Slide Insurance Aktie

Greetings. Welcome to Slide Insurance, Inc. First Quarter 2026 Earnings Call. [Operator Instructions] Please note this conference is being recorded.

I would now like to turn the conference over to your moderator today, Garrett Edson with ICR. Thank you, sir. You may proceed.

Thank you, and good morning. With us today are your host, Bruce Lucas, Chairman and Chief Executive Officer of Slide; and Andy Omiridis, Chief Financial Officer.

By now, everyone should have access to our earnings release, which was published yesterday after the market closed and can be found on our website at ir.slideinsurance.com.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements, which are based on the expectations, estimates and projections of management regarding the company's future performance, anticipated events or trends and other matters that are not historical facts.

Forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements.

These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our earnings release and recent filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of Slide.

Our statements are as of today, April 29, 2026, and we undertake no obligation to update any forward-looking statements we may make, except as required by law.

In addition, this call is being webcast, and an archived version will be available shortly after the call ends on the Investor Relations portion of the company's website at www.slideinsurance.com.

With that, I'd now like to turn the call over to our Founder, Chairman and CEO, Bruce Lucas. Please go ahead.

Thank you, and welcome to our first quarter 2026 earnings call. We appreciate your continued interest in Slide and are excited to be speaking with you today. We started off 2026 by delivering another quarter of strong execution across our business and reinforcing the ability of our tech-enabled coastal specialty focus to produce what we believe to be the best top and bottom line performance in our sector.

Our performance was once again based on strong renewal rates on our existing book, expansion of our voluntary sales and the continued acquisition of Citizens policies. For the quarter, we meaningfully grew our gross written premiums by 49% year-over-year to $414.8 million.

In the quarter, we continued to strategically capitalize on Citizens ongoing depopulation efforts. As a reminder, our extensive data capabilities and technology-driven underwriting process enables us to identify Citizens policies that offer compelling return profiles.

While we plan to remain selective in pursuing Citizens assumptions this year, we expect to continue to grow our gross written premiums in 2026 year-over-year as a result of higher policy retentions, higher voluntary sales and the launch of new states.

In addition to our strong top line results, Slide grew net income by 51% year-over-year to $139.5 million, which is another new quarterly record for the company. Along with net income, first quarter return on equity was once again strong at 12.5% and 50% on an annualized basis, reflecting the continued strength of our business.

Meanwhile, our disciplined underwriting model continues to deliver industry-leading results with our combined ratio improving to 55.5% compared to 58.9% in the prior year quarter.

Our first quarter performance continues to deliver robust profitability and attractive equity returns that create meaningful value for our shareholders. This strong start to the year positions us well to achieve our full year objectives.

We have deliberately built a dynamic coastal specialty insurance platform with the strongest balance sheet in the sector, providing us with the financial flexibility to accelerate our geographic expansion throughout 2026.

While we've established a strong market position in Florida, we're now strategically extending our proven capabilities into additional catastrophe-exposed markets. For example, South Carolina continued to deliver robust voluntary sales in the first quarter, and we're confident we will be able to build on this momentum moving forward.

As we continue to progress through 2026, we remain committed to thoughtful geographic diversification in multiple states. Our geographic expansion will bolster our foundation for sustainable growth and long-term shareholder value.

We are in the final process of completing our 2026 reinsurance program, and I anticipate completion of the reinsurance tower in the next 1 to 2 weeks.

Year-over-year, risk-adjusted rate decreases are prevalent in the Florida market and the decreases have been substantial. I will not disclose the extent of the decreases in pricing at this time, out of respect for our reinsurance partners who are still negotiating with our peers.

However, I will note that we increased our first event reinsurance tower by roughly $1 billion versus 2025. And despite this increase, reinsurance capacity significantly outpaced our demand as every layer of the reinsurance tower was oversubscribed on favorable terms.

I'd like to thank our reinsurance partners for their unwavering commitment to Slide through hard and soft market conditions, and your partnership is greatly appreciated.

During the quarter, we completed our $120 million stock repurchase program, and our Board authorized a new $125 million repurchase program in late March. In the first quarter, we repurchased approximately 7.7 million shares at a weighted average price of $17.75 per share.

Since initiating our buybacks, we have repurchased approximately 13.3 million shares at an average share price of $17.30.

Through our repurchase program, we have returned $230.9 million to shareholders and reduced our IPO dilution from 13% to 3%. This reflects our business model's ability to generate strong free cash flow, our willingness to opportunistically repurchase shares when we believe there is a dislocation in our valuation and our ability to successfully return capital to our shareholders in a highly value-accretive way.

It is unusual for a recent IPO issuer to return IPO proceeds less than 1 year after going public, and there are a couple of reasons for our decision to aggressively pursue share buybacks. First, since our IPO was priced in June at $17 per share, we have significantly outperformed our expectations each of the last 4 quarters while providing strong guidance for 2026.

Despite our consistently strong results, our share price remained close to the IPO price, which does not reflect our fair value. Second, our strong financial performance has meaningfully increased our free cash position, which continues to build.

This growth in unencumbered cash has exceeded our near-term deployment needs, and we believe we have ample capital flexibility to support our growth initiatives even after repurchasing $230 million of common stock.

Given our current earnings profile and outlook, we believe repurchasing shares at attractive valuations is a prudent use of capital that can enhance earnings per share and return on equity over time.

We remain highly confident in our business plan and expected financial performance and believe our share repurchase program further supports our objective of delivering best-in-class returns on equity. Accordingly, the Board of Directors has authorized an additional $100 million share repurchase program.

We will continue to evaluate repurchase opportunities in a disciplined manner, and we'll act when we believe doing so is in the best interest of shareholders. We expect to strengthen Slide's earnings profile and balance sheet throughout 2026, and we remain committed to deploying our excess capital in ways that maximize shareholder value.

Finally, our success is built on the efforts of our exceptional team. I want to thank all our employees for their dedication and the critical role they play in Slide's performance. I'm proud of what we are accomplishing together, and I appreciate all of you. Thank you for your continued support of Slide.

And with that, I'll now turn the call over to Andy Omiridis to provide some color on our excellent first quarter.

Thank you, Bruce, and good morning, everyone. In the first quarter, net income rose 50.8% to $139.5 million from $92.5 million in the prior year period, resulting in diluted earnings per share of $1.02. Our earnings profile continues to strengthen with growth in both top and bottom line driven by increased scale achieved following our IPO in June 2025.

Gross premiums written reached $414.8 million, up 49.1% from $278.2 million in the first quarter of 2025. This growth was driven by a 46% year-over-year increase in policies in force, which now stand at 508,928, driven by growth of voluntary new business, renewals of previously acquired Citizens policies and further Citizens acquisitions.

During the quarter, we also acquired an additional $92.3 million in annualized gross premiums or 28,783 policies from Citizens, capitalizing on selective attractive takeout opportunities.

Net losses and loss adjustment expenses totaled $111.1 million in the quarter as compared to $83.8 million in the prior year period. As a result, our accident year loss ratio improved to 28.4% from 34.2%, reflecting the continued strong performance of our book.

Policy acquisition and other underwriting expenses rose to $44.1 million from $28.6 million in the prior year period, driven by increased renewal policies from prior year assumed Citizens policies, resulting in increased policy acquisition costs in 2026.

General and administrative expenses increased to $46.2 million from $41.4 million, primarily due to higher staffing levels to support our growth. These trends produced an overall expense ratio of 25.1%, down from 27.4% in the prior period and a combined ratio of 55.5%, an improvement of 3.4 percentage points year-over-year. The gains reflect the operating leverage we continue to build as we scale the business.

