RLI CORP 10-Q

Item 1. Financial Statements ​ RLI Corp. and Subsidiaries Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ ​ Ended March 31, (in thousands, except per share data) 2026 2025 Net premiums earned ​ $ 411,386 ​ $ 398,345 Net investment income ​ ​ 42,321 ​ ​ 36,726 Net realized gains ​ ​ 9,559 ​ ​ 14,912 Net unrealized gains (losses) on equity securities ​ ​ ( 39,396 ) ​ ​ ( 42,318 ) Consolidated revenue ​ $ 423,870 ​ $ 407,665 Losses and settlement expenses ​ ​ 193,244 ​ ​ 177,238 Policy acquisition costs ​ ​ 132,075 ​ ​ 123,687 Insurance operating expenses ​ ​ 28,280 ​ ​ 26,874 Interest expense on debt ​ ​ 2,353 ​ ​ 1,335 General corporate expenses ​ ​ 2,724 ​ ​ 2,948 Total expenses ​ $ 358,676 ​ $ 332,082 Equity in earnings of unconsolidated investees ​ ​ 2,147 ​ ​ 3,048 Earnings before income taxes ​ $ 67,341 ​ $ 78,631 Income tax expense ​ ​ 12,456 ​ ​ 15,417 Net earnings ​ $ 54,885 ​ $ 63,214 ​ ​ ​ ​ ​ ​ ​ Other comprehensive earnings (loss), net of tax ​ ​ ( 25,366 ) ​ ​ 30,030 Comprehensive earnings ​ $ 29,519 ​ $ 93,244 ​ ​ ​ ​ ​ ​ ​ Basic net earnings per share ​ $ 0.60 ​ $ 0.69 Diluted net earnings per share ​ $ 0.60 ​ $ 0.68 ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding: ​ ​ ​ ​ ​ ​ Basic ​ ​ 91,926 ​ ​ 91,770 Diluted ​ ​ 92,187 ​ ​ 92,528 ​ See accompanying notes to the unaudited condensed consolidated financial statements. ​ 3 ​ Table of Contents RLI Corp. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, (in thousands, except share and per share data) 2026 2025 ASSETS ​ ​ ​ ​ ​ ​ Investments and cash: ​ ​ ​ ​ ​ ​ Fixed income: ​ ​ ​ ​ ​ ​ Available-for-sale, at fair value ​ $ 3,528,692 ​ $ 3,533,336 (amortized cost of $ 3,669,921 and allowance for credit losses of $ 538 at 3/31/26) ​ ​ ​ ​ ​ ​ (amortized cost of $ 3,642,362 and allowance for credit losses of $ 828 at 12/31/25) ​ ​ ​ ​ ​ ​ Equity securities, at fair value (cost - $ 539,859 at 3/31/26 and $ 534,311 at 12/31/25) ​ ​ 864,912 ​ ​ 898,876 Short-term investments, at cost which approximates fair value ​ ​ 386,219 ​ ​ 120,562 Other invested assets ​ ​ 60,509 ​ ​ 59,281 Cash ​ ​ 49,121 ​ ​ 51,565 Total investments and cash ​ $ 4,889,453 ​ $ 4,663,620 Accrued investment income ​ ​ 30,456 ​ ​ 30,026 Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $ 21,696 at 3/31/26 and $ 23,673 at 12/31/25 ​ ​ 243,451 ​ ​ 212,226 Ceded unearned premium ​ ​ 118,476 ​ ​ 124,669 Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $ 11,479 at 3/31/26 and $ 11,107 at 12/31/25 ​ ​ 740,503 ​ ​ 746,798 Deferred policy acquisition costs ​ ​ 176,187 ​ ​ 172,648 Property and equipment, at cost, net of accumulated depreciation of $ 86,547 at 3/31/26 and $ 84,459 at 12/31/25 ​ ​ 39,809 ​ ​ 40,733 Investment in unconsolidated investees ​ ​ 56,053 ​ ​ 53,521 Goodwill and intangibles ​ ​ 53,562 ​ ​ 53,562 Other assets ​ ​ 53,873 ​ ​ 63,683 TOTAL ASSETS ​ $ 6,401,823 ​ $ 6,161,486 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ Unpaid losses and settlement expenses ​ $ 2,927,929 ​ $ 2,886,819 Unearned premiums ​ ​ 991,717 ​ ​ 991,636 Reinsurance balances payable ​ ​ 23,455 ​ ​ 40,580 Funds held ​ ​ 134,215 ​ ​ 127,242 Income taxes-current ​ ​ 26,797 ​ ​ 29,724 Income taxes-deferred ​ ​ 5,566 ​ ​ 21,769 Short-term debt ​ ​ 50,000 ​ ​ 100,000 Long-term debt ​ ​ 297,247 ​ ​ — Accrued expenses ​ ​ 68,016 ​ ​ 128,597 Other liabilities ​ ​ 80,491 ​ ​ 56,923 TOTAL LIABILITIES ​ $ 4,605,433 ​ $ 4,383,290 ​ ​ ​ ​ ​ ​ ​ Shareholders’ Equity ​ ​ ​ ​ ​ ​ Common stock ($ 0.01 par value) ​ ​ ​ ​ ​ ​ (Shares authorized - 400,000,000 ) ​ ​ ​ ​ ​ ​ ( 137,794,359 shares issued, 91,933,931 shares outstanding at 3/31/26) ​ ​ ​ ​ ​ ​ ( 137,739,079 shares issued, 91,878,651 shares outstanding at 12/31/25) ​ $ 1,378 ​ $ 1,377 Paid-in capital ​ ​ 380,075 ​ ​ 376,679 Accumulated other comprehensive earnings (loss) ​ ​ ( 113,440 ) ​ ​ ( 88,074 ) Retained earnings ​ ​ 1,921,376 ​ ​ 1,881,213 Deferred compensation ​ ​ 11,536 ​ ​ 14,082 Less: Treasury shares, at cost ( 45,860,428 shares at 3/31/26 and 12/31/25) ​ ​ ( 404,535 ) ​ ​ ( 407,081 ) TOTAL SHAREHOLDERS’ EQUITY ​ $ 1,796,390 ​ $ 1,778,196 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ​ $ 6,401,823 ​ $ 6,161,486 ​ See accompanying notes to the unaudited condensed consolidated financial statements. ​ 4 ​ Table of