of the reporting date. The Company determines the reserve for unpaid losses and LAE on an individual-case basis for those claims reported as of December 31, 2025, with bulk reserves for additional development, if any, on the reported claims and an estimate for unpaid losses and LAE for all claims incurred related to insured events that have occurred as of December 31, 2025 but have not yet been reported by the policyholders to the Company (collectively referred to as incurred but not reported or IBNR). Management estimates IBNR reserves by projecting ultimate losses using industry-accepted actuarial methods. Management also engages independent actuarial firms to prepare an actuarial analysis of unpaid losses and LAE and provides statements of actuarial opinion on management's estimate of unpaid losses and LAE.

Estimating the liability for unpaid losses and LAE requires significant judgment including the selection of loss ratios, projection of loss development patterns, and use of and weighting of actuarial methods. Estimating the liability for unpaid losses and LAE is inherently uncertain, dependent on management's judgment, and significantly impacted by claim and actuarial factors and conditions that may change over time. The ultimate settlement of unpaid losses and LAE may vary materially from the recorded liability, and such variance may adversely affect the Company's financial results. For these reasons, we identified the estimate of unpaid losses and LAE as a critical audit matter, as it involved especially subjective auditor judgment.

*How the Critical Audit Matter was Addressed in the Audit*

Our audit procedures related to the unpaid losses and LAE reserve included the following, among others:

• We obtained an understanding, evaluated the design, and tested the operating effectiveness of key controls over the process and data used by management to estimate the liability for unpaid losses and LAE, including those controls related to the estimation of and management's review of the estimated liability of unpaid losses and LAE.

• We tested the completeness, integrity, and accuracy of the underlying data used by the Company's engaged actuaries, such as paid loss data, case reserve data, loss adjustment expense data, and loss development tables.

• With assistance from our engaged actuarial specialist, we reviewed the reasonableness of the methods and assumptions used by the Company's engaged actuaries to evaluate their unpaid losses and LAE reserve estimate. We assessed the reasonableness of management's selection of its estimate for unpaid losses and LAE, including the key factors considered by management in arriving at such estimates

/s/ Plante & Moran, PLLC

We have served as the Company's auditor since 2018.

Chicago, Illinois

March 12, 2026

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**HERITAGE INSURANCE HOLDINGS, INC.** 

**CONSOLIDATED BALANCE SHEETS**

***(In thousands)***

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| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| **ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed maturities, available-for-sale, at fair value (amortized cost of $726,774 and $692,790) | $713237 | $655555 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity securities, at fair value, (cost $1,064 and $1,936) | 1064 | 1936 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other investments, net | 1285 | 5952 |
| Total investments | 715586 | 663443 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 559274 | 452666 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 13307 | 10979 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued investment income | 6556 | 5592 |
| &nbsp;&nbsp;&nbsp;&nbsp;Premiums receivable, net | 95331 | 102134 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reinsurance recoverable on paid and unpaid claims, net of allowance for credit losses of $175 and $197 | 318588 | 740204 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid reinsurance premiums | 307039 | 309802 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax asset, net | 5855 | 13876 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred policy acquisition costs, net | 64544 | 63204 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 28254 | 38080 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use lease asset, finance | 12598 | 15082 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use lease asset, operating | 4878 | 5850 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangibles, net | 30189 | 36372 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 33823 | 11640 |
| **Total Assets** | $2195822 | $2468924 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unpaid losses and loss adjustment expenses | $579477 | $1042687 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unearned premiums | 707923 | 702707 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reinsurance payable | 232801 | 227060 |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term debt, net | 78428 | 116319 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advance premiums | 19164 | 15186 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable, net | 4282 | 846 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | 8844 | 8926 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liability, finance | 15587 | 18071 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liability, operating | 5800 | 6945 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other liabilities | 38265 | 39378 |
| **Total Liabilities** | $1690571 | $2178125 |
| Commitments and contingencies (Note 17) |  |  |
| **Stockholders' Equity:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 50,000,000 shares authorized, 43,171,585 shares issued and 30,833,776 outstanding at December 31, 2025 and 42,838,713 shares issued and 30,607,039 outstanding at December 31, 2024 | 3 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 365736 | 362644 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income, net of taxes | (10555) | (28604) |
| &nbsp;&nbsp;&nbsp;&nbsp;Treasury stock, at cost, 12,337,809 and 12,231,674 shares December 31, 2025 and 2024, respectively | (133183) | (130900) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 283250 | 87656 |
| **Total Stockholders' Equity** | 505251 | 290799 |
| **Total Liabilities and Stockholders' Equity** | $2195822 | $2468924 |

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*The accompanying notes are an integral part of these consolidated financial statements.*

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**HERITAGE INSURANCE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME**

***(In thousands, except share and per share data)*** 

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** | ***2023*** |
| **REVENUES:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross premiums written | $1436346 | $1432942 | $1343101 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in gross unearned premiums | (5243) | (26836) | (19458) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross premiums earned | 1431103 | 1406106 | 1323643 |
| &nbsp;&nbsp;&nbsp;&nbsp;Ceded premiums earned | (636946) | (638246) | (626458) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net premiums earned | 794157 | 767860 | 697185 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | 37156 | 36631 | 25756 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gains (losses) on debt securities and other investments | 2713 | (705) | (972) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other revenue | 13304 | 13199 | 13529 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | 847330 | 816985 | 735498 |
| **EXPENSES:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses and loss adjustment expenses | 313246 | 447048 | 426129 |
| &nbsp;&nbsp;&nbsp;&nbsp;Policy acquisition costs, net of ceding commission income <sup>(1)</sup> | 173961 | 191189 | 167610 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses, net of ceding commission income <sup>(2)</sup> | 92972 | 85138 | 77777 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible asset impairment |  |  | 767 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total expenses** | 580179 | 723375 | 672283 |
| **Operating income** | 267151 | 93610 | 63215 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | 7887 | 10934 | 11210 |
| **Income before income taxes** | 259264 | 82676 | 52005 |
| Income tax expense | 63670 | 21136 | 6698 |
| **Net income** | $195594 | $61539 | $45307 |
| **OTHER COMPREHENSIVE INCOME** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in net unrealized gains on investments | 23588 | 8771 | 23388 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclassification adjustment for net realized investment losses (gains) | 107 | (51) | 636 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense related to items of other comprehensive income | (5646) | (2074) | (5690) |
| **Total comprehensive income** | $213643 | $68185 | $63641 |
| **Weighted average shares outstanding** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | 30890609 | 30595348 | 26193065 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | 30949899 | 30654611 | 26252328 |
| **Earnings per share** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | $6.33 | $2.01 | $1.73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | $6.32 | $2.01 | $1.73 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)*Policy acquisition costs includes $54.8 million, $37.8 million and $48.7 million of ceding commission income for the reporting years 2025, 2024 and 2023, respectively*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)*General and administration includes $18.1 million, $12.5 million and $16.1 million of ceding commission income for the reporting years 2025, 2024 and 2023, respectively*.

*The accompanying notes are an integral part of these consolidated financial statements.*

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**HERITAGE INSURANCE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

*(In thousands, except share and per share data)*

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | ***Common<br>Shares*** | ***Common<br>Shares<br>Amount*** | ***Additional<br>Paid-in-<br>Capital*** | ***Retained<br>Earnings (Deficit)*** | ***Treasury<br>Stock*** | ***Accumulated<br>Other<br>Comprehensive<br>Income<br>(Loss)*** | ***Total<br>Stockholders'<br>Equity*** |
| **Balance at December 31, 2022** | 25539433 | $3 | $334711 | $(19190) | $(130900) | $(53585) | $131039 |
| Net unrealized change in investments, net of tax |  |  |  |  |  | 18335 | 18335 |
| Surrendered shares for tax withholding | (68865) |  | (429) |  |  |  | (429) |
| Restricted stock vested | 25000 |  |  |  |  |  |  |
| Issued restricted stock | 1286855 |  |  |  |  |  |  |
| Forfeiture on restricted stock | (483454) |  | (1750) |  |  |  | (1750) |
| Stock-based compensation on restricted stock |  |  | 3112 |  |  |  | 3112 |
| Issuance of common stock through public and private offering, net | 3919969 |  | 24666 |  |  |  | 24666 |
| Net income |  |  |  | 45307 |  |  | 45307 |
| **Balance at December 31, 2023** | 30218938 | $3 | $360310 | $26117 | $(130900) | $(35250) | $220280 |
| Net unrealized change in investments, net of tax |  |  |  |  |  | 6646 | 6646 |
| Surrendered shares for tax withholding | (77159) |  | (971) |  |  |  | (971) |
| Issued restricted stock | 465260 |  |  |  |  |  |  |
| Stock-based compensation on restricted stock |  |  | 3254 |  |  |  | 3254 |
| Additional costs associated to public offering |  |  | (3) |  |  |  | (3) |
| Unallocated dividends on restricted stock forfeitures |  |  | 54 |  |  |  | 54 |
| Net income |  |  |  | 61539 |  |  | 61539 |
| **Balance at December 31, 2024** | 30607039 | $3 | $362644 | $87656 | $(130900) | $(28604) | $290799 |
| Net unrealized change in investments, net of tax |  |  |  |  |  | 18049 | 18049 |
| Surrendered shares for tax withholding | (77659) |  | (2296) |  |  |  | (2296) |
| Issued restricted stock | 410531 |  |  |  |  |  |  |
| Stock-based compensation on restricted stock |  |  | 5388 |  |  |  | 5388 |
| Stock buyback | (106135) |  |  |  | (2283) |  | (2283) |
| Net income |  |  |  | 195594 |  |  | 195594 |
| **Balance at December 31, 2025** | 30833776 | $3 | $365736 | $283250 | $(133183) | $(10555) | $505251 |

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*The accompanying notes are an integral part of these consolidated financial statements.*

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**HERITAGE INSURANCE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

***(Amounts in thousands)***

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** | ***2023*** |
| OPERATING ACTIVITIES |  |  |  |
| Net income | $195594 | $61539 | $45307 |
| Adjustments to reconcile net income to net cash provided by operating<br> activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 5388 | 3254 | 1362 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bond amortization and accretion | (779) | (2644) | (3488) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of original issuance discount on debt | 363 | 857 | 469 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 12699 | 9551 | 8689 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 368 | 51 | 856 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized (gains) losses | (2713) | 705 | 937 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 2375 | (4839) | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill or intangible asset impairment |  |  | 767 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued investment income | (964) | (1524) | (251) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premiums receivable, net | 6413 | (12695) | 2403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid reinsurance premiums | 2763 | (15580) | 12755 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reinsurance recoverable on paid and unpaid claims | 421638 | (257775) | 322630 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes receivable |  | 13354 | (1236) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred policy acquisition costs, net | (1340) | 6053 | (3267) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right-of-use asset, net | 3456 | 3509 | 3026 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (11157) | 1034 | (1165) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unpaid losses and loss adjustment expenses | (463210) | 196732 | (285852) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unearned premiums | 5216 | 26786 | 19280 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reinsurance payable | 5741 | 67237 | (39980) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | 3436 | 846 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt issuance costs | (2204) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest | 121 | (179) | (410) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance premiums | 3978 | (8714) | (2616) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | (82) | (535) | 2867 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liability, net | (3629) | (3446) | (2785) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (1233) | 3518 | (9923) |
| Net cash provided by operating activities | 182238 | 87095 | 70415 |
| INVESTING ACTIVITIES |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed maturity securities sales, maturities and paydowns | 311323 | 203512 | 332511 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed maturity securities purchases | (344644) | (286970) | (230743) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption of equity securities | 893 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Return on other investments | 4666 | 359 | 1080 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other investment sales |  |  | 8000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity securities reinvestments of dividends | (21) | (270) | (152) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of property | 3184 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of property and equipment acquired | (8074) | (8230) | (9890) |
| Net cash (used in) provided by investing activities | (32673) | (91599) | 100806 |
| FINANCING ACTIVITIES |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from loan agreement |  | 5500 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock, net of offering costs |  | (3) | 24666 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage loan payments | (10787) | (270) | (180) |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal payments on term loan facility | (6063) | (9500) | (9500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of loan agreement | (19200) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax withholding on share-based compensation awards | (2296) | (971) | (429) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of treasury stock | (2283) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends forfeited (paid) |  | 54 | (11) |
| Net cash (used in) provided by financing activities | (40629) | (5190) | 14546 |
| Increase (decrease) in cash, cash equivalents, and restricted cash | 108936 | (9694) | 185767 |
| Cash, cash equivalents and restricted cash, beginning of period | 463645 | 473339 | 287572 |
| Cash, cash equivalents and restricted cash, end of period | $572581 | $463645 | $473339 |

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | **2025** | **2024** | **2023** |
| **Supplemental Cash Flows Information:** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Non-cash promissory note received in connection with the sale of property | $11000 | $— | $— |
| Interest paid | $6891 | $9466 | $9312 |

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Cash paid for income taxes consisted of the following as of December 31:

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | **2025** | **2024** | **2023** |
| **Income taxes paid, net of refunds** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| &nbsp;&nbsp;Federal | $50300 | $8500 | $5992 |
| &nbsp;&nbsp;State | 7558 | 4090 | 1902 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total income taxes paid, net of refunds** | $57858 | $12590 | $7894 |

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Income taxes paid, net of refunds exceeded 5% of total income taxes paid, net of refunds in the following state and local jurisdictions:

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| | | | |
|:---|:---|:---|:---|
| **State** | ***2025*** | ***2024*** | ***2023*** |
| &nbsp;&nbsp;Florida | $6673 | $3800 | $675 |
| &nbsp;&nbsp;New York | \* | \* | $507 |

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\* Jurisdiction below the threshold for the period presented

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets:

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| | | |
|:---|:---|:---|
|  | ***December 31, 2025*** | ***December 31, 2024*** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| Cash and cash equivalents | $559274 | $452666 |
| Restricted cash | 13307 | 10979 |
| &nbsp;&nbsp;**Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows** | $572581 | $463645 |

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*The accompanying notes are an integral part of these consolidated financial statements.*

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**HERITAGE INSURANCE HOLDINGS, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1. Basis of Presentation, Nature of Business and Significant Accounting Policies and Practices**

***Business Description*** 

Heritage Insurance Holdings, Inc. (the "Company") is an insurance holding company. The Company's insurance subsidiaries are Heritage Property & Casualty Insurance Company ("Heritage P&C"), Zephyr Insurance Company ("Zephyr"), and Narragansett Bay Insurance Company ("NBIC"). The Company's other subsidiaries include: Heritage MGA, LLC ("MGA"), the managing general agent that manages substantially all aspects of Heritage P&C; Contractors' Alliance Network, LLC, the Company's vendor network manager; Osprey Re Ltd., the Company's reinsurance subsidiary that may provide a portion of the reinsurance protection purchased by the Company's insurance subsidiaries; Heritage Insurance Claims, LLC, an inactive subsidiary reserved for future development; Zephyr Acquisition Company ("ZAC"), a holding company; NBIC Holdings, Inc., and NBIC Service Company, which provides services to NBIC.

The Company's primary products are personal and commercial residential insurance, which the Company currently offers in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia. The Company conducts its operations under a single reporting and operating segment.

***Basis of Presentation***

The consolidated financial statements include the accounts of Heritage Insurance Holdings, Inc. and its wholly-owned subsidiaries. The accompanying consolidated financial statements include the accounts of the Company and all other entities in which the Company has a controlling financial interest (none of which are variable interest entities). All intercompany accounts and transactions have been eliminated in consolidation.

***Business Segment***

Pursuant to FASB Accounting Standards Codification ("ASC") 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance. The Company's operations consist of a single operating and reportable segment: residential property insurance. The Company conducts its business as a property and casualty insurer, which is based upon the Company's business organizational and management structure, as well as information used by the Company's Chief Executive Officer and Board of Directors, who are collectively the chief operating decision maker ("CODM") to allocate the Company's resources. The CODM makes decisions, allocates resources, and assesses corporate performance using consolidated financial information. The CODM receives consolidated financial statements to evaluate the performance of the Company and to make decisions that affect the Company's prospects for future cash flows and profitability.

***Reclassification***

The Company did not have any reclassifications for the years ended December 31, 2025 and 2024.

***Use of Estimates***

The preparation of consolidated financial statements in conformity with United States Generally Accepted Accounting Principles ("U.S. GAAP") requires the Company to make estimates and assumptions about future events that affect the amounts reported in the Company's consolidated financial statements and accompanying notes. The Company evaluates its estimates on an ongoing basis when updated information related to such estimates becomes available. The Company bases its estimates on historical experience and information available to it at the time these estimates are made. Actual results could differ materially from these estimates.

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***Cash and Cash Equivalents***

The Company's cash and cash equivalents include demand deposits with financial institutions and short-term, highly-liquid financial instruments with original maturities of three months or less when purchased. The carrying amounts reported in the consolidated balance sheets for interest bearing deposits approximate their fair value because of the short maturity of these financial instruments.

To the extent there are negative cash balances with any individual financial institution, the Company excludes the negative amount from cash and cash equivalents negative cash balances and reports as accounts payable and other liabilities.

***Restricted Cash***

Restricted cash related to individual state regulatory deposits of $13.3 million and $11.0 million as of December 31, 2025 and 2024, respectively. The Company earned interest income of $58,022 and $33,545 on its restricted cash deposits.

***Investments***

*Securities Available for sale*

The Company investments in debt securities and short-term investments are classified as available-for-sale with maturities of greater than three months and reported at fair value in the consolidated balance sheet. Subsequent to its acquisition of debt securities and short-term available-for-sale, the Company records changes in value through the date of disposition as unrealized holding gains and losses, net of tax effects, and includes them as a component of other comprehensive income. Premium and discount on investment securities are amortized and accreted using the interest method and charged or credited to investment income. Refer to **Note 2** *"Investments"* to these consolidated financial statements for further information.

*Accumulated Other Comprehensive Income*

Accumulated other comprehensive income consists solely of unrealized gains and losses on debt securities available-for-sale, net of tax.

***Investment Gains and Losses***

Net realized investment gains and losses are included as a component of pre-tax revenues based upon specific identification of the investments sold on the trade date. Included in net realized and unrealized gains (losses) are credit impairment losses on invested assets other than those investments accounted for using the equity method of accounting described in the "Allowance for Credit Losses" and "Impairment of Other Investments" section discussed below.

***Allowance for Credit Losses (Available-for-Sale-Debt Securities)***

The impairment model for available-for-sale ("AFS") debt securities differs from the current expected credit loss ("CECL") methodology applied for held to maturity debt securities because AFS debt securities are measured at fair value rather than amortized cost. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, the security's amortized cost basis is written down to fair value through income. For AFS debt securities where neither of the criteria are met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Under the guidance, an entity may no longer consider the length of time fair value has been less than amortized cost. As of December 31, 2025 and 2024, management evaluated and determined a credit allowance was not significant to the financial statements.

