AMERICAN COASTAL INSURANCE Corp

Previous wording

Our Company’s primary source of revenue is generated from writing insurance in Florida. Our target market in such areas consists of states where the perceived threat of natural catastrophe has caused large national insurance carriers to reduce their concentration of policies. We believe an opportunity exists for ACIC to write profitable business in such areas. On May 9, 2024, we entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC (Forza) in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of IIC. Forza’s application to acquire IIC was approved by the New York Department of Financial Services ("NYDFS") on February 13, 2025, and the sale closed on April 1, 2025. The Company received cash proceeds totaling $25,679,000 from the sale resulting in a loss on disposal of $247,000, net of tax impacts. The Company also recognized a $1,348,000 loss, net of tax impacts, on IIC's fixed maturity portfolio, which was included in accumulated other comprehensive loss on the Company's Consolidated Balance Sheets prior to the sale. As a result, IIC results of operations and assets and liabilities are captured within discontinued operations and can be seen in Note 4 of the Notes to Unaudited Condensed Consolidated Financial Statements above.

Current wording

On May 9, 2024, we entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC (Forza) in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of Interboro Insurance Company (IIC), our former insurance subsidiary. Forza’s application to acquire IIC was approved by the New York Department of Financial Services ("NYDFS") on February 13, 2025, and the sale closed on April 1, 2025. The Company received cash proceeds totaling $25,679,000 from the sale resulting in a loss on disposal of $247,000, net of tax impacts. The Company also recognized a $1,348,000 loss, net of tax impacts, on IIC's fixed maturity portfolio, which was included in accumulated other comprehensive loss on the Company's Consolidated Balance Sheets prior to the sale. As a result, IIC results of operations and assets and liabilities are captured within discontinued operations and can be seen in Note 3 of the Notes to Unaudited Condensed Consolidated Financial Statements above.

Previous wording

Our policies in-force increased by 8.6% from 3,971 policies in-force at September 30, 2024 to 4,343 policies in-force at September 30, 2025. As of September 30, 2025 and 2024, all of our policies in-force are in the state of Florida.

Current wording

Our policies in-force increased by 0.4% from 4,239 policies in-force at March 31, 2025 to 4,254 policies in-force at March 31, 2026.

Previous wording

Net income (loss) excluding the effects of amortization of intangible assets, income (loss) from discontinued operations, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure, which is computed by adding amortization, net of tax, to net income (loss) and subtracting income (loss) from discontinued operations, net of tax, realized gains (losses) on our investment portfolio, net of tax, and unrealized gains (losses) on our equity securities, net of tax, from net income (loss). Amortization expense is related to the amortization of intangible assets acquired, including goodwill, through mergers and therefore the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of our operations. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. The most directly comparable GAAP measure is net income (loss). The core income (loss) measure should not be considered a substitute for net loss and does not reflect the overall profitability of our business.

Current wording

Net income (loss) excluding the effects of amortization of intangible assets, income (loss) from discontinued operations, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure, which is computed by adding amortization, net of tax, to net income (loss) and subtracting income (loss) from discontinued operations, net of tax, realized gains (losses) on our investment portfolio, net of tax, and unrealized gains (losses) on our equity securities, net of tax, from net income (loss). Amortization expense is related to the amortization of intangible assets acquired, including goodwill, through mergers and therefore the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of our operations. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. The most directly comparable GAAP measure is net income (loss). The core income (loss) measure should not be considered a substitute for net income (loss) and does not reflect the overall profitability of our business.

Previous wording

When we prepare our consolidated financial statements and accompanying notes in conformity with GAAP, we must make estimates and assumptions about future events that affect the amounts we report. Certain of these estimates result from judgments that can be subjective and complex. As a result of that subjectivity and complexity, and because we continuously evaluate these estimates and assumptions based on a variety of factors, actual results could materially differ from our estimates and assumptions if changes in one or more factors require us to make accounting adjustments. During the nine months ended September 30, 2025, we reassessed our critical accounting policies and estimates as disclosed in Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements and our Annual Report on Form 10-K for the year ended December 31, 2024. We have made no material changes or additions with regard to those policies and estimates.

