[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the reported period [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining the accounting policies and specific financial line items [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------------------- | :---------------------------- | :------------------------------ | | Total Assets | 1,346,865 | 1,216,112 | | Total Liabilities | 1,054,565 | 980,452 | | Total Stockholders' Equity | 292,300 | 235,660 | | Cash, Cash Equivalents and Restricted Cash | 407,212 | 199,393 | | Unpaid Losses and Loss Adjustment Expenses | 219,242 | 322,087 | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) This section outlines the company's financial performance over specific periods, including net income, premiums earned, and earnings per share | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Income | 26,442 | 19,054 | | Net Premiums Earned | 78,443 | 63,381 | | Diluted EPS | 0.53 | 0.39 | | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net Income | 47,790 | 42,653 | | Net Premiums Earned | 146,715 | 126,012 | | Diluted EPS | 0.96 | 0.87 | [Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20(Unaudited)) This section details changes in the company's equity over time, reflecting net income, other comprehensive income, and capital transactions | Metric | June 30, 2025 ($ thousands) | June 30, 2024 ($ thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Total Stockholders' Equity | 292,300 | 223,073 | | Net Income (Six Months) | 47,790 | 42,653 | | Other Comprehensive Income, net (Six Months) | 5,872 | (4) | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section reports the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | 154,392 | 250,886 | | Net cash provided by (used in) investing activities | 29,756 | (152,814) | | Net cash provided by financing activities | 774 | 11,458 | | Cash, cash equivalents and restricted cash at end of period | 407,212 | 281,362 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the figures presented in the unaudited condensed consolidated financial statements, covering the company's organization, significant accounting policies, discontinued operations, investments, and other financial components [1) ORGANIZATION, CONSOLIDATION AND PRESENTATION](index=10&type=section&id=1)%20ORGANIZATION,%20CONSOLIDATION%20AND%20PRESENTATION) This section describes the company's structure, primary business, and the impact of recent divestitures on its reporting segments - American Coastal Insurance Corporation (ACIC) is a property and casualty insurance holding company primarily focused on commercial residential property insurance in Florida through its wholly-owned subsidiary, American Coastal Insurance Company (AmCoastal)[31](index=31&type=chunk)[34](index=34&type=chunk) - The company completed the sale of Interboro Insurance Company (IIC) on April 1, 2025, with IIC's results now classified as discontinued operations[31](index=31&type=chunk)[33](index=33&type=chunk) - Following the IIC sale, the company operates under one reportable segment, which consists of its commercial lines business[34](index=34&type=chunk)[40](index=40&type=chunk) [2) SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=2)%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section confirms the consistency of accounting policies and discusses the assessment of new accounting standards - There have been no changes to the company's significant accounting policies as reported in its Annual Report on Form 10-K for the year ended December 31, 2024[43](index=43&type=chunk) - The company is assessing the impact of **ASU No. 2024-03** (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2026[44](index=44&type=chunk) - The company intends to adopt **ASU No. 2023-09** (Improvements to Income Tax Disclosures) in its **2025** Annual Report on Form 10-K and does not believe it will have a material impact[45](index=45&type=chunk) [3) DISAGGREGATION OF RELEVANT EXPENSE CAPTIONS](index=13&type=section&id=3)%20DISAGGREGATION%20OF%20RELEVANT%20EXPENSE%20CAPTIONS) This section provides a detailed breakdown of general and administrative expenses, highlighting key components and non-recurring items | General and Administrative Expenses | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | | :---------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total G&A Expenses | 7,778 | 11,938 | | Employee compensation | 1,934 | 4,174 | | General and Administrative Expenses | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :---------------------------------- | :------------------------------------------- | :------------------------------------------- |\ | Total G&A Expenses | 17,284 | 23,190 | | Employee compensation | 4,758 | 7,504 | - Employee compensation for both periods includes one-time employee retention tax credit refunds of **$2.9 million** (three months) and **$4.5 million** (six months) in **2025**[48](index=48&type=chunk) [4) DISCONTINUED OPERATIONS](index=13&type=section&id=4)%20DISCONTINUED%20OPERATIONS) This section details the financial impact and classification of the Interboro Insurance Company sale as discontinued operations - The sale of IIC closed on April 1, 2025, generating cash proceeds of **$25,679 thousand** and resulting in a **net loss on disposal** of **$247 thousand**[50](index=50&type=chunk) - A **$1,348 thousand net loss on IIC's fixed maturity portfolio** was recognized as part of the sale[50](index=50&type=chunk) | IIC Results from Discontinued Operations | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total revenue | 7,808 | 13,543 | | Income (loss) from discontinued operations, net of tax | 1,637 | (129) | [5) INVESTMENTS](index=16&type=section&id=5)%20INVESTMENTS) This section provides a breakdown of the company's investment portfolio, including fixed maturities, equity securities, and investment income | Investment Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------- | :-------------------------- | :------------------------------ | | Total investments | 319,031 | 341,418 | | Fixed maturities | 248,944 | 281,001 | | Equity securities | 40,502 | 36,794 | | Restricted cash | 91,727 | 62,357 | | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :------------------------------ | :------------------------------------------- | :------------------------------------------- | | Net realized investment gains (losses) | 1,382 | (121) | | Net investment income | 10,304 | 9,364 | - The company determined that none of its fixed-income securities in an unrealized loss position have declines in fair value due to credit losses, and no **credit loss allowance** was recorded at June 30, 2025[68](index=68&type=chunk) [6) EARNINGS PER SHARE (EPS)](index=23&type=section&id=6)%20EARNINGS%20PER%20SHARE%20(EPS)) This section presents the basic and diluted earnings per share for the reported periods | EPS Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | | Basic EPS | $0.55 | $0.40 | | Diluted EPS | $0.53 | $0.39 | | EPS Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.99 | $0.90 | | Diluted EPS | $0.96 | $0.87 | [7) PROPERTY AND EQUIPMENT, NET](index=23&type=section&id=7)%20PROPERTY%20AND%20EQUIPMENT,%20NET) This section details the net book value of property and equipment, along with depreciation and amortization expenses and asset disposals | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------------- | :-------------------------- | :------------------------------ | | Property and equipment, net | 3,745 | 5,736 | | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Depreciation and amortization expense | 2,027 | 2,526 | - During the six months ended June 30, 2025, the company disposed of computer hardware, software, and equipment totaling **$1,890 thousand** and impaired software totaling **$1,035 thousand**[99](index=99&type=chunk) [8) GOODWILL AND INTANGIBLE ASSETS](index=24&type=section&id=8)%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This section outlines the company's goodwill and intangible assets, including their net values and amortization expenses | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------- | :-------------------------- | :------------------------------ | | Goodwill | 59,476 | 59,476 | | Intangible assets, net | 4,689 | 5,908 | | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------- | :------------------------------------------- | :------------------------------------------- | | Amortization expense | 1,219 | 1,421 | - Estimated amortization expense for intangible assets for the remainder of **2025** is **$1,219 thousand**[104](index=104&type=chunk) [9) REINSURANCE](index=25&type=section&id=9)%20REINSURANCE) This section describes the company's reinsurance programs, including catastrophe coverage and quota share agreements, and related recoverables - The company's catastrophe reinsurance programs include AmCoastal's core catastrophe program for windstorms (**up to $1.33 billion** for first occurrence) and an all other perils excess of loss agreement (**up to $88.2 million** for first and second events)[107](index=107&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - A new catastrophe aggregate excess of loss agreement (CAT Agg) effective January 1, 2025, provides **$40 million** of aggregate limit to mitigate catastrophe frequency risk[111](index=111&type=chunk) - Shoreline Re, the company's captive reinsurance entity, participates in a **45% quota share** agreement with AmCoastal for all catastrophe perils and attritional losses[113](index=113&type=chunk)[114](index=114&type=chunk) | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------------ | :-------------------------- | :------------------------------ | | Reinsurance recoverable on paid and unpaid losses, net | 169,622 | 263,419 | [10) LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSE (LAE)](index=29&type=section&id=10)%20LIABILITY%20FOR%20UNPAID%20LOSSES%20AND%20LOSS%20ADJUSTMENT%20EXPENSE%20(LAE)) This section details the company's reserves for unpaid losses and loss adjustment expenses, noting changes due to prior year development and recent events | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------------------- | :-------------------------- | :------------------------------ | | Unpaid losses and loss adjustment expenses | 219,242 | 322,087 | - The company experienced **favorable development** in the first half of **2025** and **2024** related to prior year losses due to re-estimating ultimate losses[124](index=124&type=chunk) - Case reserves decreased due to continued settlement of prior year claims, offset by increases to IBNR reserves as a result of Hurricane Milton in Q4 2024[124](index=124&type=chunk) [11) LONG-TERM DEBT](index=29&type=section&id=11)%20LONG-TERM%20DEBT) This section provides information on the company's long-term debt, including interest rates and the impact of credit rating changes - The interest rate on the **$150 million** Senior Notes increased from **6.25%** to **7.25%** due to a **credit rating downgrade** in December 2022[127](index=127&type=chunk) - On July 21, 2025, the company's rating was upgraded to **BBB-**, which will decrease the Senior Notes interest rate back to **6.25%** effective December 16, 2025[127](index=127&type=chunk)[179](index=179&type=chunk) | Metric | June 30, 2025 ($ thousands) | January 1, 2025 ($ thousands) | | :-------------------- | :-------------------------- | :---------------------------- | | Debt issuance costs | 813 | 980 | [12) COMMITMENTS AND CONTINGENCIES](index=31&type=section&id=12)%20COMMITMENTS%20AND%20CONTINGENCIES) This section discloses the company's various commitments and potential liabilities, including legal claims and unfunded investments - The company accrued **$1,500 thousand** for a D&O policy retention related to a claim alleging wrongful acts by former UPC officers and directors, which remains open as of June 30, 2025[131](index=131&type=chunk)[133](index=133&type=chunk) | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------------------- | :-------------------------- | :------------------------------ | | Unfunded commitments (partnership investments) | 2,300 | 1,400 | | Operating lease liabilities | 3,248 | 3,323 | - The company received **$2,939 thousand** (Q2 2025) and **$4,469 thousand** (H1 2025) in Employee Retention Tax Credit refunds, fully resolving the outstanding balance[139](index=139&type=chunk) - A potential loss contingency exists related to variable ceding commissions on shared quota-share reinsurance agreements with former subsidiary UPC, due to a lack of loss data post-receivership[140](index=140&type=chunk) [13) ALLOWANCE FOR EXPECTED CREDIT LOSSES](index=33&type=section&id=13)%20ALLOWANCE%20FOR%20EXPECTED%20CREDIT%20LOSSES) This section details the allowance for expected credit losses on premiums receivable and reinsurance recoverables | Asset Pool | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :---------------------- | :-------------------------- | :------------------------------ | | Premiums Receivable | 0 | 26 | | Reinsurance Recoverables | 44 | 75 | | Total | 44 | 101 | - The company had no **allowance for expected credit losses** related to its investment holdings at June 30, 2025, or 2024[145](index=145&type=chunk) [14) STATUTORY ACCOUNTING AND REGULATION](index=35&type=section&id=14)%20STATUTORY%20ACCOUNTING%20AND%20REGULATION) This section discusses the company's compliance with regulatory capital requirements and the impact of statutory assessments - AmCoastal met all Florida regulatory requirements for capital and surplus ratios at June 30, 2025[146](index=146&type=chunk)[153](index=153&type=chunk) - The company is subject to a **1.0% Emergency Assessment** from the Florida Insurance Guaranty Association (FIGA) on direct written premiums from October 1, 2023, through September 30, 2025[147](index=147&type=chunk) | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | AmCoastal Statutory Net Income | 36,511 | 41,940 | | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------------------- | :-------------------------- | :------------------------------ | | AmCoastal Surplus as regards policyholders | 243,788 | 230,001 | [15) ACCUMULATED OTHER COMPREHENSIVE LOSS](index=37&type=section&id=15)%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) This section presents the accumulated other comprehensive loss and changes in unrealized investment losses | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :-------------------------------- | :-------------------------- | :------------------------------ | | Accumulated other comprehensive loss | (9,794) | (15,666) | | Changes in net unrealized losses on investments (pre-tax) | 7,254 | N/A | [16) STOCKHOLDERS' EQUITY](index=37&type=section&id=16)%20STOCKHOLDERS'%20EQUITY) This section provides details on stockholders' equity, including dividend policies, stock repurchase plans, and 'at the market' offerings - No dividends were declared on common stock during the six months ended June 30, 2025, and 2024[157](index=157&type=chunk) - The company has an authorized stock repurchase plan of **up to $25 million** (since July 2019) but has not repurchased any shares as of June 30, 2025[158](index=158&type=chunk) - As of June 30, 2025, **4,373,000 shares** have been sold under an 'at the market' offering agreement, generating net proceeds of approximately **$38,190 thousand**[159](index=159&type=chunk) [17) STOCK-BASED COMPENSATION](index=37&type=section&id=17)%20STOCK-BASED%20COMPENSATION) This section outlines the stock-based compensation expense for employees and directors, including details on restricted stock and stock options granted | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Employee stock-based compensation expense (pre-tax) | 1,946 | 1,037 | | Director stock-based compensation expense (pre-tax) | 258 | 171 | - Approximately **$5,535 thousand** of unrecognized employee stock compensation expense and **$426 thousand** of unrecognized director stock-based compensation expense remain at June 30, 2025[165](index=165&type=chunk) | Stock Grants (Six Months Ended June 30) | 2025 | 2024 | | :-------------------------------------- | :--- | :--- | | Restricted common stock granted (shares) | 447,237 | 501,746 | | Weighted-average grant date fair value (restricted stock) | $11.52 | $7.32 | | Stock options granted (shares) | 76,141 | 196,275 | | Weighted-average grant date fair value (stock options) | $11.63 | $4.82 | [18) SUBSEQUENT EVENTS](index=40&type=section&id=18)%20SUBSEQUENT%20EVENTS) This section reports significant events occurring after