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***Other Investments***

<u>Non-Consolidating Variable Interest Entities ("VIEs")</u> 

The Company holds certain passive investments as described in Note 2 "*Investments*" to these financial statements. The Company determines at the inception of each arrangement whether an entity in which it has made an investment or in which it has other variable interests is considered a variable interest entity ("VIE"). The Company consolidates VIEs when it is determined to be the primary beneficiary. The Company is the primary beneficiary of a VIE when it has the power to direct activities that most significantly affect the economic performance of the VIE and has the obligation to absorb the majority of their losses or entitled to benefits. If the Company is not the primary beneficiary in a VIE, it will account for the investment or other variable interests in a VIE in accordance with applicable GAAP. For the year ended December 31, 2025 and 2024, the Company was not the primary beneficiary to any of its other investments and therefore considered the other investments as non-consolidated VIEs.

Equity securities that do not result in consolidation and are not accounted for under the equity method, are measured at fair value. Equity securities without a readily determinable fair value are reported at cost, less impairment, unless the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer (measurement alternative). Changes in fair value are reflected in the Company's consolidated statements of operations. Certain other investments provide the Company with monthly or quarterly return on capital on a regular schedule.

**Impairment of Other Investments**

The Company maintains various interests in other investments without a readily determinable fair value that are evaluated for impairment at each reporting period. When such events or changes occur, the Company evaluates the estimated present value of future cash flows compared to its cost basis in the investment to evaluate whether there may be an impairment. The Company had no impairments for the year ended December 31, 2025. For the year ended December 31, 2024 and 2023, the Company recorded $0.8 million and $2.2 million , respectively, for impairment charges on its other investments.

***Fair Value***

Major categories of financial assets and liabilities are measured at fair value on a recurring basis. Certain assets and liabilities are measured at fair value on a nonrecurring basis when impaired, which include long-lived assets, and other investments that the Company cannot significantly influence.

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the principal or most advantageous market in which the Company would transact is analyzed. Assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance, are considered.

The Company estimates the fair value of its investments using the closing prices on the last business day of the reporting period, obtained from active markets such as the NYSE and NASDAQ. For securities for which quoted prices in active markets are unavailable, the Company uses observable inputs such as quoted prices in inactive markets, quoted prices in active markets for similar instruments, benchmark interest rates, broker quotes and other relevant inputs. The Company does not have any investments in its portfolio which require the use of unobservable inputs. The Company's estimate of fair value reflects the interest rate environment that existed as of the close of business on December 31, 2025. Changes in interest rates after December 31, 2025 may affect the fair value of the Company's investments.

The Company's non-financial assets, such as intangible assets, are carried at cost until there are indicators of impairment and are recorded at fair value only when an impairment charge is recognized. Refer to **Note 3** "*Intangible Assets, net*" to these consolidated financial statements for further information on the Company's 2023 goodwill impairment charges. Long term debt is recorded at carrying value, Refer to **Note 14** "*Long-Term Debt"* to these consolidated financial statements for further information.

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***Premiums***

The Company records direct and assumed premiums written as revenue, which are earned on a daily pro rata basis over the contract period of the related in force policies or reinsurance contract. For any portion of premiums not earned at the end of the reporting period, the Company records an unearned premium liability.

Premiums receivable represents amounts due from the Company's policyholders for billed premiums and related policy fees. The Company's current policy system cancels policies for non-payment in compliance with state insurance regulations, and thereby ensures that premium is not earned if the premium payment is not current. Balances in premiums receivable are removed upon cancellation of the policy due to non-payment. The Company's allowance for credit losses, which relates to premium balances from a previous billing system as well as uncollectible agent commission due back to the Company for cancelled policies, was $1.7 million and $1.4 million as of December 31, 2025 and 2024, respectively. Bad debt expense related to uncollectible agent commission due back to the Company for cancelled policies was $0.2 million, $0.1 million and $0.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

When the Company receives premium payments from policyholders prior to the effective date of the related policy, the Company records an advance premiums liability. On the policy effective date, the Company reduces the advance premium liability and records the premiums as described above.

***Policy Acquisition Costs***

The Company incurs policy acquisition costs that vary with, and are directly related to, the production of new business. Policy acquisition costs consist of the following four items: (i) commissions paid to outside agents at the time of policy issuance; (ii) policy administration fees paid to a third-party administrator at the time of policy issuance; (iii) premium taxes; and (iv) inspection fees. The Company capitalizes policy acquisition costs to the extent recoverable, then the Company amortizes those costs over the contract period of the related policy. The deferred reinsurance ceding commission income is amortized over the effective period of the related insurance policies and is offset to deferred policy acquisition costs in the Company's Consolidated Balance Sheet.

The Company earns ceding commission on its quota share reinsurance contracts. The Company's accounting policy is to allocate ceding commission between policy acquisition costs and general and administrative expenses for financial reporting purposes. Ceding commission is allocated between policy acquisition costs and general and administrative expenses based upon the proportion these costs bear to production of new business. Ceding commissions received on ceded reinsurance contracts are netted against acquisition costs and are recognized ratably over the life of the assumed underlying contract. For the years ended December 31, 2025, 2024, and 2023, the Company earned ceding commission income of $72.9 million, $50.3 million and $64.8 million of which $54.8 million, $37.8 million and $48.7 million was allocable to policy acquisition costs.

Ceding commission income is deferred and recognized over the quota share contract period. The amount and rate of ceding reinsurance commissions earned on the net quota share contract can slide within a prescribed minimum and maximum, depending on loss performance and how future losses develop.

***Premium Deficiency Reserve***

At each reporting date, the Company determines whether it has a premium deficiency. A premium deficiency would result if the sum of the Company's expected losses, deferred policy acquisition costs, and policy maintenance costs (such as costs to store records and costs incurred to collect premiums and pay commissions) exceeded the Company's related unearned premiums plus investment income. Should the Company determine that a premium deficiency exists, the Company would record a reserve for the unrecoverable portion of deferred policy acquisition cost. At December 31, 2025 and 2024, the Company has recorded no premium deficiency reserve.

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***Reinsurance***

The Company follows industry practice of reinsuring a portion of its risks. Reinsurance involves transferring, or "ceding", all or a portion of the risk exposure on policies the Company writes to another insurer, known as a reinsurer. To the extent that the Company's reinsurers are unable to meet the obligations they assume under the Company's reinsurance agreements, the Company remains liable for the entire insured loss. As a result, a reasonable possibility exists that an estimated recovery may change significantly in the near term from the amounts included in the Company's consolidated financial statements.

The Company's reinsurance agreements are generally short-term, prospective contracts. The Company records an asset, prepaid reinsurance premiums, and a liability, reinsurance payable, for the entire contract amount upon commencement of new reinsurance agreements. The Company amortizes its prepaid reinsurance premiums over the 12-month contract period.

The Company's provisional ceding commissions that it receives in connection with its reinsurance contracts are recorded as an offset to deferred acquisition costs.

When the Company incurs losses recoverable under its reinsurance program, the Company records amounts recoverable from its reinsurers on paid losses plus an estimate of amounts recoverable on unpaid losses. The estimate of amounts recoverable on unpaid losses is a function of the Company's liability for unpaid losses associated with the reinsured policies; therefore, the amount changes in conjunction with any changes to the estimate of unpaid losses. Given that an estimate of amounts recoverable from reinsurers on unpaid losses may change at any point in the future because of its relation to the Company's reserves for unpaid losses, a reasonable possibility exists that an estimated recovery may change significantly from initial estimates.

The Company remains liable for claims payments if any reinsurer is unable to meet its obligations under the reinsurance agreements. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors concentration of credit risk arising from similar geographic regions, activities or economics characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company contracts with a diverse population of reinsurers to secure its annual reinsurance coverage, for which the excess of loss treaties generally become effective June 1st each year.

***Allowance for Credit Losses for Reinsurance Recoverables***

The allowance for credit losses for reinsurance recoverable is evaluated based on historical loss experience adjusted for current events and reasonable and supportable forecasts from both internal and external sources.

The Company monitors the credit quality of its reinsurance recoverables through the use of A.M. Best's Financial Strength rating ("FSR"), or in the absence of an FSR consideration of credit ratings issued by approved rating agencies such as S&P, Moody's, or Fitch. At December 31, 2025, the determination of the allowance for credit losses on reinsurance recoverables included analysis of (i) reinsurance recoverable balances by reinsurer FSR, (ii) estimated payment patterns associated with the claims underlying the reinsurance balances and (iii) historical default rates by reinsurer FSR as published by A.M. Best. In addition to the quantitative analysis, qualitative factors considered include but are not limited to (i) global reinsurer capital level, (ii) reinsurance market trends, (iii) the interest rate environment and (iv) the stressed global economy. Reinsurance recoverables are reported on the consolidated balance sheets net of the CECL allowance, if any.

***Long-Lived Assets—Property and Equipment***

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives as follows: building—40 years; computer hardware and software 3-years; office and furniture equipment—3 to 7 years. Leasehold improvements are amortized over the shorter of the lease term or the asset's useful life. Expenditures for improvements are capitalized to the property accounts. Replacements and maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred.

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***Capitalized Software***

Costs associated with the implementation of certain internal systems are capitalized and carried at the amount capitalized less accumulated amortization once placed in service and are included as a component of fixed assets on the Company's consolidated balance sheet. Costs capitalized include internal personnel costs, external developer costs, and interest. The implementation costs relate to systems built on software which the Company purchased or licensed and developed both internally and with third party vendors. As such, capitalized costs will be amortized over the term of the useful life of the software.

***Leases***

The Company leases office space under finance and operating leases with expiration dates through 2031. The Company determines whether an arrangement constitutes a lease and record lease liabilities and right-of-use assets on its consolidated balance sheets at lease commencement. The Company primarily uses its incremental borrowing rates for its operating leases (rates are not readily determinable) and implicit rates for its financing leases in determining the present value of lease payments. The Company measures right-of-use assets based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs the Company incurs and (iii) tenant incentives under the lease. The Company begins recognizing rent expense when the lessor makes the underlying asset available to the Company, the Company does not assume renewals or early terminations unless the Company is reasonably certain to exercise these options at commencement, and it does not allocate consideration between lease and non-lease components.

For short-term leases, the Company records rent expense in its consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred.

***Goodwill and Intangible Assets***

When the Company acquires a subsidiary or other business where it exerts significant influence, the fair value of the net tangible and intangible assets acquired is determined and compared to the amount paid for the subsidiary or business acquired. Any excess of the amount paid over the fair value of those net assets is considered to be goodwill. Any excess of carrying value over fair value is written down as an impairment. This evaluation is performed annually, during the fourth quarter or more frequently if facts and circumstances warrant. An impairment loss would be recognized if, and to the extent that, the carrying value of goodwill exceeded the implied value.

Acquired intangible assets are amortized over their useful lives on a straight-line basis over the period of expected benefit, generally up to 15 years. Intangible assets are assessed for impairment generally when events or circumstances indicate a potential impairment. If it is determined that the carrying amount of the asset is not recoverable, the asset is written down to fair value and an impairment loss is recognized. For the year ended December 31, 2025 and 2024, the Company did not identify any impairments. For the year ended December 31, 2023, the Company recorded an impairment of $767,000 associated with the Company construction affiliate resulting from changes to its operations.

***Unpaid Losses and Loss Adjustment Expenses***

The Company's reserves for unpaid losses and loss adjustment expenses represent the estimated ultimate cost of settling all reported claims plus all claims the Company incurred related to insured events that have occurred as of the reporting date, but that policyholders have not yet reported to the Company (incurred but not reported, or "IBNR").

The reserve for unpaid losses is the estimate of amounts necessary to settle all reported and unreported incurred claims for the ultimate cost of insured losses, based upon the facts of each case and the Company's experience with similar cases. Salvage and subrogation are deducted from the reserve for claims and claims expense on a cash basis. The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process. Reserve estimates are primarily derived using an actuarial estimation process in which historical loss patterns are applied to actual paid losses and reported losses (paid losses plus individual case reserves established by claim adjusters) for an accident or report year to create an estimate of how losses are likely to develop over time. Development factors are calculated quarterly and periodically throughout the year for data elements such as claims reported and settled, paid losses, and paid losses combined with case reserves. The historical development patterns for these data elements are used as the assumptions to calculate reserve estimates,

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including the reserves for reported and unreported claims. Reserve estimates are regularly reviewed and updated, using the most current information available. Any resulting re-estimates are reflected in current results of operations.

The Company reports its reserves for unpaid losses and loss adjustment expenses gross of the amounts related to unpaid losses recoverable from reinsurers and reports loss and loss adjustment expenses net of amounts ceded to reinsurers. The Company does not discount its loss reserves for financial statement purposes.

***Other Revenue***

Our insurance affiliates may charge policyholders a policy fee on each policy written. The Company recognizes the income immediately when collected, which coincide with related service obligations. The Company also charges pay-plan fees to policyholders that pay its premiums in more than one installment and records the fees as income when collected. Other income also includes rental income due under non-cancelable leases for space at the Company's commercial property.

***Assessments***

Guaranty fund and other insurance-related assessments imposed upon the Company's insurance company affiliates are recorded as policy acquisition costs in the period the regulatory agency imposes the assessment. To recover assessments which are paid in advance to the guaranty fund or other insurance-related entity, the Company recoups such assessments from the Company's policyholders in the form of a policy surcharge. Once the recoupment period begins, the entire recoupment amount is recorded as an asset on the Company's balance sheet. There were no such assessments during the periods presented.

The Company collects pass through assessments imposed upon policyholders as a policy surcharge and records the amounts collected as a liability until the Company remits the amounts to the regulatory agency that imposed the assessment.

***Convertible Notes***

In August 2017 and September 2017, the Company issued collectively $136.8 million of 5.875% Convertible Senior Notes (the "Convertible Notes") due August 1, 2037. As of December 31, 2025 and 2023, the Company has approximately $885,000 of the Convertible Notes outstanding. This amount is net of $21.1 million of Convertible Notes reacquired and held by an insurance company subsidiary. Refer to **Note 14** "*Long-Term Debt"* to these consolidated financial statements for further information**.** 

***Stock-Based Compensation***

The Company measures stock-based compensation at the grant date based on the fair value of the award and recognizes stock-based compensation expense over the requisite vesting period in accordance with ASC Topic 718, *Compensation—Stock Compensation*. For awards with performance-based vesting conditions expense is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense will be recorded as if the award had been vesting on a straight line basis from the award date. The award will continue to be expensed on a straight-line basis until probability of achieving the performance-based conditions changes, if applicable.

***Earnings Per Share***

Basic net earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted net earnings per share is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding during the reported period. Common equivalent shares include incremental shares from diluted vested and unvested shares of restricted common stock and convertible notes outstanding during the period based on the "if converted" method under the guidance of ASU 2020-06.

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***Income tax*** 

Income taxes are accounted for under the asset and liability method, that recognizes the amount of income taxes payable or refundable for the current year and recognizes deferred tax assets and liabilities based on the tax rates expected to be in effect during the periods in which the temporary differences reverse. Temporary differences arise when income or expenses are recognized in different periods in the consolidated financial statements than on the tax returns. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that all, or some portion, of the benefits related to deferred tax assets will not be realized. Income taxes includes both estimated federal and state income taxes.

***Recently adopted accounting guidance***

***Accounting Standards Update No. ASU 2023-09***. In December 2023, the Financial Accounting Standards Board ("FASB") issued ***Accounting Standards Update No. 2023-09 ("ASU 2023-09")*** Income Taxes ***(Topic 740)***: Improvements to Income Tax Disclosures. This update enhances income tax disclosures by requiring public entities to report income tax expense disaggregated by federal, state, and foreign taxes, with further detail on specific jurisdictions over a quantitative threshold. In addition, public entities must also separately disclose reconciling items equal to or greater than five percent of pretax income from operations by the applicable federal statutory rate. The Company has adopted this guidance on a prospective basis for the fiscal year beginning on January 1, 2025 and resulting in enhanced income tax disclosures beginning with the Company's consolidated financial statements for the year ending December 31, 2025.

***Recent accounting guidance not adopted***

***Accounting Standards Update No. ASU 2025-06***. On September 18, 2025, the FASB issued updated guidance under ASC 350-40 on the accounting for internal-use software costs. The updated guidance removes all references to software development project stages so that the guidance is neutral to different software development methods and allows for the application of iterative software development methods such as agile. The updated guidance requires that an entity capitalize software costs when both: 1) management has authorized and committed to the funding of the software project, and 2) it is probable that the project will be completed, and the software will be used to perform its intended function. Additionally, the updated guidance clarifies that internal and external training costs and maintenance costs must be expensed as incurred.

The updated guidance is effective for the quarter ended March 31, 2028, and can be applied on a prospective, modified, or retrospective transition approach. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company's results of operations, financial position, or liquidity.

***ASU 2025-01 and 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)***. This ASU requires disaggregated disclosure of certain income statement expenses, such as employee compensation and depreciation, for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The ASU also requires disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. **ASU 2025-01** amends the effective date of **ASU 2024-03**, clarifying that "public business entities are required to adopt the guidance in annual reporting beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027." In addition, early adoption of the ASU is permitted. The Company is evaluating the guidance impact on the current presentation of the Company's income statement and expects the adoption to result in additional disclosures for certain expenses.

There are other new accounting pronouncements issued by the FASB that the Company has adopted or will adopt, as applicable. The Company does not believe any of these new accounting pronouncements have had, or will have, a material impact on its consolidated financial statements or disclosures.

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**Note 2. Investments** 

The amortized cost, gross unrealized gains and losses, and fair value of the Company's debt securities available-for-sale are as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| ***December 31, 2025*** | ***Cost or Adjusted /<br>Amortized Cost*** | ***Gross Unrealized<br>Gains*** | ***Gross Unrealized<br>Losses*** | ***Fair Value*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| ***Debt Securities Available-for-sale*** |  |  |  |  |
| &nbsp;&nbsp;U.S. government and agency securities | $89380 | $1014 | $210 | $90184 |
| &nbsp;&nbsp;States, municipalities and political subdivisions | 347487 | 2147 | 14152 | 335482 |
| &nbsp;&nbsp;Corporate bonds | 226541 | 3431 | 4250 | 225722 |
| &nbsp;&nbsp;Mortgage-backed securities <sup>(1)</sup> | 59087 | 339 | 1826 | 57600 |
| &nbsp;&nbsp;Asset-backed securities | 1199 |  | 30 | 1169 |
| &nbsp;&nbsp;Other | 3080 |  |  | 3080 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | $726774 | $6931 | $20468 | $713237 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Includes securities at December 31, 2025 with a carrying amount $3.8 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2024. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time.

---

| | | | | |
|:---|:---|:---|:---|:---|
| ***December 31, 2024*** | ***Cost or Adjusted /<br>Amortized Cost*** | ***Gross Unrealized<br>Gains*** | ***Gross Unrealized<br>Losses*** | ***Fair Value*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| ***Debt Securities Available-for-sale*** |  |  |  |  |
| &nbsp;&nbsp;U.S. government and agency securities <sup>(1)</sup> | $93416 | $245 | $900 | $92761 |
| &nbsp;&nbsp;States, municipalities and political subdivisions | 326620 | 162 | 25881 | 300901 |
| &nbsp;&nbsp;Corporate bonds | 246795 | 903 | 9009 | 238689 |
| &nbsp;&nbsp;Mortgage-backed securities <sup>(1)</sup> | 17366 |  | 2672 | 14694 |
| &nbsp;&nbsp;Asset-backed securities | 2588 |  | 88 | 2500 |
| &nbsp;&nbsp;Other | 6005 | 5 |  | 6010 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | $692790 | $1315 | $38550 | $655555 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Includes securities at December 31, 2024 with a carrying amount of $23.9 million and $6.7 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018 and 2024, respectively. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time.