Current wording

When we prepare our consolidated financial statements and accompanying notes in conformity with GAAP, we must make estimates and assumptions about future events that affect the amounts we report. Certain of these estimates result from judgments that can be subjective and complex. As a result of that subjectivity and complexity, and because we continuously evaluate these estimates and assumptions based on a variety of factors, actual results could materially differ from our estimates and assumptions if changes in one or more factors require us to make accounting adjustments. During the three months ended March 31, 2026, we reassessed our critical accounting policies and estimates as disclosed in Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements and our Annual Report on Form 10-K for the year ended December 31, 2025. We have made no changes or additions with regard to those policies and estimates.

Previous wording

We must comply with applicable state insurance regulations that prescribe the type, quality and concentrations of investments our insurance subsidiaries can make; therefore, our current investment policy limits investment in non-investment-grade fixed maturities and limits total investment amounts in preferred stock, common stock and mortgage notes receivable. We do not invest in derivative securities, however, we do hold warrants as a result of our surplus note investment. Please see Note 5 for more information.

Current wording

We must comply with applicable state insurance regulations that prescribe the type, quality and concentrations of investments our insurance subsidiary can make; therefore, our current investment policy limits investment in non-investment-grade fixed maturities and limits total investment amounts in preferred stock, common stock and mortgage notes receivable. We do not invest in derivative securities, however, we do hold warrants as a result of our surplus note investment. Please see Note 4 for more information.

Previous wording

As of September 30, 2025, one outside asset management company which has authority and discretion to buy and sell securities for us, manage our investments subject to (i) the guidelines established by our Board of Directors and (ii) the direction of management. Prior to August 2025, we engaged two outside asset management companies. The Investment Committee of our Board of Directors reviews and approves our investment policy on a regular basis.

Current wording

As of March 31, 2026, we engaged one outside asset management company, which has authority and discretion to buy and sell securities for us, manage our investments subject to (i) the guidelines established by our Board of Directors and (ii) the direction of management. Prior to August 2025, we engaged two outside asset management companies. The Investment Committee of our Board of Directors reviews and approves our investment policy on a regular basis.

Previous wording

Our cash, cash equivalents, restricted cash and investment portfolio totaled $695,047,000 at September 30, 2025, compared to $540,811,000 at December 31, 2024.

Current wording

Our cash, cash equivalents, restricted cash and investment portfolio totaled $599,445,000 at March 31, 2026, compared to $647,744,000 at December 31, 2025. The Company paid a dividend totaling approximately $36.6 million during the first quarter, which drove this decrease, along with changes in operating assets and liabilities.

Previous wording

We classify all of our fixed-maturity investments as available-for-sale. Our investments at September 30, 2025 and December 31, 2024 consisted mainly of U.S. government and agency securities, securities of investment-grade corporate issuers, mortgage-backed securities, and states, municipalities and political subdivisions. Our equity holdings as of September 30, 2025 and December 31, 2024 consisted of mutual funds and common stock. At September 30, 2025, approximately 82.8% of our fixed maturities were U.S. Treasuries or corporate bonds rated "A" or better, and 17.2% were corporate bonds rated "BBB" or "BB".

Current wording

We classify all of our fixed-maturity investments as available-for-sale. Our investments at March 31, 2026 and December 31, 2025 consisted mainly of U.S. government and agency securities, securities of investment-grade corporate issuers, mortgage-backed securities, and states, municipalities and political subdivisions. Our equity holdings as of March 31, 2026 and December 31, 2025 consisted of mutual funds and common stock. At March 31, 2026, approximately 82.5% of our fixed maturities were U.S. Treasuries or corporate bonds rated "A" or better, and 17.5% were corporate bonds rated "BBB" or "BB".

Previous wording

Our catastrophe reinsurance coverage consists of two separate placements:

Current wording

The Company's catastrophe reinsurance coverage consists of three separate placements:

Previous wording

AmCoastal’s core catastrophe reinsurance program, including catastrophe bonds (effective April 2024 and December 2024), in effect June 1 through May 31, annually, which includes excess of loss and quota share treaties providing coverage for catastrophe losses from named or numbered windstorms; and

Current wording

AmCoastal’s core catastrophe reinsurance program, including catastrophe bonds (effective April 2024 and December 2024), in effect June 1 through May 31, annually, which includes excess of loss and quota share treaties providing coverage for catastrophe losses from named or numbered windstorms;

Previous wording

AmCoastal’s all other perils catastrophe excess of loss agreement in effect January 1 through December 31, annually, which provides protection from catastrophe loss events other than named or numbered windstorms and earthquakes.