Turning to capital management. As Bruce mentioned, we completed our $120 million share repurchase program during the quarter, and our Board authorized a new $125 million program in late March. In total, we have repurchased 7.7 million shares at a weighted average price of $17.75 per share during the quarter.

As of the date of this earnings call, we have repurchased an additional 3 million shares for $53.8 million at an average price of $17.95. Since inception, we have repurchased 13.3 million shares for $230.9 million at an average price of $17.30.

As of March 31, 2026, we had cash and cash equivalents of $1.2 billion and total invested assets of $720 million, consisting of 33.5% corporate bonds, 31.3% municipal bonds, 24.1% U.S. government bonds and 11.1% asset-backed securities and other.

As a relatively new public company, I'd like to take a moment to outline our capital priorities. We have demonstrated our ability to generate strong free cash flow and have deployed that capital both to support attractive growth opportunities and to repurchase shares when we believe it is accretive over the long term.

We expect to continue managing capital in this disciplined manner, always prioritizing the actions that create the greatest long-term value for our shareholders.

I'm pleased to reaffirm that the full year 2026 guidance we provided on our February earnings call, we continue to expect gross written premiums between $1.85 billion and $1.95 billion and net income between $455 million and $470 million.

Top line growth is expected to come primarily from sustained organic expansion, including double-digit increases in policies in force and premium outside of Florida, supplemented by selective opportunities in Florida that meet our targeted returns.

Finally, we expect to file our Form 10-Q after the market closes on April 30, 2026. Thank you for your time. And operator, we are now ready to open the line for questions.

[Operator Instructions] The first question comes from Alex Scott with Barclays.

First one I had for you is just a follow-up on the reinsurance commentary you gave. It sounded like a fair amount of limit you added. So I wanted to check to see if you could give us an update on how much higher the modeled PML loss would be that would still be covered by your reinsurance tower? Has that meaningfully changed sort of the risk profile of your company?

Yes. Everything scales in tandem. So we've had obviously tremendous growth year-over-year at plus almost 50%. As you add more policies, your probable maximum loss on your reinsurance tower gets higher.

And so apples-to-apples compared to last year, it's the same. But in total, we did increase our first event reinsurance tower by $1 billion. So the tower is at approximately $3.5 billion of first event coverage. And that is in line with what we did last year, although on a smaller book and smaller tower, they are proportionately identical to one another.

Got it. Okay. That makes sense. And just to follow up on the reinsurance costs. I mean, to the extent you have savings, which it sounds like you probably will, and that's one of your biggest costs. Can you help us think through how that translates to the loss ratio and the benefit that we actually see coming through in the underwriting?

Yes. We don't have an external quota share, so it really shouldn't have any impact on underlying loss ratio. But yes, you are correct, Alex, that reinsurance is our single largest expense of the organization. So a decrease in reinsurance pricing is good for the Florida market and Florida cedents. But the underlying loss ratio should be unchanged because our only quota share is internal.

The next question is from Paul Newsome with Piper Sandler.

I wanted to ask kind of a broader question about the Citizens takeouts. There seems to be a pretty wide range of views about whether or not you can take them out -- take Citizens takeout today versus in the past, given how active folks have been. Maybe you could just talk a little bit about why you folks remain confident and if there's any sort of particular thing that you think you have an advantage over your peers in doing those takeouts.

Yes, it's a good question, Paul. I mean, obviously, the Citizens opportunity is not as robust as it has been in prior years. But every company is different. It depends on your portfolio? Where your portfolio is located? How do the Citizens policies fit within that portfolio? Are there reinsurance synergies that are created or the debit sets that happen?

So every company is going to look at the Citizens portfolio a little differently and the policies are going to model differently for everyone. We are focused on profitability, like our growth has been incredible, and we're certainly not reliant on Citizens this year. We think voluntary growth in new states is the real story for '26. But if we see opportunities in Citizens to add accretive policies that really fit well within our portfolio, we're going to do that.

And we underwrite with a $6 trillion TIB underwriting set. ProCast has been proven 100 times over now. It gives very accurate forward reinsurance costs. We feel like that gives us an advantage to find policies that are accretive to the current portfolio.

And then maybe as a second question, could we have a little additional color on the competitive environment? Perhaps the biggest question I get today is given where you and other insurers or profitability is why -- why wouldn't we see a rush of competitors come into the market? And is there any early evidence that something like that might be happening?

Yes, Paul, we're not seeing it. We get this question every quarter and every quarter our answer is the same. While there have been some new entrants to the market, I will note those entrants come in with an extremely small balance sheet. They have to scale. They have to build systems. They have to hire people. It's a loss lead. Maybe Citizens can be attractive for them, maybe not. But obviously, that opportunity is not as robust as it was, say, 2 years ago.

We're not seeing new capital flow in, and we're seeing some companies that got conditional approval in Florida, not able to raise the necessary funds to even operate. So we're just not seeing that at this time. I think the market has been pretty stable, and we're very happy with how we are positioned in Florida.

[Operator Instructions] The next question comes from Tommy McJoynt with KBW.

We appreciate you guys giving us the full year guide for net income. And to be clear, that guide, I think you said does not include your assumption for a major CAT event in the third quarter, which we as analysts often want to bake in.

Maybe you can help us frame what would happen to your net income if a prior event like a Hurricane Helene, Milton or Ian were to repeat, what would that do to your net income? We understand it's not as simple as plugging in the full first event retention just because there's offsets from claims processing revenues as well.

Well, if it's an event like Helene, there's virtually zero impact to our earnings. If there's an event like Milton, there's going to be a larger impact because it was a CAT 4 that hit Tampa. Whereas Helene was primarily a flood event.

We're still finalizing in the reinsurance tower what our first event retention is going to be. But I would say that as a guidepost, we have consistently kept our retention to no more than 25% of pretax earnings. So even if you had a full event retention, I would expect pretax earnings to go down by about 25% for the year. And so maybe we run a 40% ROE. It's -- we're in a very good spot here.

And the retention is also spread out across a very large reinsurance tower. So it's not like you have a $200 million loss and all of that loss is absorbed by the company. We spread that retention throughout different layers. We call it COPAR.

And we like to do that just to hedge the risk and show the reinsurers that we have real skin in the game. But -- and event is not some armageddon for us. It's just a ding to earnings for the year, but those earnings will still be incredibly robust.

And are there any details that you can share around second and third event loss retentions as well, the sideways protection in the reinsurance tower? Or will we need to wait for more details on the reinsurance program?

Yes. Good question. Expect something similar in terms of structure to what we did last year. We do like to step down retentions on event too. We do buy third event cover, and that is a rarity in the Florida market. In fact, I'm unaware of anyone that does that besides us. So as we get a higher number of catastrophe events, our retention steps down for each event. But we're still in the process of finalizing what that will look like, but not dissimilar to last year.

And then just last one. When we think about the new business -- sort of new business that you're generating, both in the voluntary and what I'll call the Citizens assumption side, which one of those is a larger contributor to new business growth in '26? Is it still Citizens takeouts? Or are the voluntary channels in Florida and in the other states contributing more than that this year?

It's voluntary. That will be the larger channel for sure.

The next question comes from Randy Binner with Texas Capital.

Just picking up on that question. Can you comment on the kind of the pace and the composition of the top line growth for the rest of the year? Is there going to be -- is it going to be for the voluntary business or the business in new states?