The table below summarizes the Company's fixed maturity securities at December 31, 2025 and 2024 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***December 31, 2025*** | ***December 31, 2025*** | ***December 31, 2025*** | ***December 31, 2025*** |
|  | ***Cost or Amortized Cost*** | ***Percent of Total*** | ***Fair Value*** | ***Percent of Total*** |
| ***Debt Securities Available-for-sale*** | *(in thousands)* |  | *(in thousands)* |  |
| &nbsp;&nbsp;Due in one year or less | $100223 | 14% | $99407 | 14% |
| &nbsp;&nbsp;Due after one year through five years | 401766 | 55% | 394603 | 55% |
| &nbsp;&nbsp;Due after five years through ten years | 151491 | 21% | 147346 | 21% |
| &nbsp;&nbsp;Due after ten years | 73293 | 10% | 71881 | 10% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $726774 | 100% | $713237 | 100% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***December 31, 2024*** | ***December 31, 2024*** | ***December 31, 2024*** | ***December 31, 2024*** |
|  | ***Cost or Amortized Cost*** | ***Percent of Total*** | ***Fair Value*** | ***Percent of Total*** |
| ***Debt Securities Available-for-sale*** | *(in thousands)* |  | *(in thousands)* |  |
| &nbsp;&nbsp;Due in one year or less | $92493 | 13% | $91333 | 14% |
| &nbsp;&nbsp;Due after one year through five years | 395362 | 54% | 379218 | 58% |
| &nbsp;&nbsp;Due after five years through ten years | 170853 | 24% | 154387 | 24% |
| &nbsp;&nbsp;Due after ten years | 34082 | 5% | 30617 | 5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $692790 | 95% | $655555 | 100% |

---

------

***Net Realized Gains on Debt Securities and Other Investments***

The proceeds from the sale of debt securities were $6.0 million, $6.5 million and $76.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The following table presents net realized gains (losses) on the Company's debt securities available-for-sale for the years ended December 31, 2025, 2024 and 2023, respectively:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***For the Years ended December 31,*** | ***For the Years ended December 31,*** | ***For the Years ended December 31,*** | ***For the Years ended December 31,*** | ***For the Years ended December 31,*** | ***For the Years ended December 31,*** |
|  | ***2025*** | ***2025*** | ***2024*** | ***2024*** | ***2023*** | ***2023*** |
|  | ***Realized Gains (Losses)*** | ***Fair Value at Sale*** | ***Realized Gains (Losses)*** | ***Fair Value at Sale*** | ***Realized Gains (Losses)*** | ***Fair Value at Sale*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| ***Debt Securities Available-for-sale*** |  |  |  |  |  |  |
| &nbsp;&nbsp; Realized gains | $3 | $4053 | $52 | $5702 | $2 | $22220 |
| &nbsp;&nbsp; Realized losses | (110) | 1965 | (5) | 794 | (638) | 54672 |
| Net realized (losses) gains | $(107) | $6018 | $47 | $6496 | $(636) | $76892 |

---

The following table presents the reconciliation of net realized gains on debt securities and other investments on the Company's investments reported for the years ended December 31, 2025, 2024 and 2023, respectively:

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** | ***2023*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Gross realized gains on sales of available-for-sale securities | $3 | $52 | $2 |
| Gross realized losses on sales of available-for-sale securities | (110) | (5) | (638) |
| Gross realized gains on sales of other investments | 2820 |  | 1900 |
| Impairment recovery from other investments |  | 4 |  |
| Impairment charge in other investments |  | (757) | (2236) |
| &nbsp;&nbsp;Net realized gains on debt securities and other investments | $2713 | $(705) | $(972) |

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***Equity Investments***

For the years ended December 31, 2025, 2024 and 2023, the Company had no net realized and unrealized gains or (losses) reported.

The following table presents the Company's equity investments as of December 31, 2025 and 2024, respectively.

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| | | |
|:---|:---|:---|
| ***For the Year Ended December 31,*** | ***2025*** | ***2024*** |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Membership Shares | 1064 | 1936 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity investments | $1064 | $1936 |

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***Net Investment Income***

The following table summarizes the Company's net investment income by major investment category for the years ended December 31, 2025, 2024 and 2023, respectively:

---

| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** | ***2023*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Debt securities available-for-sale | $24200 | $18151 | $16848 |
| Equity securities | 78 | 127 | 222 |
| Cash and cash equivalents | 13594 | 20881 | 8398 |
| Other investments | 1217 | 906 | 2309 |
| Net investment income | 39089 | 40065 | 27777 |
| Investment expenses | 1933 | 3434 | 2021 |
| &nbsp;&nbsp;Net investment income, less investment expenses | $37156 | $36631 | $25756 |

---

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***Unrealized Losses on Debt Securities***

The following tables present, for all debt securities available-for-sale in an unrealized loss position, for which no allowance for credit loss is established (including securities pledged), the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***Less Than Twelve Months*** | ***Less Than Twelve Months*** | ***Less Than Twelve Months*** | ***Twelve Months or More*** | ***Twelve Months or More*** | ***Twelve Months or More*** |
| ***December 31, 2025*** | ***Number of<br>Securities*** | ***Gross<br>Unrealized<br>Losses*** | ***Fair Value*** | ***Number of<br>Securities*** | ***Gross<br>Unrealized<br>Losses*** | ***Fair Value*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| ***Debt Securities Available-for-sale*** |  |  |  |  |  |  |
| &nbsp;&nbsp;U.S. government and agency securities |  | $— | $— | 12 | $210 | $11164 |
| &nbsp;&nbsp;States, municipalities and political subdivisions | 7 | 55 | 10937 | 302 | 14097 | 232460 |
| &nbsp;&nbsp;Corporate bonds | 9 | 11 | 11734 | 115 | 4239 | 77501 |
| &nbsp;&nbsp;Mortgage-backed securities |  |  |  | 112 | 1826 | 13336 |
| &nbsp;&nbsp;Asset-backed securities |  |  |  | 20 | 30 | 1170 |
| &nbsp;&nbsp;Other |  |  |  |  |  |  |
| ***Total*** | 16 | $66 | $22672 | 561 | $20402 | $335631 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***Less Than Twelve Months*** | ***Less Than Twelve Months*** | ***Less Than Twelve Months*** | ***Twelve Months or More*** | ***Twelve Months or More*** | ***Twelve Months or More*** |
| ***December 31, 2024*** | ***Number of<br>Securities*** | ***Gross<br>Unrealized<br>Losses*** | ***Fair Value*** | ***Number of<br>Securities*** | ***Gross<br>Unrealized<br>Losses*** | ***Fair Value*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| ***Debt Securities Available-for-sale*** |  |  |  |  |  |  |
| &nbsp;&nbsp;U.S. government and agency securities | 18 | $294 | $29710 | 19 | $606 | $18541 |
| &nbsp;&nbsp;States, municipalities and political subdivisions | 26 | 803 | 29440 | 342 | 25078 | 249317 |
| &nbsp;&nbsp;Corporate bonds | 44 | 496 | 33391 | 170 | 8513 | 114361 |
| &nbsp;&nbsp;Mortgage-backed securities | 1 |  |  | 122 | 2672 | 14694 |
| &nbsp;&nbsp;Asset-backed securities |  |  |  | 31 | 88 | 2501 |
| &nbsp;&nbsp;Other |  |  |  |  |  |  |
| ***Total*** | 89 | $1593 | $92541 | 684 | $36957 | $399415 |

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The Company's unrealized losses on debt securities have not been recognized because the securities are of a high credit quality with investment grade ratings. After reviewing the Company's portfolio, if (i) the Company does not have the intent to sell, or (ii) it is more likely than not it will not be required to sell the security before its anticipated recovery, then the Company's intent is to hold the investment securities to recovery, or maturity if necessary to recover the decline in valuation as prices accrete to par. However, the Company's intent may change prior to maturity due to certain types of events, which include, but are not limited to, changes in the financial markets, the Company's analysis of an issuer's credit metrics and prospects, changes in tax laws or the regulatory environment, or as a result of significant unforeseen changes in liquidity needs. As such, the Company may, from time to time, sell invested assets subsequent to the balance sheet date that it did not intend to sell at the balance sheet date. Conversely, the Company may not sell invested assets that the Company asserted it intended to sell at the balance sheet date. Such changes in intent are due to unforeseen events occurring subsequent to the balance sheet date.

The Company evaluated the available for sale investments that were in an unrealized loss position for the years ended December 31, 2025 and 2024 and determined that the decline in fair value was caused by rising interest rates, resulting in no credit loss allowance recorded as of December 31, 2025 or December 31, 2024.

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***Other Investments*** 

*Non-Consolidated Variable Interest Entities ("VIEs")*

The Company makes passive investments in limited partnerships ("LPs"), which is accounted for using the equity method, with income reported in net realized and unrealized gains and losses. The Company also makes passive investments in a Real Estate Investment Trust ("REIT"), which are accounted for using the measurement alternative method, which is reported at cost less impairment (if any), plus or minus changes from observable price changes, as described in the table below.

The following table summarizes the Company's non-consolidated VIEs by category at December 31, 2025 and 2024 (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | ***Carrying Value*** | ***Carrying Value*** |
| ***For the Year Ended December 31,*** | ***Balance Sheet*** | ***Method*** | ***2025*** | ***2024*** |
| &nbsp;&nbsp;&nbsp;&nbsp;Other Real Estate LLC<sup>(1)</sup> | Other Investments | Equity Method | $472 | $549 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real Estate Corporation<sup>(2)</sup> | Other Investments | Measure Alternative | 446 | 542 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred Membership/Interest <sup>(3)</sup> | Other Investments | Measure Alternative |  | 4490 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-real estate related <sup>(4)</sup> | Other Investments | Equity Method | 367 | 371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-consolidated VIEs |  |  | $1285 | $5952 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For the year ended December 31, 2025 and 2024 the Company received principal pay downs in the amount of and $77,138 and $134,152 respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)For the year December 31, 2025, and 2024 the Company received return on capital distributions in the amounts of $96,000 and $216,000, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The preferred interest agreement dated June 2022 in aggregate of $8.5 million was subject to fixed principal and interest schedules with a maturity date of July 1, 2027. In December 31, 2023, the Company sold $4.0 million of its preferred interest to a nonaffiliated party. For the year December 31, 2025, the Company received $4.5 million as full principal payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)The Company does not have the ability to redeem or withdraw from the funds, or to sell, assign, or transfer its investment, without the consent of the General Partner or Managers of each fund, but will receive distributions based on the liquidation of the underlying assets and interest processed from the underlying assets. Semi-annually, the Company reviews the investments for impairments based on activity and/or communications received from the General Partner.

The following table summarizes the carrying value and maximum loss exposure of the Company's non-consolidated VIEs at December 31, 2025 and 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***As of December 31, 2025*** | ***As of December 31, 2025*** | ***As of December 31, 2024*** | ***As of December 31, 2024*** |
|  | ***Carrying Value*** | ***Maximum Loss Exposure*** | ***Carrying Value*** | ***Maximum Loss Exposure*** |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments in non-consolidated VIEs - Equity method | $839 | $839 | $920 | $920 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments in non-consolidated VIEs - Measurement alternative | $446 | $446 | $5032 | $5032 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total non-consolidated VIEs** | $1285 | $1285 | $5952 | $5952 |

---

The Company's maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported as "other investments" in the Company's consolidated balance sheet. No agreements exist requiring the Company to provide additional funding to any of the non-consolidated VIEs in excess of the Company's initial investment.

**Note 3. Intangible Assets, net** 

For the years ended December 31, 2025 and 2024, other intangible assets, net were $30.2 million and $36.4 million, respectively. These amounts include $1.3 million relating to insurance licenses classified as an indefinite lived intangible.

Management reviewed intangibles and concluded no circumstances or events occurred that would indicate the carrying value of the intangible assets may not be recoverable other than what was recorded during the second quarter of 2023. During the second quarter of 2023, management impaired certain named intangible assets with a carrying value of $767,000 associated with the Company's construction affiliate resulting from changes to its operations.

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***Intangible Assets, net***

Our intangible assets resulted primarily from the acquisitions of Zephyr Acquisition Company and NBIC Holdings, Inc. and consist of brand, agent relationships, renewal rights, customer relations, trade names, non-competes and insurance licenses. Finite-lived intangibles assets are amortized over their useful lives from one to fifteen years.

The tables below detail the finite-lived intangible assets, net as of December 31, 2025 and 2024, respectively (amounts in thousands):

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| | | |
|:---|:---|:---|
|  | For the Year Ended December 31, | For the Year Ended December 31, |
|  | **2025** | **2024** |
| **Amortizing intangible assets** | (in thousands) | (in thousands) |
| &nbsp;&nbsp;Agent relationships | $15500 | $15500 |
| &nbsp;&nbsp;Renewal rights | 57200 | 57200 |
| &nbsp;&nbsp;Trade names | 9000 | 9000 |
| &nbsp;&nbsp;Non-compete | 4790 | 4790 |
| &nbsp;&nbsp;Total | 86490 | 86490 |
| &nbsp;&nbsp;Accumulated amortization | (57616) | (51433) |
| Total infinite-lived intangible assets, net | 28874 | 35057 |
| **Indefinite-lived intangible assets:** |  |  |
| &nbsp;&nbsp;License acquired | 1315 | 1315 |
| Total intangible assets, net | $30189 | $36372 |

---

Estimated annual pretax amortization of intangible assets for each of the next five years and thereafter is as follows (in thousands):

---

| | |
|:---|:---|
| **Year** | **Amount** |
| 2026 | $6033 |
| 2027 | 5836 |
| 2028 | 3913 |
| 2029 | 3813 |
| 2030 | 3813 |
| Thereafter | 5464 |
|  | $28874 |

---

Amortization expense of intangible assets was $6.2 million, $6.2 million and $6.4 million for the years ending December 31, 2025, 2024 and 2023, respectively.

**Note 4. Earnings Per Share**

The following table sets forth the computation of basic and diluted net income per share for the periods indicated:

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** | ***2023*** |
| **Basic earnings per share:** |  |  |  |
| &nbsp;&nbsp;Net income attributable to common stockholders (000's) | $195594 | $61539 | $45307 |
| &nbsp;&nbsp;Weighted average shares outstanding | 30890609 | 30595348 | 26193065 |
| **Basic earnings per share:** | $**6.33** | $**2.01** | $**1.73** |
| **Diluted earnings per share:** |  |  |  |
| &nbsp;&nbsp;Net income attributable to common stockholders (000's) | $195594 | $61539 | $45307 |
| &nbsp;&nbsp;Weighted average shares outstanding | 30890609 | 30595348 | 26193065 |
| **Add: Effect of dilutive securities** |  |  |  |
| &nbsp;&nbsp;5.875% Convertible Notes | 59289 | 59263 | 59263 |
| &nbsp;&nbsp;Diluted weighted average common shares outstanding | 30949899 | 30654611 | 26252328 |
| **Diluted earnings per share:** | $**6.32** | $**2.01** | $**1.73** |

---

Basic earnings per share is computed by dividing net income by the weighted-average number of common stock outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common stock outstanding during

------

the reporting period. The dilutive shares the Company considers in its diluted earnings per share calculation relate to its outstanding 5.875% Convertible Notes.

**Note 5. Fair Value Measurements** 

Certain of the Company's assets are carried at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Accordingly, when market observable data are not readily available, the Company's own assumptions are set to reflect those that market participants would be presumed to use in pricing the asset or liability at the measurement date. Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the level of judgment associated with inputs used to measure their fair value and the level of market price observability, as follows:

Level 1 – Unadjusted quoted prices are available in active markets for identical assets/liabilities as of the reporting date.

Level 2 – Valuations based on observable inputs, such as quoted prices similar assets or liabilities at the measurement date; quoted prices in the markets that are not active; or other inputs that are observable, either directly or indirectly.

Level 3 – Pricing inputs are unobservable and significant to the overall fair value measurement, and the determination of fair value requires significant management judgment or estimation.

For the Company's investments in U.S. government securities that do not have prices in active markets, agency securities, state and municipal governments, and corporate bonds, the Company obtains the fair values from its third-party valuation service and evaluates the relevant inputs, assumptions, methodologies and conclusions associated with such valuations. The valuation service calculates prices for the Company's investments in the aforementioned security types on a month-end basis by using several matrix-pricing methodologies that incorporate inputs from various sources. The model the valuation service uses to price U.S. government securities and securities of states and municipalities incorporates inputs from active market makers and inter-dealer brokers. To price corporate bonds and agency securities, the valuation service calculates non-call yield spreads on all issuers, uses option-adjusted yield spreads to account for any early redemption features, then adds final spreads to the U.S. Treasury curve as of quarter end. The inputs the valuation service uses in their calculations are not quoted prices in active markets, but are observable inputs, and therefore represent Level 2 inputs.

The following table presents information about the Company's assets measured at fair value on a recurring basis. The Company assesses the levels for the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Company's accounting policy regarding the recognitions of transfers between levels of the fair value hierarchy.

For the years ended December 31, 2025 and 2024, there were no transfers in or out of Level 1, 2, and 3.