Current wording

AmCoastal’s all other perils catastrophe excess of loss agreement in effect January 1 through December 31, annually, which provides protection from catastrophe loss events other than named or numbered windstorms and earthquakes; and

Previous wording

AmCoastal’s core catastrophe reinsurance program provides occurrence-based coverage up to an exhaustion point of approximately $1,330,000,000 for a first occurrence and $1,676,000,000 in the aggregate. Under this program, the Company's GAAP retention on a first event is $29,750,000 ($14,000,000 retained by AmCoastal under statutory accounting principles (STAT retained), $15,750,000 (retained separately by the Company's captive). The Company has purchased second and third event retrocession coverage, reducing its second event GAAP retention to $18,500,000 ($14,000,000 STAT retained by AmCoastal, $4,500,000 retained separately by the Company's captive) and third event GAAP retention to $3,750,000, based on three $100,000,000 loss events. AmCoastal’s program provides sufficient coverage for approximately a 1-in-203-year return period, indicating that the probability of a single occurrence exceeding protection purchased is roughly 0.5% estimated by blending the AIR 10, AIR 11.5, RMS 22 and RMS 23 catastrophe models using long-term catalogs including demand surge and based on total insured value at September 30, 2025 of $69 billion. AmCoastal’s program also provides sufficient coverage for a 1-in-100-year event followed by a 1-in-50-year event in the same treaty year, the probability of which is less than 0.1%. While we believe these catastrophe models are very good tools and their output provides reasonable proxies for the probability of exhausting our reinsurance protections, they are imperfect, so actual results could vary dramatically from those expected.

Current wording

AmCoastal’s core catastrophe reinsurance program provides occurrence-based coverage up to an exhaustion point of approximately $1,330,000,000 for a first occurrence and $1,676,000,000 in the aggregate. Under this program, the Company's GAAP retention on a first event is $29,750,000 ($14,000,000 retained by AmCoastal under statutory accounting principles (STAT retained), $15,750,000 (retained separately by the Company's captive)). The Company has purchased second and third event retrocession coverage, reducing its second event GAAP retention to $18,500,000 ($14,000,000 STAT retained by AmCoastal, $4,500,000 retained separately by the Company's captive) and third event GAAP retention to $3,750,000, based on three $100,000,000 loss events. AmCoastal’s program provides sufficient coverage for approximately a 1-in-217-year return period, indicating that the probability of a single occurrence exceeding protection purchased is roughly 0.5% when using the catastrophe model AIR 11.5 (using the long-term catalog with demand surge and loss adjustment expense included) and based on total insured value at September 30, 2025 of $69 billion. AmCoastal’s program also provides sufficient coverage for a 1-in-100-year event followed by a 1-in-50-year event in the same treaty year, the probability of which is less than 0.1%. While we believe these catastrophe models are useful tools and their outputs provide reasonable proxies for the probability of exhausting our reinsurance protections, they are imperfect, and actual results may differ materially from those expected.

Previous wording

AmCoastal’s all other perils catastrophe excess of loss agreement provides protection from catastrophe loss events other than named windstorms and earthquakes up to $88,200,000 for a first and second event, totaling $176,400,000 in the aggregate. This agreement provides sufficient coverage for approximately a 1-in-450-year return period, indicating that the probability of a single occurrence exceeding protection purchased is no more than 0.2%.

Current wording

AmCoastal’s all other perils catastrophe excess of loss agreement provides protection from catastrophe loss events other than named windstorms and earthquakes up to $95,600,000 for a first event, totaling $170,400,000 in the aggregate. This agreement provides sufficient coverage for approximately a 1-in-227-year return period, indicating that the probability of a single occurrence exceeding protection purchased is no more than 0.5%.

Previous wording

In addition to the programs described above, AmCoastal purchased a new catastrophe aggregate excess of loss coverage (the “CAT Agg” agreement) to mitigate our catastrophe frequency risk. This agreement provides coverage for in-force, new and renewal business. Effective January 1, 2025, the new CAT Agg agreement provides $40,000,000 of aggregate limit (with a $20,000,000 per occurrence cap) in excess of zero after the $40,000,000 annual aggregate deductible has been met. The CAT Agg agreement limits our losses from all catastrophe loss events, including named windstorms, severe convective storms and winter storm events for the full year ending December 31, 2025.