Is it going to be pretty linear? Is there any seasonality? There's kind of a tough comp in the fourth quarter. It'd just be helpful to kind of understand high level, how you see the rest of the top line coming in for the remaining 3 quarters in the year?

Yes. I would expect top line to steadily increase as we move through 2026 with the launch of new products, new states, et cetera. We do have to watch our growth because we're purchasing a reinsurance tower, and that tower has projections as to what our in-force portfolio will look like at September 30.

And -- so we have to kind of navigate within the tower on the top line growth, but we did model in some very strong top line growth into the reinsurance purchase. So we're able to kind of go full steam at this point and continue to fill the exposure set within our reinsurance tower. But I definitely think you're going to see an acceleration, particularly in the third and fourth quarters.

Okay. That's helpful. And then just one detailed question. Do you -- was there any PYD or Cat in the loss ratio in the quarter?

We had some CAT in there. We had some relatively minor events in the first quarter, but there is no PYD. The earnings number that we posted is 100% a quarterly function with no PYD in it.

Okay. Got it. And then just one more, if I could. The cash balance seems high. I'm a little newer to the story, so maybe I'm not up to speed on this. But it seems like some of the cash balance on the balance sheet could shift into investments that could generate a higher yield. Is that the right way to think of how the investment income line might develop over time?

I believe, yes. And the reason the cash balance is so high is because the company keeps crushing its own projections in terms of profitability, and it is meaningfully accretive to our cash balance.

As a result of the cash balance accelerating, particularly over the last 4 quarters, we've been able to do things like return $230 million of equity back to shareholders. And we still believe that we have more capital on the balance sheet than we need to execute on the business plan. So we are working closely with our financial advisers. We are reinvesting those cash proceeds into higher-yielding assets.

But at this point in time, nothing is a higher yield than just the underwriting. I mean when you're running 55 combined ratios, you want to continue to bolster and increase your underwriting capability.

But it is a [ chance, ] and it takes time to deploy capital in an effective and thoughtful way. But it's a good problem to have, and we expect that problem to get a little bit bigger as we go through the year, and we start posting earnings numbers for the rest of the 2026 quarters.

The next question comes from Matt Carletti with Citizens Capital Markets.

Bruce, I was hoping you could just spend a minute talking about some of the new states you talked about kind of New York, New Jersey, California and so forth. And just help us with kind of which ones you might find most attractive. Some of those have been in the news in different ways. Obviously, California has a bit of a capacity issue going on to the wildfires.

There's been kind of proposed profit caps in New York, which I know it won't be a big state for you overnight and maybe it's a bunch of noise about nothing. But just curious kind of your views as you sit there and think about kind of where to put your chits as you kind of expand outside of Florida.

Yes, it's a good question, Matt. I would say #1 for us is definitely California. We've spent a lot of time developing on California product and partnerships, distribution, that launch is imminent. I mean it could happen this week. I mean we're that close. We're just putting the finishing touches on systems at this point in time. So we expect to launch that product in the near term, but we think there's a tremendous opportunity in California.

We also do believe that New York and New Jersey are still very accretive. And the primary reason for that is there is a capacity shortfall in both of those markets. There are tremendous reinsurance synergies that we pick up as we scale in the Northeast. It's the blueprint and model that I kind of created when I was at Heritage and it was very successful. So I have a high degree of confidence in that execution strategy.

We'll see what New York does on profit caps. I think that's going to be a much bigger issue for, say, a company that has 100% of their premium in New York not a company at the end of the year that will have 4% or 5% of its premium in Europe, if that. So it's not really an issue at this point in time. We're still on track and on schedule to launch all of our new states, and we feel pretty bullish about that growth opportunity.

The next question is a follow-up from Alex Scott with Barclays.

I wanted to see if you could comment a little bit more on some of your efforts on distribution in California ahead of the launch. I mean, is that -- is building out distribution something that takes a long time and sort of you have the blueprint and some of the initial foundation laid, but it will kind of come in over time?

Or has a lot of that work been done upfront? I'm just trying to understand how impactful this launch could be on growth for the rest of the year.

Yes, Alex, good question. All of our distribution is in place. So we spent the time on the front end to identify the right distribution partners in a very large and differentiated market. California is huge. It's not like there's 2 or 3 markets. There's probably 20 markets within California.

So all of that work is done. Really at this point, we're just fine-tuning some system issues, technical issues, but it will get launched here in short order. And we do think there's an opportunity to grow top line this year by $50 million to $100 million just in California, if not more. So we're really chomping at the bit to get the finishing touches on and launch the program.

Got it. That's helpful. Follow-up I had is on just the prioritization of capital return. You're in a unique position where you have enough cash coming in to potentially grow and return capital. And I look at my own model even and -- even with a good amount of growth, premium to surplus is coming down in my model, which probably doesn't make a whole lot of sense.

With the stock trading at what is -- at 5.5x price to earnings, I mean, a significant discount even to the arguably more volatile reinsurers and property CAT, will you continue to leverage buybacks to reduce your share count the way you did this quarter until that's corrected?

Yes, that's a great question. It's something that we talk about a lot is capital management. And you're right. This is a good problem to have. Most companies do not have the problem that we have on profitability and cash. But we are always, first and foremost, looking for the highest return on equity for our shareholders. That is our #1 mission at Slide. It should be everyone's #1.

And so the first thing we do is we really pick apart the business plan. We look at the opportunities in front of us, the amount of capital that will be required, what we believe the ROE will be on those opportunities. And once we have that cash position set aside for the growth initiatives, we then start looking at excess cash, what's the best use of it.

There are definitely instances where you'd want to have some redundant capital on your balance sheet. I think that is prudent. It helps us kind of hedge out any volatility in the portfolio. But we have been generating such rapid increases in profitability and free cash that buying back stock at an average of $17.30 a share, which is less than 2% higher than the IPO price, that's a no-brainer. We'll take that trade all day.

When we went public in June of last year, there were analyst projections that were issued to the Street as to what we were going to do in '25 and '26. I think it's very safe to say that we have absolutely surpassed all of those expectations in a meaningful way, yet the stock had been kind of stuck right around that IPO price.

When we see that type of dislocation, we're a strong and aggressive buyer. And as we continue to increase our earnings, increase our top line, you should expect us to be very active in share buybacks as long as the price is not indicative of fair value.

Thank you. At this time, I would like to turn it back over to Mr. Bruce Lucas for closing comments.

I would just like to thank everyone for participating in our first quarter earnings call.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

Greetings, and welcome to the Slide Insurance Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder this conference is being recorded.

It is now my pleasure to hand the floor over to the Slide Team to begin.

Thank you, and good morning. With us today are your hosts, Bruce Lucas, Chairman and Chief Executive Officer of slide; Andy Omiridis, Chief Financial Officer. By now everyone should have access to our earnings release, which was published yesterday after the market closed and can be found on our website at ir.slideinsurance.com.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements which are based on the expectations, estimates and projections of management regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. Forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance and therefore, undue reliance should not be placed upon them.

We refer all of you to our earnings release and recent filings with the SEC for a more detailed discussion of the risk and uncertainties that could impact the future operating results and financial condition of slide. Our statements are as of today, February 25, 2026, and we undertake no obligation to update any forward-looking statements we may make except as required by law.

In addition call is being webcast, and an archived version will be available shortly after the call ends on the Investor Relations portion of the company's website at www.slideinsurance.com.

With that, I'd now like to turn the call over to Chairman and CEO, Bruce Lucas. Please go ahead.

