JRVR 10-K & 10-Q changes, risk factors and insider trading

•Reserving for losses and loss adjustment expenses is an inherently uncertain process, and our actual incurred losses and loss adjustment expenses may be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations.

•A decline in our financial strength rating may result in a reduction of new or renewal business.business and a default under our credit facility.

•We have primary liability on our insurance policies for losses, even if reinsurance counterparties or insurance companies with which we have a fronting arrangement fail to make any contractually obligated payments with respect to such loss, or if we do not receive indemnification payments pursuant to an arrangement we have with a former customer.

•Our credit agreement contains financial and other covenants, the breach of any of which could result in acceleration of payment of amounts due under our credit facility.

•The CompanyCompany, andprior to the Domestication, James River Group Holdings UK Limited (“James River UK”), mayprior beto (its dissolution, and JRG Re, prior to its disposition, may have been) subject to U.S. federal income taxation and our non-U.K. companies may behave been subject to U.K. taxation, which may have a material adverse effect on our operating results.

Risks Related to Ownership of Our Common SharesStock

•The identification of material weaknesses or the failureFailure to otherwise maintain effective internal controls may result in material misstatements in our financial reporting and/or cause us to fail to meet our periodic reporting obligations.

•The holder of the Series A Convertible Preferred Shares (the “Series A Preferred Shares”) holds 9.9% of our aggregate voting power and may have significant influence over matters requiring shareholder approval, and additionally, any sales of a significant number of common sharesstock by the holder may have an adverse affecteffect on our share price.

•The conversion of the Series A Preferred Shares into common sharesstock would dilute the ownership of common shareholders and may adversely affect the market price of our common shares.stock.

•The amount of dividends that we may pay to our common shareholders is subject to restriction pursuant to the terms of the Series A Preferred Shares,Shares and our Credit Agreement, and we cannot assure you that we will declare or pay dividends on our common sharesstock in the future.

•There are regulatory limitations on the ownership and transfer of our common shares.stock.

Reserving for losses and loss adjustment expenses is an inherently uncertain process, and our actual incurred losses and loss adjustment expenses may be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations.

In the insurance industry, there is always the risk that reserves may prove inadequate, and actual results always differ from our reserve estimates. It is possible for insurance companies to underestimate the cost of claims. Our estimates could prove to be low, and this underestimation could have a material adverse effect on our financial strength. For example, in our Excess and Surplus Lines segment, we experienced adverse development net of reinsurance on the reserves for losses and loss adjustment expenses of: $76.7 million for the calendar year ended December 31, 2024, including a $52.2 million reserve charge upon execution of the E&S ADC (consideration paid in excess of initial reserves), and $32.6 million for the calendar year ended December 31, 2023, with adverse development in accident years 2020 and prior exceeding favorable development on accident years 2022 and 2021. We also previously experienced significant adverse development in our commercial auto business in our Excess and Surplus Lines segment, including $200.1 million for the calendar year ended December 31, 2021, and in our former casualty reinsurance segment, which we disposed of on April 16, 2024.

• When we write “occurrence” policies, we are obligated to pay covered claims, up to the contractually agreed amount, for any covered loss that occurs while the policy is in force. Losses can emerge many years after a policy has lapsed. Accordingly, our first notice of a claim or group of claims may arise many years after a policy has lapsed. Approximately 96% of our Excess and Surplus Lines net casualty loss reserves are associated with “occurrence form” policies at December 31, 2024.2025. Additionally, in some cases the loss can exceed the policy limits contracted.

• New theories of liability are enforced retroactively from time to time by courts. See alsothe Risk Factor “The effect of emerging claim and coverage issues on our business is uncertain” risk factor herein.

• We occasionally enter new lines of insurance, and as a consequence, we sometimes have to make estimates of future losses for risk classes with which we do not have a great deal of our own historical loss experience. This lack of loss experience may contribute to making errors of judgment when establishing reserves.

A decline in our financial strength rating may result in a reduction of new or renewal business.business and a default under our credit facility.

Factors such as business revenue, political and economic conditions, the volatility and strength of the capital markets, inflation and pandemics can all affect the business and economic environment. These same factors affect our ability to generate revenue and profits. In an economic downturn that is characterized by higher unemployment, declining spending and reduced corporate revenues, the demand for insurance products is adversely affected, which directly affects our premium levels and profitability. Negative economic factors may also affect our ability to receive the appropriate rate for the risk we insure with our policyholders and may adversely affect the number of policies we can write, including with respect to our opportunities to underwrite profitable business. In an economic downturn, our customers may have less need for insurance coverage, cancel existing insurance policies, modify their coverage, self-insure their risks, or not renew with us. Existing policyholders may exaggerate or even falsify claims to obtain higher claims payments, or not pay premiums on our policies when due. These outcomes would reduce our underwriting profit to the extent these factors are not reflected in the rates we charge.

We underwrite a significant portion of our insurance in (i) the Excess and Surplus Lines segment inTexas, Florida, California, Texas and New York, and (ii) the fronting and program business of the Specialty Admitted Insurance segment in Texas, California, North Carolina, Florida, and Illinois.York. Any economic downturn or reduced business activities in any such state, or other states where we conduct business, could have a material adverse effect on our financial condition and results of operations.

• the Specialty Admitted Insurance segment conducted business with twofive agencies that produced $239.5$174.8 million in gross written premiums, representing 57.7%83.5% of that segment’s gross written premiums for the year.

We rely on a select group of customers for a significant portion of our business, and the continued loss or termination of our relationship with any such customers, or a material reduction in their business, could materially adversely affect our rate of growth, results of operations and financial condition.

Our largest customer,customers are a risk purchasing group in the Excess and Surplus Lines segment and an agent forin the Specialty Admitted Insurance segment,segment. accountedThis same Specialty Admitted Insurance segment agent was our largest customer in 2024 and 2023, accounting for approximately $175.7 million (12.3%) of our consolidated gross written premium from continuing operations in 2024. This same agent was our largest customer in 2023, accounting for approximatelyand $163.1 million (10.8%) of our consolidated gross written premium from continuing operations in 2023.the respective years. No other customer generated 10.0% or more of consolidated gross written premiums from continuing operations in 2025, and no customer other than the Specialty Admitted Insurance segment agent referenced above generated 10% or more of consolidated gross written premiums from continuing operations in 2024 or in 2023. AsIn of December 31, 2024,2024 this Specialty Admitted Insurance segment agent had givengave notice of its decision to non-renew or terminate its remaining programsprograms, withand thein Specialtyconnection Admitted Insurance segment, withtherewith the last program scheduled to endterminated in mid-2025.

The continued loss or termination of our relationship with our customers, or a material reduction in business with any such party, could materially adversely affect our rate of growth, results of operations and financial condition.

We purchase reinsurance in many of our lines of business to help manage our exposure to insurance and reinsurance risks that we underwrite and to reduce volatility in our results.

Many reinsurance companies have begun to exclude certain coverages from, or alter terms in, the reinsurance contracts we enter into with them. Some exclusions relate to risks that we cannot in turn exclude from the policies we write due to business or regulatory constraints. In addition, reinsurers are imposing terms, such as lower per occurrence and aggregate limits, and more exclusions, limiting the protection provided under the reinsurance contract. As a result, we, like other direct insurance companies, write insurance policies which to some extent do not have the benefit of reinsurance protection. These gaps in reinsurance protection expose us to greater risk and greater potential losses. For example, certain reinsurers have excluded coverage for terrorist acts or priced such coverage at unreasonably high rates. Many direct insurers, including us, have written policies without terrorist act exclusions and in many cases we cannot exclude terrorist acts because of regulatory constraints. We may, therefore, be exposed to potential losses as a result of terrorist acts. See also “Item 1. Business — Purchase of Reinsurance.”

We are subject to credit risk with regard to our reinsurance counterparties, insurance companies with which we have a fronting arrangement and an indemnification arrangement we have with a former customer.

Although reinsurance makes the assuming reinsurer liable to us to the extent of the risk ceded, we are not relieved of our primary liability to our insureds as the direct insurer. At December 31, 2024,2025, reinsurance recoverables on unpaid losses from our three largest reinsurers was $980.6$936.9 million in the aggregate and represented 49.1%46.2% of the total balance. Additionally, prepaid reinsurance premiums ceded to three reinsurers at December 31, 20242025 was $108.5$60.0 million in the aggregate, or 36.6%29.4% of the total balance of prepaid reinsurance premiums. In addition to reinsurance purchased to manage our prospective business, we have three retroactive reinsurance arrangements on legacy books of business in the Excess & Surplus Lines segment: the first, a loss portfolio transfer reinsurance transaction on our legacy commercial auto lines business (the “Commercial Auto LPT”); the second, a combined loss portfolio transfer and adverse development cover reinsurance contract entered into in July 2024 on our Excess & Surplus Lines segment casualty portfolio losses attaching to premium earned 2010-2023, excluding, among others, losses related to commercial auto policies issued to a former large insured or its affiliates (the “casualty subject business”) (the “E&S ADC”); and the third, an adverse development cover reinsurance contract entered into in November 2024 also covering the casualty subject business (the “E&S Top Up ADC”). At December 31, 2024,2025, reinsurance recoverables on the Commercial Auto LPT were $36.6$12.4 million andmillion, reinsurance recoverables on the E&S ADC were $362.0$397.0 million.million, There were noand reinsurance recoverables on the E&S Top Up ADC atwere December$51.4 31, 2024.million.