Contents RLI Corp. and Subsidiaries Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ Comprehensive ​ ​ ​ ​ ​ ​ ​ Treasury ​ ​ Common ​ Shareholders’ ​ Common ​ Paid-in ​ Earnings ​ Retained ​ Deferred ​ Shares (in thousands, except share and per share data) Shares Equity Stock Capital (Loss) Earnings Compensation at Cost Balance, January 1, 2025 ​ 91,738,132 ​ $ 1,521,967 ​ $ 1,376 ​ $ 367,645 ​ $ ( 173,723 ) ​ $ 1,719,668 ​ $ 13,498 ​ $ ( 406,497 ) Net earnings ​ — ​ ​ 63,214 ​ ​ — ​ ​ — ​ ​ — ​ ​ 63,214 ​ ​ — ​ ​ — Other comprehensive earnings (loss), net of tax ​ — ​ ​ 30,030 ​ ​ — ​ ​ — ​ ​ 30,030 ​ ​ — ​ ​ — ​ ​ — Deferred compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,686 ) ​ ​ 1,686 Share-based compensation ​ 34,602 ​ ​ 2,777 ​ ​ — ​ ​ 2,777 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Dividends and dividend equivalents ($ 0.15 per share) ​ — ​ ​ ( 13,776 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 13,776 ) ​ ​ — ​ ​ — Balance, March 31, 2025 ​ 91,772,734 ​ $ 1,604,212 ​ $ 1,376 ​ $ 370,422 ​ $ ( 143,693 ) ​ $ 1,769,106 ​ $ 11,812 ​ $ ( 404,811 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ Comprehensive ​ ​ ​ ​ ​ ​ ​ Treasury ​ ​ Common ​ Shareholders’ ​ Common ​ Paid-in ​ Earnings ​ Retained ​ Deferred ​ Shares (in thousands, except share and per share data) ​ Shares ​ Equity ​ Stock ​ Capital ​ (Loss) ​ Earnings ​ Compensation ​ at Cost Balance, January 1, 2026 ​ 91,878,651 ​ $ 1,778,196 ​ $ 1,377 ​ $ 376,679 ​ $ ( 88,074 ) ​ $ 1,881,213 ​ $ 14,082 ​ $ ( 407,081 ) Net earnings ​ — ​ ​ 54,885 ​ ​ — ​ ​ — ​ ​ — ​ ​ 54,885 ​ ​ — ​ ​ — Other comprehensive earnings (loss), net of tax ​ — ​ ​ ( 25,366 ) ​ ​ — ​ ​ — ​ ​ ( 25,366 ) ​ ​ — ​ ​ — ​ ​ — Deferred compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 2,546 ) ​ ​ 2,546 Share-based compensation ​ 55,280 ​ ​ 3,397 ​ ​ 1 ​ ​ 3,396 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Dividends and dividend equivalents ($ 0.16 per share) ​ — ​ ​ ( 14,722 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 14,722 ) ​ ​ — ​ ​ — Balance, March 31, 2026 ​ 91,933,931 ​ $ 1,796,390 ​ $ 1,378 ​ $ 380,075 ​ $ ( 113,440 ) ​ $ 1,921,376 ​ $ 11,536 ​ $ ( 404,535 ) ​ See accompanying notes to the unaudited condensed consolidated financial statements. ​ 5 ​ Table of Contents RLI Corp. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ ​ Ended March 31, (in thousands) 2026 2025 Net cash provided by operating activities ​ $ 42,829 ​ $ 103,514 Cash Flows from Investing Activities ​ ​ ​ ​ ​ ​ Purchase of: ​ ​ ​ ​ ​ ​ Fixed income securities, available-for-sale ​ $ ( 195,814 ) ​ $ ( 153,952 ) Equity securities ​ ​ ( 13,500 ) ​ ​ ( 41,503 ) Property and equipment ​ ​ ( 1,062 ) ​ ​ ( 1,053 ) Other ​ ​ ( 3,815 ) ​ ​ ( 2,710 ) Proceeds from sale of: ​ ​ ​ ​ ​ ​ Fixed income securities, available-for-sale ​ ​ 62,748 ​ ​ 10,207 Equity securities ​ ​ 18,205 ​ ​ 26,679 Other ​ ​ 747 ​ ​ 953 Proceeds from call or maturity of: ​ ​ ​ ​ ​ ​ Fixed income securities, available-for-sale ​ ​ 118,529 ​ ​ 99,651 Net proceeds from sale (purchase) of short-term investments ​ ​ ( 265,657 ) ​ ​ ( 41,686 ) Net cash used in investing activities ​ $ ( 279,619 ) ​ $ ( 103,414 ) Cash Flows from Financing Activities ​ ​ ​ ​ ​ ​ Proceeds from issuance of debt ​ $ 297,223 ​ $ — Payment of debt ​ ​ ( 50,000 ) ​ ​ — Cash dividends paid ​ ​ ( 14,707 ) ​ ​ ( 13,761 ) Proceeds from stock option exercises ​ ​ 1,830 ​ ​ 929 Net cash used in financing activities ​ $ 234,346 ​ $ ( 12,832 ) Net increase in cash ​ $ ( 2,444 ) ​ $ ( 12,732 ) Cash at the beginning of the period ​ ​ 51,565 ​ ​ 39,790 Cash at March 31, ​ $ 49,121 ​ $ 27,058 ​ See accompanying notes to the unaudited condensed consolidated financial statements. ​ 6 ​ Table of Contents NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ​ 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ​ A. BASIS OF PRESENTATION ​ The unaudited interim condensed consolidated financial statements of RLI Corp. (the Company) and subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). These condensed consolidated financial statements do not include all the disclosures required by GAAP for annual financial statements and should be read in conjunction with our 2025 Annual Report on Form 10-K. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, of a normal and recurring nature, that are necessary for fair financial statement presentation. The results of operations for any interim period are not necessarily indicative of the operating results for a full year. Certain reclassifications were made to 2025 to conform to the classifications used in the current year. ​ The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. These estimates are inherently subject to change and actual results could differ significantly from these estimates. ​ B. ADOPTED ACCOUNTING STANDARDS ​ No new accounting standards applicable in 2026 materially impact our financial statements. ​ C. PROSPECTIVE ACCOUNTING STANDARDS ​ 2024-03—Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ​ The guidance in ASU 2024-03 requires disaggregation of certain expenses into specified categories in the notes to the financial statements. Each relevant expense caption on the face of the statement of earnings that includes specific expenses, such as employee compensation, depreciation and intangible asset amortization, are required to be separately disclosed in a tabular presentation. Additionally, a separate total of selling expenses is required to be disclosed, along with a definition of what is included in selling expenses. ​ This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Although the Company continues to evaluate the impact of adopting this new accounting standard, the amendments are disclosure-related and should not have a material impact on our financial statements. ​ 2025-06—Intangibles-Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal -Use Software ​ The guidance in ASU 2025-06 removes the concept of project stages and requires the capitalization of software costs when management has committed to funding the software project and it is probable that the project will be completed. This ASU is effective for fiscal years beginning after December 15, 2027, but early adoption is permitted as of the beginning of an annual reporting period. The Company continues to evaluate the impact of adopting this new accounting standard, but does not expect the standard will have a material impact on our financial statements. ​ D. REINSURANCE ​ Ceded unearned premiums and reinsurance balances recoverable on unpaid losses and settlement expenses are reported separately as an asset, rather than being netted with the related liability, since reinsurance does not relieve the Company of our liability to policyholders. Such balances are subject to the credit risk associated with the individual reinsurer. We continually monitor the financial condition of our reinsurers and actively follow up on any past due or disputed amounts. As part of our monitoring efforts, we review reinsurers’ annual financial statements and Securities and Exchange Commission filings for those that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the AM Best and 7 ​ Table of Contents Standard & Poor’s (S&P) ratings of our reinsurers. We subject our reinsurance balances recoverable to detailed recoverability tests, including a segment-based analysis using the average default rating percentage by S&P rating, which assists the Company in assessing the sufficiency of its allowance. Additionally, we perform an in-depth reinsurer financial condition analysis prior to the renewal of our reinsurance placements. ​ Our policy is to charge to earnings, in the form of an allowance, an estimate of unrecoverable amounts from reinsurers. This allowance is reviewed on an ongoing basis to ensure that the amount makes a reasonable provision for reinsurance balances that we may be unable to recover. Once regulatory action (such as receivership, finding of insolvency, order of conservation or order of liquidation) is taken against a reinsurer, the paid and unpaid recoverable balances for the reinsurer are specifically identified and written off through the use of our allowance for estimated unrecoverable amounts from reinsurers. When we write-off such a balance, it is done in full. We then re-evaluate the overall allowance and determine whether the balance is sufficient and, if needed, an additional allowance is recognized. ​ The allowance for uncollectible amounts on paid reinsurance balances receivable was $ 17 million at March 31, 2026 and