Thank you, and welcome to our fourth quarter 2025 earnings call. We appreciate your continued interest in Slide and are excited to be speaking with you today. 2025 was a significant year for Slide -- we took the company public and continued to derate the ability of our tech-enabled coastal specialty focus to deliver the best top and bottom line performance in our sector, and we believe the best is yet to come. We closed out the year with another industry-leading performance. We delivered fourth quarter results that materially outpaced our prior guidance for gross premiums written and net income primarily as a result of higher voluntary sales, better retention ratios, favorable loss development and assumption activity from Citizens Insurance.

Our voluntary sales in the fourth quarter showed strong performance once again, and we believe the trend for year-over-year higher top line growth will persist in 2026. For the quarter, we meaningfully accelerated our gross premiums written, which increased by 57% year-over-year to $618 million. We were opportunistic with respect to the ongoing Citizens depopulation and assumed a significant number of policies in the quarter, driving another strong top line performance. Our vast data set and technology-enabled underwriting approach allows us to find policies and citizens with very attractive return characteristics.

We expect to continue to be opportunistic with respect to Citizens depopulation efforts in 2026, albeit at a lesser level as we believe there will be fewer policies that meet our criteria to assume. However, we expect to grow our gross premiums written in 2026 year-over-year as a result of higher policy retentions, higher voluntary sales and the launch of new states in the Northeast in California. In addition to our strong top line results, Slide produced $170 million in net income in the quarter. more than doubling the $75 million in the prior year quarter, which represents yet another quarterly record for Slide. Along with net income, fourth quarter return on equity was once again strong at 16.4% in the quarter. For 2025, Slide produced a 57.4% return on equity, notwithstanding the substantial capital raise in the second quarter from our initial public offering.

Meanwhile, our conservative approach to underwriting and reserving continues to lead to best-in-class margins with a quarterly combined ratio of 38% versus 60.9% in the prior year period. Quite simply, our fourth quarter and full year 2025 performance was once again clear evidence of the power of the Slide business model. Our long-term value proposition continues to deliver excellent earnings and attractive returns on equity creating long-term shareholder value. All of these accomplishments provide us with significant momentum as we progress through 2026.

We have carefully and thoughtfully created a high momentum coastal specialty insurer as evidenced by our industry-leading performance, and we have the strongest balance sheet in the coastal specialty sector. Slide is the only coastal specialty insurer to surpass $1 billion in book value, ending the year at just over $1.1 billion, along with $2.9 billion of assets only 2.9% debt-to-capital ratio and over $1.2 billion in cash and cash equivalents.

Our superior balance sheet and future earnings gives Slide ample capital to scale faster than its peers, which is a tremendous market advantage. We intend to use our balance sheet and profitability to further expand our geographic footprint in 2026. We have successfully established ourselves in Florida and South Carolina. But as previously mentioned, it is time to pivot towards growing our operations and bringing our unique skill set to other catastrophe exposed markets. To that end, we continue to produce strong voluntary sales in South Carolina during the fourth quarter, and we believe this trend will continue through 2026.

Importantly, we remain on track pending final regulatory approval to begin writing by peril, tailored policies in New York and New Jersey in the first half of 2026 Rhode Island in the second half of 2026, and we expect to launch an excess and surplus product in California in the next 30 to 60 days. As we diversify into these new geographies, we will utilize our decades of experience in our proprietary [ ProCast ] technology to underwrite policies that enhance our portfolio, manage our concentration of risk and our reinsurance expense, all while optimizing profitability. We expect to expand thoughtfully in these new states using our large data set and balance sheet to generate growth and enhance bottom line results.

We have achieved extraordinary growth from our start-up origins, far exceeding our expectations. Since slides launch in 2022, we have produced the best top and bottom line results of any coastal carrier in my career. Since 2022, we have achieved a 55% compounded annual growth rate in gross premiums written while delivering a 7,399% compounded annual growth rate in net income. Our track record is unmatched in the industry, but we are not resting on our prior success. We believe that there is a tremendous long-term opportunity ahead of us, and our results to date have positioned us to successfully continue on this trend moving forward.

We're poised for continued growth in 2026 with double-digit increases in policies in force and gross written premiums in our expanding footprint outside of Florida. Our strategic diversification will establish Slide as a leader across multiple regions in catastrophe exposed homeowners insurance, fueling our growth engine for years to come and delivering sustained long-term success in shareholder value. In the fourth quarter, we repurchased $20 million in equity at an average price of $16.38 a share. On our prior earnings call, I noted that Slides earnings and balance sheet growth are substantially outpacing our prior estimates and this trend accelerated in the fourth quarter as evidenced by $170 million in net income in the quarter versus our guidance of $115 million to $125 million.

I expect our earnings to be on a strong upward trend through 2026, and we will deploy excess capital in a manner that increases shareholder value. At current trading levels, I fully expect to opportunistically repurchase our stock throughout 2026 as the company has more than enough capital to meet our business plan for growth while retiring undervalued common stock. There are several reasons why we intend to continue our share repurchases in 2026. First, as mentioned, Slide has an abundance of capital at its disposal and the earnings power of the business is significantly outpacing our prior estimates.

We expect that 2026 will produce gross written premiums in the range of $1.85 billion to $1.95 billion and after-tax net income between $455 million and $470 million. As of yesterday's closing price, Slide is trading at less than 2x book value and a sub-5 trailing P/E ratio despite producing a 57% return on equity in the prior year. Our current forward P/E ratio for 2026 is similar to our trailing metrics. At these levels, it is very accretive for Slide to retire common stock that is undervalued until a more normalized valuation is reflected in our share price.

Our incredible success is a team effort, and I would be remiss if I did not thank all of our employees for their relentless efforts to make slide in the company it is today. I'm extremely proud to work with you and truly appreciate your sacrifice for our company. We appreciate your continued support of the slide.

And with that, I'll now turn the call over to Andy Omiridis to provide some color on our excellent fourth quarter and full year 2025.

Thank you, Bruce, and good morning to everyone. For the fourth quarter of 2025, gross premiums written were $618.5 million, a 57% increase compared to $394.6 million in the prior year period. Strong top line growth was primarily driven by the acquisition of additional policies from Citizens as well as relatively consistent year-over-year renewal rates of existing written policies and a strong increase in commercial residential premiums. At the end of the quarter, we had approximately 493,500 policies in force, up 44% from 1 year ago and up 40% from September 30.

in the fourth quarter, Slide assumed approximately 152,000 policies from Citizens. As a reminder, all citizens policies assumed have different renewal dates assumed premium and renewal premium, which can create lumpiness and how premiums earned through in forward quarters. Total revenue of $347 million increased 46% compared to $238.5 million in the prior year period primarily attributable to the assumption of policies from Citizens and renewals of existing policies driving an increase in net premiums earned. During the fourth quarter, net losses and loss adjustment expenses incurred were $27.1 million with no losses from significant storms. This compared to $59.1 million in the year ago quarter, which included catastrophe losses of $32.1 million from Hurricane Debby, Helene and Milton.

The company takes a conservative approach to reserving for losses. Our loss ratio for the fourth quarter of 2025 improved to 8.3% compared to 26.3% in the prior year period, reflecting favorable prior year development. Policy acquisition and other underwriting expenses in the quarter were $42.3 million compared to $29.1 million in the prior year period. The increase was primarily attributable to greater policies in force on a year-over-year basis and greater investments in technology. G&A expenses were $51.4 million compared to $45.7 million in the prior year period due primarily to growth in staffing to support the company's continued expansion.