Estimating reinsurance recoverables on unpaid losses is inherently uncertain and our reinsurance may ultimately be less than our estimates. At December 31, 2024,2025, all of our material reinsurance recoverable amounts are from companies with A.M. Best ratings of “A-” (Excellent) or better, or, if not rated by A.M. Best, have statutory surplus of $100 million or more, are collateralized by the reinsurer for our benefit through letters of credit or funds held in trust accounts, or represent recoverables from a state residual market for automobile insurance, but we cannot be sure that our reinsurers will pay all reinsurance claims on a timely basis or at all. Similarly, in our fronting business, which we conduct through our Specialty Admitted Insurance segment, we are primarily liable to the insureds because we have issued the policies. While we customarily require a collateral trust arrangement to secure the obligations of the insurance entity for which we are fronting, we do not obtain collateral in every instance. See also “Item 1. Business — Business Segments — Specialty Admitted Insurance Segment — Fronting & Program Business.” Reinsurers or fronting partners may default in their financial obligations to us as the result of insolvency, lack of liquidity, operational failure, fraud, asserted defenses based on agreement wordings or the principle of utmost good faith, asserted deficiencies in the documentation of agreements or for other reasons. The failure of a reinsurer or fronting partner to pay us does not lessen our contractual obligations to insureds. If a reinsurer or fronting partner fails to pay the expected portion of a claim or claims, our net losses might increase substantially and materially adversely affect our financial condition. Any disputes regarding reinsurance contracts, indemnification arrangements and related agreements could be time-consuming, costly and uncertain of success.

Pricing involves the acquisition and analysis of historical loss data and the projection of future trends, loss costs and expenses, and inflation trends, among other factors, for each of our products in multiple risk tiers and many different markets. In order to accurately price our policies, we must:

In addition to charging profitable rates on the insurance policies we issue, we also must be able to collect the premiums,premiums (including audit premiums), deductibles, and self-insured retentions that our insureds agreed to pay at the inception of their policies.policies, and we may not always be able to obtain collateral from our insureds to manage this collection risk. The inability or refusal of our insureds to pay the amounts owed by them pursuant to their policies undermines our goal of underwriting risk accurately and charging competitive yet profitable rates, and could adversely affect our results of operations and our profitability.

A large-scale pandemic, the continued threat or occurrence of terrorism, within the United States and abroad, or military and other actions, and heightened security measures in response to these types of threats may cause significant volatility and losses in our investment portfolio from declines in the equity markets and from interest rate changes in the United States, Europe and elsewhere, and result in loss of life, property damage, disruptions to commerce and reduced economic activity. Some of our assets in our investment portfolio may be adversely affected by declines in the equity markets and reduced economic activity caused by a large-scale pandemic or the continued threat of terrorism. Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, profitability, competitiveness, marketability of product offerings, liquidity and operating results. For example, the COVID-19 pandemic presented, and other future pandemics could present, inflation, supply chain disruptions, labor shortages, backlogs in the court system, responsive regulatory actions and mandates, financial market disruptions, and economic downturn, among other things.

Our primary market risk exposures are to changes in interest rates and equity prices. See also “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.” A decline in interest rates reduces the return available on short-term investments and new fixed maturity investments (including those purchased for re-investment), thereby negatively impacting our net investment income on a going forward basis, while rising interest rates reduce the market value of existing fixed maturity investments, thereby negatively impacting our book value. PriorDuring to2023, 2022,with interestsigns ratesof hadinflation been at or near historic lows, limiting yields on fixed income investmentseasing and negativelyoptimism impactingabout investmentfuture income.Federal Increases in interest rates since 2022, while generating higher investment yields, led to declines in the fair values of our fixed income securities, influenced by the duration of our fixed income investments and the extent ofReserve interest rate increases. For example, for the year ended December 31, 2022, we experienced unrealized losses on fixed maturity investments of $193.0 million, which were recognized in other comprehensive loss. During 2023,cuts, the fair values of our fixed maturity securities recovered some of the unrealized losses withexperienced signsin of2022 inflationdue easingto andincreases optimism about future Federal Reservein interest raterates cuts.that year. Unrealized gains of $99.3 million were recognized in other comprehensive income for the year ended December 31, 2023. In 2024, interest rates rose moderately and $6.3 million of unrealized losses were recognized in other comprehensive loss for the year ended December 31, 2024. Investment income decreased in 2025 by $9.6 million or 10.4% from the prior year and $35.3 million of unrealized gains were recognized in other comprehensive income for the year ended December 31, 2025 principally due to a lower interest rate environment in 2025 which impacted yields across several areas of the portfolio. Some fixed income securities have call or prepayment options, which represent possible reinvestment risk in declining rate environments. Other fixed income securities such as mortgage-backed and asset-backed securities carry prepayment risk or, in a rising interest rate environment, may not pre-pay as quickly as expected. In addition, individual securities in our fixed income securities portfolio are subject to credit risk and default. Downgrades in the credit ratings of fixed maturities can have a significant negative effect on the market valuation of such securities.

We hold investments in bank loansloans, (7.4%which comprise 7.9% of the carrying value of our cash and invested assets (excluding restricted cash equivalents) as of December 31, 2024.2025. Most of these loans are issued to sub-investment grade borrowers. While this class of investment has been profitable for us, a severe downturn in the markets could materially adversely affect the value of these investments, including the possibility that we would suffer substantial losses on this portfolio. As of December 31, 2024,2025, the fair value of our investments in bank loans was $142.4$155.1 million.

As of December 31, 2024,2025, we held equity investments of $7.7$7.3 million in non-public limited liability companies that have invested in renewable energy investments. We invested in the equity of these projects because we anticipate earning attractive risk-adjusted returns from these investments. However, our investments in these projects are illiquid and the ultimate results from these investments may be unknown for some time. Changes in renewable energy policies in the current administration have increased the risks of these investments.

Market disruptions like those experienced during the credit-driven financial market collapse in 2008, as well as the significant amount of capital allocated to alternative asset management, have led to increased governmental as well as self-regulatory scrutiny of the insurance industry in general. In addition, certainCertain legislation proposing greater regulation of the insurance industry is periodically considered by governing bodies of some jurisdictions as well as the U.S. federal government. The credit-driven financial market collapse in 2008 or other significantSignificant market disruptions or industry changes, such as the growing amount of capital allocated to alternative asset management, may increase the likelihood that some increased regulation of the industry is mandated.

Our business could be materially adversely affected by changes in state laws, including those relating to asset and reserve valuation requirements, surplus requirements, limitations on investments and dividends, enterprise risk and risk-based capitalRBC requirements and, at the federal level, by laws and regulations that may affect certain aspects of the insurance industry, including proposals from time to time for preemptive federal regulation. The U.S. federal government generally has not directly regulated the insurance industry except for certain areas of the market, such as insurance for flood, nuclear and terrorism risks. However, the U.S. federal government has undertaken initiatives or considered legislation in several areas that may affect the insurance industry, including tort reform,reform and corporate governance and the taxation of reinsurance companies. The Dodd-Frank Act also established the Federal Insurance Office, which is authorized to study, monitor and report to Congress on the insurance industry and to recommend that the FSOC designate an insurer as an entity posing risks to U.S. financial stability in the event of the insurer’s material financial distress or failure. In December 2013, the Federal Insurance Office issued a report on alternatives to modernize and improve the system of insurance regulation in the United States, including increasing national uniformity through either a federal charter or effective action by the states. Any additional regulations established as a result of the Dodd-Frank Act or actions in response to the Federal Insurance Office Report could increase our costs of compliance or lead to disciplinary action.governance. In addition, legislation has been introduced from time to time that, if enacted, could result in the U.S. federal government assuming a more direct role in the regulation of the insurance industry, including federal licensing in addition to or in lieu of state licensing and reinsurance for natural catastrophes. We are unable to predict whether any legislation will be enacted or any regulations will be adopted, or the effect that any such developments could have on our business, financial condition or results of operations.

Additionally, the regulatory environment surrounding information security and data privacy is increasingly demanding. We are subject to numerous U.S. federal and state laws governing the protection of personal and confidential information of our clients and employees, and newthese privacy laws have been adopted orrequirements are beingconstantly considered at the stateevolving and federal level that may be applicable to us.developing. The NAIC adopted an Insurance Data Security Model Law on October 24, 2017, which requires licensed insurance entities to comply with detailed information security requirements. Most states have either adopted the NAIC Insurance Data Security Model Law or similar laws that govern the cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws. ItThis isincludes notthe yetNew knownYork whether,State Department of Financial Services’ Part 500 Cybersecurity Regulation, which includes additional certification obligations, enhanced governance requirements, audit requirements, technology and tobusiness whatcontinuity extent, additional state legislatures or insurance regulators where we operate will enact the NAIC Insurance Data Security Model Law in whole or in part, or in a modified form. Such enactments, especially if inconsistent between states or with existing lawsrequirements and regulations,cyber couldevent raisenotification compliance costs or increase the risk of noncompliance, with the attendant risk of being subject to regulatory enforcement actions and penalties, as well as reputational harm.obligations. Further, several states have enacted privacy laws requiring specific disclosures regarding privacy practices and granting certain rights to consumers with respect to the use by companies of their personally identifiable information. There has also been proposed privacy legislation at the federal level. These newNew privacy laws and information security laws, especially if inconsistent between regulators or with existing laws and regulations, may impose compliance costs, and ambiguities surrounding their applicability and interpretation may increase the risk of noncompliance, with the attendant risk of being subject to regulatory enforcement actions and penalties, as well as class action litigation.litigation and reputational harm. Any such events could potentially have an adverse impact on our business, financial condition or results of operations.