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| | | | | |
|:---|:---|:---|:---|:---|
| ***December 31, 2025*** | ***Total*** | ***Quoted Prices in Active Markets for Identical Assets (Level 1)*** | ***Significant Other Observable Inputs (Level 2)*** | ***Significant Unobservable Inputs (Level 3)*** |
| ***Financial assets:*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| &nbsp;&nbsp;Cash and cash equivalents | $559274 | $559274 | $— | $— |
| &nbsp;&nbsp;Restricted cash | $13307 | $13307 | $— | $— |
| ***Debt Securities Available-for-sale*** |  |  |  |  |
| &nbsp;&nbsp;U.S. government and agency securities | $90184 | $— | $90184 | $— |
| &nbsp;&nbsp;States, municipalities and political subdivisions | 335482 |  | 335482 |  |
| &nbsp;&nbsp;Corporate bonds | 225722 |  | 225722 |  |
| &nbsp;&nbsp;Mortgage-backed securities | 57600 |  | 57600 |  |
| &nbsp;&nbsp;Asset-backed securities | 1169 |  | 1169 |  |
| &nbsp;&nbsp;Other | 3080 |  | 3080 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total debt securities | $713237 | $— | $713237 | $— |
| ***Equity Securities*** |  |  |  |  |
| &nbsp;&nbsp;Common stock | 1064 | 1064 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total debt securities and equity securities | $714301 | $1064 | $713237 | $— |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| ***December 31, 2024*** | ***Total*** | ***Quoted Prices in Active Markets for Identical Assets (Level 1)*** | ***Significant Other Observable Inputs (Level 2)*** | ***Significant Unobservable Inputs (Level 3)*** |
| ***Financial assets:*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| &nbsp;&nbsp;Cash and cash equivalents | $452666 | $452666 | $— | $— |
| &nbsp;&nbsp;Restricted cash | $10979 | $10979 | $— | $— |
| ***Debt Securities Available-for-sale*** |  |  |  |  |
| &nbsp;&nbsp;U.S. government and agency securities | $92761 | $— | $92761 | $— |
| &nbsp;&nbsp;States, municipalities and political subdivisions | 300901 |  | 300901 |  |
| &nbsp;&nbsp;Corporate bonds | 238689 |  | 238689 |  |
| &nbsp;&nbsp;Mortgage-backed securities | 14694 |  | 14694 |  |
| &nbsp;&nbsp;Asset-backed securities | 2500 |  | 2500 |  |
| &nbsp;&nbsp;Other | 6010 |  | 6010 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total debt securities | $655555 | $— | $655555 | $— |
| ***Equity Securities*** |  |  |  |  |
| &nbsp;&nbsp;Common stock | 1936 | 1936 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total debt securities and equity securities | $657491 | $1936 | $655555 | $— |

---

**Non-recurring fair value measurements**

Assets and liabilities that are measured at fair value on a non-recurring basis include intangible assets which are recognized at fair value during the period in which an acquisition is completed, from updated estimates and assumptions during the measurement period, or when they are considered to be impaired. To evaluate such assets for a potential impairment, the Company determines the fair value of the intangible assets using a combination of a discounted cash flow approach and market approaches, which contain significant unobservable inputs and therefore are considered a Level 3 fair value measurement. The unobservable inputs in the analysis generally include future cash flow projections and a discount rate.

During the second quarter of 2023, the Company recorded an impairment of $767,000 of named intangible assets associated with a construction division given management changes to its operations.

**Note 6. Other Comprehensive Income**

The following table is a summary of other comprehensive income and discloses the tax impact of each component of other comprehensive income for the years ended December 31, 2025, 2024 and 2023, respectively:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2025*** | ***2025*** | ***2024*** | ***2024*** | ***2024*** | ***2023*** | ***2023*** | ***2023*** |
|  | ***Pre-tax*** | ***Tax*** | ***After-<br>tax*** | ***Pre-<br>tax*** | ***Tax*** | ***After-<br>tax*** | ***Pre-tax*** | ***Tax*** | ***After-<br>tax*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| **Other comprehensive income** |  |  |  |  |  |  |  |  |  |
| Change in unrealized gains on investments, net | $23588 | (5620) | $17968 | $8771 | (2086) | $6685 | $23388 | (5539) | $17850 |
| Reclassification adjustment of realized losses (gains) included in net income | 107 | (26) | 81 | (51) | 12 | (39) | 636 | (151) | 484 |
| **Effect on other comprehensive income** | $23695 | $(5646) | $18049 | $8720 | $(2074) | $6646 | $24024 | $(5690) | $18335 |

---

**Note 7. Other Assets**

The following table summarizes the Company's other assets as of December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
| ***Description*** | ***December 31, 2025*** | ***December 31, 2024*** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| Other amounts receivable | $12129 | $2542 |
| State underwriting pooling & assoc. | 2111 | 2156 |
| Other prepaid expenses | 5821 | 4277 |
| Prepaid Premium taxes | 12909 |  |
| Unallocated Remittances | 853 | 2665 |
| &nbsp;&nbsp;**Total other assets** | $33823 | $11640 |

---

------

Prepaid premium taxes relates to amounts associated under the Florida Department of Revenue premium tax credit program, which the Company provided to its policyholders as required by Florida law. Included in other amounts receivable is a promissory note issued in connection with the sale of the Company's real estate to a non-affiliated party in July 2025. The note bears interest at 7% per annum and requires monthly interest payments beginning August 1, 2025. As of December 31, 2025, the outstanding principal balance of the note was approximately $11.07 million. On January 23, 2026, the Company received full payment on the $11.0 million promissory note and the accrued but unpaid interest of $48,521.

**Note 8. Leases**

The Company has entered into operating and financing leases primarily for real estate and vehicles. The Company will determine whether an arrangement is a lease at inception of the agreement. The operating leases have terms of one to ten years, and often include one or more options to renew. These renewal terms can extend the lease term from two to ten years and are included in the lease term when it is reasonably certain that the Company will exercise the option. The Company considers these options in determining the lease term used in establishing the Company's right-of-use assets and lease obligations. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Because the rate implicit in each operating lease is not readily determinable, the Company uses its incremental borrowing rate to determine present value of the lease payments. The Company used the implicit rates within the finance leases.

The components of lease costs were as follows (in thousands) for the respective years:

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| | | |
|:---|:---|:---|
|  | ***December 31, 2025*** | ***December 31, 2024*** |
| &nbsp;&nbsp;Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations | $1567 | $1614 |
| **Finance lease cost:** |  |  |
| &nbsp;&nbsp;Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations | 2484 | 2522 |
| &nbsp;&nbsp;Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations | 690 | 793 |
| **Total finance lease cost** | $3174 | $3315 |
| &nbsp;&nbsp;Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations | $1177 | $1475 |
| &nbsp;&nbsp;Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations | $124 | $77 |

---

Right-of-use lease asset and lease liability was as follows (in thousands):

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| | | |
|:---|:---|:---|
| **Operating Leases** | ***December 31, 2025*** | ***December 31, 2024*** |
| &nbsp;&nbsp;Right of use assets | $4878 | $5850 |
| &nbsp;&nbsp;Lease liability | $5800 | $6945 |
| **Finance Leases** |  |  |
| &nbsp;&nbsp;Right of use assets | $12598 | $15082 |
| &nbsp;&nbsp;Lease liability | $15587 | $18071 |

---

Supplemental cash flow information related to the Company's operating and financial leases as follows (in thousands):

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| | | |
|:---|:---|:---|
| **Operating Leases** | ***December 31, 2025*** | ***December 31, 2024*** |
| &nbsp;&nbsp;Lease liability payment | $(1398) | $(1131) |
| **Finance Leases** |  |  |
| &nbsp;&nbsp;Lease liability payment | $(2231) | $(2315) |

---

------

Weighted-average remaining lease term and discount rate for the Company's operating and financing leases was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Weighted-average remaining lease term** | ***December 31, 2025*** |  | ***December 31, 2024*** |  |
| &nbsp;&nbsp;Operating lease | 2.10 | yrs. | 4.60 | yrs. |
| &nbsp;&nbsp;Finance lease | 5.22 | yrs. | 6.19 | yrs. |
| **Weighted-average discount rate** |  |  |  |  |
| &nbsp;&nbsp;Operating lease | 5.33 | % | 5.36 | % |
| &nbsp;&nbsp;Finance lease | 4.12 | % | 4.14 | % |

---

Maturities of lease liabilities for financing and operating leases were as follows as of December 31, 2025 (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***Financing Lease*** | ***Operating Lease*** |
| 2026 | $3216 | 1748 |
| 2027 | 3190 | 1659 |
| 2028 | 3270 | 1693 |
| 2029 | 3351 | 1257 |
| 2030 | 3436 | 41 |
| 2031and thereafter | 864 |  |
| Total lease payments | 17327 | 6398 |
| &nbsp;&nbsp;Less: imputed interest | 1740 | 598 |
| Present value of lease liabilities | $15587 | $5800 |

---

**Note 9. Property and Equipment**

Property and equipment, net consists of the following at December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| Land | $— | $2582 |
| Building |  | 9599 |
| Computer hardware and software | 41035 | 33236 |
| Office furniture and equipment | 1498 | 1498 |
| Tenant and leasehold improvements | 5462 | 11023 |
| Vehicle fleet | 234 | 515 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total, at cost | 48229 | 58453 |
| Less: accumulated depreciation and amortization | (19975) | (20373) |
| Property and equipment, net | $28254 | $38080 |

---

For the year ended December 31, 2025, the Company capitalized an additional $7.3 million of internal-use software development for the new policy, billing, and claims system. The Company is incurring additional costs as new capabilities and products are be added to the system, which will be capitalized as appropriate. During the second quarter of 2025, the Company began the development to incorporate the Company's commercial products into the system, and the Company estimates completion of the development and full integration by the end of 2026. Once placed in service, the Company will amortize the capitalized internally developed software costs over the estimated useful life of 7 years, on a straight-line basis.

Depreciation and amortization expense for property and equipment was approximately $6.5 million, $3.4 million and $2.4 million for the year ended December 31, 2025, 2024 and 2023, respectively. On July 23, 2025, the Company sold its real estate consisting of 13 acres of land, two buildings and a parking garage for $16.0 million less fees and commission of $674,640. The Company recognized a net gain of approximately $2.7 million from the sale and reported the transaction within the Company's Consolidated Statement of Operations in net realized gains on debt securities and other investments. As part of the sale consideration, the buyer issued a promissory note to the Company for $11.0 million with a maturity date on January 23, 2026, which accrues interest at a rate of 7% per annum and under which the buyer agreed to make regularly scheduled monthly payments of all accrued unpaid interest due as of each payment date, commencing on August 1, 2025. For the year ended December 31, 2025, the Company had recognized $343,863 as interest income from the promissory note. Also, as part of the building sale transaction the Company paid off the associated $10.8 million mortgage loan.

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**Note 10. Deferred Reinsurance Ceding Commission**

The Company defers certain income in connection with its quota share reinsurance contracts. The deferred reinsurance ceding commission ("DRCC") is deferred and earned subject to the terms of the reinsurance agreements. Ceding commission on quota share agreements generally includes a provisional ceding rate, subject to sliding scale adjustments based on the loss experience of the reinsurers. Adjustments are reflected in current operations. The Company allocates 75% of ceding commission income to policy acquisition costs and 25% of ceding commission income to general and administrative expenses.

The deferred reinsurance ceding commission income is amortized over the effective period of the related insurance policies. For the year ended December 31, 2025, 2024 and 2023 the Company allocated ceding commission income of $54.8 million, $37.8 million and $48.7 million to policy acquisition costs and $18.1 million, $12.5 million and $16.1 million to general and administrative expense, respectively.

The table below depicts the activity with regard to deferred reinsurance ceding commission during the years ended December 31, 2025, 2024 and 2023.

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| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| &nbsp;&nbsp;Beginning balance of deferred ceding commission income | $42561 | $33627 | $42758 |
| &nbsp;&nbsp;Ceding commission deferred | $72603 | 59205 | 55639 |
| &nbsp;&nbsp;Less: ceding commission earned | $(72951) | (50271) | (64770) |
| Ending balance of deferred ceding commission income | $42213 | $42561 | $33627 |

---

Deferred ceding commission income is recorded as an offset to deferred policy acquisition costs in the Company's Consolidated Balance Sheet.

**Note 11. Deferred Policy Acquisition Costs, net**

The Company defers certain costs in connection with written policies, called deferred policy acquisition costs ("DPAC"), which are amortized over the effective period of the related insurance policies. As described in Note 10. Deferred Reinsurance Ceding Commission, the Company records provisional ceding commission that it receives in connection with the Company's reinsurance contracts as an offset to deferred policy acquisition costs. Therefore, deferred policy acquisition costs are presented net of deferred reinsurance ceding commission.

The Company anticipates that its DPAC, net will be fully recoverable in the near term. The table below depicts the activity with regard to DPAC, net for the years ended December 31, 2025 and 2024:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Beginning Balance | $63204 | $69256 | $56859 |
| &nbsp;&nbsp;&nbsp;&nbsp;Policy acquisition costs deferred | $271007 | 271566 | 249922 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization | $(227454) | $(235057) | $(203898) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unearned ceding commission | $(42213) | (42561) | (33627) |
| Ending Balance | $64544 | $63204 | $69256 |

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**Note 12. Reinsurance** 

**Overview**

**<u>Reinsurance</u>**

In order to limit the Company's potential exposure to individual risks and catastrophic events, the Company purchases significant reinsurance from third party reinsurers. Purchasing reinsurance is an important part of the Company's risk strategy, and premiums ceded to reinsurers is one of the Company's largest costs. The Company has strong relationships with reinsurers, which it attributes to its management's industry experience, disciplined underwriting, and claims management capabilities. For each of the twelve months beginning June 1, 2025 and 2024, the Company purchased catastrophe excess of loss reinsurance from

------

the following sources: (i) the Florida Hurricane Catastrophe Fund, a state-mandated catastrophe fund ("FHCF") which provides reinsurance for Florida personal residential and commercial residential admitted policies only, (ii) private reinsurers, all of which were rated "A-" or higher by A.M. Best Company, Inc. ("A.M. Best") or Standard & Poor's Financial Services LLC ("S&P") or were fully collateralized, (iii) the Company's wholly-owned reinsurance subsidiary, Osprey Re Ltd. ("Osprey"), and (iv) Citrus Re Ltd ("Citrus Re") a special purpose vehicle through which the Company sponsors catastrophe bonds. In addition to purchasing excess of loss catastrophe reinsurance, the Company also purchases quota share, property per risk and facultative reinsurance from reinsurers who are either rated "A-" or higher by A.M. Best or were fully collateralized. The Company's quota share program limits its exposure on catastrophe and non-catastrophe losses and provides ceding commission income. The Company's per risk programs limit its net exposure in the event of a severe non-catastrophe loss impacting a single location or risk. The Company also utilizes facultative reinsurance to supplement its per risk reinsurance program where the Company's capacity needs dictate.

Purchasing a sufficient amount of reinsurance to cover catastrophic losses from single or multiple events or significant non-catastrophe losses is an important part of the Company's risk strategy. Reinsurance involves transferring, or "ceding", a portion of the risk exposure on policies the Company writes to another insurer, known as a reinsurer. To the extent that the Company's reinsurers are unable to meet the obligations they assume under the Company's reinsurance agreements, the Company remains liable for the entire insured loss.

The Company's state insurance regulators require the Company, like all insurance companies, to have a certain amount of capital and reinsurance coverage in order to cover losses and loss adjustment expenses upon the occurrence of a catastrophic event. The Company's reinsurance program provides reinsurance which complies with state regulator requirements, which are generally based on the probable maximum loss that it would incur from an individual catastrophic event estimated to occur once in every 100 years based on its portfolio of insured risks. The nature, severity and location of the event giving rise to such a probable maximum loss differs for each insurer depending on the insurer's portfolio of insured risks, including, among other things, the geographic concentration of insured value within such portfolio. As a result, a particular catastrophic event could be a one-in-100-year loss event for one insurance company while having a greater or lesser probability of occurrence for another insurance company. The Company also purchases reinsurance coverage to protect against the potential for multiple catastrophic events occurring in the same year. The Company shares portions of its reinsurance program coverage among its insurance company affiliates.

**2025-2026 Reinsurance Towers by Region**

The following graphics depict the Company's reinsurance program structure for the 2025-2026 hurricane season for a first event by region. Reinsurance coverage provided by Osprey to the Company's insurance company affiliates is not included below as these reinsurance towers only reflect third party reinsurance coverage.

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---

| | | |
|:---|:---|:---|
| Millions |  |  |
| **$1,625.82M** | **Layer 6 FL/SE<br>100% of $145M xs $765M <br>1@100%** | **Layer 6 FL/SE<br>100% of $145M xs $765M <br>1@100%** |
| $1,480.82M |  |  |
| $1,415.82M | **Layer 5 FL/SE<br>100% of $155M xs $610M <br>1@100%** | **Layer 5 FL/SE<br>100% of $155M xs $610M <br>1@100%** |
| $1,412.03M |  |  |
|  | **Citrus Re 2025 FL/SE Bond 50% of $200M xs $700M** |  |
| $1,315.82M $1,215.82M |  | **Citrus Re 2024 FL/SE Bond 50% of $100M xs $700M** |
| $1,175.82M | **Citrus Re 2024 FL/SE Bond 35.71% of $140M xs $560M ($50M)** |  |
| $1,075.82M |  |  |
|  | **Layer 4 FL/SE<br>100% of $170M xs $440M<br>1@100%** | **Layer 4 FL/SE<br>100% of $170M xs $440M<br>1@100%** |
| $955.82M | **Layer 3 Ex- HI<br>100% of $150M xs $290M<br>1@100% w/ RPP** | **Layer 3 Ex- HI<br>100% of $150M xs $290M<br>1@100% w/ RPP** |
|  | **FHCF Layer<br>90% of $573.14M<br>xs<br>$321.97M<br>($515.82M)** | **FHCF Layer<br>90% of $573.14M<br>xs<br>$321.97M<br>($515.82M)** |
| $321.97M |  |  |
| $290.00M | **Layer 2<br>100% of $140M xs $150M<br>1@100% w/ RPP** | **Layer 2<br>100% of $140M xs $150M<br>1@100% w/ RPP** |
| $150.00M | **Layer 1<br>100% of $100M xs $50M <br>1@100% w/ RPP** | **Layer 1<br>100% of $100M xs $50M <br>1@100% w/ RPP** |
| $50.0M | **Retention** | **Retention** |
|  | **FL 1st Event** | **FL 1st Event** |

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------

---

| | | |
|:---|:---|:---|
| Millions |  |  |
| **$1,060.00M** | **Citrus Re 2023-1 Northeast/ Hawaii Only Bond<br>100% of $115M xs $945M** | **Citrus Re 2023-1 Northeast/ Hawaii Only Bond<br>100% of $115M xs $945M** |
| $945.00M | **Northeast Only <br>52% of $250M xs $695M ($130M)<br>1@100%** | **Citrus Re 2023-1 Northeast Only Bond 48% of $250M xs $695M ($120M)** |
| $695.00M | **NE/HI<br>100% of <br>$255M xs $440M<br>1@100%** | **NE/HI<br>100% of <br>$255M xs $440M<br>1@100%** |
| $440.00M | **Layer 3 Ex- HI<br>100% of $150M xs $290M<br>1@100% w/ RPP** | **Layer 3 Ex- HI<br>100% of $150M xs $290M<br>1@100% w/ RPP** |
| $290.00M | **Layer 2<br>100% of $140M xs $150M<br>1@100% w/ RPP** | **Layer 2<br>100% of $140M xs $150M<br>1@100% w/ RPP** |
| $150.00M |  |  |
|  | **Layer 1<br>100% of $100M xs $50M <br>1@100% w/ RPP** | **Layer 1<br>100% of $100M xs $50M <br>1@100% w/ RPP** |
| $50.00M | **Retention** |  |
|  |  | **Net Quota Share** |
|  | **NE 1st Event** | **NE 1st Event** |

---

---

| | | |
|:---|:---|:---|
| **Millions** |  |  |
| **$865.00M** | **Citrus Re 2023-1 Northeast/ Hawaii Only Bond<br>100% of $115M xs $750M** | **Citrus Re 2023-1 Northeast/ Hawaii Only Bond<br>100% of $115M xs $750M** |
| $750.00M | **HI Only <br>51.2% of $205M xs $545M <br>1@100% ($105M)** | **Citrus Re 2025 Hawaii Only Bond 48.8% of $205M xs $545M ($100M)** |
| $545.00M | **NE/HI<br>100% of <br>$255M xs $290M<br>1@100%** | **NE/HI<br>100% of <br>$255M xs $290M<br>1@100%** |
| $290.00M | **Layer 2<br>100% of $140M xs $150M<br>1@100% w/ RPP** | **Layer 2<br>100% of $140M xs $150M<br>1@100% w/ RPP** |
| $150.00M |  |  |
|  | **Layer 1<br>100% of $100M xs $50M <br>1@100% w/ RPP** | **Layer 1<br>100% of $100M xs $50M <br>1@100% w/ RPP** |
| $50.00M | **Retention** | **Retention** |
|  | **HI 1st Event** | **HI 1st Event** |

---

\* xs = in excess

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**2025 - 2026 Reinsurance Program**

***Catastrophe Excess of Loss Reinsurance***

Effective June 1, 2025, the Company entered into catastrophe excess of loss reinsurance agreements for 2025-2026 covering Heritage Property & Casualty Insurance Company ("Heritage P&C"), Zephyr Insurance Company ("Zephyr") and Narragansett Bay Insurance Company ("NBIC"). As described above, the catastrophe reinsurance programs are allocated among traditional reinsurers, Citrus Re and Osprey Re. The FHCF covers Florida admitted market risks only and the Company elected to participate at 90.0% for the 2025 hurricane season. The Company's affiliate, Osprey Re, provides reinsurance for a portion of the Heritage P&C, NBIC and Zephyr programs. The Company's third-party reinsurers are either rated "A-" or higher by A.M. Best or S&P or are fully collateralized, to reduce credit risk. Osprey Re and Citrus Re are fully collateralized programs.