Our combined ratio improved to 38% compared to 60.9% in the prior year period, primarily as a result of increased net premiums earned from the growth of policies in force, a decrease in cat losses from both hurricane and non-hurricane weather activity and release of reserves related to non-cat events. Net income more than doubled to $170.4 million compared to $75.1 million in the prior year period. Diluted earnings per share for the fourth quarter of 2025 was $1.23 per share. Return on equity was 16.4% during the fourth quarter and 57.4% for the full year.

Turning to our balance sheet. As of December 31, 2025, we had cash and cash equivalents of $1.2 billion, an additional $481.8 million of restricted cash held with the benefit of our captive reinsurance sales invested assets of $593.7 million and outstanding long-term debt of $33.7 million. We believe our balance sheet will enable the company to continue to profitably grow our business over the long term. In the fourth quarter, we repurchased approximately 1.2 million shares at a weighted average price of $16.38. There is approximately $80 million available under our $120 million share repurchase program. I would like to give further detail on the 2026 guidance that Bruce provided.

As Bruce stated, 2025 marked a key evolution for Slide as we scaled rapidly through Citizens depopulation and began building our presence in additional catastrophe prone areas outside of Florida. In 2026, Slide expects to generate gross written premiums in the range of $1.85 billion to $1.95 billion, and the company expects to generate net income in the range of $455 million to $470 million. For 2026 top line growth is expected to be driven primarily by sustained organic expansion including double-digit increases in policies in force and premium outside of Florida, complemented by selective growth opportunities within Florida that reach our return threshold. We expect our established presence in Florida to continue to flush while we grow into a geographically diversified leader in catastrophe-exposed homeowners insurance.

With that, I thank you for your time, and we will now open up the call for Q&A. Operator?

[Operator Instructions]

Our first question is from Tommy McJoynt with KBW.

The first 1 here is just on your opportunity going forward with continuous Citizens takeouts through the depopulation efforts. We can see that the number of policies that are with citizens have come down a lot over the past couple of years. So can you talk about what we should expect going forward? Is there a constant sort of churn within Citizens that policy is continuously get added and then become available for depopulation? Or is the opportunity set just a lot more limited going forward?

Good question, Tommy. The answer is both. So you have front-end voluntary underwriting taking place the citizens are adding about 8,000 policies a month. Now not all of those policies are viable. But let's just say, as a baseline number, there's 100,000 policies that they're adding to their portfolio annually. And then you have to look at the existing policies, the main driver as to whether or not those policies are a good fit is going to be the reinsurance cost. And so we don't know what the reinsurance market is going to do this year by all the indications, it appears to be a down pricing market, which is good for before the consumer, but that would open up a new tranche of policies that would look good to us.

So we do think that there is ongoing opportunities at Citizens, I cannot quantify what that is at this point in time. But suffice to say, it is a smaller opportunity than what we have seen in prior years.

And then just second topic to talk about here. You alluded to it there briefly. We've certainly seen the 1/1 headlines about what happened to property cat reinsurance rates coming down quite significantly at the January 1 renewals. Can you talk about your expectations and what's embedded in your guidance for your cost of reinsurance? And just remind us so when it renews, is it 6/1 focused? How much of the program renews each year versus multiyear. Yes, just talk about that.

Yes. Another really good question. So we have not received quotes yet from our traditional reinsurance markets. Our reinsurance submission went out this week. So we expect to have a little better understanding of where pricing is going to evolve in the next couple of months. But I will note that we did recently placed a large ILS bond. It's about $320 million of limit -- and that bond risk adjusted year-over-year was down over 20%. Now I don't know if that's going to be where the traditional measures come in. So I'll just avoid any guidance on that point. Suffice to say, our guidance does have a reduction in reinsurance expenses embedded within it. but we don't know the extent of what that reduction will look like until we get a little further along prior to our 6/1 renewal.

Our next question is from Paul Newsome with Piper Sandler.

Appreciate the call. Wanted to see if you had a few more thoughts on the competitive environment. We hear just a lot about price declines, particularly in Florida, but even in other areas. And I was wondering in your view over the last quarter, has it changed materially? How has this affected where you're thinking about growing geographically or any other strategic changes that the environment may have led you to adjust your situation.

Yes. I mean, Paul, it's a great question. It's 1 I get often. We're really not seeing big swings in pricing. There are a lot of new codes that have come in, very thinly capitalized -- they came in thinking they'd get this great opportunity from Citizens that isn't there anymore for them in the scale that they were planning. They could always reduce rates a little bit to try to get an underwriting advantage, but that would be extremely detrimental to their bottom line. Right now the market is trending a little lower, but I'm not seeing big swings. We'll know more once we see what reinsurance pricing looks like because 70% of our premium dollar or more is actually going toward a reinsurance component and the policy premium.

So that's the big needle mover, and we need a few more months to go through that renewal process to get a better understanding of what that looks like and its potential impact on rate. But I do feel confident in stating a couple of things around reinsurance. First, I believe that there is -- even with the reinsurance price decline, margins are going to be maintained. They go lockstep with 1 another. So bottom line numbers should be unaffected by a rate decrease.

Second, there are tremendous reinsurance synergies to be gained by expanding our footprint outside of Florida and South Carolina. And that is what we are really focused on more than anything else. -- we expect to launch California on excess and surplus lines in the next 30 to 60 days. We are on track to launch Northeastern states, New York, New Jersey, and later this year, Rhode Island. And there are a lot of other E&S pockets out there that we are going to launch later this year. So we think that even with a decline potentially a small 1 in rates this year, we still believe we're on an upward momentum trend for top line growth given the diversification of new state launches and our underwriting Slide has only accelerated over the last 9 months within Florida. And so that's a good trend to have at this point.

Is your expectation for lower reinsurance costs in your guidance prospectively mainly a function of the diversification benefit that you would get when you move outside of Florida? Or is it you're actually thinking you've got a little bit of expectation with the actual ultimate sort of apples to apples prices are full.

It's both. I mean, definitely the latter. -- risk-adjusted rates, I believe, will come down in 2026. I just can't comment on what the magnitude of that is going to be and certainly don't want to be in a public forum negotiating what I think that's going to be with our reinsurance partners. But I do think risk-adjusted rates are lower and our cap bond really reflects that. But you also pick up overall diversification benefit on your reinsurance tower as you spread your footprint across the wider geography.

[Operator Instructions]

Our next question is from Alex Scott with Barclays.

First one I have is on some of the home affordability initiatives that are out there. Could you talk about what you're seeing in the market and how, if at all, some of that could or may not affect your plans just given how strong your profitability has been?

Yes. I think you're probably referencing the comments by Governor Hochul in New York about 30 days ago. Let's just hope that does not happen. I mean these coastal catastrophe-exposed areas don't tend to fare well when there is a profitability cap. And the reason for that is you have no downside on losses, but you have an upside on profitability. And you really need both of those to be free market exercises because over the long haul, you're going to have some down years there on losses you're going to have some up years. you average them together, and it becomes a very sustainable model. We'll see what the New York legislature puts in place. We're definitely focused on it because we plan on launching New York very soon.

Suffice to say that once we get a better understanding of the proposals, we can give more clear guidance and comments around that market in particular. But I do firmly believe that they put in profitability caps in New York. You're actually going to see insurers pull out of the state and create an even bigger prices. And a great example of that would be the California admitted market. You can see it on full display. So time will tell right now. I don't have any other insight other than she made some comments to the governor about capping profitability in homeowners.

Yes. That's helpful and a good segue into my next question, which was potential for the E&S market in California. I know you mentioned you'd be launching that soon. And I appreciate you probably don't want to provide like break that out in the guidance, but I wanted to get a feel for how impactful you expect that to be relative to the guidance you've given. Is that a significant contributor to your 2026 premium growth?