Our admitted insurance subsidiaries are subject to extensive regulation,regulation and supervision, primarily by California (the domiciliary state for Falls Lake Fire and Casualty), Ohio (the domiciliary state for James River Insurance, James River Casualty, Stonewood Insurance and Falls Lake National), and to a lesser degree, the other jurisdictions in the United States in which we operate. In the United States, the NAIC is a standard-setting and regulatory support organization. Among other things, the NAIC develops and recommends adoption of model insurance laws and regulations. Model laws and regulations promulgated by the NAIC become effective in a state only once formally adopted, and may be modified by each state. Certain of these model laws and regulations, including as adopted by our state insurance regulators, are noted below. Most insurance regulations are designed to protect the interests of insurance policyholders, as opposed to the interests of shareholders. These regulations generally are administered by a department of insurance in each state and relate to, among other things, authorizations to write certain lines of business, capital and surplus requirements, reserve requirements, rate and form approvals, investment and underwriting limitations, affiliate transactions, dividend limitations, cancellation and non-renewal of policies, changes in control, solvency, receipt of reinsurance credit, accounting principlesprinciples, governance and a variety of other financial and non-financial aspects of our business. These laws and regulations are regularly re-examined and any changes in these laws and regulations or new laws or interpretations thereof may be more restrictive, could make it more expensive to conduct business or otherwise materially adversely affect our financial condition or operations. StateFurther, insurancethe departmentsCompany alsoand conductits periodicemployees examinationsor agents acting on the Company’s behalf, may not be in full compliance with all existing applicable laws and regulations or their interpretation by the relevant authorities and, given the complex nature of the affairsrisks, ofit insurancemay companiesnot always be possible for the Company to ascertain compliance with such laws and reinsurance companies and require the filing of annual and other reports relating to financial condition, holding company issues and other matters. These regulatory requirements may impose timing and expense or other constraints that could materially adversely affect our ability to achieve some or all of our business objectives. Failure by any of our insurance subsidiaries to comply with applicable regulations could result in a requirement for that subsidiary to cease writing business.regulations.

The NAIC has developed a system to test the adequacy of statutory capital of U.S.-based insurers, known as risk-based capital or “RBC,RBC”, that many states have adopted. This system establishes the minimum amount of risk-based capitalRBC necessary for an insurer to support its overall business operations. It identifies property-casualty insurers that may be inadequately capitalized by looking at certain inherent risks of each insurer’s assets and liabilities and its mix of net written premiums. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including remedial actions, supervision, rehabilitation or liquidation. Failure to maintain adequate risk-based capitalRBC at the required levels could materially adversely affect the ability of our insurance subsidiaries to maintain regulatory authority to conduct their business. Further, the application and methods of calculating RBC are subject to change. In recent years, the NAIC has adopted, or is considering adopting, several changes impacting how RBC is calculated, including initiatives aimed at a comprehensive review of the RBC investment framework, as well as using modeling methodology to determine RBC charges for structured securities. The NAIC’s work is ongoing and could result in changes to RBC requirements and calculations in the future, which could affect our capital planning, investment strategies and reporting obligations. The ultimate impact on solvency position from any future material changes cannot be determined at this time. For additional information, see “Item 1. Business — U.S. Insurance Regulation — State Regulation.”

U.S. insurers are required by state and federal law to offer coverage for terrorism in certain commercial lines, including workers’ compensation.lines. As discussed under “Item 1. Business — U.S. Insurance Regulation — Federal Regulation,” the Terrorism Acts require commercial property and casualty insurance companies to offer coverage for acts of terrorism, whether foreign or domestic, and established a federal assistance program through the end of 2027 to help cover claims related to future terrorism-related losses. The impact of any terrorist act is unpredictable, and the ultimate impact on us would depend upon the nature, extent, location and timing of such an act.

We, and our MGAs and other agents who have the ability to bind our policies, rely on information provided by insureds or their representatives when underwriting insurance policies. While we or our agents may make inquiries to validate or supplement the information provided, weunderwriting decisions may make underwriting decisionsbe based on incorrect or incomplete information. It is possible that we will misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that we insure because of our or our agents' reliance on inadequate or inaccurate information.

In addition, in the Specialty Admitted Insurance segment, MGAsour and othergeneral agents have the authority to bind policies on our behalf within prescribed underwriting guidelines, and third party administrators manage and pay claims on our behalf and advise us with respect to case reserves. If any such agents exceed their authority, breach their obligations to us, fail to maintain proper licenses, have weak internal controls, or engage in fraudulent activities, our reputation could suffer, we may experience regulatory intervention, or our financial condition and results of operations could be materially adversely affected. Although we are continually monitoring these agents and administrators, our monitoring efforts may not be adequate.

As an insurance enterprise, we are in the business of binding certain risks. The employees who conduct our business, including executive officers and other members of management, underwriters, claims professionals, and other employees, do so in part by making decisions and choices that involve exposing us to risk. These include decisions such as setting underwriting guidelines and standards, product design and pricing, determining which business opportunities to pursue, claims management decisions, and other decisions. Although we assign underwriting authorities and employ controls and procedures designed to monitor employees’ business decisions and prevent us from taking excessive risks, these controls and procedures may not be effective. If our employees take excessive risks, the impact of those risks could have a material adverse effect on our financial condition and business operations.

• satisfy letters of credit or guarantee bond requirements that may be imposed by our clients or by regulators;

Any equity or debt financing, if available at all, may be on terms that are unfavorable to us. Further, any additional capital raised through the sale of equity could dilute shareholders’ ownership interest in the Company and would likely cause the value of our shares to decline. For example, in May 2021, we raised $192.1 million in equity capital (the “May Equity Offering”) to protect our balance sheet after experiencing $170.0 million of adverse development on our commercial auto business in the first quarter of 2021 almost entirely related to a previously canceled account that has been in run-off since 2019. In the May Equity Offering, we announced the offering of 6,497,500 shares at $31.00 per share the day after our shares had a closing market price equal to $46.50. Also, on March 1, 2022 we issued 150,000 Series A Perpetual Cumulative Convertible Preferred Shares, par value $0.00125 per share (the "Series A Preferred Shares"), for an aggregate purchase price of $150 million, primarily to protect our balance sheet after experiencing $115.0 million of adverse reserve development in our former casualty reinsurance segment in the fourth quarter of 2021. The Series A Preferred Shares, among other things, have the right to receive a payment on account of the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company before any payment may be made to holders of any other class or series of capital shares, pay dividends to the security holders at the initial rate of 7% of their liquidation preference of $1,000 per share per annum, include restrictions that may limit our ability to pay dividends to common shareholders and may not be redeemed at our election. See the Risk Factors "“The Series A Preferred Shares have rights, preferences and privileges that are not held by, and are preferential to the rights of, our common shareholders, which could adversely affect our liquidity and financial condition"” and "“The amount of dividends that we may pay to our common shareholders is subject to restrictions pursuant to the terms of the Series A Preferred Shares,Shares and our Credit Agreement, and we cannot assure you that we will declare or pay dividends on our common sharesstock in the future."”

Additionally, on November 11, 2024 we entered into (i) an amendment of the investment agreement with the holder of the Series A Preferred Shares, which provided for the conversion of 37,500 Series A Preferred Shares, having a liquidation value of $37.5 million, into common shares, and (ii) a subscription agreement to issue common shares with a value of $12.5 million. The price per share utilized for the share issuances pursuant to thethese two agreements was $6.40, resulting in the issuance of 7,812,500 common shares in the aggregate. The closing price of our common shares on November 11, 2024, the last completed trading day prior to our announcement of the share issuances was $6.62 per share. We also announced on November 11, 2024 that our quarterly dividend would be reduced to $0.01 per common shares from the $0.05 per common share that we had paid since March 2022.

James River Group Holdings, Ltd.Inc. is a Bermuda-based holding company. We ownowns and operateoperates a group of specialty property and casualty insurance companies withfocused on underwriting small and middle market casualty risks within the U.S. excess and surplus (“E&S”) lines market. Our objective ofis generatingto generate compelling returns on tangible common equity while limiting underwriting and investment volatility. We seek to accomplish this by earning profits from insurance underwriting and generating meaningful risk-adjusted investment returns, while managing our capital.