Current wording

In addition to the programs described above, AmCoastal renewed its catastrophe aggregate excess of loss coverage (the “CAT Agg” agreement) to mitigate our catastrophe frequency risk. This agreement provides coverage for in-force, new and renewal business. Effective January 1, 2026, the CAT Agg agreement provides $40,000,000 of aggregate limit (with a $20,000,000 per occurrence cap) in excess of zero after the $40,000,000 annual aggregate deductible has been met. The CAT Agg agreement limits our losses from all catastrophe loss events, including named windstorms, severe convective storms and winter storm events for the full year ending December 31, 2026.

Previous wording

Where we think prudent, particularly where premium rates are high relative to the risk, we retain risk whereby AmCoastal purchases reinsurance from Shoreline Re, our captive reinsurance entity. Shoreline Re participates on AmCoastal's all other perils catastrophe excess of loss agreement and AmCoastal's excess per risk agreement. In addition, Shoreline Re participates in a 45% quota share agreement with AmCoastal, which provides coverage for all catastrophe perils as well as attritional losses incurred. The table below outlines the participation of Shoreline Re for each program, including premium received and capital at risk.

Current wording

Where we think prudent, particularly where premium rates are high relative to the risk, we retain risk whereby AmCoastal purchases reinsurance from Shoreline Re, our captive reinsurance entity. Shoreline Re has historically participated on AmCoastal's all other perils catastrophe excess of loss agreement and AmCoastal's excess per risk agreement. In addition, Shoreline Re participates in a 45% quota share agreement with AmCoastal, which provides coverage for all catastrophe perils as well as attritional losses incurred.

Previous wording

(5)This treaty was commuted on June 1, 2025 with no impact on our consolidated results.

Current wording

(4)This treaty was commuted on June 1, 2025 with no impact on our consolidated results.

Previous wording

The table below outlines our external quota share agreements in effect for the nine months ended September 30, 2025 and 2024.

Current wording

The table below outlines our external quota share agreements in effect for the three months ended March 31, 2026 and 2025.

Previous wording

(2) The cession rate of this treaty was reduced from 20% to 15% effective June 1, 2025 to June 1, 2026.

Current wording

(2) The cession rate of this treaty was reduced from 20% to 15% effective June 1, 2025.

Previous wording

Reinsurance costs as a percentage of gross earned premium during the three and nine months ended September 30, 2025 and 2024 were as follows:

Current wording

Reinsurance costs as a percentage of gross earned premium during the three months ended March 31, 2026 and 2025 were as follows:

Previous wording

Unpaid losses and LAE totaled $188,703,000 and $322,087,000 as of September 30, 2025 and December 31, 2024, respectively.

Current wording

Unpaid losses and LAE totaled $126,990,000 and $165,701,000 as of March 31, 2026 and December 31, 2025, respectively.

Previous wording

Our gross written premiums decreased $9,056,000, or 1.8%, to $498,010,000 for the nine months ended September 30, 2025 from $507,066,000 for the same period in 2024, driven by a decrease in premium written in the third quarter as we managed our exposure. Gross premium earned increased $14,420,000, or 3.0%, to $490,318,000 for the nine months ended September 30, 2025 from $475,898,000 for the same period in 2024. Ceded premiums earned decreased $12,615,000, or 4.6%, to $262,785,000 for the nine months ended September 30, 2025 from $275,400,000 for the same period in 2024. The breakdown of the year-over-year change in these premiums and new and renewal policies are shown in the tables below. More detail regarding our ceded premiums can be seen in our analysis of financial condition above.

Current wording

Our gross written premiums decreased $48,457,000, or 24.5%, to $149,395,000 for the three months ended March 31, 2026 from $197,852,000 for the same period in 2025. Gross premium earned decreased $20,967,000, or 12.9%, to $141,134,000 for the three months ended March 31, 2026 from $162,101,000 for the same period in 2025. These changes are mainly attributed to a decrease of 24% in our net pricing year-over-year as the market softened. Ceded premiums earned decreased $18,306,000, or 19.5%, to $75,523,000 for the three months ended March 31, 2026 from $93,829,000 for the same period in 2025. The breakdown of the quarter-over-quarter change in these premiums and new and renewal policies are shown in the tables below. More detail regarding our ceded premiums can be seen in our analysis of financial condition above.