It's a part of it. I wouldn't say it's significant, but it is definitely a part of it. What I will say is that within our guidance expectations, we do have a premium number that I'm not going to announce publicly that we expect to achieve in California this year. But if I were taking the over under on that number, I'd probably take the over. I think the opportunity there is tremendous. It's the largest insurance state in the country. There is still an admitted insurance crisis in California. Their plan is still adding a tremendous amount of exposure. So the opportunity is still very much attractive and I think that there is a strong likelihood that we will outperform our internal expectations in California this year.

Our next question is from Matt Carletti with Citizens.

Just a numbers question for me. Andy, in your comments, you mentioned there were some favorable prior period development and obviously low cap. I know there's no name storm -- do you have -- can you provide those numbers, just what the dollar impact of favorable was as well as just weather capped in the quarter?

Sure. So the number was $27.5 million, Matt, for the quarter. And I'm sure as -- because it was a little multiple. What was the rest of your inquiry?

Just out of the cats in the quarter. I know there wasn't any name storm, but was there kind of other weather that was down the cap.

No, there really wasn't any. It's literally it was -- and the breakdown was because we have disclosed it to [indiscernible] which comes out on Friday, it's '24, '23 and '22, but it's all prior year development and no cat changes our activity.

Yes. And typically, Matt, I'll add that fourth quarter is generally the best loss ratio quarter of the year. It provided you don't have a hurricane in October. Loss ratios are always extremely low in Florida in the fourth quarter. So we're not really surprised by the results, but we did have the favorable development PYD year-over-year of $27.5 million, which helped our numbers, some. But I mean, we still produced, call it, $150 million in net income even without that.

There are no further questions at this time. I would like to hand the floor back over to Bruce Lucas for any closing comments.

I would just like to thank everyone for participating on today's earnings call.

This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.

Greetings, and welcome to the Slide Insurance Holdings, Inc. Third Quarter 2025 Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded.

It is now my pleasure to pass the call over to the Slide team. Thank you. You may begin.

Thank you, and good afternoon. With us today are your hosts, Bruce Lucas, Chairman and Chief Executive Officer of Slide; and Jesse Schalk, Chief Financial Officer. By now, everyone should have access to our shareholder letter, which was released prior to this call and which may also be found on our website at ir.slideinsurance.com.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements, which are based on the expectations, estimates and projections of management regarding the company's future performance, anticipated events or trends and other matters that are not historical facts.

The forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict, and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them.

We refer all of you to our shareholder letter and recent filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of Slide. Our statements are as of today, November 5, 2025, and we undertake no obligation to update any forward-looking statements we may make, except as required by law.

In addition, this call is being webcast, and an archived version will be available shortly after the call ends on the Investor Relations portion of the company's website at www.slideinsurance.com.

With that, I'd now like to turn the call over to Chairman and CEO, Bruce Lucas. Please go ahead.

Thank you, and welcome to our third quarter 2025 earnings call. We appreciate your continued interest in Slide and are excited to be speaking with you today. Before we discuss our results, I want to take a moment to thank all of our employees for their tireless effort to make Slide's successful. I am extremely proud to work with you and truly appreciate your sacrifice for our company.

It's a great time to be a Slide shareholder. The third quarter was our best quarter in the company's history as we delivered superior top and bottom line growth. Our performance was nothing short of remarkable across the board, and we expect that momentum to carry into the fourth quarter and 2026.

For the quarter, we had a meaningful acceleration of gross premiums written, which increased by 33.8% year-over-year to $463 million. We also expect to further grow gross premiums written in the fourth quarter compared to the third quarter.

In addition to our solid top line results, our net income in the third quarter set a new record at Slide. Our net income more than coupled to $111 million compared to $17.6 million in the prior year quarter. Along with net income, third quarter return on equity was strong at 12.1% in the quarter.

Year-to-date, Slide has produced 39.2% return on equity, despite a large capital raise in the second quarter from our initial public offering. Third quarter earnings per diluted share is $0.79.

I have consistently stated that we take a conservative approach to our reserving philosophy. We believe that it is better to be conservative on a quarterly basis until reserves have bad time to season and more fully develop. We are at the point where we are gaining much more clarity into our reserve development trends, and we believe our core loss ratios are more accurately reflecting the ultimate performance.

In the third quarter, our consolidated loss ratio was 13.7%, a 77% reduction year-over-year. All of these factors contributed to the best quarter in the company's history and produced a 48.5% combined ratio compared to a 94.3% combined ratio year-over-year. Our third quarter performance is a clear testament to the power of the Slide business model and our long-term value proposition that we have built over the past several years.

As we have consistently noted, we fundamentally operate our business with a long-term mindset and have to date focused on bottom line earnings and ROE. Backed by our decades of experience, our wealth of data and our proprietary ProCast technology, we believe our team knows how to most effectively underwrite homeowners' policies to efficiently manage our portfolio, our concentration of risk and our reinsurance expense to optimize profitability.

That laser focus on underwriting in concert with a benign hurricane season enabled us to once again deliver superior loss and combined ratios in the quarter, along with another quarter of favorable prior year development.

Our growth model includes both voluntary business and Citizens takeouts. We typically analyze both opportunities to find the best combination of business that maximizes our ROE. During the quarter, we participated in one small assumption from Citizens that generated over $22 million in gross premiums written, while our new business voluntary premium set a new quarterly record for Slide with over $65 million of gross premiums written.

Our growth has favorably impacted our balance sheet, and I expect that Slide will be the first and only homeowners' insurer in Florida to cross $1 billion in shareholders' equity, and it will happen in the fourth quarter of 2025. We have carefully and thoughtfully created the most successful coastal specialty insurer in the country as evidenced by our industry-leading performance.

Our balance sheet is just as impressive as our earnings to date. Slide does not have an external quota share and our net written premium to consolidated capital is approximately 1:1, and our debt-to-capital ratio is only 3.5%. Moving forward, we intend to use our balance sheet and profitability to accelerate growth beginning in 2026.

Near-term growth is a key driver to long-term success, and we are at a stage in our life cycle where growth initiatives are becoming more of our central focus. It will take time to develop, launch and scale new growth initiatives, but it is important to lay the foundation for growth in the near term. There is a cost to scaling top line as we invest in systems and personnel, but we feel that the investment will pay dividends as we move forward even if it has an impact to our bottom line in the short term.

I noted on our last call that we were reserving underwriting capacity in anticipation of significant fourth quarter takeouts of Citizens policies in Florida. I'm very pleased to note that for the month of October, we assumed 60,186 policies from Citizens.

We continue to outperform the broader market on our ability to underwrite Citizens policies as evidenced by the October takeout, which was the largest policy assumption in the Florida market. While we only assume appropriately underwritten policies, these takeouts typically have superior combined ratios, meaning they should be further accretive to our net income moving forward.

Our decision to take a conservative underwriting approach in the second quarter in order to save underwriting capacity for the fourth quarter was the right decision, and the company is in a substantially better position as we approach year-end. While we expect growth in policies in force in the fourth quarter, we are also making solid progress with respect to expanding our footprint in additional states.

We experienced substantial growth in South Carolina during the third quarter as we continue to expand on this coastal opportunity. We also filed for products and rates in New York and New Jersey. While timing is subject to regulatory approval, we are hopeful that we will begin writing [indiscernible] tailored products in those states in the first half of 2026, which is consistent with our original time line. We are also making solid progress with our California launch using excess and surplus lines products.