For the year ended December 31, 2024,2025, approximately 76.2%84.5% of our gross written premiums and 88.7%95.9% of our net written premiums from continuing operations originated from the U.S. E&S lines market, which we believe puts us among the top three publicly traded insurers as ranked by highest concentrations of E&S risk. We also have a specialty admitted insurance business in the United States. We intend to concentrate substantially all of our underwriting in casualty insurance, and for the year ended December 31, 2024,2025, 96.3%96.7% of our gross written premiums from continuing operations were derived from casualty insurance. We focus on writing business in specialty markets where our underwriters have particular expertise and where we have long-standing distribution relationships;relationships, maintaining a strong balance sheet with appropriate reserves;reserves, monitoring reinsurance recoverables carefully;carefully, managing our investment portfolio actively without taking undue risk;risk, using technology to monitor trends in our business;business, responding rapidly to market opportunities and challenges;challenges, and actively managing our capital.

The Excess and Surplus Lines segment offers E&S commercial lines liability and property insurance in every U.S. state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands through James River Insurance and its wholly-owned subsidiary, James River Casualty. James River Insurance and James River Casualty are both non-admitted carriers. Non-admitted carriers writing in the E&S market are not bound by most of the rate and form regulations imposed on standard market companies, allowing them flexibility to change the coverage terms offered and the rate charged without the time constraints and financial costs associated with the rate and form filing process. In 2024,2025, the average account in this segment (excluding commercial auto policies) generated annual gross written premiums of approximately $26,800.$26,500. The Excess and Surplus Lines segment distributes its products primarily through wholesale insurance brokers. Members of our management team have participated in this market for over threetwenty decadesyears and have long-standing relationships with the wholesale agents who place E&S lines accounts. The Excess and Surplus Lines segment produced 71.0%82.1% of our gross written premiums and 87.5%95.7% of our net written premiums for the year ended December 31, 2024.2025.

DuringAll 2022, Carolina Re commutedof the outstandingCompany’s obligationsU.S.-domiciled cededinsurance undersubsidiaries are party to an intercompany pooling agreement that distributes the intercompanynet quota-shareunderwriting reinsuranceresults agreementsamong backthe group companies based on their approximate pro-rata level of statutory capital and surplus to the Company’stotal U.S.-basedCompany insurancestatutory subsidiaries with effect from January 1, 2022. Carolina Re concluded all operationscapital and was dissolved in December 2023. During 2023, JRG Re commuted the outstanding obligations ceded under the intercompany quota share reinsurance agreements back to the Company's U.S.-based insurance subsidiaries with effect from January 1, 2023.surplus. We report all segment information in this ‘‘Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ prior to the effects of intercompany reinsurance, consistent with the manner in which we evaluate the operating performance of our reportable segments.

The A.M. Best Company financial strength rating for our group’s regulated insurance subsidiaries is “A-” (Excellent) with a negative outlook. This rating reflects A.M. Best’s evaluation of our insurance subsidiaries’ financial strength, operating performance and ability to meet obligations to policyholders and is not an evaluation directed towards the protection of investors. The rating for our operating insurance companies of “A-” (Excellent) is the fourth highest rating of the thirteen ratings issued by A.M. Best and is assigned to insurers that have, in A.M. Best’s opinion, an excellent ability to meet their ongoing obligations to policyholders.

The financial strength ratings assigned by A.M. Best have an impact on the ability of our insurance subsidiaries to attract and retain agents and brokers and on the risk profiles of the submissions for insurance that our subsidiaries receive. We believe the “A-” (Excellent) ratings assigned to our insurance subsidiaries allow our subsidiariesExcess and Surplus Lines segment to actively pursue relationships with the agents and brokers identified in theirits marketing plans.

Underwriting profit is a non-GAAP measure commonly used in the property and casualty insurance industry to evaluate underwriting performance. We believe that the disclosure of underwriting profit by individual segment and of the Company as a whole is useful to investors, analysts, rating agencies and other users of our financial information in evaluating our performance because our objective is to consistently earn underwriting profits. We evaluate the performance of our segments and allocate resources based primarily on the potential for underwriting profit. We define underwriting profit as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) less losses and loss adjustment expenses on business from continuing operations not subject to retroactive reinsurance accounting and other operating expenses. Other operating expenses include the underwriting, acquisition, and insurance expenses of the operating segments and, for consolidated underwriting profit, the expenses of the Corporate and Other segment. Our definition of underwriting profit may not be comparable to that of other companies. See “Reconciliation of Non-GAAP Measures” for a reconciliation of underwriting profit to income from continuing operations before taxes and for additional information.

Accident year loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses for the current accident year (excluding development on prior accident year reserves) to net earned premiums for the current year (excluding ceded earned premium associated with adverse development covers covering prior accident years and net earned premium adjustments on certain reinsurance treaties with reinstatement premiums associated with prior years).

Adjusted net operating income is an internal performance measure used in the management of our operations. We believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net operating income is defined as income available to common shareholders excluding a) income (loss) from discontinued operationsoperations, b) the impact of retroactive reinsurance accounting, c) net realized and unrealized gains (losses) on investments, d) certain non-operating expenses such as professional service fees related to certain lawsuits, various strategic initiatives, and the filing of registration statements for the offering of securities, e) severance costs associated with terminated employees, and f) deemed dividends recorded with the amendment of the Series A Preferred Shares.Shares, and g) the one-time tax benefit from the Domestication for business interest expenses. Adjusted net operating income is a non-GAAP measure and should not be viewed as a substitute for net income calculated in accordance with GAAP. Our definition of adjusted net operating income may not be comparable to that of other companies. See “Reconciliation of Non-GAAP Measures” for a reconciliation of income available to common shareholders to adjusted net operating income.

Tangible equity is defined as shareholders' equity plus mezzanine Series A Preferred Shares (as defined below) and the unrecognized deferred retroactive reinsurance gain less goodwill and intangible assets, net of amortization. We believe tangible equity is a good measure to evaluate the strength of our balance sheet and to compare returns relative to this measure. Key financial measures that we use to assess our longer term financial performance include the percentage growth in our tangible equity per share and our return on tangible equity. Tangible equity is a non-GAAP measure and should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. Our definition of tangible equity may not be comparable to that of other companies. See “Reconciliation of Non-GAAP Measures” for a reconciliation of shareholders' equity to tangible equity.

Our Reserve Committee consists of our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and Chief Actuary. Additionally, the presidents, chief financial officersofficers, Chief Claims Officer, and segment actuaries of each of our insurance segments participate in the Reserve Committee meetings for their respective segments. The Reserve Committee meets quarterly to review the actuarial recommendations made by each segment actuary and use their best judgment to determine the best estimate to be recorded for the reserve for losses and loss adjustment expenses on our balance sheet.

The Expected Loss method multiplies earned premiums by an initial expected loss ratio. In our Excess and Surplus Lines segment and for our Workers’ Compensation book in the Specialty Admitted Insurance segment, the initial expected loss ratio is estimated based on adjusting book of business prior year experience to current cost and rate level. In our programs business within the Specialty Admitted Insurance segment, the expected loss ratio is based on the actuarial pricing of the individual account. Alternatively, when company experience lacks historical depth, initial expected loss ratios can be determined using loss ratios implied by industry loss costs for the class or reported industry loss ratios.

The Incurred Loss Development method uses historical loss reporting patterns by accident year to estimate future loss reporting patterns. In this method, our actuaries review historical loss reporting patterns to develop incurred loss development factors that are applied to current reported losses to calculate expected ultimate losses.

Different reserving methods are appropriate in different situations, and our actuaries use their judgment and experience to determine the weighting of the methods detailed above to use for each accident year and each line of business. For example, the current accident year has very little incurred and paid loss development data on which to base reserve projections. As a result, we rely heavily on the Expected Loss Method in estimating reserves for the current accident year. The Company generally sets the initial expected loss ratio for the current accident year consistent with the internal actuaries’ pricing assumptions adjusted upward where warranted based on management's judgment of parameter risk in order to produce the best estimate. We believe that this is a reasonable and appropriate reserving assumption for the current accident year since our pricing assumptions are actuarially driven and since we expect to make an acceptable return on the new business that we write. If actual loss emergence is better than our initial expected loss ratio assumptions, we will experience favorable development, and if it is worse than our initial expected loss ratio assumptions, we will experience adverse development. Conversely, sufficient incurred and paid loss development is available for our oldest accident years, so more weight is given to the Incurred Loss Development method and the Paid Loss Development method than the Expected Loss Method. The Bornhuetter-Ferguson Incurred Loss Development and Paid Loss Development methods blend features of the Expected Loss Method and the Incurred and Paid Loss Development methods. The Bornhuetter-Ferguson methods are typically used for the more recent prior accident years.

In applying these methods to develop an estimate of the reserve for losses and loss adjustment expenses, our actuaries use judgment to determine three key parameters for each accident year and line of business: the initial expected loss ratios, the incurred and paid loss development factors and the weighting of the actuarial methods to be used for each accident year and line of business. Judgment is also required to make actuarial adjustments, if needed, for changes in claims processing and case reserving that could cause current reported loss and paid loss development patterns to deviate from historical patterns. For the Excess and Surplus Lines segment, the segment actuary performs a study on each of these parameters at least annually as part of the Detailed Valuation Review ("DVR") and makes recommendations for the initial expected loss ratios, the incurred and paid loss development factors and the weighting of the actuarial methods by accident year and line of business. Members of the Reserve Committee review and approve the parameter review actuarial recommendations, and absent any developments requiring an earlier review, these approved parameters are generally used in the reserve estimation process for the next four quarters at which time a new parameter study is performed. For the Specialty Admitted Insurance segment, expected loss ratios, loss development factors, and loss cost trends are reviewed and updated at least annually.