the reporting period, such as new legislation and credit rating upgrades - The 'One Big Beautiful Bill Act' (OBBBA) was signed into law on July 4, 2025, making permanent certain tax provisions and changing others, mostly effective 2026; the company is evaluating its impact[178](index=178&type=chunk) - On July 21, 2025, Kroll Bond Rating Agency upgraded the company's issuer and debt ratings to **BBB-**, which will reduce the Senior Notes interest rate from **7.25%** to **6.25%** effective December 16, 2025[179](index=179&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and cash flows, highlighting key performance indicators, significant events, and future outlook. It includes an executive summary, detailed analysis of revenues and expenses, and discussions on liquidity and capital resources [EXECUTIVE SUMMARY](index=41&type=section&id=EXECUTIVE%20SUMMARY) This section provides an overview of the company's business, recent strategic changes, and key operational highlights - ACIC is a holding company primarily engaged in commercial property and casualty insurance in Florida through its wholly-owned subsidiary, AmCoastal[182](index=182&type=chunk)[183](index=183&type=chunk) - The sale of IIC on April 1, 2025, resulted in its classification as discontinued operations, focusing the company's continuing operations on commercial residential insurance[183](index=183&type=chunk) - Policies **in-force increased by 11.0%** to **4,402** at June 30, 2025, from **3,964** at June 30, 2024, all in Florida[184](index=184&type=chunk) [2025 Highlights](index=42&type=section&id=2025%20Highlights) This section summarizes key financial performance metrics for 2025, including net income, diluted EPS, and book value per share | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Consolidated net income | 26,442 | 19,054 | | Net income available to ACIC stockholders per diluted share | 0.53 | 0.39 | | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------- | | Consolidated net income | 47,790 | 42,653 | | Net income available to ACIC stockholders per diluted share | 0.96 | 0.87 | | Core income | 47,408 | 44,001 | | Metric | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :---------------- | | Book value per share | $6.00 | $4.63 | [Consolidated Net Income](index=43&type=section&id=Consolidated%20Net%20Income) This section presents a summary of the company's consolidated financial performance, including net premiums earned, total revenue, total expenses, and combined ratios | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------------- | :------------------------------------------- | :------------------------------------------- | | Net premiums earned | 146,715 | 126,012 | | Total revenue | 158,669 | 135,254 | | Total expenses | 97,372 | 80,620 | | Combined ratio | 62.7% | 59.1% | | Underlying combined ratio | 65.0% | 59.7% | [Definitions of Non-GAAP Measures](index=44&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines non-GAAP financial measures used by management to assess operational performance, such as underlying combined ratio and core income - The 'underlying combined ratio' is a non-GAAP measure that excludes current year catastrophe losses and prior year reserve development to highlight business trends[194](index=194&type=chunk) - The 'underlying loss and LAE' is a non-GAAP measure that excludes current year catastrophe losses and prior year reserve development to analyze loss trends[195](index=195&type=chunk) - 'Core income (loss)' is a non-GAAP measure that adjusts net income for amortization of intangible assets, discontinued operations, and realized/unrealized investment gains/losses, net of tax, to evaluate operational performance[196](index=196&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=44&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) This section confirms that there were no material changes or additions to the company's critical accounting policies and estimates - The company reassessed its critical accounting policies and estimates during the six months ended June 30, 2025, and made no material changes or additions[197](index=197&type=chunk) [RECENT ACCOUNTING STANDARDS](index=44&type=section&id=RECENT%20ACCOUNTING%20STANDARDS) This section directs readers to detailed disclosures regarding recent accounting standards and their potential impact on the company - Refer to Note 2 in the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of recent accounting standards that may affect the company[198](index=198&type=chunk) [ANALYSIS OF FINANCIAL CONDITION - JUNE 30, 2025 COMPARED TO DECEMBER 31, 2024](index=45&type=section&id=ANALYSIS%20OF%20FINANCIAL%20CONDITION%20-%20JUNE%2030,%202025%20COMPARED%20TO%20DECEMBER%2031,%202024) This section analyzes the company's financial position at June 30, 2025, compared to December 31, 2024, focusing on changes in investments, reinsurance, and unpaid losses and loss adjustments [Investments](index=45&type=section&id=Investments) This section details the company's investment strategy and portfolio composition, including cash, equivalents, and fixed maturities - The company's investment strategy aims to preserve capital, maximize after-tax investment income, maintain liquidity, and minimize risk, with a moderate equity exposure[200](index=200&type=chunk) | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------------ | :-------------------------- | :------------------------------ | | Total cash, cash equivalents, restricted cash and investments | 726,243 | 540,811 | - At June 30, 2025, approximately **86.8%** of fixed maturities were U.S. Treasuries or corporate bonds rated 'A' or better, and **13.2%** were corporate bonds rated 'BBB' or 'BB'[203](index=203&type=chunk) [Reinsurance](index=47&type=section&id=Reinsurance) This section describes the company's reinsurance programs, including catastrophe coverage, aggregate limits, and captive reinsurer participation - The company's catastrophe reinsurance coverage includes AmCoastal's core program for windstorms (**up to $1.33 billion** for first occurrence) and an all other perils excess of loss agreement (**up to $88.2 million** for first and second events)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - A new catastrophe aggregate excess of loss agreement (CAT Agg) effective January 1, 2025, provides **$40 million** of aggregate limit to mitigate catastrophe frequency risk[208](index=208&type=chunk) - Shoreline Re, the company's captive reinsurer, participates in a **45% quota share** agreement with AmCoastal for all catastrophe perils and attritional losses[211](index=211&type=chunk)[212](index=212&type=chunk) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | | Total Ceding Ratio | (55.2)% | (60.1)% | [Unpaid Losses and Loss Adjustments](index=50&type=section&id=Unpaid%20Losses%20and%20Loss%20Adjustments) This section discusses the company's liability for unpaid losses and loss adjustment expenses, highlighting changes and the judgmental nature of estimates - Unpaid losses and LAE totaled **$219,242 thousand** as of June 30, 2025, a decrease from **$322,087 thousand** as of December 31, 2024[225](index=225&type=chunk) - The process of estimating loss reserves requires significant judgment, and ultimate liability may differ from current estimates due to various factors[226](index=226&type=chunk) [RESULTS OF OPERATIONS - COMPARISON OF THE THREE MONTH PERIODS ENDED JUNE 30, 2025 AND 2024](index=53&type=section&id=RESULTS%20OF%20OPERATIONS%20-%20COMPARISON%20OF%20THE%20THREE%20MONTH%20PERIODS%20ENDED%20JUNE%2030,%202025%20AND%202024) This section compares the company's operational results for the three months ended June 30, 2025, against the same period in 2024, detailing changes in revenue and expenses [Revenue](index=53&type=section&id=Revenue) This section analyzes changes in gross written premiums and policy counts for the reported period | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Gross written premiums | 228,346 | 229,449 | - New and renewal policies increased by **205** in Q2 2025 compared to Q2 2024[232](index=232&type=chunk) [Expenses](index=53&type=section&id=Expenses) This section details the changes in operating expenses, including net loss and LAE, policy acquisition costs, and general and administrative expenses | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total operating expenses | 32,035 | 25,877 | | Net loss and LAE | 15,540 | 15,277 | | Policy acquisition costs | 24,257 | 13,939 | | General and administrative expenses | 7,778 | 11,938 | - Policy acquisition costs increased due to decreased reinsurance ceding commission income (quota share cession rate reduction) and increased external management fees (AmRisc contract renewal)[238](index=238&type=chunk) - General and administrative expenses decreased primarily due to a non-recurring employee retention tax credit refund of **$2,939 thousand**[239](index=239&type=chunk) [RESULTS OF OPERATIONS - COMPARISON OF THE SIX MONTH PERIODS ENDED JUNE 30, 2025 AND 2024](index=55&type=section&id=RESULTS%20OF%20OPERATIONS%20-%20COMPARISON%20OF%20THE%20SIX%20MONTH%20PERIODS%20ENDED%20JUNE%2030,%202025%20AND%202024) This section compares the company's operational results for the six months ended June 30, 2025, against the same period in 2024, detailing changes in revenue and expenses [Revenue](index=55&type=section&id=Revenue) This section analyzes changes in gross written premiums and policy counts for the reported period | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------------- | :------------------------------------------- | :------------------------------------------- | | Gross written premiums | 426,198 | 414,050 | - New and renewal policies increased by **339** in H1 2025 compared to H1 2024[243](index=243&type=chunk) [Expenses](index=55&type=section&id=Expenses) This section details the changes in operating expenses, including net loss and LAE, policy acquisition costs, and general and administrative expenses | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total operating expenses | 65,007 | 46,724 | | Net loss and LAE | 26,929 | 27,751 | | Policy acquisition costs | 47,723 | 23,534 | | General and administrative expenses | 17,284 | 23,190 | - Policy acquisition costs increased due to decreased ceding commission income (quota share reinsurance coverage reduction) and increased external management fees (AmRisc contract renewal)[248](index=248&type=chunk) - General and administrative expenses decreased primarily due to a non-recurring employee retention tax credit refund of **$4,469 thousand**[249](index=249&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=56&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's sources and uses of cash, capital structure, and cash flow activities from operations, investing, and financing - The company generates cash primarily from premium collections, reinsurance recoveries, investment income, and asset sales, and uses it for claims, expenses, debt, and investments[250](index=250&type=chunk) - As a holding company, ACIC relies on cash dividends or intercompany loans from its management subsidiaries, which are subject to regulatory restrictions for insurance subsidiaries[251](index=251&type=chunk) - The company made a capital contribution of **$8,269 thousand** to Shoreline Re and received a dividend of **$23,000 thousand** from AmCoastal during H1 2025[252](index=252&type=chunk)[253](index=253&type=chunk) | Cash Flow Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | 154,392 | 250,886 | | Net cash provided by (used in) investing activities | 29,756 | (152,814) | | Net cash provided by financing activities | 774 | 11,458 | | Cash, cash equivalents and restricted cash at end of period | 407,212 | 281,362 | - The decrease in operating cash flow was driven by changes in reinsurance payable and recoverable, while the swing in investing cash flow was due to net sales of investments and proceeds from the IIC sale[257](index=257&type=chunk)[258](index=258&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=58&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) This section confirms the absence of off-balance sheet arrangements and material changes to contractual obligations - As of June 30, 2025, the company did not have any off-balance sheet arrangements or material changes to contractual obligations during the quarter[260](index=260&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section reiterates the company's exposure to market risks, including interest rate risk, credit risk, and equity price risk, and confirms no material changes during the quarter - The company is exposed to market risks, including interest rate risk (fixed-maturity securities), credit risk (issuers of fixed-maturities), and equity price risk (equity securities)[261](index=261&type=chunk) - There were no material changes in market risk during the quarter ended June 30, 2025[261](index=261&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting, with no material changes identified during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[263](index=263&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of June 30, 2025[263](index=263&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect the company's internal control during the quarter ended June 30, 2025[264](index=264&type=chunk) [PART II. OTHER INFORMATION](index=61&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity security sales, defaults, and other miscellaneous information [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) This section details the company's involvement in claims-related legal actions in the ordinary course of business and provides an update on a specific D&O insurance policy claim - The company is involved in routine claims-related legal actions and accrues amounts for probable unfavorable outcomes[267](index=267&type=chunk) - A claim for **$40 million** under the D&O policy, with a **$1.5 million** retention, related to UPC's insolvency, remains open as of June 30, 2025, with litigation anticipated[268](index=268&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factors, emphasizing the company's reliance on agent relationships, particularly with AmRisc, and the potential adverse impact of losing these relationships or failing to attract new agents - There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K, except as set forth in this section[269](index=269&type=chunk) - The company's business heavily relies on its exclusive managing agency contract with AmRisc, and the loss of this relationship or AmRisc's failure to produce required business volume could materially adversely affect the company[270](index=270&type=chunk) - The company's success also depends on strong relationships with its network of **10** independent wholesalers for apartment insurance, who own customer relationships and represent competing insurers[271](index=271&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms that the company did not engage in any unregistered sales or repurchases of equity securities during the reported period - During the six months ended June 30, 2025, the company did not sell any unregistered equity securities or repurchase any of its equity securities[272](index=272&type=chunk) [Item 3. Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the period - None[273](index=273&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Not applicable[274](index=274&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to disclose - None[275](index=275&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished with the Form 10-Q, including certifications and XBRL documents - Exhibits include amendments to the Certificate of Incorporation and Bylaws, Certifications of Principal Executive and Financial Officers (**302** and **906**), and XBRL documents[277](index=277&type=chunk) [SIGNATURES](index=65&type=section&id=SIGNATURES) This section contains the required signatures of the company's authorized officers, confirming the filing of the report - The report was signed by B. Bradford Martz, President & Chief Executive Officer, and Svetlana Castle, Chief Financial Officer, on August 7, 2025[281](index=281&type=chunk)

American Coastal Insurance (ACIC) came out with quarterly earnings of $0.54 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.4 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +42.11%. A quarter ago, it was expected that this property and casualty insurance company would post earnings of $0.4 per share when it actually produced earnings of $0.42, delivering a surprise of +5%. ...