The reinsurance program, which is segmented into layers of coverage, protects the Company for excess property catastrophe losses and loss adjustment expenses. The 2025-2026 reinsurance program provides first event coverage up to $1.6 billion for Heritage P&C, first event coverage up to $1.1 billion for NBIC, and first event coverage up to $865.0 million for Zephyr. The Company's first event retention in a 1 in 100-year event would include retention for the respective insurance company as well as any retention by Osprey. The first event maximum retention up to a 1 in 100-year event for each insurance company subsidiary is as follows: Heritage P&C – $50.0 million, of which $50.0 million would be ceded to Osprey in a shared contract with NBIC and Zephyr; NBIC – $38.0 million of which the entire amount would be ceded to Osprey in a shared contract with Heritage P&C and Zephyr; and Zephyr — $50.0 million, of which $50 million would be ceded to Osprey in a shared contract with Heritage P&C and NBIC.

The Company is responsible for all losses and loss adjustment expenses in excess of the Company's reinsurance program. For second or subsequent catastrophic events, the Company's total available coverage depends on the magnitude of the first event, as the Company may have coverage remaining from layers that were not previously fully exhausted. An aggregate of $3.75 billion of limit is available in 2025, which includes reinstatement through the purchase of reinstatement premium protection. The amount of coverage, however, will be subject to the severity and frequency of such events.

The Company placed occurrence contracts for business underwritten by NBIC which covers all catastrophe losses excluding named storms which contracts expire December 31, 2026. One contract which is 70% placed has a $30.0 million limit in excess of a retention of $20.0 million while another contract provides the remaining 30% with a $25.0 million limit in excess of a retention of $25.0 million. Each contract has one reinstatement available. The Company placed occurrence contracts for business underwritten by NBIC which covers all catastrophe losses excluding named storms which contracts expire December 31, 2025. One contract which is 55% placed has a $15.0 million limit in excess of a retention of $25.0 million while another contract provides the remaining 45% with a $20.0 million limit in excess of a retention of $20.0 million. Each contract has one reinstatement available.

*<u>Net Quota Share Reinsurance</u>*

The Company's Net Quota Share coverage is proportional reinsurance, which applies to most business underwritten by NBIC, for which certain of the Company's other reinsurance programs (property catastrophe excess of loss and general excess of loss) inures to the quota share program. The amount and rate of ceding commissions slide, within a prescribed minimum and maximum, depending on loss performance. The Net Quota program has a term of one year. The Net Quota Share program which renewed on December 31, 2025 ceded 40.0% of the net premiums, with an occurrence limit of $30.0 million for catastrophe losses is in effect on the current year quota share program, subject to certain aggregate loss limits that vary by reinsurer. The Net Quota Share program which renewed on December 31, 2024 ceded 46.0% of the net premiums, with an occurrence limit of $20.0-$25.0 million for catastrophe losses is in effect on the current year quota share program, subject to certain aggregate loss limits that vary by reinsurer.

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*<u>Per Risk Coverage</u>*

For losses arising from business underwritten by Heritage P&C, losses arising from commercial residential business underwritten by NBIC and Zephyr, and southeastern U.S. surplus lines business underwritten by NBIC, excluding losses from named storms, the Company purchased property per risk coverage. The contracts period for this program is one year. For the contract period of July 1, 2025 through June 30, 2026, the program was 100% placed. Under this program, the limit recoverable for an individual loss in excess of $2.0 million per claim is $8.0 million and total limit for all losses is $24.0 million. There are two reinstatements available with additional premium due based on the amount of the layer exhausted. For the contract period from June 15, 2024 through June 30, 2025, which was 100% placed, the limit recoverable for an individual loss in excess of $1.5 million per claim was $8.5 million and total limit for all losses was $25.5 million. There were two reinstatements available with additional premium due based on the amount of the layer exhausted.

For losses arising from commercial residential business underwritten by NBIC, the Company also purchased property per risk coverage for losses and loss adjustments expenses in excess of $1.0 million per claim. The limit recovered for an individual loss is $1.0 million and total limit for all losses is $3.0 million.

In addition, the Company purchased facultative reinsurance for losses in excess of $10.0 million for any properties it insured where the total insured value exceeded $10.0 million. The maximum limit for this coverage is $80.0 million. This coverage applies to losses arising from business underwritten by Heritage P&C and losses arising from commercial residential business underwritten by Narragansett and Zephyr, excluding losses from named storms. The Company also purchased facultative reinsurance for losses underwritten by NBIC in excess of $3.5 million.

*<u>General Excess of Loss</u>*

The Company's general excess of loss reinsurance protects personal residential multi-peril business underwritten by Narragansett and Zephyr from single risk losses. For the contract period of July 1, 2025 through June 30, 2026, the coverage is $2.5 million excess $1.0 million for property losses and $1.0 million excess $1.0 million for casualty losses, and is 47.5% placed. For the contract period of July 1, 2024 through June 30, 2025, the coverage is $2.5 million excess $1.0 million for property losses and $1.0 million excess $1.0 million for casualty losses, and is 50.0% placed.

*For a detailed discussion of the Company's* ***2024-2025 Reinsurance Program*** *refer to Part II, Item 8, "Financial Statements and Supplementary Data" and "****Note 12. Reinsurance****" in the Company's 2024 Form 10-K.*

**Effect of Reinsurance**

The Company's reinsurance arrangements had the following effect on certain items in the Consolidated Statement of Income for the year ended December 31, 2025, 2024 and 2023:

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31, 2025*** | ***For the Year Ended December 31, 2025*** | ***For the Year Ended December 31, 2025*** |
|  | Premiums Written | Premiums Earned | Losses and Loss<br>Adjustment Expenses |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Direct | $1436346 | $1431103 | $266953 |
| Ceded | (634182) | (636946) | 46293 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net | $802164 | $794157 | $313246 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31, 2024*** | ***For the Year Ended December 31, 2024*** | ***For the Year Ended December 31, 2024*** |
|  | Premiums Written | Premiums Earned | Losses and Loss<br>Adjustment Expenses |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Direct | $1432942 | $1406106 | $1162476 |
| Ceded | (653827) | (638246) | (715428) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net | $779115 | $767860 | $447048 |

---

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31, 2023*** | ***For the Year Ended December 31, 2023*** | ***For the Year Ended December 31, 2023*** |
|  | Premiums Written | Premiums Earned | Losses and Loss<br>Adjustment Expenses |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Direct | $1343101 | $1323643 | $875475 |
| Ceded | (613739) | (626458) | (449346) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net | $729362 | $697185 | $426129 |

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**Note 13. Reserve For Unpaid Losses**

The Company determines the reserve for unpaid losses on an individual-case basis for all incidents reported. The liability also includes amounts which are commonly referred to as incurred but not reported, or "IBNR", claims as of the balance sheet date. The Company estimates its IBNR reserves by projecting its ultimate losses using industry accepted actuarial methods and then deducting actual loss payments and case reserves from the projected ultimate losses.

The table below summarizes the activity related to the Company's reserve for unpaid losses:

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** | ***2023*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Balance, beginning of period | $1042687 | $845955 | $1131807 |
| Less: reinsurance recoverable on unpaid losses | 675652 | 421797 | 759681 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net balance, beginning of period | 367035 | 424158 | 372126 |
| Incurred related to: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current year | 326700 | 421633 | 427702 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prior years | (13454) | 25415 | (1573) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total incurred | 313246 | 447048 | 426129 |
| Paid related to: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current year | 210804 | 233248 | 232827 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prior years | 159367 | 270923 | 141270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total paid | 370171 | 504171 | 374097 |
| Net balance, end of period | 310110 | 367035 | 424158 |
| Plus: reinsurance recoverable on unpaid losses | 269367 | 675652 | 421797 |
| Balance, end of period | $579477 | $1042687 | $845955 |

---

The Company believes that the reserve for unpaid losses reasonably estimates the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

As of December 31, 2025, the Company reported $310.1 million in unpaid losses and loss adjustment expenses, net of reinsurance which included $247.7 million attributable to IBNR net of reinsurance recoverable, or 79.9% of net reserves for unpaid losses and loss adjustment expenses. Total incurred losses reflect favorable development of $13.5 million in 2025, $25.4 million of adverse development in 2024 and $1.6 million of favorable development in 2023, all associated with management's best estimate of actuarial loss and LAE reserves with consideration given to Company specific historical loss experience.

Reinsurance recoverable on unpaid losses includes expected reinsurance recoveries associated with reinsurance contracts the Company has in place. The amount may include recoveries from catastrophe excess of loss reinsurance, net quota share reinsurance, per risk reinsurance, and facultative reinsurance contracts.

In the fourth quarter of 2022 we re-estimated our ultimate losses for Hurricane Irma, which struck Florida in 2017. As a result of that re-estimation, Heritage exhausted the private layers of reinsurance specific to Hurricane Irma but had a 45% participation in the FHCF limit remaining. As further described in Note 17, Commitments and Contingencies, to these consolidated financial statements, the Company's 2017 reinsurance agreement with the FHCF required a commutation no later than 60 months after the end of the contract year. As part of this process, Heritage and the FHCF terminated the 2017 reinsurance agreement and agreed on the amount that the FHCF would pay to the Company to settle all outstanding losses owed under the

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agreement related to losses from Hurricane Irma. As such, this commutation process resulted in a final determination of and payment for known, unknown or unreported claims relating to Hurricane Irma. Social inflation and the litigated claims environment in the State of Florida, which affected Hurricane Irma claims, could result in future adverse development of these claims, which creates uncertainty as to the ultimate cost to settle all of the remaining Hurricane Irma claims. Accordingly, should future re-estimations to Hurricane Irma losses increase the Company's expected loss reserves, all of the increase will be retained by the Company. The net unfavorable loss development described above stemmed primarily from losses associated with Hurricane Irma, for which the losses were fully retained.

The following is information about incurred and paid claims development as of December 31, 2025, net of reinsurance, as well as cumulative claim payments and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts.

The information by accident year for years prior to 2025 is presented as required supplementary information and is unaudited.

Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance

*(in thousands, except number of claims)*

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** |  |  |  |
| **<u>Accident year</u>** | **<u>2016 & prior</u>** | **<u>2017</u>** | **<u>2018</u>** | **<u>2019</u>** | **<u>2020</u>** | **<u>2021</u>** | **<u>2022</u>** | **<u>2023</u>** | **<u>2024</u>** | **2025** | **<u>Net IBNR<br>Reserves</u>** | **<u>Reported<br>Claims</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;2016 & prior | 237207 | 242611 | 250990 | 250235 | 250067 | 250482 | 249315 | 250707 | 252749 | 252557 | 25 | 138756 |
| &nbsp;&nbsp;&nbsp;&nbsp;2017 |  | 189163 | 195240 | 192749 | 194618 | 195602 | 211386 | 220944 | 272157 | 287610 | 19077 | 73366 |
| &nbsp;&nbsp;&nbsp;&nbsp;2018 |  |  | 278047 | 272154 | 270956 | 276546 | 286051 | 288792 | 291988 | 292789 | 1763 | 34504 |
| &nbsp;&nbsp;&nbsp;&nbsp;2019 |  |  |  | 198568 | 171237 | 170383 | 176942 | 179628 | 182203 | 183701 | 1875 | 26386 |
| &nbsp;&nbsp;&nbsp;&nbsp;2021 |  |  |  |  | 358344 | 350394 | 360498 | 362892 | 366731 | 367948 | 5884 | 39871 |
| &nbsp;&nbsp;&nbsp;&nbsp;2022 |  |  |  |  |  | 390597 | 359325 | 357370 | 363572 | 364146 | 8243 | 33182 |
| &nbsp;&nbsp;&nbsp;&nbsp;2022 |  |  |  |  |  |  | 452397 | 433895 | 420633 | 417428 | 16998 | 42320 |
| &nbsp;&nbsp;&nbsp;&nbsp;2023 |  |  |  |  |  |  |  | 382449 | 354146 | 352494 | 30238 | 20772 |
| &nbsp;&nbsp;&nbsp;&nbsp;2024 |  |  |  |  |  |  |  |  | 408422 | 379747 | 67101 | 22993 |
| &nbsp;&nbsp;&nbsp;&nbsp;2025 |  |  |  |  |  |  |  |  |  | 282119 | 80751 |  |
|  |  |  |  |  |  |  |  |  | Total | $3180539 | $231955 |  |

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Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** |  |
| **<u>Accident year</u>** | **<u>2016 & prior</u>** | **<u>2017</u>** | **<u>2018</u>** | **<u>2019</u>** | **<u>2020</u>** | **<u>2021</u>** | **<u>2022</u>** | **<u>2023</u>** | **<u>2024</u>** | **2025** |
| &nbsp;&nbsp;&nbsp;&nbsp;2016 & prior | 132679 | 211512 | 233540 | 238868 | 241875 | 244820 | 246826 | 249901 | 252212 | 254032 |
| &nbsp;&nbsp;&nbsp;&nbsp;2017 |  | 101541 | 168606 | 178622 | 184313 | 188928 | 194079 | 163068 | 244841 | 264544 |
| &nbsp;&nbsp;&nbsp;&nbsp;2018 |  |  | 164641 | 232211 | 248783 | 265868 | 277489 | 285447 | 288794 | 290230 |
| &nbsp;&nbsp;&nbsp;&nbsp;2019 |  |  |  | 64356 | 125359 | 147406 | 161938 | 172497 | 177816 | 180718 |
| &nbsp;&nbsp;&nbsp;&nbsp;2021 |  |  |  |  | 198834 | 299825 | 324860 | 334937 | 351397 | 360416 |
| &nbsp;&nbsp;&nbsp;&nbsp;2022 |  |  |  |  |  | 215478 | 302379 | 329367 | 345419 | 352707 |
| &nbsp;&nbsp;&nbsp;&nbsp;2022 |  |  |  |  |  |  | 224721 | 339825 | 380005 | 394456 |
| &nbsp;&nbsp;&nbsp;&nbsp;2023 |  |  |  |  |  |  |  | 191596 | 291089 | 313696 |
| &nbsp;&nbsp;&nbsp;&nbsp;2024 |  |  |  |  |  |  |  |  | 228670 | 305670 |
| &nbsp;&nbsp;&nbsp;&nbsp;2025 |  |  |  |  |  |  |  |  |  | 168716 |
|  |  |  |  |  |  |  |  |  | Total | $2885186 |

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Reconciliation of Reserve Balances to Liability for Unpaid Loss and Loss Adjustment Expenses

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| | |
|:---|:---|
| Unpaid Loss and Allocated Loss Adjustment Expense, Net of Reinsurance | $294367 |
| Reinsurance recoverable on unpaid losses | 269367 |
| Unpaid Unallocated Loss Adjustment Expense | 15743 |
| Unpaid losses and loss adjustment expenses | $579477 |

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Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance as of December 31, 2025 (Unaudited)

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year - 1** | **Year - 2** | **Year - 3** | **Year - 4** | **Year - 5** | **Thereafter** |
| Percentage | 53.0% | 29.5% | 8.3% | 3.5% | 2.2% | 3.5% |

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**Note 14. Long-Term Debt**

**Convertible Senior Notes**

In August 2017 and September 2017, the Company issued in aggregate $136.8 million of 5.875% Convertible Senior Notes ("Convertible Notes") maturing on August 1, 2037, unless earlier repurchased, redeemed or converted. Interest is payable semi-annually in arrears, on February 1, and August 1 of each year. In January 2022, the Company repurchased and retired $11.7 million of outstanding Convertible Senior Notes. Payment was made in cash and the Convertible Notes were retired at the time of repurchase. In addition, the Company expensed $242,700 which was the proportionate amount of the unamortized issuance and debt discount costs associated with this repurchase.

As of December 31, 2025 and 2024, the Company had approximately $885,000 of the Convertible Notes outstanding, net of $21.1 million of Convertible Notes held by an insurance company subsidiary. For the years ended December 31, 2025 and 2024, the Company made interest payments, net of affiliated Convertible Notes, of approximately $50,230, on the outstanding Convertible Notes.

**Senior Secured Credit Facility**

On July 22, 2025, the Company and its subsidiary guarantors entered into the Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") with lenders from time to time party thereto and Regions Bank, as administrative agent and collateral agent. The Amended and Restated Credit Agreement amended and restated in its entirety the Credit Agreement dated as of December 14, 2018 (as amended to date, the "Prior Credit Agreement").

The Amended and Restated Credit Agreement, among other things, (i) increased the overall size of the senior secured credit facilities to an aggregate principal amount of up to $200.0 million, consisting of (a) a revolving credit facility that continues to have an aggregate principal amount of up to $50.0 million (inclusive of a $25.0 million sublimit for swingline loans), but with an extended maturity of July 2030 (the "Revolving Credit Facility"), (b) a term loan facility for an aggregate of $75 million principal amount outstanding as of the date of the Amended and Restated Agreement, with an extended maturity of July 2030 (the "Term Loan Facility"), and (c) a $75 million committed delayed draw term loan that may be advanced to finance specified permitted acquisitions and investments, subject to satisfaction of conditions to borrowing and compliance with a specified consolidated leverage ratio, in up to five separate installments during the two year period following the effective date of the Amended and Restated Credit Agreement with a maturity of July 2030 (the "Delayed Draw Term Loan Facility"), (ii) reduced the applicable margin for loans from (a) the prior range of 2.75% to 3.25% (plus the 0.10% credit adjustment spread) to a range from 2.50% to 3.00% per annum for SOFR loans (and removes the 0.10% SOFR credit adjustment spread) and (b) the prior range of 1.75% to 2.25% per annum for base rate loans to a range from 1.50% to 2.00%, in each case based on a consolidated leverage ratio ranging from less than or equal to 1-to-1 to greater than 1.5-to-1 and (iii) amended the terms of specified financial and negative covenants, which will generally allow the Company more flexibility, including to sell certain real estate assets located in Clearwater, Florida. All other material terms of the Prior Credit Agreement remain unchanged in the Amended and Restated Credit Agreement.