The impact of recording the net reserve for losses and loss adjustment expenses at the highest value from the sensitivity analysis above would be to increase losses and loss adjustment expenses incurred by $63.5$97.5 million, reduce after-tax net income by $50.2$77.0 million, reduce shareholders’ equity by $50.2$77.0 million and reduce shareholders’ tangible equity by $50.2$77.0 million, in each case at or for the year ended December 31, 2024.2025.

Loss reserve estimates are subject to a high degree of variability due to the inherent uncertainty of ultimate claims settlement values. In recording our best estimate of our reserve for losses and loss adjustment expenses, our Reserve Committee may select an amount that is different from the actuarial recommendation submitted after considering other qualitative factors and our knowledge and expectations of trends and other business developments that impact our best estimate. There is inherent variation associated with our reserve estimates and the possibility that there are unforeseen or incorrectly valued liabilities in the actuarial recommendations exists. We believe that the insurance that we write is subject to above-average variation in reserve estimates. The Excess and Surplus Lines market is subject to high policyholder turnover and changes in underlying mix of exposures. This turnover and change in underlying mix of exposures can cause actuarial estimates based on prior experience to be less reliable than estimates for more stable, admitted books of business. As a casualty insurer, losses on our policies often take a number of years to develop, making it difficult to estimate the ultimate losses associated with this business. Judicial and regulatory bodies have frequently interpreted insurance contracts in a manner that expands coverage beyond that which was contemplated at the time that the policy was issued. In addition, many of our policies are issued on an occurrence basis, and insureds suffering a loss frequently seek coverage beyond the policies’ original intent.

IBNR reserve estimates are dependent on many assumptions and are inherently less precise than case reserve estimates.subjective. A 5% change in net IBNR reserves at December 31, 20242025 would equate to a $34.5$39.5 million change in the reserve for losses and loss adjustment expenses at such date, a $27.3$31.2 million change in after-tax net income, a 5.9%5.8% change in shareholders’ equity and a 6.2%5.7% change in tangible equity, in each case at or for the year ended December 31, 2024.2025.

We experienced $31.6$1.5 million of net adversefavorable development in 20232025 on the reserve for losses and loss adjustment expenses held at December 31, 20222024 (excluding adverse prior year development subject to deferral under retroactive reinsurance accounting - see “Retroactive Reinsurance Accounting” below). This reserve development included $32.6$5.0 million of net adversefavorable development in the Excess and Surplus Lines segment and $972,000$3.5 million of net favorableadverse development in the Specialty Admitted Insurance segment. The $5.0 million of net favorable development in the Excess and Surplus Lines segment is net of $51.4 million ceded to the E&S Top Up ADC. The E&S Top Up ADC is not in a gain position, thus it is not subject to retroactive reinsurance accounting and there are no deferrals related to the E&S Top Up ADC in 2025. Accordingly, all cessions to the E&S Top Up ADC in 2025 reduce net incurred losses and loss adjustment expenses. Additionally, the net favorable development excludes $27.2 million of adverse development ceded to the Commercial Auto LPT and E&S ADC that was deferred under retroactive reinsurance accounting. The $27.2 million is included in net incurred losses and loss adjustment expenses on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).

The Company elected the fair value option to account for bank loan participations. Under the fair value option, bank loan participations are measured at fair value, and changes in unrealized gains and losses in bank loan participations are reported in our Consolidated Statements of (Loss) Income and Comprehensive Loss as net realized and unrealized gains (losses) on investments. Losses due to credit-related impairments on bank loan participations are determined based upon consultations and advice from the Company's specialized investment manager and consideration of any adverse situations that could affect the borrower's ability to repay, the estimated value of underlying collateral, and other relevant factors. For the years ended December 31, 2025, 2024, 2023, and 2022,2023, management concluded that $203,000, $3.3 million, $397,000, and $574,000$397,000 of the net realized and unrealized gains (losses) were due to credit-related impairments, respectively.

Fair values are measured in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurements. The guidance establishes a framework for measuring fair value and a three-level hierarchy based upon the quality of inputs used to measure fair value. The three levels of the fair value hierarchy are: (1) Level 1: quoted price (unadjusted) in active markets for identical assets, (2) Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument and (3) Level 3: inputs to the valuation methodology are unobservable for the asset or liability.

The guidance in ASU 2023-072023-09—SegmentIncome ReportingTaxes (Topic 280740): Improvements to ReportableIncome SegmentTax Disclosures was designed to improveincrease reportabletransparency segmentabout income tax information through improvements to the rate reconciliation and disclosure requirements,of primarilyincome throughtaxes enhanced disclosures about significant segment expenses.paid. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted the new standard effective with this Form 10-K by providing additional segment disclosures in Note 20.15. The new standard did not have a material impact on the Company's financial statements.

Domestication of James River Group Holdings, Ltd.Inc. (“JRG Holdings”)

(1) Underwriting profit (loss) profit and adjusted net operating income (loss) income are non-GAAP measures. See “Reconciliation of Non-GAAP Measures.”

The Company reportedproduced net income from continuing operations of $49.8 million and adjusted net operating income of $54.1 million for the year ended December 31, 2025 compared to a net loss from continuing operations of $63.5 million forand thean year ended December 31, 2024 compared toadjusted net incomeoperating from continuing operationsloss of $61.2$41.5 million for the year ended December 31, 2023.2024. The netyear-over-year loss from continuing operations in the current yearimprovement was largely attributabledriven toby reserve development on prior accident years in the Excess and Surplus Lines segment which was impacted$5.0 bymillion favorable for the year ended December 31, 2025 compared to $76.7 million of net adverse reservefor developmentthe year ended December 31, 2024 (including a $52.2 million reserve charge upon execution of the E&S ADC in the third quarter), and $52.8 million of ceded premium recorded upon execution of the E&S Top Up ADC in the2024. fourthNet quarter.income Adjustedfrom netcontinuing operating loss was $41.5 millionoperations for the year ended December 31, 20242025 comparedalso toincludes adjusteda netone-time operatingtax incomebenefit of $50.3$14.1 million forfrom the yearDomestication ended(discussed Decemberabove 31,in 2023.Strategic Actions and below in Income Tax Expense section).

Underwriting results were a profit of $20.3 million (combined ratio of 96.6%) for the year ended December 31, 2025 compared to a loss of $105.6 million (combined ratio of 117.6%) for the year ended December 31, 20242024. comparedThe toimprovement profitin ofunderwriting $24.5results million (combined ratio of 96.5%) forreflects the yearsame endedfactors Decembermentioned 31,above 2023. The underwriting loss in the current year was largely driven by net adverseincluding reserve development on prior accident years (see loss ratio discussion below) and the $52.8 million of ceded premium associated with the E&S Top Up ADC in the prior year which increased our prior year combined ratio by 9.5 points. Underwriting results for the years ended December 31, 20242025 and 20232024 also include $13.7$12.3 million and $16.4$13.7 million, respectively, of premium adjustments associated with prior years including reinstatement premium in the Excess and Surplus Lines segment which reduced net written and net earned premiums, and underwriting profit. The impact of the premium adjustments was a 2.61.9 and 2.12.6 percentage point increase in our combined ratios in the respective years.

Our loss ratio increasedimproved from 69.9%86.2% in the prior year to 86.2%66.4% in the current year primarily driven by higher net adverse reserve development on prior accident years and the impact of the ceded premium associated with the E&S Top Up ADC in the prior year (+a 7.0 pointspoint addition to the prior year loss ratio). Net adverse reserveReserve development on prior accident years (excluding adverse prior year development from continuing operations that is subject to deferral under retroactive reinsurance accounting - see discussion below) was $1.5 million or 0.3 percentage points favorable for the year ended December 31, 2025 compared to $76.1 million or 12.7 percentage points adverse for the year ended December 31, 20242024. comparedThe tofavorable $31.6reserve million or 4.5 percentage points adversedevelopment for the year ended December 31, 2023.2025 included $5.0 million of net favorable development in the Excess and Surplus Lines segment and $3.5 million of net adverse development in the Specialty Admitted Insurance segment. The adverse reserve development for the year ended December 31, 2024 included $76.7 million of net adverse development in the Excess and Surplus Lines segment, including the $52.2 million reserve charge upon execution of the E&S ADC (consideration paid in excess of initial reserves), and $607,000 of net favorable development in the Specialty Admitted Insurance segment. ThePremium adverseadjustments reserveassociated developmentwith forprior theyears yearincluding endedreinstatement December 31, 2023 included $32.6 million of net adverse reserve developmentpremium in the Excess and Surplus Lines segment increased the respective loss ratios by 1.4 and $1.02.0 millionpoints. The loss ratio for the current year also benefited from a lower current accident year loss ratio and segment mix with the Excess and Surplus Lines segment representing 93.2% of consolidated net favorableearned developmentpremiums in the Specialtyyear Admittedended InsuranceDecember segment.31, 2025 compared to 85.3% in the year ended December 31, 2024.