December 31, 2025. The allowance for uncollectible amounts on unpaid reinsurance balances recoverable was $ 11 million at March 31, 2026 and December 31, 2025. Changes in the allowances were due to changes in the amount of reinsurance balances outstanding, the composition of reinsurers from whom the balances were recoverable and their associated S&P default ratings. No write-offs were applied to the allowances in the first three months of 2026 and less than $ 1 million was recovered. ​ E. INTANGIBLE ASSETS ​ The composition of goodwill and intangible assets at March 31, 2026 and December 31, 2025 is detailed in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, (in thousands) 2026 2025 Goodwill ​ ​ ​ ​ ​ ​ Surety ​ $ 40,816 ​ $ 40,816 Casualty ​ ​ 5,246 ​ ​ 5,246 Total goodwill ​ $ 46,062 ​ $ 46,062 Indefinite-lived intangibles ​ ​ 7,500 ​ ​ 7,500 Total goodwill and intangibles ​ $ 53,562 ​ $ 53,562 ​ Annual impairment assessments were performed on our goodwill and state insurance license indefinite-lived intangible assets during the second quarter of 2025. Based upon these reviews, none of the assets were impaired. In addition, there were no triggering events as of March 31, 2026 that would suggest an updated impairment test would be needed for our goodwill and intangible assets. ​ F. EARNINGS PER SHARE ​ Basic earnings per share (EPS) is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the dilution that could occur if securities or other contracts to issue common stock or common stock equivalents were exercised or converted into common stock. When inclusion of these items increases the earnings per share or reduces the loss per share, the effect on earnings is anti-dilutive. Under these circumstances, the diluted net earnings or net loss per share is computed excluding these items. The following represents a reconciliation of the numerator and denominator of the basic and diluted EPS computations contained in the unaudited condensed consolidated financial statements: ​ 8 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ For the Three Months ​ ​ Ended March 31, 2026 ​ Ended March 31, 2025 ​ ​ Income ​ Shares ​ Per Share ​ Income ​ Shares ​ Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings available to common shareholders ​ $ 54,885 ​ 91,926 ​ $ 0.60 ​ $ 63,214 ​ 91,770 ​ $ 0.69 Effect of Dilutive Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options and restricted stock units ​ ​ — ​ 261 ​ ​ ​ ​ ​ — ​ 758 ​ ​ ​ Diluted EPS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings available to common shareholders ​ $ 54,885 ​ 92,187 ​ $ 0.60 ​ $ 63,214 ​ 92,528 ​ $ 0.68 Anti-dilutive securities excluded from diluted EPS ​ ​ ​ ​ ​ 1,066 ​ ​ ​ ​ ​ ​ ​ ​ 48 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ G. COMPREHENSIVE EARNINGS ​ Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our available-for-sale fixed income portfolio. In reporting the components of comprehensive earnings, we used the federal statutory tax rate of 21 percent. Other comprehensive earnings (loss), as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax benefit of $ 7 million for the first quarter of 2026, compared to $ 8 million of tax expense for the same period in 2025. ​ Unrealized losses, net of tax, recognized in other comprehensive earnings (loss) were $ 25 million for the first three months of 2026, compared to $ 30 million of unrealized gains, net of tax, in the first three months of 2025. The unrealized losses in 2026 were attributable to an increase in interest rates, which decreased the fair value of securities held in the fixed income portfolio. Interest rates decreased during 2025, which increased the fair value of securities held in the fixed income portfolio. ​ The following table illustrates the changes in the balance of each component of accumulated other comprehensive earnings (loss) for each period presented in the unaudited condensed consolidated financial statements: ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ For the Three Months ​ ​ ​ Ended March 31, ​ Unrealized Gains (Losses) on Available-for-Sale Securities 2026 2025 Beginning balance ​ $ ( 88,074 ) ​ $ ( 173,723 ) ​ Other comprehensive earnings (loss) before reclassifications ​ ​ ( 25,977 ) ​ ​ 29,899 ​ Amounts reclassified from accumulated