Previous wording

Expenses for the nine months ended September 30, 2025 increased $19,370,000, or 15.3%, to $146,062,000 from $126,692,000 for the same period in 2024. The increase in expenses was primarily due to an increase in policy acquisition costs year-over-year. This was partially offset by decreased general and administrative expenses and loss and loss adjustment expenses year-over-year. The details of these changes can be seen below.

Current wording

Expenses for the three months ended March 31, 2026 decreased $1,395,000, or 3.0%, to $45,683,000 from $47,078,000 for the same period in 2025. The decrease in expenses was primarily due to a decrease in policy acquisition costs and loss and loss adjustment expenses quarter-over-quarter. This was partially offset by increased general and administrative expenses quarter-over-quarter. The details of these changes can be seen below.

Previous wording

Loss and LAE decreased $3,385,000, or 8.6%, to $36,140,000 for the nine months ended September 30, 2025 from $39,525,000 for the same period in 2024. Loss and LAE expense as a percentage of net earned premiums decreased 3.8 points to 15.9% for the nine months ended September 30, 2025, compared to 19.7% for the same period in 2024. Excluding catastrophe losses and prior year reserve development, our gross underlying loss and LAE ratio for the nine months ended September 30, 2025 was 8.2%, an increase of 0.5 points, from 7.7% during the nine months ended September 30, 2024.

Current wording

Loss and LAE decreased $1,146,000, or 10.1%, to $10,243,000 for the three months ended March 31, 2026 from $11,389,000 for the same period in 2025. Loss and LAE expense as a percentage of net earned premiums decreased 1.1 points to 15.6% for the three months ended March 31, 2026, compared to 16.7% for the same period in 2025. Excluding catastrophe losses and prior year reserve development, our underlying loss and LAE as a percentage of gross earned premiums for the three months ended March 31, 2026 would have been 8.4%, or no change from 8.4% during the three months ended March 31, 2025.

Previous wording

Policy acquisition costs increased $28,686,000, or 64.5%, to $73,162,000 for the nine months ended September 30, 2025 from $44,476,000 for the same period in 2024. The primary driver of the increase was a decrease in ceding commission income of $15,973,000 as the result of the Company's decrease in quota share reinsurance coverage from 40% to 20%, effective June 1, 2024 and from 20% to 15%, effective June 1, 2025. External management fees also increased $12,643,000 as a result of a one percent increase in the management fee and profit share accrual pursuant to the renewal terms of the contract with AmRisc, LLC effective June 1, 2024.

Current wording

Policy acquisition costs decreased $1,073,000, or 4.6%, to $22,393,000 for the three months ended March 31, 2026 from $23,466,000 for the same period in 2025. The primary driver of the decrease was a decrease in external management fees of $3,153,000 as a result of the decrease in gross premiums shown above. This was partially offset by a decrease in ceding commission income of $2,361,000 as the result of the Company's decrease in quota share reinsurance coverage from 20% to 15%, effective June 1, 2025.

Previous wording

As a holding company, we do not conduct any business operations of our own and, as a result, we rely on cash dividends or intercompany loans from our management subsidiaries to pay our general and administrative expenses. Insurance regulatory authorities heavily regulate our insurance subsidiary, including restricting any dividends paid by our insurance subsidiary and requiring approval of any management fees our insurance subsidiary pays to our management subsidiaries for services rendered; however, nothing restricts our non-insurance company subsidiaries from paying us dividends other than state corporate laws regarding solvency. Our management subsidiaries pay us dividends primarily using cash from the collection of management fees from our insurance subsidiary, pursuant to the management agreements in effect between those entities. In accordance with state laws, our insurance subsidiary may pay dividends or make distributions out of that part of its statutory surplus derived from its net operating profit and its net realized capital gains. The Risk-Based Capital (RBC) guidelines published by the National Association of Insurance Commissioners may further restrict our insurance subsidiary's ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause their respective surplus as it regards policyholders to fall below minimum RBC guidelines. See Note 14 in our Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Current wording