Our expense ratio increasedimproved from 26.6%31.4% in the prior year to 31.4%30.2% in the current year largelyreflecting driven by higher compensationgeneral and badadministrative debtexpense expenses,reductions across all segments and lowerfavorable netcommission earnedadjustments premiumsrelated to run-off programs in theour ExcessSpecialty andAdmitted SurplusInsurance Linessegment. segmentThe whichprior year expense ratio was impacted by the $52.8 million of ceded premium on the E&S Top Up ADC (+a 2.5 point impactaddition onto the prior year consolidated expense ratio),. partiallyPremium offsetadjustments associated with prior years including reinstatement premium in the Excess and Surplus Lines segment increased the respective consolidated expense ratios by a0.6 lowerand current0.7 yearpoints in the respective years. Refer to the Segment Results section below for further discussion of the segment expense ratio for the Specialty Admitted Insurance segment driven by lower commissions and lower expenses for compensation and taxes, licenses, and fees.ratios.

The Company accounted for the amendment ofamended the Series A Preferred Shares on November 11, 20242024. asThe amendment was considered an extinguishment of the pre-amendment Series A Preferred Shares for accounting purposes due to the significance of qualitative and quantitative changes to the shares. The Company estimated the fair value of the new Series A Preferred Shares to be $133.1 million on the date of issuance and classified the new Series A Preferred Shares as mezzanine equity. The Company recorded deemed dividends of $27.0 million within retained deficit for the difference between the $144.9 million carrying value of the extinguished pre-amendment Series A preferred shares and the combined $133.1 million estimated fair value of the new Series A Preferred Shares and the $38.8 million fair value of the new common shares issued through conversion of Series A Preferred Shares in the amendment. Also included in the dividends on Series A Preferred Shares were declared dividends of $10.1$7.9 million and $10.5$10.1 million for the years ended December 31, 20242025 and 2023,2024, respectively.

There have been no material changes in our risk factors in the quarter ended MarchJune 31,30, 2026 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, except as follows:

The availability and cost of reinsurance are subject to prevailing market conditions, both in terms of price and available capacity, each of which can affect our business volume and profitability. The availability of reasonably affordable reinsurance is a critical element of our business plan. One important way we utilize reinsurance is to reduce volatility in claims payments by limiting our exposure to losses from large risks. Another way we use reinsurance is to purchase substantial protection against concentrated losses when we enter new markets. In addition, the ability to obtain reinsurance is critical to our fee-based fronting business. As a result, our ability to manage volatility, mitigate significant losses, expand into new markets, grow by offering insurance to new kinds of enterprises, or grow our fronting business may be limited by the unavailability of reasonably priced reinsurance. We may not be able to obtain reinsurance on acceptable terms or from entities with satisfactory creditworthiness. In such event, if we are unwilling to accept the terms or credit risk of potential reinsurers, we would have to reduce the level of our underwriting commitments, which would reduce our revenues. Reinsurance capacity hasis becomesubject moreto market cycles and sudden changes. Capacity can be restricted making reinsurance placements more challenging in recent years.challenging.

Many reinsurance companies exclude certain coverages from, or alter terms in, the reinsurance contracts we enter into with them. Some exclusions relate to risks that we cannot in turn exclude from the policies we write due to business or regulatory constraints. In addition, reinsurers are imposing terms, such as lower per occurrence and aggregate limits, and more exclusions, limiting the protection provided under the reinsurance contract. For example, some of our reinsurance treaties are subject to loss ratio caps or aggregate limits. While ceded losses to our reinsurance treaties were within these loss ratio caps and aggregate limits, where applicable, as of MarchJune 31,30, 2026, lessthere thancan $500,000be no assurance that the amount of limitceded remainslosses availablewill withremain respectwithin tothese aloss reinsurerratio incaps oneand ofaggregate our 2021 excess casualty reinsurance treaties.limits. If ceded losses were to exceed the loss ratio cap or aggregate limit that applies to a reinsurer’s participation on a given reinsurance contract, the Company would not have reinsurance coverage from that reinsurer's share of losses in excess of such loss ratio cap or aggregate limit, which could have a material adverse effect on our business, liquidity and results of operations. As a result, we, like other direct insurance companies, write insurance policies which to some extent do not have the benefit of reinsurance protection. These gaps in reinsurance protection expose us to greater risk and greater potential losses. For example, certain reinsurers have excluded coverage for terrorist acts or priced such coverage at unreasonably high rates. Many direct insurers, including us, have written policies without terrorist act exclusions and in many cases we cannot exclude terrorist acts because of regulatory constraints. We may, therefore, be exposed to potential losses as a result of terrorist acts. See also “Item 1. Business — Purchase of Reinsurance” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 3, 2026.

In addition to the traditional prospective reinsurance described above, we have purchased retroactive reinsurance in the form of loss portfolio transfers and adverse development covers on certain books of our business. This retroactive reinsurance may prove to be inadequate to cover the adverse loss development on the subject business. InFor particular,example, the ESE&S Top Up ADC purchased in 2024 hashad a $75.0 million limit, $7.5 millionnone of which remains available as of MarchJune 31,30, 2026.

The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors. Factors that could cause such differences are discussed in the sections entitled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q, and Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three and six months ended MarchJune 31,30, 2026 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025.

Underwriting profit is a non-GAAP measure commonly used in the property and casualty insurance industry to evaluate underwriting performance. We believe that the disclosure of underwriting profit by individual segment and of the Company as a whole is useful to investors, analysts, rating agencies and other users of our financial information in evaluating our performance because our objective is to consistently earn underwriting profits. We evaluate the performance of our segments and allocate resources based primarily on the potential for underwriting profit. We define underwriting profit as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) less losses and loss adjustment expenses on business from continuing operations notexcluding subjectthe toimpact of retroactive reinsurance accounting and other operating expenses. Other operating expenses include the underwriting, acquisition, and insurance expenses of the operating segments and, for consolidated underwriting profit, the expenses of the Corporate and Other segment. Our definition of underwriting profit may not be comparable to that of other companies. See “Reconciliation of Non-GAAP Measures” for a reconciliation of underwriting profit to income from continuing operations before taxes and for additional information.

Unless specified otherwise, all references to our defined metrics above in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” are for our business from continuing operations thatexcluding isthe notimpact subject toof retroactive reinsurance accounting. Management believes that the lack of economic impact of retroactive reinsurance accounting makes the presentation of our key metrics on business notexcluding subjectthe toimpact of retroactive reinsurance accounting helpful to the users of our financial information. See “Underwriting Performance Ratios” and “Reconciliation of Non-GAAP Measures.”

(2)Included in underwriting results for the three and six months ended MarchJune 31,30, 2026 and 2025 is gross fee income of $1.5$977,000 and $2.5 million, respectively ($3.9 million and $4.3$8.3 million,million respectively.in the respective prior year periods).

Three Months Ended MarchJune 31,30, 2026 and 2025

The Company reported aproduced net lossincome from continuing operations of $8.8$6.6 million for the three months ended MarchJune 31,30, 2026.2026 This comparescompared to net income from continuing operations of $11.0$5.1 million for the three months ended MarchJune 31,30, 2025. Adjusted net operating income was $5.8$10.0 million and $9.1$11.7 million in the respective periods.

Underwriting results were a loss of $6.2 million (combined ratio of 104.6%) for the three months ended March 31, 2026 compared to an underwriting profit of $721,000 (combined ratio of 99.5%) for the three months ended March 31, 2025. Underwriting results for the respective periods include $6.7 million$552,000 and $3.1$2.7 million of premium adjustments associated with prior years including reinstatement premiums in the Excess & Surplus Lines segment which reduced net written and net earned premiums, and underwriting profit. The impact of the premium adjustments was a 4.90.4 and 2.01.7 percentage point increase in our combined ratios in the respective periods. The premium adjustments in the current period were primarily reinstatement premiums driven by one large claim ceded to a $9.0 million excess of $2.0 million treaty. The Company has less than $10.0 million of remaining exposure to additional reinstatement premiums on this treaty.

The loss ratio for the currentthree yearmonths periodended June 30, 2026 was 2.41.8 percentage points higherlower than the prior year period primarily due to a slightly higher current accident year loss ratio and the impact of premium adjustments in the Excess & Surplus Lines segment (3.2 points and 1.4 points in the respective periods). Netnet reserve development on prior accident years (excluding adverse prior year development that is subject to deferral under retroactive reinsurance accounting - see discussion below) that was $165,000$569,000 andor $131,0000.4 favorablepercentage points adverse in the three months ended MarchJune 31,30, 2026 compared to $3.0 million or 2.0 percentage points adverse in the three months ended June 30, 2025. Premium adjustments associated with prior years including reinstatement premium in the Excess and 2025,Surplus respectively.Lines segment increased the respective loss ratios by 0.3 and 1.2 percentage points.

Our expense ratio increased from 32.7%30.5% in the prior year period to 35.4%33.9% in the current year primarilyperiod reflectingdue to the premium8.9% adjustmentsdecline in net earned premiums, largely driven by the non-renewal of several programs in the ExcessSpecialty &Admitted Surplus Lines segment which represented a 1.7segment, and 0.6 percentage point increase in the consolidated expense ratio in the respective periods. The higher current year expense ratio also reflects lower ceding commissions in the Excess & Surplus Lines segment as we are retaining a greater percentage of the business we are writing in the segment and the decline in net earned premiums in the Specialty Admitted segment due to our selective approach to new fronting opportunities and the non-renewal of several programs.segment. General and administrative expenses for the total Company were down $4.0$2.5 million compared to the prior year.year period including a $2.3 million decline in the Specialty Admitted Insurance segment where we are closely managing expenses.