Financial Data and Key Metrics Changes - American Coastal Insurance Corporation reported a 26% year-over-year increase in revenues and a 51% year-over-year growth in pretax earnings, achieving a core return on equity of approximately 42% [5][6] - Net income for the quarter was $26.4 million, with core income rising to $26.8 million, an increase of $7.2 million year-over-year [9] - The combined ratio improved to 60.6%, a decrease of 4.3 points from the previous year, and the non-GAAP underlying combined ratio was 62.2%, also below the 65% target [10][11] - Cash and investments grew by 34.3% since year-end to $726.2 million, reflecting strong liquidity [11] Business Line Data and Key Metrics Changes - The company’s policies in force increased by approximately 10% since year-end, with total insured value rising by about 18% to $69.8 billion as of June 30 [6] - Policy acquisition costs increased by $10.3 million or 74.8%, while general and administrative expenses decreased by $4.1 million or 34.5% due to the receipt of Employee Retention Tax Credit refunds [9] Market Data and Key Metrics Changes - The Florida market for admitted commercial residential property insurance remains relatively healthy, although property insurance rates continued to decline in most territories during the second quarter [6] - Southeast Florida is experiencing a firmer market compared to the rest of the state, with expectations of improvement due to ongoing capacity and underwriting constraints [6] Company Strategy and Development Direction - The company is cautiously optimistic about growing its presence in the apartment space in Florida, focusing on high-quality risks rather than aggressive growth targets [15][17] - The company aims to maintain a strong underwriting discipline, prioritizing expected returns on capital over sheer premium volume [17][34] Management's Comments on Operating Environment and Future Outlook - Management noted that the underwriting environment is expected to remain healthy, but potential decreases in rates could impact growth opportunities [32] - The company has regained investment grade status, which reduces the interest rate on senior notes by 100 basis points, indicating positive directional momentum [7][8] Other Important Information - The company completed its core catastrophe reinsurance program renewal with a risk-adjusted cost decrease of approximately 12.4% [6] - The company has received all Employee Retention Tax Credit refunds, confirming no lingering credits are expected [37] Q&A Session Summary Question: Insights on Skyway Underwriters and Market Context - Management expressed cautious optimism about growing in the apartment space, emphasizing a selective approach to underwriting [15][16] Question: Apartment Binding Ratio Implications - The increase in the binding ratio is attributed to gaining experience and improved relationships with distribution partners, along with seasonal factors [29][30] Question: Future Binding Ratio Expectations - Management indicated uncertainty about the binding ratio for the second half of the year, suggesting it could either increase or decrease based on market conditions [32] Question: Market Conditions in Southeast Florida - Management highlighted that Southeast Florida is a challenging market with more demand than supply, which bodes well for the company's book of business [35][36] Question: Employee Tax Retention Credit Status - Management confirmed that all expected Employee Retention Tax Credits have been received [37]

Financial Performance - ACIC's Non-GAAP Core Income for Q2 2025 increased by $7.2 million (+36.4%) year-over-year to $26.8 million ($0.54 per share) from $19.6 million ($0.40 per share) [9] - Net premiums earned grew by $15.0 million (+23.8%) year-over-year to $78.4 million [9] - The combined ratio decreased to 60.6% from 64.9% in the prior year, and the Non-GAAP underlying combined ratio decreased to 62.2% from 66.4% [9] - Stockholders' equity increased by $56.6 million from December 31, 2024, to $292.3 million, or $6.00 per share [9] - Net income from continuing operations increased by $8.9 million (+46.6%) year-over-year to $28.0 million [14] Balance Sheet & Investment - Total Assets reached $1.35 billion as of June 30, 2025 [6] - Total Equity was $292.3 million as of June 30, 2025 [6] - Cash & investments increased by 34.3% from December 31, 2024, to $726.243 million [15] - Total Cash & Investments increased by 27.7% from Mar. 31, 2025 to $726.243 million [17] Other Highlights - The company completed its Core CAT reinsurance program effective June 1, 2025, with a risk-adjusted decrease of -12.4% [9] - ACIC was upgraded to investment grade status (BBB-) by KBRA on 7.21.25, saving approximately $1.5 million per year in interest expense [9]

Company to Host Quarterly Conference Call at 5:00 P.M. ET on August 6, 2025 The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations. ST. PETERSBURG, Fla., Aug. 06, 2025 (GLOBE NEWSWIRE) -- American Coastal Insurance Corporation (Nasdaq: ACIC) ("ACIC" or the "Company"), a property and casualty insurance holding company, today reported its financial results for the second quarter ende ...

[Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) ACIC announced Q2 2025 financial results and conference call details, with the CEO highlighting strong performance and market share gains [Announcement & Conference Call](index=1&type=section&id=Announcement%20%26%20Conference%20Call) American Coastal Insurance Corporation (ACIC) announced its financial results for the second quarter ended June 30, 2025, and scheduled a conference call to discuss these results - American Coastal Insurance Corporation (ACIC) reported financial results for its second quarter ended June 30, 2025[2](index=2&type=chunk) - The company will host a quarterly conference call at 5:00 P.M. ET on August 6, 2025[1](index=1&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO B. Bradford Martz expressed satisfaction with a strong quarter, highlighting year-over-year growth in total revenue and underwriting profit, continued market share gains in the commercial residential segment, and a positive outlook reinforced by recent credit rating upgrades - Achieved year-over-year growth in both **total revenue** and **underwriting profit**[4](index=4&type=chunk) - Continued to gain **market share** in the commercial residential segment[4](index=4&type=chunk) - Received recent **credit rating upgrades** from Kroll Bond Rating Agency, reflecting a very positive outlook[4](index=4&type=chunk) [Financial Highlights (Summary Table)](index=1&type=section&id=Financial%20Highlights%20%28Summary%20Table%29) ACIC's Q2 2025 financial highlights include strong growth in net income and EPS, alongside key metrics for return on equity and combined ratio [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) ACIC reported strong financial performance for Q2 2025, with significant increases in net premiums earned, total revenue, and consolidated net income, alongside growth in diluted EPS and book value per share Key Financial Metrics (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | Change (%) | | :----------------------------------- | :-------------------- | :-------------------- | :--------- | | Gross premiums written | 228,346 | 229,449 | (0.5)% | | Gross premiums earned | 165,460 | 155,450 | 6.4% | | Net premiums earned | 78,443 | 63,381 | 23.8% | | Total revenue | 86,467 | 68,656 | 25.9% | | Income from continuing operations, net of tax | 28,037 | 19,073 | 47.0% | | Consolidated net income | 26,442 | 19,054 | 38.8% | | Net income available to ACIC stockholders per diluted share (Total) | 0.53 | 0.39 | 35.9% | | Core income | 26,756 | 19,611 | 36.4% | | Core income per diluted share | 0.54 | 0.40 | 35.0% | | Book value per share (as of June 30) | 6.00 | 4.63 | 29.6% | [Return on Equity and Core Return on Equity](index=2&type=section&id=Return%20on%20Equity%20and%20Core%20Return%20on%20Equity) The company's GAAP Return on Equity and Core Return on Equity both decreased for the three and six months ended June 30, 2025, compared to the prior year, despite an increase in net income Return on Equity (Annualized) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Return on equity based on GAAP income from continuing operations, net of tax | 43.6% | 45.6% | 37.1% | 51.1% | | Return on equity based on GAAP net income | 41.1% | 45.6% | 37.1% | 51.0% | | Core return on equity | 41.6% | 46.9% | 36.8% | 52.6% | [Combined Ratio and Underlying Ratio](index=3&type=section&id=Combined%20Ratio%20and%20Underlying%20Ratio) ACIC's combined ratio improved for the three months ended June 30, 2025, primarily driven by a significant decrease in the net loss ratio, while the six-month combined ratio saw an increase Combined Ratio (Consolidated) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (pts) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (pts) | | :-------------------------- | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | Loss ratio, net | 19.8% | 24.1% | (4.3) | 18.4% | 22.0% | (3.6) | | Expense ratio, net | 40.8% | 40.8% | — | 44.3% | 37.1% | 7.2 | | Combined ratio (CR) | 60.6% | 64.9% | (4.3) | 62.7% | 59.1% | 3.6 | | Underlying combined ratio | 62.2% | 66.4% | (4.2) | 65.0% | 59.7% | 5.3 | [Detailed Quarterly Financial Results](index=4&type=section&id=Detailed%20Quarterly%20Financial%20Results) ACIC's detailed Q2 2025 financial results cover net income, premiums, loss and LAE, acquisition costs, administrative expenses, and reinsurance costs [Net Income and EPS](index=4&type=section&id=Net%20Income%20and%20EPS) Net income for Q2 2025 increased significantly year-over-year, driven by higher gross premiums earned and decreased ceded premiums earned, partially offset by increased policy acquisition costs and a net loss from discontinued operations Net Income and EPS (Three Months Ended June 30) | Metric | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Net income ($ in millions) | 26.4 | 19.1 | | Diluted EPS | 0.53 | 0.39 | - Drivers of net income included increased **gross premiums earned** and decreased **ceded premiums earned**, leading to an overall increase in revenues[16](index=16&type=chunk) - Offset by increased **policy acquisition costs** and a net loss from discontinued operations of **$1.6 million**[16](index=16&type=chunk) [Gross Written Premium](index=4&type=section&id=Gross%20Written%20Premium) Total gross written premium experienced a slight decrease in Q2 2025, primarily due to a reduction in direct premium Gross Written Premium (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | Change ($) | Change (%) | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Direct premium | 228,373 | 229,449 | (1,076) | (0.5)% | | Assumed premium | (27) | — | (27) | (100.0)% | | Total commercial property gross written premium | 228,346 | 229,449 | (1,103) | (0.5)% | [Loss and Loss Adjustment Expenses (LAE)](index=4&type=section&id=Loss%20and%20Loss%20Adjustment%20Expenses%20%28LAE%29) Loss and LAE increased slightly in Q2 2025, but as a percentage of net earned premiums, it decreased significantly, indicating improved underwriting performance, with the underlying gross loss and LAE ratio also showing a decrease Loss and LAE (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | Change ($) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Net loss and LAE | 15,540 | 15,277 | 263 | | % of Net earned premiums | 19.8% | 24.1% | (4.3) pts | | Gross underlying loss and LAE ratio | 10.2% | 10.5% | (0.3) pts | [Policy Acquisition Costs](index=4&type=section&id=Policy%20Acquisition%20Costs) Policy acquisition costs increased substantially in Q2 2025, primarily due to a decrease in ceding commission income resulting from reduced quota share reinsurance coverage and an increase in external management fees Policy Acquisition Costs (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | Change ($) | | :---------------------- | :-------------------- | :-------------------- | :--------- | | Policy acquisition costs | 24,257 | 13,939 | 10,318 | - Increase primarily due to a decrease in **ceding commission income** from reduced quota share reinsurance coverage (from **40% to 20%** effective June 1, 2024, and to **15%** effective June 1, 2025)[20](index=20&type=chunk) - External management fees also increased due to a **one percent increase** in the management fee and profit share accrual with AmRisc, LLC[20](index=20&type=chunk) [General and Administrative Expenses](index=4&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses decreased in Q2 2025, driven by a non-recurring employee retention tax credit refund and reduced spending on professional and consulting services General and Administrative Expenses (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | Change ($) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | General and administrative expenses | 7,778 | 11,938 | (4,160) | - Decrease driven by a **non-recurring employee retention tax credit refund** received in Q2 2025[21](index=21&type=chunk) - External spending for professional and consulting services also decreased[21](index=21&type=chunk) [Reinsurance Costs](index=4&type=section&id=Reinsurance%20Costs) The total ceding ratio decreased in Q2 2025, primarily due to a reduction in quota share reinsurance coverage, which was replaced by more cost-effective excess-of-loss coverage Reinsurance Costs as a Percentage of Gross Earned Premium | Category | 2025 | 2024 | | :--------- | :--- | :--- | | Non-at-Risk | (0.3)% | (0.2)% | | Quota