The net proceeds from the advance, along with cash on hand, were used to repay approximately $78 million in principal amount outstanding under the Prior Credit Agreement, including to pay accrued interest, fees, costs and expenses in connection with the closing of the Amended and Restated Credit Agreement.

As of December 31, 2025, the Amended and Restated Credit Agreement provided senior secured credit facilities in the aggregate principal amount of up to $200.0 million, consisting of (1) the Term Loan Facility in an aggregate principal amount of $75.0 million , (2) the Delayed Draw Term Loan Facility in an aggregate principal amount of $75.0 million and (3) the 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) (collectively, the "Credit Facilities").

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Term Loan Facility. The principal amount of the term loan facility under the Prior Credit Agreement amortized in quarterly installments, beginning with the close of the fiscal quarter ending March 31, 2019 and was amortizing in an amount equal to $2.4 million per quarter until its scheduled maturity date of July 28, 2026. The term loan facility under the Prior Credit Agreement was to mature on July 28, 2026 but was refinanced in full in connection with the Amended and Restated Credit Agreement. As of December 31, 2024, there was $70.1 million in aggregate principal outstanding under the term loan facility under the Prior Credit Agreement and as of December 31, 2025, there was $74.0 million in aggregate principal amount under the Term Loan Facility under the Amended and Restated Credit Agreement. The principal amount of the Term Loan Facility under the Amended and Restated Credit Agreement 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, increasing to approximately $1.4 million commencing with the quarter ending September 30, 2028 with the remaining balance payable at maturity in July 2030.

For the years ended December 31, 2025 and 2024, the Company made principal payments of approximately $4.8 million and $6.1 million, respectively, and interest payments of $2.5 million and $3.9 million, respectively, on the term loan facility under the Prior Credit Agreement. Under the Amended and Restated Credit Agreement the Company made principal and interest payments of $3.9 million as of December 31, 2025.

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 million and the unused amount of the Revolving Credit Facility. Immediately prior to entering into the Amended and Restated Credit Agreement the Company had $10.0 million in borrowings under the revolving credit facility under the Prior Credit Agreement. 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 was repaid in connection with the Amendment 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. The letters of credit were not drawn upon during the first quarter of 2025 and were cancelled on their maturity date of March 16, 2025. At December 31, 2025, there were $32.0 million outstanding letters of credit issued under the Revolving Credit Facility. For year ended December 31, 2025, the Company made interest payments in aggregate of approximately $362,784 on the revolving credit facility under the Prior Credit Agreement and $143,263 relating to letters of credit and unused availability commitment fees. For the year ended December 31, 2025, the Company made interest payments in aggregate of approximately $43,858 on the Revolving Credit Facility amended and $240,059 relating to letters of credit and unused availability commitment fees.

At the Company's 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 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.

At December 31, 2025, the effective interest rate for the Term Loan Facility was 6.816%. The Company monitors the rates prior to the reset date which allows it to establish if the payment is monthly or quarterly payment based on the most beneficial rate used to calculate the interest payment.

**Mortgage Loan**

In October 2017, the Company and its subsidiary, Skye Lane Properties LLC, jointly obtained a commercial real estate mortgage loan in the amount of $12.7 million, bearing interest of 4.95% per annum and maturing on October 30, 2027. Pursuant to the terms of the mortgage loan, on October 30, 2022, the interest rate adjusted to an interest rate equal to the annualized interest rate of the United States 5-year Treasury Notes as reported by the Federal Reserve on a weekly average basis plus 3.10%, which resulted in an increase of the rate from 4.95% to 7.42% per annum, paid monthly. For the years ended December 31, 2025 and 2024, the Company made principal and interest payments of $564,042 and $1.1 million on the mortgage loan,

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respectively. On July 23, 2025, the Company paid the mortgage loan principal and accrued interest balance in full in the amount of $10.7 million as part of the sale of the Company's commercial real estate.

**FHLB Loan Agreements**

In December 2018, a subsidiary of the Company received a 3.094% fixed interest rate cash loan of $19.2 million from the Federal Home Loan Bank Atlanta ("FHLB-ATL"). On September 29, 2023, the Company restructured the December 2018 agreement to extend the maturity date to March 28, 2025, with a 5.109% fixed interest rate payable quarterly commencing on December 28, 2023. In connection with the initial loan agreement, the subsidiary became a member of the FHLB-ATL. Membership in the FHLB-ATL required an investment in FHLB-ATL's common stock which was purchased in December 2018 and valued at $1.4 million. Additionally, the transaction required the acquired FHLB-ATL common stock and certain other investments to be pledged as collateral. In March 2025, the Company repaid the loan and released the investments from pledged collateral. As of December 31, 2025, the Company's membership in FHLB-ATL was reduced to $570,000. For the years ended December 31, 2025, and 2024, the Company made quarterly interest payments under the terms of the loan agreement in aggregate amounts of approximately $239,780 and $994,742, respectively.

As of December 31, 2025 and at December 31, 2024, the Company also held other common stock from FHLB Boston for a value of $177,197, classified as equity securities and reported at fair value on the condensed consolidated financial statements.

In December 2018, a subsidiary of the Company became a member of the FHLB 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 December 31, 2025, the fair value of the collateralized securities and term certificate deposits was $6.0 million and the equity investment in FHLB common stock was $316,300.

For the years ended December 31, 2025 and 2024, the Company made monthly interest payments as per the terms of the loan agreement in aggregate of $235,881, and $224,895, respectively.

The following table summarizes the Company's long-term debt:

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| | | |
|:---|:---|:---|
|  | ***December 31, 2025*** | ***December 31, 2024*** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| Convertible debt | $885 | $885 |
| Mortgage loan |  | 10749 |
| Credit loan facility | 74063 | 70125 |
| Revolving credit facility |  | 10000 |
| FHLB loan agreement | 5500 | 24700 |
| &nbsp;&nbsp;Total principal amount | $80448 | $116459 |
| Deferred finance costs | $2020 | $140 |
| &nbsp;&nbsp;Total long-term debt | $78428 | $116319 |

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As of the date of this report, the Company was in compliance with the applicable terms of all its covenants and other requirements under the Credit Agreement, Convertible Notes, cash borrowings and other loans. The Company's ability to secure future debt financing depend, in part, on its ability to remain in such compliance. The covenants in the Credit Agreement may limit the Company's flexibility in connection with future financing transactions and in the allocation of capital in the future, including the Company's ability to pay dividends and make stock repurchases, and contribute capital to its insurance subsidiaries that are not parties to the Credit Agreement.

The covenants and other requirements under the revolving agreement represent the most restrictive provisions that we are subject to with respect to the Company's long-term debt.

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The schedule of principal payments on long-term debt is as follows:

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| | |
|:---|:---|
| ***December 31,*** | ***Amount*** |
| 2026 | $3750 |
| 2027 | 3750 |
| 2028 | 4675 |
| 2029 | 11100 |
| 2030 | 56288 |
| Thereafter | 885 |
| &nbsp;&nbsp;Total principal payments | $80448 |

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**Note 15. Income Taxes**

The following table summarizes the provision for income taxes:

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** | ***2023*** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Federal: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | $50400 | $21710 | $5572 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred | 3074 | (4530) | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for Federal income tax | 53475 | 17180 | 5642 |
| State: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | 10894 | 4264 | 1086 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred | (699) | (308) | (30) |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for State income tax expense | 10196 | 3956 | 1056 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for income taxes | $63670 | $21136 | $6698 |

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The income tax expense differs from the amounts computed by applying the U.S. federal income tax rate of as indicated below to pretax income as a result of the following (in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** | ***2023*** |
|  | % | % | % |
| United States |  |  |  |
| &nbsp;&nbsp;Foreign |  |  |  |
| &nbsp;&nbsp;Income from continuing operations before tax |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. federal statutory tax rate | 21.0% | 21.0% | 21.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;State and local income taxes, net of federal income tax effect | 3.1% | 3.7% | 1.6% |
| Foreign tax effects |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Bermuda |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign Tax Statutory Exemption | -3.1% | 3.1% | 25.3% |
| Effect of cross-border tax laws |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;US tax on foreign insurance income | 3.1% | -3.1% | -25.3% |
| Changes in valuation allowances |  |  | 10.9% |
| Nontaxable or nondeductible items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Executive Compensation 162(m) | 0.6% | 1.1% | 0.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Others | -0.1% | -0.3% | 0.6% |
| Other Adjustments |  |  |  |
| Total tax expense | 24.6% | 25.6% | 12.9% |

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The provision for income taxes was $63.7 million for the year ended December 31, 2025 compared to $21.1 million for the year ended December 31, 2024. The effective tax rate for the year ended December 31, 2025 was 24.6% compared to 25.6% in the prior year. The effective tax rate for 2025 was slightly below than the statutory rate, driven by higher pre-tax income compared to the prior year which had a dilutive effect on permanent tax differences, whereas the effective tax rate for 2024 was slightly higher than the statutory rate.

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The significant components of deferred tax assets and liabilities included in the consolidated balance sheets as of December 31, 2025 and 2024 were as follows:

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| | | |
|:---|:---|:---|
|  | ***For the Year Ended December 31,*** | ***For the Year Ended December 31,*** |
|  | ***2025*** | ***2024*** |
| **Deferred tax assets:** | ***(in thousands)*** | ***(in thousands)*** |
| &nbsp;&nbsp;&nbsp;&nbsp;Unearned premiums | $19342 | $18617 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating loss |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-related discount on loss reserve | 4399 | 5079 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 1323 | 669 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment |  | 1366 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 1533 | 1536 |
| &nbsp;&nbsp;&nbsp;&nbsp;Note discount |  | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Leases | 924 | 959 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized losses | 4185 | 9813 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 488 | 459 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax asset | 32194 | 38506 |
| &nbsp;&nbsp;&nbsp;&nbsp;Valuation allowance |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted deferred tax asset | 32194 | 38506 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred acquisition costs | $15379 | $15028 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 152 | 191 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment | 2738 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Note discount | 37 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basis in purchased investments | 2 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basis in purchased intangibles | 6652 | 8027 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 1379 | 1378 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liabilities | 26339 | 24630 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred tax assets | $5855 | $13876 |

---

The Company had no capital loss carryforward as of December 31, 2025 and 2024.

In assessing the net carrying amount of deferred tax assets, the Company considers whether it is more likely than not that the Company will not realize some portion or all of the deferred tax assets. The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

As of December 31, 2025 and 2024, the Company has a gross operating loss carryforward for state income tax purposes (FL State only) of $0 and 10.0 million, respectively. The statute of limitations related to the Company's federal and state income tax returns generally remains open from the Company's filings for 2022 through 2024. Additionally, federal tax return filings for 2019 and 2021 remain to the extent of carryback refunds of 2022 capital and net operating losses. There are currently no tax years under examination.

The Company's reinsurance affiliate, Osprey, which is based in Bermuda, made an irrevocable election under section 953(d) of the U.S. Internal Revenue Code of 1986, as amended, to be treated as a domestic insurance company for U.S. Federal income tax purposes. As a result of this election, the Company's reinsurance subsidiary is subject to United States income tax as if it were a U.S. corporation.

On December 31, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023 (Bermuda CIT), which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025. The Company currently meets an exception which would delay Bermuda taxation until 2030. Prior to December 31, 2023, the Company had an undertaking from Bermuda that exempted it from any local profits, income or capital gains taxes until the year 2035.

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The Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15%, which was effective on January 1, 2024. While it is uncertain whether the United States will enact legislation to adopt Pillar Two rules, various other governments around the world have enacted legislation. As currently designed, Pillar Two will ultimately apply to the Company's worldwide operations. Considering the Company does not have material operations in jurisdictions with tax rates lower than the Pillar Two minimum, these rules have not materially impacted the Company's global tax costs in 2024 or 2025 and the impact is not expected to be material in future periods. Management will continue to monitor both United States and global legislative action related to Pillar Two for potential impacts.

On July 4, 2025, the "One Big Beautiful Bill Act" ("OBBBA") was signed into law in the United States. The Act makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. Certain changes include the immediate expensing of acquired business assets and a temporary suspension of the requirement to capitalize and amortize U.S. R&D expenditures. The tax effects of the enacted legislation are reflected in the 2025 financials and there was no material impact to the effective tax rate. The Company will continue to monitor the impact of the OBBBA on future financial statements.

**Note 16. Statutory Accounting and Regulations**

State laws and regulations, as well as national regulatory agency requirements, govern the operations of all insurers such as the Company's insurance subsidiaries. The various laws and regulations require that insurers maintain minimum amounts of statutory surplus and risk-based capital; restrict insurers' ability to pay dividends; restrict the allowable investment types and investment mixes and subject the Company's insurers to assessments.

The Company's insurance subsidiaries are required to file with state insurance regulatory authorities an "Annual Statement" which report under the statutory-basis of accounting which differs from GAAP, among other items, net income and surplus as regards policyholders, which is called stockholder's equity under GAAP. The combined results of the Company's insurance subsidiaries' reported statutory-basis results included net income of $108.3 million and $21.4 million for the years ended December 31, 2025 and 2024, respectively. The Company's insurance subsidiaries must maintain capital and surplus ratios or balances as determined by the regulatory authority of the states in which they are domiciled. Heritage P&C is required to maintain statutory-basis capital and surplus equal to the greater of $15 million or 10% of their respective liabilities. Zephyr is required to maintain a deposit of $750,000 in a federally insured financial institution. NBIC is required to maintain statutory-basis capital and surplus of $3.0 million. The combined statutory surplus for Heritage P&C, NBIC, and Zephyr was $392.5 million at December 31, 2025. The combined statutory-basis surplus for Heritage P&C, NBIC, and Zephyr was $285.5 million at December 31, 2024. State laws also require the Company's insurance subsidiaries to adhere to prescribed premium-to-capital surplus ratios, with which the Company's insurance affiliates are complying. At December 31, 2025, the Company's insurance subsidiaries met the financial and regulatory requirements of the states in which they do business.

The legislatures of the states of domicile of the Company's insurance affiliates have adopted the National Association of Insurance Commissioners ("NAIC") recommendations with regard to expansion of the regulation of insurers to include non-insurance entity affiliates. Specifically, the law permits the state insurance regulators to examine affiliated entities within an insurance holding company system in order to ascertain the financial condition of the insurer. The law also provides for certain disclosures regarding enterprise risk, which are satisfied by the provision of related information filed with the SEC.

The NAIC published risk-based capital guidelines for insurance companies that are designed to assess capital adequacy and to raise the level of protection that statutory-basis surplus provides for policy holders. Most states, including Florida, Hawaii, and Rhode Island, have enacted the NAIC guidelines as statutory requirements, and insurers having less statutory-basis surplus than required will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. State insurance regulatory authorities could require an insurer to cease operations in the event the insurer fails to maintain the required statutory capital.

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State laws for Florida, Hawaii, and Rhode Island permit an insurer to pay dividends or make distributions out of that part of statutory surplus derived from net operating profit and net realized capital gains. The applicable laws pertain to the state of domicile of each insurance company affiliate and provide calculations to determine the amount of dividends or distributions that can be made without the prior approval of the insurance regulatory authority and the amount of dividends or distributions that would require prior approval of the insurance regulatory authority. In the state of Florida, a dividend may be taken without regulatory approval if the dividend is equal to or less than the greater of 10% of the insurer's surplus or the insurer's net income. In the state of Rhode Island, a dividend may be taken without regulatory approval if the dividend is equal to or less than the lesser of 10% of the insurer's surplus or the insurer's net income excluding realized capital gains. The state of Hawaii restricts dividends without regulatory approval to the smaller of prior years' net income or 10% of prior year's surplus. Heritage P&C and NBIC have not paid dividends in any of the last three years. Zephyr paid no dividends for the years ended December 31, 2025 and 2024 and paid dividends of $3.9 million for the year ended December 31, 2023.

Statutory risk-based capital requirements may further restrict the Company's insurance subsidiaries ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause statutory-basis surplus to fall below minimum risk-based capital requirements.

State insurance laws limits an insurer's investment in equity instruments and also restricts investments in medium to low quality debt instruments. The Company's insurance affiliates were in compliance with all investment restrictions at December 31, 2025 and 2024.

Governmental agencies or certain quasi-governmental entities can levy assessments upon the Company in the states in which the Company writes policies. Refer to **Note 1** "*Basis of Presentation*, *Nature of Business and Significant Accounting Policies and Practices*" to these consolidated financial statements for further information for a description of how the Company recovers assessments imposed upon it. Governmental agencies or certain quasi-governmental entities can also levy assessments upon policyholders, and the Company collects the amount of the assessments from policyholders as surcharges for the benefit of the assessing agency. There are currently assessments being collected from policyholders and remitted to governmental or quasi-governmental entities. If an assessment becomes levied the Company would multiply the premium written on each policy by these assessment percentages to determine the additional amount that it will collect from the policyholder and remit to the assessing agencies.

The Company reported its insurance subsidiaries' assets, liabilities and results of operations in accordance with GAAP, which varies from statutory-basis accounting principles prescribed or permitted by state laws and regulations, as well as by general industry practices.

The Company's reinsurance subsidiary, Osprey, which was incorporated on April 23, 2013, is licensed as a Class 3A Insurer under The Bermuda Insurance Act 1978 and related regulations. Osprey is required to meet and maintain certain minimum levels of solvency and liquidity. Each year Osprey is required to file with the Bermuda Monetary Authority (the "Authority") a Capital and Solvency Return, Statutory Financial Return and Audited Financial Statements within four months of its relevant financial year end. Osprey maintains sufficient collateral to comply with regulatory requirements as of December 31, 2025. Bermuda's standard for financial statement reporting is U.S. GAAP.

**Note 17. Commitments and Contingencies**

The Company is involved in claims-related legal actions arising in the ordinary course of business. The Company accrues amounts resulting from claims-related legal actions in unpaid losses and loss adjustment expenses during the period that it determines an unfavorable outcome becomes probable and it can estimate the amounts. Management makes revisions to its estimates based on its analysis of subsequent information that the Company receives regarding various factors, including: (i) per claim information; (ii) company and industry historical loss experience; (iii) judicial decisions and legal developments in the awarding of damages; and (iv) trends in general economic conditions, including the effects of inflation.

The Company's Florida insurance company affiliate is required to enter into a reinsurance contract with the FHCF for a portion of its catastrophe risk transfer each year. Since the Company's inception in 2012, certain catastrophic events have resulted in losses which pierced the FHCF layer and resulted in reimbursements from the FHCF. To date, losses from Hurricane

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Irma, which struck in 2017, Hurricane Ian, which struck in 2023, and Hurricane Milton, which struck in 2024, have triggered the Company's FHCF coverage.