Adjusted net operating income declined from the prior year period due to the lower underwriting results,results. Growth in tangible common equity of 2.8% in the current year quarter was largely driven by net income, partially offset by higher investment income. Tangible common equity declined 1.3% in the three months ended March 31, 2026 driven by the net loss for the period and unrealized losses on fixed maturities in other comprehensive income causeddue byto higherincreases in interest rates. Our 5.7%9.8% adjusted net operating return on tangible common equity for the three months ended MarchJune 31,30, 2026 compares to ana 11.5%14.0% return for the three months ended MarchJune 31,30, 2025.

On September 27, 2021, James River Insurance and James River Casualty Company (together, “James River”) entered into a loss portfolio transfer transaction (the “Commercial Auto LPT”) with Aleka Insurance, Inc. (“Aleka”), a captive insurance company affiliate of Rasier LLC, to reinsure substantially all of the Excess & Surplus Lines segment's legacy portfolio of commercial auto policies previously issued to Rasier LLC and its affiliates (collectively, “Rasier”) for which James River is not otherwise indemnified by Rasier. The reinsurance coverage is structured to be fully collateralized, is not subject to an aggregate limit, and is subject to certain exclusions. The cumulative amounts ceded under the loss portfolio transfer was $451.4 million as of both MarchJune 31,30, 2026 and December 31, 2025.

On November 11, 2024, Enstar, through its subsidiary Cavello Bay Reinsurance Limited (“Cavello Bay”), entered into an adverse development cover agreement with James River (“E&S Top Up ADC”), pursuant to which, in exchange for a premium of $52.8 million (less an amount equal to the federal excise tax payable on the premium), Cavello Bay reinsures, effective January 1, 2024, 100% of the losses associated with James River’s Excess & Surplus Lines segment casualty portfolio losses attaching to premium earned during 2010-2023 (both years inclusive). The E&S Top Up ADC excludes losses related to commercial auto policies issued to a former large insured or its affiliates and is subject to a retention by James River of $1,183.7 million (the limit of the E&S ADC executed on July 2, 2024) and up to an aggregate limit of $75.0 million. The E&S Top Up ADC closed on December 23, 2024. The Company recognized a $52.8 million reduction in pre-tax income in connection with the adverse development cover upon closing. In 2025, $51.4 million of adverse development was ceded to the E&S Top Up ADC, reducing the aggregate limit remaining on the E&S Top Up ADC to $23.6 million at December 31, 2025. In the threesix months ended MarchJune 31,30, 2026, an additional $16.2$23.6 million of adverse development was ceded to the E&S Top Up ADC, further reducingexhausting the aggregateremaining limit remaining onof the E&S Top Up ADC to $7.5 million at March 31, 2026.ADC. Of the $16.2$23.6 million, $14.8$22.2 million was subject to deferral under retroactive reinsurance accounting.

The following tables summarize the retroactive reinsurance accounting for the Commercial Auto LPT, the E&S ADC, and the E&S Top Up ADC for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively.

Gross written premiums for the Excess & Surplus Lines segment (which represents 89.8%93.0% and 91.5% of our consolidated gross written premiums in the three and six months ended MarchJune 31,30, 20262026, respectively) were flatdown with16.7% and 10.0% compared to the three and six month prior year periodperiods, asrespectively. Markets are extremely competitive and we continueremain tofocused prioritizeon our underwriting guidelines, prioritizing profitable growth in small to medium sized accounts. TheSubmissions, marketquotes, forand Excessrenewal Propertyrates remainscontinued challenging.to Submissionsgrow increasedcompared 3.5% overto the prior year quarterperiods. andThe renewalnumber ratesof werebound uppolicies 6.6%as a percentage of business quoted, however, dropped compared to the threeprior monthsyear endedperiods Marchdue 31,to 2025.increased competition. The change in gross written premiums by primary underwriting division is shown below:

Gross written premiums for the Specialty Admitted Insurance segment (which represents 10.2%7.0% and 8.5% of our consolidated gross written premiums in the three and six months ended MarchJune 31,30, 20262026, respectively) declined 70.3%75.9% and 73.0% from the three and six month prior year periods, respectively, reflecting non-renewals of programs. We are being selective with fronting opportunities, focusing on low net retentions and placing strong, rated, reinsurance support. The fronting and reinsurance markets are currently very competitive, and we have refined our underwriting appetite meaningfully over the last few years. The segment currently has four active programs.

Net premium retention for the Excess & Surplus Lines segment increased in the current year periods due to changes made in our reinsurance coverage to retain more of the business we write. ThisThe segment retention was partiallyalso offsetimpacted by the impact of higher premium adjustments in the current year associated with prior years including reinstatement premium ($6.7 million$552,000 and $3.1$7.2 million in the three and six months ended MarchJune 31,30, 20262026, respectively, compared to $2.7 million and 2025,$5.8 respectivelymillion in the respective prior year periods) which reduced net written premiums and the net retention ratio in both periods.

The Excess & Surplus Lines segment produced underwriting profits of $4.7$9.9 million and $11.7 million (combined ratios of 96.5%92.8% and 91.5%91.7%) in the three months ended MarchJune 31,30, 2026 and 2025, respectively. The underwriting results in the respective periods were impacted by $6.7 million$552,000 and $3.1$2.7 million of premium adjustments associated with prior years including reinstatement premium which reduced net written and net earned premiums, and underwriting profit. The impact of the premium adjustments was a 4.7 and 2.0 percentage point increase inincreased the segment combined ratio forby 0.4 and 1.7 percentage points in the respective quarters.

The loss ratio for the three months ended MarchJune 31,30, 2026 increaseddecreased from the prior year quarter primarily due to a higher current accident year loss ratio and the impact of premium adjustments (an additional 3.3 points and 1.4 points in the respective periods). Netnet reserve development on prior accident years (excluding adverse prior year development that is subject to deferral under retroactive reinsurance accounting - see discussion above) that was $100,000$275,000 or 0.2 percentage points and $10,000$2.3 favorablemillion or 1.6 percentage points adverse in the three months ended MarchJune 31,30, 2026 and 2025, respectively.respectively, and the impact of premium adjustments (an additional 0.3 and 1.2 percentage points in the respective periods), partially offset by a higher current accident year loss ratio in the current year period.

The expense ratio increased from 26.7%25.3% in the prior year quarter to 28.5%27.4% in the current quarter primarily reflecting the decrease in net earned premiums and lower ceding commissions (we are retaining a greater percentage of the business we write in the segment in the current year), primarilypartially reflectingoffset theby premium adjustments which represented a 1.40.1 and 0.60.5 percentage point increase in the segment expense ratio in the respective periods. The higher current year expense ratio also reflects lower ceding commissions in the segment as we are retaining a greater percentage of the business we write.

(2)Underwriting results include gross fee income of $1.5 million$977,000 and $4.3$2.5 million for the three and six months ended MarchJune 31,30, 20262026, respectively ($3.9 million and 2025,$8.3 respectively.million in the respective prior year periods).

The Specialty Admitted Insurance segment reported underwriting losses of $1.8$2.8 million and $306,000$4.6 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to underwriting losses of $1.4 million and 2025,$1.7 respectively.million in the respective prior year periods. Lower written and earned premium volumes in 2026 reflect our selective approach to new fronting opportunities and the non-renewal of several programs. Net development in our loss estimates for prior accident years was $65,000$294,000 and $121,000$229,000 favorableadverse in the three and six months ended MarchJune 31,30, 20262026, respectively, compared to $700,000 and 2025,$579,000 respectively.adverse in the respective prior year periods. We are closely managing expenses for the segment. Underwriting expenses decreased 48.8%19.7% and 34.0% from the respective three and six month prior year periods driven by a $2.9 million decrease indecreased compensation and other general and administrative expenses, partially offset by a decreasedecreases in net ceding commissions.

Other operating expenses for the Corporate and Other segment include personnel costs associated with the holding companies, professional fees, long-term incentive compensation (including share-based compensation) for the full Company, public company expenses and various other corporate expenses. The expenses are included in our calculation of consolidated underwriting profit, and in our consolidated expense ratio and combined ratio. Total operating expenses of the Corporate and Other segment were $9.1$7.4 million and $16.5 million for the three and six months ended MarchJune 31,30, 2026, respectively, down from $10.6$8.2 million and $18.9 million in the respective prior year periods due to lower compensation expenses.

Net investment income was $21.3$20.3 million and $20.0$41.6 million for the three and six months ended MarchJune 31,30, 20262026, respectively ($20.5 million and 2025,$40.5 respectively.million Income fromin the respective prior year periods). The Company's private investments ($1.8generated income of $334,000 and $2.1 million for the three and $200,000six months ended June 30, 2026, respectively (income of $986,000 and $1.2 million in the respective prior periods) increased due to the growth of our investments in structured private credit.. Excluding private investments, our net investment income for the three and six months ended MarchJune 31,30, 2026 decreasedincreased 1.5%0.3% and 2.1%, respectively, from the prior year period principally due to lowerallocations yields.of capital to higher yielding fixed maturities. The average duration of our portfolio excluding restricted cash equivalents was 3.53.6 years at MarchJune 31,30, 2026.