Given our strong results, we believe that the market is not recognizing the fair value of our company. In response, our Board of Directors authorized a $75 million repurchase program at the end of August, which we used in the third quarter to repurchase over 1.4 million shares at an average price of $14.22, which I am confident will produce a meaningful ROE for all shareholders.

Our prior share repurchase authorization has approximately $55 million remaining. Given our confidence in our long-term strategy, the Board today increased our authorization to $120 million with $100 million in remaining authorization that will be available to repurchase shares. As a result, we plan to aggressively buy back stock until we believe the share price is trading in a manner that reflects our fair value.

Given our strong balance sheet and our acceleration in earnings, we have abundant capital to return capital to shareholders if the market value is understated, while still executing on our core business plan, including growth.

On the back of our success thus far in the October Citizens takeouts, we are currently expecting another meaningful amount of takeouts to be assumed in November and December. Post November, we are planning to provide an update on our expectations for our fourth quarter 2025 results as the composition of our book is changing. This guidance will be very important for investors in updating their outlook. Additionally, we expect to provide our outlook for 2026 when we report our fourth quarter earnings.

As mentioned in our S-1, we remain steadfast in our commitment to strong corporate governance and transparent oversight, particularly with respect to executive compensation. In preparation for the 2026 proxy season, we have engaged compensation advisory partners as our independent compensation consultant to ensure our executive pay program aligns with prevailing executive compensation parameters and best practices.

The company is currently exempt from say-on-pay, but I believe we should always solicit investor feedback on compensation issues. Consistent with our focus on good governance, we also expect to incorporate investor feedback into our executive compensation framework and long-term strategy.

Before turning the call over to Jesse, I want to take a minute to touch on our corporate structure. The past several years have been nothing short of a 24/7 grind to grow Slide from an idea in my mind to fruition. We have scaled from start-up in a manner that no one outside of our team thought was possible. We believe that there is tremendous opportunity ahead of us, and it will take a tireless effort by our team to continue to execute in the manner in which we are accustomed.

To that end, we have made adjustments to our corporate structure to better align our talents and resources, enabling us to execute our business plan more effectively. We are pleased to announce that Chas Powell has been promoted to Chief Revenue Officer and will oversee all aspects related to revenue, including sales, underwriting, agency services and product.

Shannon Lucas is stepping down as Chief Risk Officer, and Matt Larson has been promoted to CRO to fill this role. Matt will oversee all aspects of risk management and our multibillion-dollar reinsurance program. Meanwhile, Shannon will now serve as our President and Chief Operating Officer, which allows us to consolidate all operational aspects under her leadership.

In addition, Andy Omiridis will join our team effective December 1 as our Chief Financial Officer and Executive Vice President. Andy has over 30 years of experience and has held key roles at PricewaterhouseCoopers, Chubb, AIG, Argo, Kemper and AMERISAFE and has significant public market experience. Jesse Schalk will remain with Slide until March 2 to help facilitate a smooth and seamless transition.

I want to thank Jesse for his partnership over the past several years, which, of course, included helping to bring us public earlier this year. Jesse is one of the best insurance executives I've ever worked with and is a brilliant problem solver and strategist. Over the past 3 years, he has been instrumental in our success, and I wish him all the best moving forward.

We appreciate your continued interest and support of Slide. And with that, I'll now turn the call over to Jesse Schalk to provide some color on our very successful third quarter.

Thank you, Bruce, and good afternoon to everyone on the call. Let's go right into our third quarter results.

For the third quarter of 2025, gross premiums written were $463.4 million, a 34% increase compared to $346.3 million in the prior year period, driven by the acquisition of additional policies from Citizens as well as consistent year-over-year renewal rates of existing written policies, including Citizens policies assumed in prior quarters and a strong increase in commercial residential premiums.

At the end of the quarter, we had approximately 351,700 policies in force up 28% from 1 year ago and up modestly from June 30. As Bruce mentioned, we kept policies in force relatively consistent throughout the quarter to preserve growth capacity for this quarter's Citizens takeouts, of which we assumed 60,186 policies in October. This provides us a natural opportunity to touch briefly on how Citizens assumptions work.

It's important to note that while we may assume a number of Citizens policies in a given month, the policies all have different renewal dates, assumed premiums and renewal premiums. As Bruce mentioned, we plan to provide an update post November on our expectations for fourth quarter 2025 after we have assumed these policies.

Total revenue of $265.7 million increased 33% compared to $200.1 million in the prior year period, primarily attributable to an increase in net premiums earned due to the assumption of policies from Citizens and increased renewals of existing policies.

Losses and loss adjustment expenses incurred net were $33.2 million, and there were no incurred losses from significant storms. This was compared to $111.7 million, which was inclusive of catastrophe losses of $55.8 million from Hurricanes Debby and Helene in the prior year period. This decrease in the quarter was primarily due to lower-than-expected payments on losses incurred in earlier quarters of the current year as well as prior years.

While the third quarter of 2025 was a benign weather season for hurricanes and convective storms, the company continues to reserve for losses conservatively. Our loss ratio for the third quarter of 2025 improved to 13.7% compared to 60.4% in the prior year period. Third quarter loss ratios included $33.5 million of favorable development of prior accident years compared to $1.4 million of adverse development in the prior year period.

Policy acquisitions and other underwriting expenses in the quarter were $36.4 million compared to $22 million in the prior year period. The increase was primarily attributable to greater policies in force on a year-over-year basis as well as fewer premiums earned on Citizens policies in their assumption period.

G&A expenses were $45 million compared to $38 million in the prior year period, due primarily to the growth in staffing to support the company's increased policies in force. Our combined ratio improved to 48.5% compared to 94.3% in the prior year period, primarily as a result of increased net premiums earned from growth of policies in force, a decrease in Cat losses from non-hurricane weather activity and the release of reserves related to non-Cat events.

Net income more than doubled to $111 million compared to $17.6 million in the prior year period. Diluted earnings per share for the third quarter of 2025 was $0.79. Return on equity was 12.1% compared to 4.9% in the prior year period, driven by increased earnings in the third quarter of 2025 due to reduction in losses incurred. As of September 30, 2025, we have generated a return on equity of 39.2% year-to-date.

Turning to our balance sheet. As of September 30, 2025, we had cash and cash equivalents of $861.6 million, an additional $539.9 million of restricted cash held for the benefit of our captive reinsurance sales, invested assets of $478.6 million and long-term debt of $35.0 million.

In the third quarter, we repurchased approximately 1.4 million shares at a weighted average price of $14.22. There is approximately $100 million available under our expanded repurchase program. We believe our capitalization and liquidity will enable the company to continue to profitably grow our business over the long-term.

With that, I thank you for your time, and we will now open up the call for Q&A. Operator?

[Operator Instructions] And the first question comes from the line of Alex Scott with Barclays.

So results look really strong. It seems like you've got some good growth opportunities. Can you talk to me about the increased authorization on the buyback and just how you're thinking about the trade-off between the growth opportunities you have and obviously, a view that the stock is trading below its intrinsic value at this point?

Yes, it's a great question, and it's something that we've been really paying attention to, particularly throughout the third quarter. We have abundant capital. And our earnings are expanding. Our growth is expanding. We have more than enough capital to repurchase shares if the share price is trading below fair value, while still executing on every aspect of our business plans, including accelerated growth.

So if we have the abundance of capital and we're trading below our fair value, it's a great way to return ROE to our shareholders, and we are not afraid to aggressively repurchase stock until the share price normalizes in a range that we feel reflects the intrinsic value of the company.