The Company's 2017 reinsurance agreement with the FHCF is consistent among Florida insurance companies and required a commutation no later than 60 months after the end of the contract year, for which the commutation process began in June 2023. This commutation represents an agreement between Heritage and the FHCF to terminate the 2017 reinsurance agreement and agree on the conditions under which all obligations for both parties are discharged and therefore a final determination of and payment for any claims related to Hurricane Irma. The terms of the 2017 reinsurance agreement with the FHCF provide for the commutation process as well as the process to settle any disagreements as to the present value of outstanding losses that served as the basis for determining the amount payable by FHCF upon termination of the reinsurance agreement. During the third quarter of 2023, the commutation process was completed and a final payment by the FHCF was received by the Company. Social inflation and the litigated claims environment in the State of Florida, which affected Hurricane Irma claims could result in adverse development of these claims, which creates uncertainty as to the ultimate cost to settle the remaining Hurricane Irma claims. Accordingly, the final amount paid by the FHCF could vary from the Company's current or future estimation of losses to be recovered from the FHCF.

Further, as described in Note 13. Reserve for Unpaid Losses, in the fourth quarter of 2022 the Company re-estimated its ultimate losses for Hurricane Irma and as a result of that re-estimation, the private layers of reinsurance specific to Hurricane Irma were exhausted. Accordingly, any subsequent adverse development on Hurricane Irma are retained by the Company.

**Note 18. Accounts Payable and Other Liabilities**

Other liabilities consist of the following as of December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
| ***Description*** | ***December 31, 2025*** | ***December 31, 2024*** |
|  | *(in thousands)* | *(in thousands)* |
| Accounts payable and other payables | 18845 | 21154 |
| Accrued interest | 26 | 146 |
| Other liabilities | 36 | 213 |
| Premium tax |  | 438 |
| Commission payables | 19358 | 17427 |
| Total other liabilities | $38265 | $39378 |

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**Note 19. Accrued Bonus Compensation**

For the year ended December 31, 2025, the Company recognized employee bonus compensation expense of $6.8 million. At December 31, 2025, the Company has accrued bonus of $6.6 million, which is expected to be paid in the first quarter of 2026. For the year ended December 31, 2024, the Company recognized employee bonus compensation expense in aggregate of $5.3 million, of which $5.7 million was unpaid until 2025.

**Note 20. Related Party Transactions** 

In July 2020, the Board of Directors appointed Mark Berset to the Board of Directors of the Company. Mr. Berset is also the Chief Executive Officer of Comegys Insurance Agency, Inc. ("Comegys"), an independent insurance agency that writes policies for the Company. The Company pays commission to Comegys based upon standard industry rates consistent with those provided to the Company's other insurance agencies. There have been no arrangements or understandings between Mr. Berset and any other persons with respect to his appointment as a director. Effective September 23, 2025, Mr. Berset retired from the Board of Directors of the Company to pursue other opportunities. For the years ended December 31, 2025, 2024 and 2023, the Company paid agency commission to Comegys of approximately $139,839, $139,762 and $132,505, respectively.

On September 2, 2025, the Audit Committee of the Board of Directors of the Company approved the repurchase of 21,000 shares of the Company's common stock held by one of its executive officers in lieu of the officer selling the shares on the open market. The shares of common stock were repurchased on September 5, 2025 under the Company's 2025 Share Repurchase Plan at the market price of $24.47 per share.

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**Note 21. Employee Benefit Plan**.

The Company provides a 401(k) plan for substantially all employees. The Company provides a matching contribution of 100% on the first 3% of employees' contribution and 50% on the next 2% of the employees' contribution to the plan. The maximum match is 4%. For the years ended December 31, 2025, 2024 and 2023, the contributions made to the plan on behalf of the participating employees were approximately $1.7 million, $1.6 million and $1.3 million, respectively.

Since September 1, 2021, the Company has been enrolled in a flex healthcare plan which allows employees the choice of three medical plans with a range of coverage levels and costs. For the years ended December 31, 2025, 2024 and 2023, the Company's medical costs were $6.6 million, $5.6 million and $5.0 million, respectively. The current healthcare plan is fully insured.

**Note 22. Equity**

The total amount of authorized capital stock consists of 50,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of December 31, 2025, the Company had 30,833,776 shares of common stock outstanding, 12,337,809 treasury shares of common stock and 1,479,243 shares of unvested shares of restricted common stock issued reflecting total paid-in capital of $365.7 million as of such date.

**Common Stock**

Holders of common stock are entitled to one vote for each share held on all matters subject to a vote of stockholders, subject to the rights of holders of any outstanding preferred stock. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election, subject to the rights of holders of any outstanding preferred stock. Holders of common stock will be entitled to receive ratably any dividends that the board of directors may declare out of funds legally available therefor, subject to any preferential dividend rights of outstanding preferred stock. Upon the Company's liquidation, dissolution or winding up, the holders of common stock will be entitled to receive ratably its net assets available after the payment of all debts and other liabilities and subject to the prior rights of holders of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. There is no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of the Company's capital stock (excluding restricted stock) are fully paid and non-assessable.

**Stock Repurchase Program** 

On December 15, 2022, the Board of Directors established a new share repurchase program plan to commence upon December 31, 2022, for the purpose of repurchasing up to an aggregate of $10.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2023 (the "2023 Share Repurchase Plan"). There were no shares repurchased for the year ended December 31, 2023.

On March 11, 2024, the Board of Directors established a new share repurchase program plan which commenced upon the expiration of the 2023 Share Repurchase Plan on December 31, 2023, for the purpose of repurchasing up to an aggregate of $10.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2024 (the "2024 Share Repurchase Plan"). There were no shares repurchased for the year ended December 31, 2024.

On December 9, 2024, the Board of Directors established a new share repurchase program plan which commenced upon the expiration of the 2024 Share Repurchase Plan on December 31, 2024, for the purpose of repurchasing up to an aggregate of $10.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2025 (the "2025 Share Repurchase Plan"). For the year ended December 31, 2025, the Company repurchased in aggregate 106,135 shares of its common stock under its repurchase program for $2.3 million.

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On November 5, 2025, the Board of Directors established a new share repurchase plan to commence upon the expiration of the previously authorized share repurchase plan on December 31, 2025, for the purpose of repurchasing up to an aggregate of $25.0 million of common stock through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2026 (the "2026 Share Repurchase Plan").

**Public and Private Offering of shares of Common Stock**

On December 14, 2023, the Company completed a primary offering of 3,703,703 shares of its common stock at a public offer price of $6.75 per share. In a concurrent private placement, the Company issued 148,148 shares of its common stock to an investor at the public offering price. Additionally, the Company completed the purchase by one of its independent Directors and the Company's Director and CEO, of 40,871 and 27,247, shares of common stock, respectively, at $7.34, the closing price of common stock on December 14, 2023.

The gross proceeds to Heritage from the public offering and private placement, before deducting underwriting discounts, commissions and other offering expenses, were approximately $26.5 million. The Company intends to use the net proceeds from the public offering and the private placement for general corporate and operations purposes and to provide capital for anticipated growth and expansion efforts.

**Dividends**

The declaration and payment of any future dividends will be subject to the discretion of the Board of Directors and will depend on a variety of factors including the Company's financial condition and results of operations.

The Board of Directors elected not to declare any dividends during the calendar years of 2023 through 2025.

**Note 23. Stock-Based Compensation**

*Restricted Stock*

The Company adopted the Heritage Insurance Holdings, Inc., 2023 Omnibus Incentive Plan (the "2023 Plan"), which became effective on June 7, 2023 upon approval by the Company's stockholders. The 2023 Plan authorized 2,125,000 shares of common stock for issuance under the Plan for future grants. Upon effectiveness of the original 2023 Plan, no new awards may be granted under the prior Omnibus Incentive Plan, which will continue to govern the terms of awards previously made under such plan. In June 2025, the 2023 Plan was amended, effective on June 10, 2025 upon approval by the Company's stockholders, to increase the authorized shares by 1,800,000 shares of common stock for issuance under the 2023 Plan for future grants.

At December 31, 2025, there were 2,026,449 shares available for grant under the 2023 Plan. The Company recognizes compensation expense under ASC 718 for its stock-based payments based on the fair value of the awards.

On June 10, 2025, the date of the annual meeting of the Company's stockholders, the Company awarded to non-employee directors an aggregate of 15,300 shares of common stock with a fair value at the time of grant of $23.53 per share. The stock was fully vested on the date of issuance.

On April 15, 2025, the Company awarded 9,000 shares of time-based restricted stock, with a fair value at the time of grant of $17.30 per share under the 2023 Plan to certain employees. The time-based restricted stock vested on December 15, 2025.

On March 11, 2025, the Company awarded an aggregate of 99,246 shares of time-based restricted stock and 285,985 shares of performance-based restricted stock, each at a fair value at the time of grant of $11.88 per share under the 2023 Plan to certain employees. The time-based restricted stock vests annually in three equal installments commencing on December 15, 2025. The performance based restricted stock has a three-year performance period beginning on January 1, 2025 and ending on December 31, 2027 and will vest following the end of the performance period but no later than March 31, 2028.

On January 10, 2025, the Company awarded 1,000 shares of time-based restricted stock, with a fair value at the time of grant of $10.86 per share under the 2023 Plan to an employee. The time-based restricted stock vested on December 15, 2025.

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In January 2025, the Company evaluated the restricted stock performance criteria and determined that based on the Company's results measured against the performance conditions under the awards, the maximum percentage would most likely be met by each of the recipients at the end of the vesting period for the 2024 awards, which were issued at target. Therefore, additional shares of restricted stock are expected to be earned upon vesting and beginning the first quarter of 2025, the Company began to recognize stock-based compensation on the additional 217,877 shares of performance-based restricted stock, as a result of the expected maximum achievement of the performance conditions under the awards.

In June 2024, the Company awarded to non-employee directors an aggregate of 39,312 shares of restricted stock with a fair value at the time of grant of $8.14 per share. The restricted stock will vest on the next annual meeting of the Company's stockholders that occurs after the award date, provided the member remains on the Board until such date. The restricted stock fully vested on June 5, 2025.

In March 2024, the Company awarded an aggregate of 8,390 shares of time-based restricted stock, with a fair value at the time of grant of $7.15 per share to certain employees. The time-based restricted stock fully vested on December 15, 2024.

On February 26, 2024, the Company awarded an aggregate of 163,640 shares of time-based restricted stock and an aggregate of 253,918 shares of performance-based restricted stock, with a fair value at the time of grant of $7.02 per share to certain employees. The time-based restricted stock will vest annually in three equal installments commencing on December 15, 2024. The performance based restricted stock has a three-year performance period beginning on January 1, 2024 and ending on December 31, 2026 and will vest following the end of the performance period but no later than March 31, 2027.

In November 2023, the Compensation Committee approved the cancellation of 420,225 performance-based unvested awards. The Company determined the performance criteria for certain performance-based unvested awards would not be met and accordingly, reversed previously recorded stock based compensation of approximately $1.7 million associated with those awards.

On July 11, 2023, the Company awarded 351,716 time-based restricted stock and 857,843 performance-based restricted stock, with a fair value at the time of grant of $4.08 per share under the Company's 2023 Omnibus Incentive Plan to certain employees. The time-based restricted stock will vest annually in three equal installments commencing on December 15, 2023. The performance based restricted stock has a three-year performance period beginning on January 1, 2023 and ending on December 31, 2025 and will vest following the end of the performance period but no later than March 30, 2026.

In June 2023, the Company awarded to non-employee directors in aggregate 63,744 shares of restricted stock with a fair value at the time of grant of $5.02 per share. In August 2023, the awards were amended which resulted in an adjustment to the number of shares of restricted stock awarded from 63,744 to 77,296 shares of restricted stock. The restricted stock shall vest on the earlier of (i) the one-year anniversary of the date of issuance and (ii) the day immediately prior to the date of the following year's annual meeting of stockholders, provided the member remains on the Board until such date. The restricted stock fully vested on June 5, 2024.

For the shares of performance-based restricted stock that are issued at target, the number of shares that will be earned at the end of the performance period is subject to increase or decrease based on the results of the performance condition. However, for those issued at the maximum, the number of shares that will be earned at the end of the performance period is subject to decrease based on the results of the performance condition under the awards.

The 2023 Plan authorizes the Company to grant stock options at exercise prices equal to the fair market value of the Company's stock on the dates the options are granted. The Company has not granted any stock options since 2015 and all unexercised stock options have since been forfeited.

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Restricted stock activity for the three years ended December 31, 2025, 2024 and 2023 is as follows:

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| | | |
|:---|:---|:---|
|  | <br><br>Number of shares | Weighted-Average<br>Grant-Date Fair<br>Value per Share |
| **Non-vested, at December 31, 2022** | 648493 | $7.38 |
| &nbsp;&nbsp;Granted - Performance-based restricted stock | 857843 | 4.08 |
| &nbsp;&nbsp;Granted - Time-based restricted stock | 429012 | 4.08 |
| &nbsp;&nbsp;Vested | (221218) | 3.51 |
| &nbsp;&nbsp;Canceled and surrendered | (552319) | 7.26 |
| **Non-vested, at December 31, 2023** | 1161811 | $4.25 |
| &nbsp;&nbsp;Granted - Performance-based restricted stock | 253918 | 7.02 |
| &nbsp;&nbsp;Granted - Time-based restricted stock | 211342 | 7.23 |
| &nbsp;&nbsp;Vested | (214991) | 9.55 |
| &nbsp;&nbsp;Canceled and surrendered | (77159) | 12.58 |
| **Non-vested, at December 31, 2024** | 1334921 | $8.36 |
| &nbsp;&nbsp;Granted - Performance-based restricted stock | 285985 | 11.88 |
| &nbsp;&nbsp;Granted - Time-based restricted stock | 124546 | 13.69 |
| &nbsp;&nbsp;Vested | (188550) | 28.44 |
| &nbsp;&nbsp;Canceled and surrendered | (77659) | 29.57 |
| **Non-vested, at December 31, 2025** | 1479243 | $18.86 |

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Awards are being amortized to expense over a one to three year vesting period. The Company recognized $5.4 million, $3.3 million, and $1.3 million of compensation expense for the years ended December 31, 2025, 2024 and 2023, respectively.

During the year ended December 31, 2025, the Company granted in aggregate 410,531 of time-based and performance-based restricted stock. During the year ended December 31, 2025, 266,209 shares of restricted stock were vested and released. Of the stock released to employees, 77,659 shares were withheld to cover withholding taxes of $2.3 million.

During the year ended December 31, 2024, the Company granted in aggregate 465,260 of time-based and performance-based restricted stock. During the year ended December 31, 2024, 292,150 shares of restricted stock were vested and released. Of the stock released to employees, 77,159 shares were withheld to cover withholding taxes of $971,000.

During the year ended December 31, 2023, the Company granted in aggregate 803,401 net of 483,454 cancelled shares of time-based and performance-based restricted stock. During the year ended December 31, 2023, 221,218 shares of restricted stock were vested and released. Of the stock released to employees, 68,865 shares were withheld to cover withholding taxes of $429,000.

At December 31, 2025, there was approximately $1.2 million unrecognized expense related to time-based unvested restricted stock and an additional $3.6 million for performance-based restricted stock, which is expected to be recognized over the remaining restriction periods as described in the table below. For the comparable period in 2024, there was $3.5 million of unrecognized expense.

Additional information regarding the Company's outstanding non-vested time-based restricted stock and performance-based restricted stock at December 31, 2025 is as follows:

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| | | | |
|:---|:---|:---|:---|
| **Grant date** | **Restricted shares unvested** | **Share Value at Grant Date Per Share** | **Remaining Restriction Period (Years)** |
| July 11, 2023 | 818627 | 4.08 | 0.3 |
| February 27, 2024 | 54547 | 7.02 | 1.0 |
| February 27, 2024 | 253918 | 7.02 | 1.3 |
| March 11, 2025 | 66165 | 11.88 | 2.0 |
| March 11, 2025 | 285986 | 11.88 | 2.3 |
|  | 1479243 |  |  |

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**Note 24. Selected Quarterly Financial Data (unaudited)**

The following table provides a summary of unaudited quarterly results for the periods presented (in thousands, except per share data):

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| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended December 31, 2025** | **First Quarter** | **Second Quarter** | **Third Quarter** | **Fourth Quarter** |
| Net premiums earned | $200034 | $196316 | $195132 | $202675 |
| Investment income | $8575 | $9034 | $9686 | $9861 |
| Total revenues | $211520 | $208035 | $212459 | $215316 |
| Total operating expenses | $169084 | $143165 | $142293 | $125637 |
| Operating income | $42436 | $64870 | $70166 | $89679 |
| Net income | $30474 | $48024 | $50421 | $66675 |
| Basic net income per share | $0.99 | $1.55 | $1.63 | $2.16 |
| Diluted net income per share | $0.99 | $1.55 | $1.63 | $2.15 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended December 31, 2024** | **First Quarter** | **Second Quarter** | **Third Quarter** | **Fourth Quarter** |
| Net premiums earned | $179426 | $190316 | $198841 | $199277 |
| Investment income | $8551 | $9769 | $9801 | $8510 |
| Total revenues | $191302 | $203571 | $211849 | $210263 |
| Total operating expenses | $168598 | $175932 | $200100 | $178745 |
| Operating income | $22704 | $27639 | $11749 | $31518 |
| Net income | $14225 | $18869 | $8152 | $20293 |
| Basic net income per share | $0.47 | $0.62 | $0.27 | $0.66 |
| Diluted net income per share | $0.47 | $0.61 | $0.27 | $0.66 |

---

The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted-average shares outstanding for each period.

**Note. 25. Segment Reporting**

The Company conducts its business as a residential property insurer, which is based upon the Company's business organizational and management structure, as well as information used to allocate the Company's resources and assess performance by the Company's Chief Executive Officer and Board of Directors, who are collectively the chief operating decision maker ("CODM").

The Company's business is reported as one operating and reportable segment, which is residential property insurance. The Company's residential property insurance business was determined to be one operating and reportable segment based on the Company's approach to making decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents, and monitoring the regulatory environment.

As the Company operates as one reportable segment, all significant expenses presented to the CODM are presented on the face of the Consolidated Statements of Income and Comprehensive Income. The CODM uses net income to evaluate income generated from segment assets, such as return on assets, in deciding whether to reinvest profits into the business or other parts of the entity, such as for acquisitions or to pay dividends.

The residential property insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with the Company's independent agents. The Company's property insurance business is comprised of commercial lines insurance and personal lines insurance and is evaluated on a consolidated basis.

Certain members of the Board of Directors also serve on the Audit Committee and, in that capacity, review selected statutory financial information separate from the consolidated GAAP financial information provided to the CODM. This statutory information is reviewed for regulatory and oversight purposes and does not affect the Company's conclusion that it has one operating and reportable segment.

The accounting policies applied in measuring segment results are the same as those described in Note 1, "**Summary of Significant Accounting Policies**," to the consolidated financial statements..