Of our total cash and invested assets of $1,955.6$1,939.2 million at MarchJune 31,30, 2026 (excluding restricted cash equivalents), $227.6$195.6 million represents the cash and cash equivalents portion of the portfolio. The majority of the portfolio, or $1,434.4$1,439.3 million, is comprised of fixed maturity securities that are classified as available-for-sale and carried at fair value with unrealized gains and losses on these securities reported, net of applicable taxes, as a separate component of accumulated comprehensive income (loss). Also included in our investments are $153.3$156.7 million of bank loan participations, $72.3$73.6 million of equity securities,securities $597,000(majority preferred stock), $4.0 million of short-term investments, and $67.4$70.0 million of other invested assets.

Bank loan participations generally provide a higher yield than our portfolio of fixed maturity securities and are primarily senior, secured floating-rate debt rated “BB”, “B”, or “CCC” by Standard & Poor’s or an equivalent rating from another nationally recognized statistical rating organization, and are therefore below investment grade. Bank loans include assignments of and participations in performing and non-performing senior corporate debt generally acquired through primary bank syndications and in secondary markets. They consist of, but are not limited to, term loans, the funded and unfunded portions of revolving credit facilities, and similar loans and investments. Bank loan participations are measured at fair value pursuant to the Company's election of the fair value option, and changes in unrealized gains and losses in bank loan participations are reported in our income statement as net realized and unrealized gains (losses) on investments. At MarchJune 31,30, 2026 and December 31, 2025, the fair market value of these securities was $153.3$156.7 million and $155.1 million, respectively.

For the threesix months ended MarchJune 31,30, 2025,2026, the Company recognized net realized and unrealized investment losses of $1.4$5.6 million,million ($999,000 of net realized and unrealized investment gains for three months ended June 30, 2026), including $640,000$2.5 million of net unrealized losses on bank loan participations, $708,000$1.0 million of net unrealized gainslosses for the change in the fair value of equity securities,securities $1.7(majority preferred stock), $2.1 million of net realized investment losses on the sale of bank loan participations, $210,000$209,000 of net realized investment gains on the sale of equity securities,securities (majority preferred stock), and $25,000$175,000 of net realized investment gainslosses on the sale of fixed maturity securities.

In conjunction with its outside investment managers, the Company performs quarterly reviews of all securities within its investment portfolio to determine whether any impairment has occurred. As a result of this review, management concluded that there were no credit-related impairments of fixed maturity securities at MarchJune 31,30, 2026, December 31, 2025, or MarchJune 31,30, 2025. At MarchJune 31,30, 2026, 100.0% of the Company’s fixed maturity security portfolio was rated “BBB-” or better (“investment grade”) by Standard & Poor’s or received an equivalent rating from another nationally recognized rating agency. Management does not intend to sell available-for-sale securities in an unrealized loss position, and it is not “more likely than not” that the Company will be required to sell these securities before a recovery in their value to their amortized cost basis occurs.

The following table sets forth the composition of the Company’s portfolio of available-for-sale fixed maturity securities by rating as of MarchJune 31,30, 2026:

OtherThe income and expense items netted to income of $759,000 and $355,000 for the three months ended March 31, 2026 and 2025, respectively. Non-operatingnon-operating expenses included in the respective totals were $128,000 and $563,000,above primarily consistingconsist of legal and other professional fees and other expenses related to various strategic initiatives, employee severance,initiatives and litigation that the Company is involved in. The non-operating expenses were offset by $815,000 and $835,000 of broker incentive rebates in the Excess & Surplus Lines segment,in, as well as otheremployee miscellaneousseverance income in the respective periods.costs.

Interest expense was $5.6 million and $5.5$11.2 million for the three and six months ended MarchJune 31,30, 20262026, respectively ($5.8 million and 2025,$11.3 respectively.million in the respective prior year periods). See “—Liquidity and Capital Resources—Sources and Uses of Funds” for more information regarding our senior bank debt facilities and trust preferred securities.

The Company recorded $91,000 of amortization of intangible assets in each of the three months ended MarchJune 31,30, 2026 and 2025.2025 ($182,000 in each of the six months ended June 30, 2026 and 2025).

The Company’s U.S. federal income tax expense differs from the amount computed by applying the federal statutory income tax rate of 21% to income before taxes primarily due to interest income on tax-advantaged state and municipal securities, dividends received income, and excess tax benefits and expenses on share based compensation. Prior to the Company's domestication from Bermuda to the U.S. on November 7, 2025, the Company's effective tax rate was impacted by the relative mix of income from continuing operations reported by country and the statutory tax rates of 0% and 21% imposed by Bermuda and the U.S., respectively. The Company did not receive a U.S. tax deduction for losses in Bermuda in the prior year periodperiods resulting from Bermuda holding company expenses and interest expense. For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, our effective tax rate on income (loss) income from continuing operations was (17.5%)21.8% and 31.4%,0.9%, respectively.respectively (30.1% and 31.0% in the respective prior year periods). The effective tax rate of 0.9% for the threesix months ended MarchJune 31,30, 2026 was below the federal statutory income tax rate of 21% primarily because of excess tax expenses on share based compensation.compensation RSUof awards$356,000 vest onduring the anniversary of their grant date which are predominately in the first quarter of each year.period.

The Company has a deferred tax asset of $11.7$11.9 million at MarchJune 31,30, 2026 associated with unrealized losses in the Company’s available-for-sale fixed maturity securities portfolio. The unrealized losses are attributable to changes in market interest rates and other economic factors rather than credit-related factors of the issuers. The Company does not intend to sell available-for-sale debt securities in an unrealized loss position, and it is not “more likely than not” that the Company will be required to sell these securities before a recovery in their fair value to their amortized cost basis occurs. The Company’s hold to recovery assertion related to investments in an unrealized loss position is considered a tax planning strategy. Both the cash generated by the Company from operating activities and the unused capacity on the Company’s unsecured revolving credit facilities reduce the likelihood of having to sell debt securities in an unrealized loss position. As a result, the Company has concluded that no valuation allowance is required for the deferred tax asset associated with unrealized losses on its investments at MarchJune 31,30, 2026.

The Company also has a deferred tax asset of $14.1 million at MarchJune 31,30, 2026 associated with the effects of our 2025 domestication on the business interest expense deduction. The carryforward period for this tax benefit is unlimited and does not expire, but the annual utilization on the consolidated U.S. federal income tax return is limited to the separate company (in this case, our ultimate holding company) that generated the benefit. The Company has developed tax planning strategies that we believe are prudent and feasible to increase the utilization of the carryforward in future tax years. These strategies include reducing interest expense and increasing investment income and overall pre-tax income - both at that specific entity (the ultimate holding company). As a result, the Company has concluded that no valuation allowance is required for the deferred tax asset at MarchJune 31,30, 2026.

The Company’s gross reserve for losses and loss adjustment expenses at MarchJune 31,30, 2026 was $3,087.8$3,090.0 million. Of this amount, 75.1%75.7% relates to amounts that are IBNR. This amount was 75.9% at December 31, 2025. The Company’s gross reserves for losses and loss adjustment expenses by segment are summarized as follows:

At MarchJune 31,30, 2026, the amount of net reserves (prior to the $1.7 million allowance for uncollectible reinsurance recoverables) of $1,071.6$1,056.3 million that related to IBNR was 78.1%.81.1%. This amount was 73.5% at December 31, 2025. The Company’s net reserves for losses and loss adjustment expenses by segment are summarized as follows:

Cash used in operating activities excluding restricted cash equivalents was $760,000$5.9 million for the threesix months ended MarchJune 31,30, 2026. This compares to cash used in operating activities excluding restricted cash equivalents of $51.8$26.9 million for the threesix months ended MarchJune 31,30, 2025. Both periods reflect lower premium collections in the Specialty Admitted Insurance segment due to the non-renewal of several programs. The prior year period was also negatively impacted by timing of reinsurance settlements.

Cash used in investing activities was $29.4$53.8 million and $53.0$133.7 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, reflecting the Company's efforts to enhance the yield in our investment portfolio by investing available cash and cash equivalents into higher yielding investments. Cash and cash equivalents excluding restricted cash equivalents represented 11.6%10.1% and 14.7%11.4% of total cash and invested assets at MarchJune 31,30, 2026 and 2025.

Cash used in financing activities of $3.2$5.6 million for the threesix months ended MarchJune 31,30, 2026 includes $521,000$985,000 of dividends paid to common shareholders, $2.0$3.9 million of dividends paid on the Series A Preferred Shares, and $671,000$677,000 of payroll taxes withheld and remitted on net settlement of RSUs. Cash provided by financing activities of $21.9$18.3 million for the threesix months ended MarchJune 31,30, 2025 includes a $25.0 million borrowing under the Previous Credit Agreement (as defined below), $600,000$1.1 million of dividends paid to common shareholders, $2.0$3.9 million of dividends paid on the Series A Preferred Shares, and $545,000$550,000 of payroll taxes withheld and remitted on net settlement of RSUs.