Share | (15.1)% | (26.4)% | | All Other | (37.2)% | (32.7)% | | Total Ceding Ratio | (52.6)% | (59.3)% | - Decrease in quota share reinsurance coverage from **40% to 20%** (effective June 1, 2024) and further to **15%** (effective June 1, 2025) lowered the overall ceding ratio[23](index=23&type=chunk) - Replacement excess of loss coverage was more **cost-effective** than higher quota share coverage[23](index=23&type=chunk) [Financial Position & Investments](index=5&type=section&id=Financial%20Position%20%26%20Investments) ACIC's financial position shows significant growth in investment holdings and an increase in book value per share [Investment Portfolio Highlights](index=5&type=section&id=Investment%20Portfolio%20Highlights) The company's cash, restricted cash, and investment holdings significantly increased from December 31, 2024, to June 30, 2025, driven by cash flows from operations, with fixed maturities remaining the largest component of investments Cash and Investment Holdings | Metric | June 30, 2025 ($ in millions) | December 31, 2024 ($ in millions) | | :------------------------------------------ | :------------------------------ | :-------------------------------- | | Total cash, restricted cash and investment holdings | 726.2 | 540.8 | | Fixed maturities as % of total investments | 78.0% | 82.3% | | Modified duration of fixed maturity investments | 2.2 years | 2.2 years | - Increase driven by **cash flows from operations**[24](index=24&type=chunk) - Holdings consist of U.S. government and agency securities, corporate debt, mutual funds, and investment grade money market instruments[24](index=24&type=chunk) [Book Value Analysis](index=6&type=section&id=Book%20Value%20Analysis) Book value per common share and underlying book value per common share both increased significantly from December 31, 2024, to June 30, 2025, primarily due to an increase in retained earnings from net income Book Value Per Share | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Book Value Per Common Share | $6.00 | $4.89 | | Underlying Book Value Per Common Share | $6.20 | $5.21 | - Increase driven by an increase in **retained earnings** as a result of net income for the first half of 2025[26](index=26&type=chunk) [Discontinued Operations](index=8&type=section&id=Discontinued%20Operations) This section details the completed sale of Interboro Insurance Company, including cash proceeds and financial impact [Interboro Insurance Company Sale](index=8&type=section&id=Interboro%20Insurance%20Company%20Sale) ACIC completed the sale of its subsidiary, Interboro Insurance Company (IIC), on April 1, 2025, for $25.679 million in cash, resulting in a loss on disposal and a loss on IIC's fixed maturity portfolio - Sale of Interboro Insurance Company (IIC) to Forza Insurance Holdings, LLC closed on **April 1, 2025**[38](index=38&type=chunk) - Received cash proceeds totaling **$25,679,000** from the sale[38](index=38&type=chunk) - Resulted in a **loss on disposal of $247,000**, net of tax impact, and a **$1,348,000 loss**, net of tax impact, on IIC's fixed maturity portfolio[38](index=38&type=chunk) [Definitions of Non-GAAP Measures](index=7&type=section&id=Non-GAAP%20Measures%20Definitions) This section defines ACIC's key non-GAAP financial measures, such as core income, core return on equity, and underlying ratios [Core Income (Loss)](index=7&type=section&id=Core%20Income%20%28Loss%29) Core income (loss) is a non-GAAP measure that adjusts net income (loss) by excluding amortization of intangible assets, income/loss from discontinued operations, realized gains/losses, and unrealized gains/losses on equity securities, providing a clearer view of the company's operating performance - Computed by adding **amortization (net of tax)** to net income (loss) and subtracting **income (loss) from discontinued operations**, **realized gains (losses) on investment portfolio**, and **unrealized gains (losses) on equity securities** (all net of tax)[32](index=32&type=chunk) - Excludes items not arising through normal operations or varying independently of operations to evaluate performance[32](index=32&type=chunk) [Core Return on Equity](index=7&type=section&id=Core%20Return%20on%20Equity) Core return on equity is a non-GAAP ratio calculated using core income (loss) to evaluate the company's underwriting and operating results, excluding items not necessarily indicative of operating trends - Calculated by dividing **core income (loss)** for the period by the **average stockholders' equity** for the trailing twelve months[33](index=33&type=chunk) - Excludes income/loss from discontinued operations, non-cash amortization of intangible assets, unrealized gains/losses on equity security investments, and net realized gains/losses on investment portfolio[33](index=33&type=chunk) - Used by management to evaluate performance and establish financial targets[33](index=33&type=chunk) [Underlying Combined Ratio](index=8&type=section&id=Underlying%20Combined%20Ratio) The underlying combined ratio is a non-GAAP measure that subtracts the effect of current year catastrophe losses and prior year reserve development from the combined ratio, aiming to highlight business trends obscured by these volatile items - Computed by subtracting the effect of **current year catastrophe losses** and **prior year development** from the combined ratio[35](index=35&type=chunk) - Useful to investors and management to highlight trends not obscured by the frequency and severity of catastrophe losses or unexpected loss development on historical reserves[35](index=35&type=chunk) [Underlying Loss and LAE](index=8&type=section&id=Underlying%20Loss%20and%20LAE) Underlying loss and LAE is a non-GAAP measure that excludes current year catastrophe losses and prior year reserve development from net loss and LAE, allowing for a more accurate analysis of the company's loss trends - Computed by subtracting the effect of **current year catastrophe losses** and **prior year reserve development** from net loss and LAE[36](index=36&type=chunk) - Used to analyze loss trends that may be impacted by these significant and volatile items[36](index=36&type=chunk) [Underlying Book Value Per Common Share](index=8&type=section&id=Underlying%20Book%20Value%20Per%20Common%20Share) Underlying book value per common share is a non-GAAP measure that excludes accumulated other comprehensive income (loss) from common stockholders' equity, providing insight into changes in net worth attributable to management efforts by removing the effect of interest rate fluctuations - Computed by dividing **common stockholders' equity** (excluding accumulated other comprehensive income (loss)) by **total common shares outstanding** plus **dilutive potential common shares outstanding**[37](index=37&type=chunk) - Used to identify and analyze changes in net worth attributable to management efforts, eliminating the effect of interest rates[37](index=37&type=chunk) [Company Information](index=6&type=section&id=Company%20Information) This section provides an overview of ACIC's business, including its focus, partnerships, financial ratings, and conference call details [About American Coastal Insurance Corporation](index=6&type=section&id=About%20American%20Coastal%20Insurance%20Corporation) American Coastal Insurance Corporation is a property and casualty insurance holding company focused on insuring Condominium and Homeowner Association properties and Apartments in Florida, operating with an exclusive partnership with AmRisc Group and maintaining strong financial stability ratings - Holding company of American Coastal Insurance Company, founded in **2007**[30](index=30&type=chunk) - Primary business is insuring **Condominium and Homeowner Association properties**, and **Apartments in Florida**[30](index=30&type=chunk) - Exclusive partnership for distribution of Condominium Association properties in Florida with **AmRisc Group**[30](index=30&type=chunk) - Maintains a Financial Stability Rating of **'A', 'Exceptional' from Demotech**, and an **'A-' insurance financial strength rating with a Positive outlook by Kroll**[30](index=30&type=chunk) [Conference Call & Presentation Details](index=6&type=section&id=Conference%20Call%20%26%20Presentation%20Details) Details for the upcoming quarterly conference call and access to the accompanying earnings presentation are provided for