------

The following table summarizes the components of the Company's segments revenue and expenses for the following years:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | ***2025*** | ***2024*** | ***2023*** |
| **Revenues:** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| &nbsp;&nbsp;Earned premium, net of ceded premium | $794157 | $767860 | $697185 |
| &nbsp;&nbsp;Net investment income | 37156 | 36631 | 25756 |
| &nbsp;&nbsp;Net realized gains (losses) on debt securities and other investments | 2713 | (705) | (972) |
| &nbsp;&nbsp;Other revenue | 13304 | 13199 | 13529 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 847330 | 816985 | 735498 |
| **Expenses:** |  |  |  |
| &nbsp;&nbsp;Losses and loss adjustment expense - current year | 326700 | 421633 | 427702 |
| &nbsp;&nbsp;Losses and loss adjustment expense - prior year | (13454) | 25415 | (1573) |
| &nbsp;&nbsp;Policy acquisition costs | 173961 | 191189 | 167610 |
| &nbsp;&nbsp;General and administration costs <sup>(1)(2)</sup> | 80273 | 75588 | 69855 |
| &nbsp;&nbsp;Depreciation & amortization | 12699 | 9551 | 8689 |
| &nbsp;&nbsp;Interest expense | 7887 | 10934 | 11210 |
| &nbsp;&nbsp;Income tax expense | 63670 | 21136 | 6698 |
| &nbsp;&nbsp;&nbsp;&nbsp;Segment net income | 195594 | 61539 | 45307 |
| **Reconciliation of profit or loss:** |  |  |  |
| &nbsp;&nbsp;Adjustment and reconciling items: |  |  |  |
| **Consolidated net income** | $195594 | $61539 | $45307 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Excludes depreciation and amortization expense

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)For the year ended December 31, 2023 general and administration includes the $767,000 impairment on tangible assets

**Note 26. Subsequent Events**

The Company performed an evaluation of subsequent events through the date the condensed consolidated financial statements were issued and determined there were no recognized or unrecognized subsequent events that would require an adjustment or additional disclosure in the consolidated financial statements as of December 31, 2025.

In January 2026, the Company repurchased an aggregate of 112,858 shares of its common stock under the 2026 Share Repurchase program for a total purchase price of $3.0 million.

On January 23, 2026, the Company received full payment on the $11.0 million promissory note recorded previously in Other accounts receivable, along with the accrued but unpaid interest of $48,521.

The Company experienced losses from three winter storms that occurred in January and February of 2026 and expects to incur approximately $22.8 million of pre-tax catastrophe losses, net of reinsurance, related to these events.

------

**PART IV**

**Item 15. Ex** **hibits, Financial Statements Schedules**

(a)The following documents are filed as part of this report.

(1)Financial Statements

The following consolidated financial statements of the Company and the reports of independent auditors thereon are filed with this report:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Changes in Stockholders' Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

(2)*Financial Statement Schedules*

The following additional financial schedules are furnished herewith pursuant to requirements of Form 10-K.

**Schedules required to be filed under the provisions of Regulations S-X Article 7:** 

---

| | |
|:---|:---|
|  | **Page** |
| [<u>Schedule II Condensed Financial Information of Registrant</u>](#schedule_ii) | 52 |
| [<u>Schedule V Valuation Allowance and Qualifying Accounts</u>](#schedule_v) | 55 |
| [<u>Schedule VI Supplemental Information Concerning Consolidated Property-Casualty Insurance Operations</u>](#schedule_vi) | 56 |

---

(3)List of Exhibits

The following is a list of exhibits filed or incorporated by reference as part of this Annual Report on Form 10-K

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** | **Description (File No. 001-36462)** |
| 3.1 | [<u>Certificate of Incorporation of Heritage Insurance Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed on August 6, 2014)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312514298331/d743593dex31.htm) |
| 3.2 | [<u>By-laws of Heritage Insurance Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q filed on August 6, 2014)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312514298331/d743593dex32.htm) |
| 4.1 | [<u>Form of Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1/A (File No. 333-195409) filed on May 13, 2014)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312514196708/d667216dex41.htm) |
| 4.2 | [<u>Form of 5.875% Convertible Senior Notes due 2037 (included in Exhibit 4.1), incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 8-K filed on August 16, 2017)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312517259947/d444357dex11.htm) |
| 4.3 | [<u>Indenture, date as of August 16, 2017, by and among the Company. Heritage MGA, LLC as guarantor, and Wilmington Trust, National Association, as trustee, (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on August 16, 2017)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312517259947/d444357dex41.htm) |
| 4.4 | [<u>Description of Capital Stock dated December 31, 2019 (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K filed on March 10, 2020)</u>](https://www.sec.gov/Archives/edgar/data/0001598665/000156459020009748/hrtg-ex45_230.htm) |
| 10.1 | [<u>Amended and Restated Credit Agreement, dated July 22, 2025 among Heritage Insurance Holdings, Inc., certain subsidiaries of Heritage Insurance Holdings, Inc. from time to time party as guarantors, the lenders from time to</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312525164405/d930483dex1030.htm) |

---

------

---

| | |
|:---|:---|
|  | [<u>time party and Regions Bank, as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.30 to the Company's Current Report on Form 8-K filed on July 24, 2025</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312525164405/d930483dex1030.htm) |
| 10.2† | [<u>Heritage Insurance Holdings, Inc. Omnibus Incentive Plan (incorporated by reference to Exhibit 10.28 to the Company's Registration Statement filed on Form S-1 (File No. 333-195409) filed on April 21, 2014)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312514150787/d667216dex1028.htm) |
| 10.3† | [<u>Heritage Insurance Holdings, Inc. 2023 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement filed on Form S-8 (File No. 333-272474) on June 7, 2023)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312523162241/d497233dex991.htm). |
| 10.4† | [<u>Form of Restricted Stock Award Agreement (Time-based and Performance-Based Vesting, as of March 2025) (incorporated by reference to Exhibit 10.30 to the Company's Quarterly Report on Form 10-Q filed on May 9, 2025)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000159866525000027/ex1030stockagreementtbandpb.htm) |
| 10.5† | [<u>Form of Amendment to Restricted Stock Award Agreements (incorporated by reference to Exhibit 10.31 to the Company's Quarterly Report on Form 10-Q filed on May 9, 2025)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000159866525000027/ex1031amendstockagreement.htm) |
| 10.6† | [<u>Form of Stock Award Agreement (Non-employee directors, as of June 2025) (incorporated by reference to Exhibit 10.32 to the Company's Quarterly Report on Form 10-Q filed on August 8, 2025)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000159866525000058/stkawardagmtnoneedirex1032.htm) |
| 10.7† | [<u>Employment Agreement dated January 1, 2024 between Heritage Insurance Holdings, Inc., and Kirk Lusk (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on January 11, 2024)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312524006610/d710971dex102.htm) |
| 10.8† | [<u>Employee Agreement dated January 1, 2024 between Heritage Insurance Holdings, Inc. and Sharon Binnun (incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed on January 11, 2024)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312524006610/d710971dex104.htm) |
| 10.9† | [<u>Employment Agreement dated April 2, 2018 between Zephyr Insurance Company, Inc., and Tim Johns (incorporated by reference to Exhibit 10.21 to the Company's Form 10-Q filed on May 7, 2021)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000156459021025308/hrtg-ex1021_96.htm) |
| 10.10† | [<u>Employment Agreement dated January 1, 2024 between Heritage Insurance Holdings, Inc., and Ernie Garateix (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on January 11, 2024)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312524006610/d710971dex101.htm) |
| 10.11† | [<u>Employment Agreement dated January 1, 2024 between Heritage Insurance Holdings, Inc., and Tim Moura (incorporated by reference to Exhibit 10.3 to the Company's Form 8-K filed on January 11, 2024)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312524006610/d710971dex103.htm) |
| 19.1 | [<u>Heritage Insurance Holdings, Inc.</u> Insider Trading Policy <u>(incorporated by reference to Exhibit 19.1 to the Company's Annual Report on Form 10-K filed on March 13, 2025)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000159866525000009/hrtg-insidertradingpolicye.htm) |
| 21\* | [<u>Subsidiaries of the Registrant</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312526103715/hrtg-ex21.htm) |
| 23.1\* | [<u>Consent of Plante Moran, PLLC</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312526103715/hrtg-ex23_1.htm) |
| 31.1\* | [<u>Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312526103715/hrtg-ex31_1.htm) |
| 31.2\* | [<u>Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312526103715/hrtg-ex31_2.htm) |
| 31.3\*\* | [<u>Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](hrtg-ex31_3.htm) |
| 31.4\*\* | [<u>Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](hrtg-ex31_4.htm)<br>|

---

------

---

| | |
|:---|:---|
| 32.1\*\*\*<br>| [<u>Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](https://www.sec.gov/Archives/edgar/data/1598665/000119312526103715/hrtg-ex32_1.htm)<br>|
| 32.2\*\*\*\*<br>| [<u>Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](hrtg-ex32_2.htm)<br>|
| 97.1 | [<u>Heritage Insurance Holdings, Inc. Executive Officers Clawback Policy (incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 10-K filed on March 13, 2024)</u>](https://www.sec.gov/Archives/edgar/data/1598665/000095017024030766/hrtg-ex97_1.htm) |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
| 104 | The cover page from the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, formatted in Inline XBRL (included in Exhibit 101) |

---

\* Previously filed with the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 12, 2026

\*\* Filed herewith

\*\*\* Previously furnished with the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 12, 2026

\*\*\*\* Furnished herewith

† Management contract or compensatory plan or arrangement

------

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
|  |  | **HERITAGE INSURANCE HOLDINGS, INC.** | **HERITAGE INSURANCE HOLDINGS, INC.** |
| Date: | March 19, 2026 | By: | /s/ ERNESTO GARATEIX |
|  |  |  | Chief Executive Officer |
|  |  |  | (Principal Executive Officer and Duly Authorized Officer) |

---

------

**SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT**

**Condensed Balance Sheet** 

The following summarizes the major categories of Heritage Insurance Holdings, Inc.'s financial statements (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| **ASSETS** |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $5220 | $2505 |
| &nbsp;&nbsp;Investment in and advances to subsidiaries | 593914 | 427959 |
| &nbsp;&nbsp;Other assets | 2155 | 1356 |
| **Total Assets** | $601290 | $431821 |
| **LIABILITIES** |  |  |
| &nbsp;&nbsp;Other liabilities | $96039 | $141021 |
| **Total Liabilities** | $96039 | $141021 |
| **STOCKHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp;Common stock | $3 | $3 |
| &nbsp;&nbsp;Paid-in-capital | 365736 | 362644 |
| &nbsp;&nbsp;Treasury | (133183) | (130900) |
| &nbsp;&nbsp;Accumulated other comprehensive income | (10555) | (28604) |
| &nbsp;&nbsp;Retained earnings | 283250 | 87656 |
| **Total Stockholders' Equity** | $505251 | $290799 |
| **Total Liabilities and Stockholders' Equity** | $601290 | $431821 |

---

------

**Condensed Statement of Operations**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | ***(In thousands, except share and per share amounts)*** | ***(In thousands, except share and per share amounts)*** | ***(In thousands, except share and per share amounts)*** |
| **Revenue:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other revenue | $21534 | $21011 | $17208 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 21534 | 21011 | 17208 |
| **Expenses:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expense | 11987 | 10714 | 1841 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance cost | 363 | 856 | 469 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | 7609 | 9292 | 10238 |
| Total expenses | $19959 | $20862 | $12548 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes and equity in net income of subsidiaries | 1575 | 149 | 4660 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | 1091 | 270 | 1905 |
| Income (loss) before equity in net income of subsidiaries | 484 | (121) | 2755 |
| Equity in net income of subsidiaries | 195110 | 61661 | 42552 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Consolidated net income** | $195594 | $61540 | $45307 |

---

*See notes to condensed financial statements.*

------

**SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT**

**Condensed Statement of Cash Flows**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
| **Cash flows from operating activities:** | **2025** | **2024** | **2023** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| **Net income (loss)** | $484 | $(121) | $2754 |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |  |
| &nbsp;&nbsp;Stock-based compensation | 5388 | 3254 | 1362 |
| &nbsp;&nbsp;Amortization of debt issuance cost | 363 | 857 | 469 |
| &nbsp;&nbsp;Impairment on other investments |  | 483 |  |
| &nbsp;&nbsp;Deferred income taxes | (1695) | (107) | 39 |
| Changes in operating assets and liabilities |  |  |  |
| &nbsp;&nbsp;Prepaid | (928) | (295) | 137 |
| &nbsp;&nbsp;Income taxes payable | (13738) | 8389 | 9415 |
| &nbsp;&nbsp;Accrued interest on debt | (117) | (173) | (425) |
| &nbsp;&nbsp;Other assets | 130 | 134 | 2572 |
| &nbsp;&nbsp;Debt issuance costs | (2204) |  |  |
| &nbsp;&nbsp;Dividends payable |  | (54) | (19) |
| &nbsp;&nbsp;Other liabilities | (539) | 19 | (588) |
| &nbsp;&nbsp;**Net cash (used in) provided by operating activities** | $(12856) | $12386 | $15716 |
| Investing Activities: |  |  |  |
| &nbsp;&nbsp;Dividends received from subsidiaries | 45400 | 55609 | 33900 |
| &nbsp;&nbsp;Investments and advances to subsidiaries | 1803 | (81607) | (38475) |
| &nbsp;&nbsp;**Net cash provided by (used in) investing activities** | 47203 | (81607) | (38475) |
| Financing Activities: |  |  |  |
| &nbsp;&nbsp;Mortgage loan payments | (10787) | (270) | (180) |
| &nbsp;&nbsp;Payment on 7% loan | (10204) |  |  |
| &nbsp;&nbsp;Issuance of common stock, net |  | (3) | 24666 |
| &nbsp;&nbsp;Repayment of long-term debt | (6063) | (9500) | (9500) |
| &nbsp;&nbsp;Shares tendered for income tax withholdings | (2296) | (971) | (429) |
| &nbsp;&nbsp;Purchase of treasury stock | (2282) |  |  |
| &nbsp;&nbsp;Dividends forfeited |  | 54 |  |
| Net cash (used in) provided by financing activities | (31632) | 44919 | 48457 |
| Increase (decrease) in cash and cash equivalents | 2715 | (24302) | 25698 |
| &nbsp;&nbsp;**Cash and cash equivalents, beginning of period** | 2505 | 26807 | 1109 |
| &nbsp;&nbsp;**Cash and cash equivalents, end of year** | $5220 | $2505 | $26807 |

---

*See notes to condensed financial statements.*

------

**SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT**

**Notes to Condensed Financial Statements** 

**(1)** **Organization and Basis of Presentation** 

Heritage Insurance Holdings, Inc., ("we", "our", "us" and "Heritage"), established in 2012 and incorporated in the state of Delaware in 2014, is a property and casualty insurance holding company that provides personal and commercial residential property insurance. We are headquartered in Tampa, Florida and, through our insurance company subsidiaries, Heritage Property & Casualty Insurance Company ("Heritage P&C"), Narragansett Bay Insurance Company ("NBIC") and Zephyr Insurance Company ("Zephyr"), we write personal residential property insurance in the states of Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia. We also provide commercial residential insurance for properties in Florida, New Jersey, and New York and are also licensed in the state of Pennsylvania, but have not written business in that state. In order to limit our potential exposure to catastrophic events, we purchase significant reinsurance from third party reinsurers and may sponsor catastrophe bonds issued by Citrus Re Ltd.

The accompanying condensed financial statements included the activity of Heritage and the equity basis of its consolidated subsidiaries. Accordingly, these condensed financial statements have been presented for the parent company only. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes of Heritage Insurance and subsidiaries set forth in Part II, Item 8 Financial Statements and Supplemental Data of this Annual Report.

In applying the equity method to our consolidated subsidiaries, we record the investment at cost and subsequently adjust for additional capital contributions, distributions and proportionate share of earnings or losses.

**SCHEDULE V – VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS** 

The following table summarizes activity in the Company's allowance for doubtful accounts for the year ended December 31, 2025 and 2024.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Description** | **Beginning balance** | **Charges in earnings** | **Charges to other accounts** | **Deductions** | **Ending balance** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Year ended December 31, 2025 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful accounts | $1359 | 180 | 210 |  | $1749 |
| Year ended December 31, 2024 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful accounts | $1307 | 190 | (138) |  | $1359 |

---

------

**SCHEDULE VI – SUPPLEMENTAL INFORMATION CONCERNING CONSOLIDATED PROPERTY AND CASUALTY INSURANCE OPERATIONS** 

The following table provides certain information related to the Company's property and casualty operations as of, and for the periods presented (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of<br>December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
| **Year** | **Reserves for<br>Unpaid Losses<br>and LAE** | **Incurred<br>Losses and<br>LAE Current<br>Year** | **Incurred<br>Losses and<br>LAE Prior<br>Years** | **Paid losses<br>and LAE** | **Net<br>Investment<br>Income** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| 2025 | $579477 | $326700 | $(13454) | $370171 | $37156 |
| 2024 | $1042687 | $421633 | $25415 | $504171 | $36631 |
| 2023 | $845955 | $427702 | $(1573) | $374097 | $25756 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of<br>December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
| **Year** | **Deferred<br>Policy<br>Acquisition<br>Costs<br>("DPAC")** | **Amortization<br>of DPAC, Net** | **Net Premiums<br>Written** | **Net Premiums<br>Earned** | **Unearned<br>Premiums** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| 2025 | $64544 | $227454 | $802164 | $794157 | $707923 |
| 2024 | $63204 | $235058 | $779115 | $767860 | $702707 |
| 2023 | $102884 | $213028 | $729362 | $697185 | $675921 |

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## Exhibit 31.3

**Exhibit 31.3** 

**CERTIFICATION** 

I, Ernesto Garateix, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A of Heritage Insurance Holdings, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading, with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: March 19, 2026 | /s/ ERNESTO GARATEIX |
|  | Ernesto Garateix |
|  | *Chief Executive Officer (Principal* <br>*Executive Officer)* |

---

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## Exhibit 31.4

**Exhibit 31.4**

**CERTIFICATION** 

I, Kirk Lusk, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A of Heritage Insurance Holdings, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading, with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: March 19, 2026 | /s/ KIRK LUSK |
|  | Kirk Lusk |
|  | *Chief Financial Officer (Principal* <br>*Financial Officer)* |

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## Exhibit 32.2

**Exhibit 32.2** 

**CERTIFICATIONS PURSUANT TO** 

**18 U.S.C. SECTION 1350** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002** 

In connection with the Amendment No. 1 to the Annual Report of Heritage Insurance Holdings, Inc. (the "Company") on Form 10-K/A for the period ending December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Ernesto Garateix, Chief Executive Officer of the Company and Kirk Lusk, Chief Financial officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to our knowledge, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| By: | /s/ ERNESTO GARATEIX |
|  | Ernesto Garateix  |
|  | *Chief Executive Officer (Principal Executive Officer)*  |

---

---

| | |
|:---|:---|
| By: | /s/ KIRK LUSK |
|  | Kirk Lusk  |
|  | *Co-Chief Financial Officer (Principal Financial Officer)* |

---

Date March 19, 2026

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