As a holding company, we do not conduct any business operations of our own and, as a result, we rely on cash dividends or intercompany loans from our management subsidiary to pay our general and administrative expenses. Insurance regulatory authorities heavily regulate our insurance subsidiary, including restricting any dividends paid by our insurance subsidiary and requiring approval of any management fees our insurance subsidiary pays to our management subsidiary for services rendered; however, nothing restricts our non-insurance company subsidiaries from paying us dividends other than state corporate laws regarding solvency. Our management subsidiary pays us dividends primarily using cash from the collection of management fees from our insurance subsidiary, pursuant to the management agreements in effect between those entities. In accordance with state laws, our insurance subsidiary may pay dividends or make distributions out of that part of its statutory surplus derived from its net operating profit and its net realized capital gains. The Risk-Based Capital (RBC) guidelines published by the National Association of Insurance Commissioners may further restrict our insurance subsidiary's ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause their respective surplus as it regards policyholders to fall below minimum RBC guidelines. See Note 8 in our Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Previous wording

Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (in thousands)

Current wording

Cash Flows for the Three Months Ended March 31, 2026 and 2025 (in thousands)

Previous wording

During the nine months ended September 30, 2025, we experienced cash inflows of $118,777,000 compared to $241,907,000 during the nine months ended September 30, 2024. This change was driven by a decrease in the change in reinsurance payable of $68,695,000 and a decrease in the change in reinsurance recoverable of $74,531,000, partially offset by a decrease in the change in unpaid loss and loss adjustment expenses of $42,051,000. The change in reinsurance payable can be attributed to the pricing change in the renewal of our core catastrophe program in 2025, with the risk adjusted decrease being -12.4%. The change in unpaid loss and loss adjustment expenses and the corresponding reinsurance recoverable balance is attributed to the continued settlement of catastrophe claims with no similar activity occurring in 2025.

Current wording

During the three months ended March 31, 2026, we experienced cash outflows of $5,736,000 compared to cash inflows of $26,443,000 during the three months ended March 31, 2025. This change was driven by a reduction in premiums collected that was more than the reduction in net paid losses during the three months ended March 31, 2026 as compared to March 31, 2025. The change in reinsurance recoverable decreased $44,859,000 and the change in unearned premiums decreased $30,825,000, partially offset by a decrease in the change in unpaid loss and loss adjustment expenses of $27,195,000. The change in unpaid loss and loss adjustment expenses and the corresponding reinsurance recoverable balance can be attributed to the continued settlement of catastrophe claims with no similar activity occurring in 2026.

Previous wording

The principal cash inflows from our investing activities come from repayments of principal, proceeds from maturities and sales of investments. We closely monitor and manage these risks through our comprehensive investment risk management process. The principal cash outflows relate to sales of investments. The primary liquidity concerns with respect to these cash flows are the risk of default by debtors and market disruption. During the nine months ended September 30, 2025, net sales of investments totaled $12,896,000 compared to net purchases of investments of $162,893,000 during the nine months ended September 30, 2024. We also had net proceeds from the sale of our former subsidiary, IIC, of $4,495,000 in 2025.

Current wording

The principal cash inflows from our investing activities come from repayments of principal, proceeds from maturities and sales of investments. We closely monitor and manage these risks through our comprehensive investment risk management process. The principal cash outflows relate to sales of investments. The primary liquidity concerns with respect to these cash flows are the risk of default by debtors and market disruption. During the three months ended March 31, 2026, net purchases of investments totaled $6,459,000 compared to net sales of investments of $5,300,000 during the three months ended March 31, 2025.

Previous wording

The principal cash outflows from our financing activities come from repayments of debt and payments of dividends. The primary liquidity concern with respect to these cash flows is market disruption in the cost and availability of credit. We believe our current capital resources, together with cash provided from our operations, are sufficient to meet currently anticipated working capital requirements. During the nine months ended September 30, 2025, cash provided by financing activities totaled $774,000, compared to $11,621,000 provided by financing activities for the nine months ended September 30, 2024. The decrease in inflow in 2025 is attributed to the proceeds received from the issuance of our common stock, primarily under our at the market program described above during 2024.

Current wording

The principal cash outflows from our financing activities come from payments of dividends, repayments of debt, and repurchases of common stock. The primary liquidity concern with respect to these cash flows is market disruption in the cost and availability of credit. We believe our current capital resources, together with cash provided from our operations, are sufficient to meet currently anticipated working capital requirements. During the three months ended March 31, 2026, cash used in financing activities totaled $41,574,000, compared to $309,000 provided by financing activities for the three months ended March 31, 2025, driven by the payment of a special cash dividend of $0.75 per share declared in December 2025 and paid in January 2026 and treasury stock repurchases of $5,000,000.