Yes. Understood. Okay. Next one, could you talk about the environment in Florida a bit? I mean, we've heard about Progressive doing so well, they had to, I think, refund some premiums back to policyholders. I know that's auto, not home. But are you seeing any of the national carriers or any of the Florida-specific carriers beginning to heat up in terms of competition, certainly still getting a lot of growth, particularly with the Citizens. But I'm just trying to understand how we should think about the more organic piece of the growth within Florida over the next couple of years.

Yes. We're not really seeing the nationals here at this point in time. I'm aware of that Progressive refund, but you're correct, that's auto. That's not our line of business. And I'm not sure the details why they did that.

As far as we look at market and competition in Florida, it feels very stable compared to what it was last quarter and last year. There are some smaller carriers with very limited capital that are out there. They can't really write a lot against a very small capital base. We're not really seeing them in any meaningful way. When you look at our voluntary premiums that we wrote in Florida, I mean, it was a record voluntary production quarter for us, same with South Carolina.

So there's still an abundant opportunity to expand top line via new business, organic sales. We've got a great rate structure, reputation, and we have the best balance sheet, we believe, in the industry. All those are attractive features to our agent force, and I'm just happy to report that the growth has continued to trend higher and above our internal expectations.

Great.

And the next question comes from the line of Tommy McJoynt with KBW.

You spoke a little bit there and in the prepared remarks about the growth opportunities in some of those other coastal markets outside of Florida. But beyond November, do you anticipate Citizens takeouts will also remain a significant contributor to the growth opportunity into 2026?

Yes. I mean there's still ample opportunity at Citizens. What we need to do is see what policies were actually assumed in the fourth quarter. So we're going to get some updated data from Citizens within the next 30 days or so. We'll see what's there, what's left. There is still opportunity there. Obviously, the more policies that are removed, the lower the opportunity becomes.

But we're very bullish about our fourth quarter assumptions. We're going to update the market on those statistics here in just a few weeks. But there's still growth opportunities there, but I think our focus is rightfully focused on expanding our voluntary distribution channels, products into new states as quickly as we can.

We've spent the last 3 years growing and scaling the balance sheet, and we wanted to have a really an A.M. Best level balance sheet. We have that now writing at a 1:1 net premium to consolidated capital. It's pretty unheard of in Florida. Now it's time to shift into growth mode, which sounds kind of weird because we've grown in 3 years from 0 to our current numbers. But we do think there is a very large growth opportunity outside of Florida, and that's really what our focus is going to be on as we move into 2026.

Got it. And you mentioned that 1:1 ratio there of net written to capital. Do you think that's the right number to use going forward for you guys just to stay conservative, perhaps as you expand outside of Florida, does that enable you to write at a higher premium leverage if you have more diversification? Can you talk about how that number might trend?

Yes. It's a very -- it's an incredible number to have as a coastal specialty insurer. I mean nobody has a number like that. It's just a hallmark of stability when you have a really good balance sheet.

But to answer your question, we can absolutely put more leverage on. But with our earnings profile and the ROEs that we are generating, which are just absolutely incredible, we're going to have even more capital coming into the equation here in 2026 that we can use to grow and scale and maintain conservative writing ratio leverage.

[Operator Instructions] And the next question comes from the line of Paul Newsome with Piper Sandler.

There's been a fair amount of discussion about total reform having, if anything, a bigger effect than folks expected. And that, in turn, putting a little pressure on rates -- default rates. Do you anticipate having to stall some of your peers and cut rates a little bit because of the total reform? And I guess relatedly, what's going on with the inflation guard offsets?

Yes. Good question, Paul. I mean we've been steadily decreasing rates for the last 2 years. So that trend is still kind of intact. You get a lot of variability to -- like this year, you look at the first 9 months of 2025, it's been a very light FCF severe convective storm season. We haven't had really any hurricane activity, of course.

So that is helping loss ratios a lot, but you also should expect that there will be a little bit more weather-related losses as you move forward because this year was such an aberration. We don't really see big rate decreases on the horizon at this time. A lot of the rate that we have is really driven by our reinsurance program.

Now if reinsurance rates go the way some people are expecting them to go, maybe that has an offset. But we buy more reinsurance than anybody else in the market. We buy 30 rent coverage. We're buying to a level well in excess of regulatory requirements. And as long as we have the expenses to justify the rate, I really don't see a meaningful move.

So at this point, no, we don't have any plans for significant rate decreases because we've already taken down rate, and we think that the market is relatively stable at this price point.

Is there any inflation guide being booked through?

Yes, sorry. Yes. We are doing 5% on TIV at renewal. It's important to mark your book appropriately. There are impacts on rebuilding costs due to tariffs, et cetera. So we need to make sure that we are maintaining a portfolio that is in line with the inflationary pressures to rebuild the home.

And then the gross written premium came in a little bit better than we expected this quarter. And I think last quarter, there was talk about sort of a shift in where you're picking up policies within Florida that sort of reduced the average premium. Is there any sort of similar thing happening this quarter with a shift in kind of where you're picking up premiums versus maybe last quarter or something that's in there that's not just pure PIF changes?

Yes. I mean, Paul, when you get to look at our treaty date is June 1 every year. And so when we're looking at 2Q, we've given projections to the reinsurers as to what our probable maximum loss statistics are going to look like.

We wanted to be conservative in the second quarter and not overshoot those projections out of the gate. It gives you no wiggle room as you move through hurricane season. Once we got through the 2Q numbers, we took a harder look at what our trends look like. We had room for growth. We had record growth in the third quarter.

We also saw a meaningful increase in commercial residential premium and those have much higher average premiums in a personal lines policy. And so that contributed pretty significantly to the growth rate, and that is continuing into the fourth quarter.

And the next question is a follow-up from Alex Scott with Barclays.

I wanted to ask about just the strength of the balance sheet comments you've made. And one of the things we've seen, I guess, even more broadly across the industry is a fair amount of favorable PYD from property just in light of the benign season as well.

And any comments you can make about -- I don't know whether it's the IBNR levels in your reserves or anything else you could tell us about the way that you've been booking attritional losses that gives you confidence in making the statements you're making around the balance sheet strength?

Yes, that's a great question. We're a relatively newer company. We've only really been on risk for 3.5 years. And as a result of that, we rely a lot on industry experience as we look at what our loss reserve should be booked at.

As we've kind of gone through our life cycle over the past 3.5 years, we have, as I've stated numerous times, taken a very conservative approach to our reserving philosophy. We are at the point now where we are seasoning more. We have more clarity into the ultimate development of those losses.

And wherever we feel like we are comfortable in terms of a PYD release, we go ahead and -- we're going to go ahead and do that. We did it in the second quarter a little bit. There was a little over $30 million pretax that was released in the third quarter. As we continue to age out the prior quarters and prior years, we're going to take a harder look at where the reserves are, and we'll mark the book accordingly.

But it's been nothing but a favorable trend really for us over the past several years. And reserve releases as we move into the end of each calendar year has been a pretty normal phenomenon on Slide. Did it last year, we're doing it again this year. And that's really a reflection of a very conservative reserve profile.

Yes. Understood. That makes sense. Just as a housekeeping item, could you tell us what the Cats were, if there were any this quarter? I just didn't see it in the shareholder letter. I wanted to make sure I had that...

Yes. No, this was a Cat-free quarter, which is our favorite type of quarter.

There are no further questions at this time, and that concludes the question-and-answer session, and that also concludes today's teleconference. We thank you for your participation. You may disconnect your lines at this time.