investors - Conference Call Date and Time: **August 6, 2025 - 5:00 P.M. ET**[28](index=28&type=chunk) - Webcast available at investors.amcoastal.com or https://event.webcasts.com/starthere.jsp?ei=1727195&tp_key=9825ec9393[28](index=28&type=chunk) - Earnings presentation available on the Company's website at investors.amcoastal.com/Presentations[29](index=29&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This section provides a standard disclaimer for forward-looking statements, noting that actual results may differ due to risks and uncertainties [Disclaimer](index=8&type=section&id=Disclaimer) The report includes a standard disclaimer regarding forward-looking statements, indicating that these statements are based on estimates and assumptions, and actual results may differ materially due to various risks and uncertainties. The company undertakes no obligation to update these statements - Statements not historical facts are **'forward-looking statements'** based on reasonable estimates, assumptions, and plans[39](index=39&type=chunk) - Actual results could differ materially if underlying estimates, assumptions, or plans prove inaccurate or if other risks arise[40](index=40&type=chunk) - Statements are made subject to the **safe-harbor provisions** of the Private Securities Litigation Reform Act of 1995[40](index=40&type=chunk) - The Company undertakes no obligation to update or revise any forward-looking statements[40](index=40&type=chunk) [Consolidated Financial Statements](index=10&type=section&id=Consolidated%20Financial%20Statements) This section presents ACIC's consolidated financial statements, detailing comprehensive income and balance sheet as of June 30, 2025 [Consolidated Statements of Comprehensive Income](index=10&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The consolidated statements of comprehensive income detail the company's revenue, expenses, net income, and other comprehensive income for the three and six months ended June 30, 2025, and 2024, showing overall growth in net income and total comprehensive income Consolidated Statements of Comprehensive Income (Three Months Ended June 30) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | | :------------------------------------------ | :-------------------- | :-------------------- | | Gross premiums written | 228,346 | 229,449 | | Net premiums earned | 78,443 | 63,381 | | Total revenue | 86,467 | 68,656 | | Losses and loss adjustment expenses | 15,540 | 15,277 | | Policy acquisition costs | 24,257 | 13,939 | | General and administrative expenses | 7,778 | 11,938 | | Total expenses | 50,294 | 44,580 | | Income from continuing operations, net of tax | 28,037 | 19,073 | | Net income | 26,442 | 19,054 | | Total comprehensive income | 29,484 | 19,248 | | Diluted EPS (Total) | 0.53 | 0.39 | [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets as of June 30, 2025, and December 31, 2024, show an increase in total assets, primarily driven by higher cash and cash equivalents, and an increase in total stockholders' equity Consolidated Balance Sheets (As of) | Metric | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :------------------------------------------ | :----------------------------- | :------------------------------- | | Total investments | 319,031 | 341,418 | | Total cash, cash equivalents and restricted cash | 407,212 | 199,393 | | Total Assets | 1,346,865 | 1,216,112 | | Unpaid losses and loss adjustment expenses | 219,242 | 322,087 | | Unearned premiums | 383,991 | 285,354 | | Total Liabilities | 1,054,565 | 980,452 | | Total Stockholders' Equity | 292,300 | 235,660 | - Assets held for sale decreased from **$73,243 thousand to $0**, reflecting the completion of the IIC sale[45](index=45&type=chunk) - Common stockholders' equity increased from **$235,660 thousand to $292,300 thousand**[45](index=45&type=chunk)

Core Viewpoint - American Coastal Insurance Corporation is set to release its financial results for the second quarter of 2025 on August 6, 2025, after market close, followed by a conference call at 5:00 p.m. ET [1][2]. Company Overview - American Coastal Insurance Corporation is the holding company for American Coastal Insurance Company, which was established in 2007 to insure condominium and homeowner association properties, as well as apartments in Florida [4]. - The company has an exclusive partnership with AmRisc Group for the distribution of condominium association properties in Florida, focusing on hurricane-exposed properties [4]. - American Coastal Insurance Company has received a Financial Stability Rating of "A, Exceptional" from Demotech and an "A-" insurance financial strength rating with a Positive outlook from Kroll [4]. - The issuer rating for American Coastal Insurance Corporation is 'BBB-' with a Positive outlook from Kroll [4]. Conference Call Details - The conference call for the second quarter results will take place on August 6, 2025, at 5:00 p.m. ET, with participant dial-in numbers provided for both the United States and international callers [3]. - Interested parties are encouraged to join the call 10 minutes prior to the start time [2].

Core Viewpoint - American Coastal Insurance Corporation has received upgrades in its Issuer and Debt ratings from Kroll Bond Rating Agency, reflecting improved financial metrics and a positive outlook for future performance [1][2]. Financial Ratings - Kroll Bond Rating Agency upgraded American Coastal's Issuer Rating from BB+ to BBB- and its Debt Rating from BB+ to BBB- [1]. - The Insurance Financial Strength Rating for American Coastal Insurance Company was affirmed at A- with a Positive outlook [1][2]. Financial Performance - The upgrades are attributed to improvements in financial leverage metrics and strong double-digit EBIT interest coverage [2]. - The change in outlook to Positive indicates expectations of continued favorable operating results and strong risk-adjusted capitalization [2]. Cost Savings - The upgrade to investment grade status will reduce the company's annual interest expense by $1.5 million, supporting its strategy for responsible business growth [3]. Company Overview - American Coastal Insurance Corporation, founded in 2007, specializes in insuring Condominium and Homeowner Association properties in Florida [4]. - The company has an exclusive partnership with AmRisc Group for the distribution of Condominium Association properties in Florida [4]. - American Coastal Insurance Company has received a Financial Stability Rating of "A", Exceptional from Demotech, and maintains an "A-" insurance financial strength rating with a Positive outlook from Kroll [4].

Group 1 - The article emphasizes a value investing approach, focusing on an owner's mindset and a long-term investment horizon [1] - The author does not engage in writing sell articles or recommending shorting stocks, indicating a preference for long positions [1] - The author has no current stock or derivative positions in the companies mentioned and does not plan to initiate any within the next 72 hours [2] Group 2 - The article expresses personal opinions and is not influenced by compensation from companies mentioned, aside from Seeking Alpha [2] - It clarifies that past performance does not guarantee future results, and no specific investment advice is provided [3] - The article notes that the views expressed may not reflect those of Seeking Alpha as a whole, highlighting the independent nature of the analysis [3]

Core Viewpoint - American Coastal Insurance Corporation held its Q1 2025 earnings conference call on May 8, 2025, with key executives discussing the company's performance and future outlook [1][3]. Group 1: Company Overview - The conference call featured President and CEO Bradford Martz and CFO Svetlana Castle, highlighting the leadership's engagement with investors [1][3]. - The call was made available on the company's website, with a replay option for approximately 30 days, indicating a commitment to transparency and investor relations [3]. Group 2: Financial Communication - The company provided access to the latest earnings release and presentation in the investor section of its website, ensuring stakeholders have the necessary information for analysis [3]. - Forward-looking statements were made during the call, emphasizing the company's reliance on reasonable estimates and assumptions for future performance [4].