other comprehensive earnings ​ ​ 611 ​ ​ 131 ​ Net current-period other comprehensive earnings (loss) ​ $ ( 25,366 ) ​ $ 30,030 ​ Ending balance ​ $ ( 113,440 ) ​ $ ( 143,693 ) ​ Balance of securities for which an allowance for credit losses has been recognized in net earnings ​ ​ 1,710 ​ ​ 1,692 ​ ​ Credit losses on or the sale of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive earnings (loss) to current period net earnings. The effects of reclassifications out of accumulated other comprehensive earnings (loss) by the respective line items of net earnings are presented in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount Reclassified from Accumulated Other ​ ​ (in thousands) ​ Comprehensive Earnings (Loss) ​ ​ ​ ​ For the Three Months ​ ​ Component of Accumulated ​ Ended March 31, ​ Affected line item in the Other Comprehensive Earnings (Loss) 2026 2025 Statement of Earnings Unrealized gains and losses on available-for-sale securities ​ $ ( 1,063 ) ​ $ ( 205 ) ​ Net realized gains (losses) ​ ​ ​ 290 ​ ​ 40 ​ Credit gains (losses) presented within net realized gains ​ ​ $ ( 773 ) ​ $ ( 165 ) ​ Earnings (loss) before income taxes ​ ​ ​ 162 ​ ​ 34 ​ Income tax (expense) benefit ​ ​ $ ( 611 ) ​ $ ( 131 ) ​ Net earnings (loss) ​ 9 ​ Table of Contents H. FAIR VALUE MEASUREMENTS ​ Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. We determined the fair value of certain financial instruments based on their underlying characteristics and relevant transactions in the marketplace. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ​ The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value. ​ Level 1 is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets. ​ Level 2 is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data. ​ Level 3 is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable. ​ As a part of management’s process to determine fair value, we utilize widely recognized, third-party pricing sources to determine our fair values. We have obtained an understanding of the third-party pricing sources’ valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy. ​ Corporate, Agencies, Government and Municipal Bonds: The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in approximate order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. ​ Mortgage-backed Securities (MBS)/Commercial Mortgage-backed Securities (CMBS) and Asset-backed Securities (ABS): The pricing vendor evaluation methodology primarily includes interest rate movements and new issue data. Evaluation of the tranches (non-volatile, volatile or credit sensitivity) is based on the pricing vendors’ interpretation of accepted modeling and pricing conventions. This information is then used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate MBS and CMBS volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates and recent trade activity. MBS/CMBS and ABS with corroborated, observable inputs are classified as Level 2. All of our MBS/CMBS and ABS are deemed Level 2. ​ Regulation D Private Placement Securities: All Regulation D privately-placed bonds are classified as corporate securities and deemed Level 3. The pricing vendor evaluation methodology for these securities includes a combination of observable and unobservable inputs. Observable inputs include public corporate spread matrices classified by sector, rating and average life, as well as investment and non-investment grade matrices created from fixed income indices. Unobservable inputs include a liquidity spread premium calculated based on public corporate spread and private corporate spread matrices. The quantitative detail of the liquidity spread premium is neither provided nor reasonably available to the Company. An increase to the credit spread assumptions would result in a lower fair value. ​ For all of our fixed income securities classified as Level 2, we periodically conduct a review to assess the reasonableness of the fair values provided by our pricing services. Our review consists of a two-pronged approach. First, we compare prices provided by our pricing services to those provided by an additional source. In some cases, we obtain prices from securities brokers and compare them to the prices provided by our pricing services. If discrepancies are found in our comparisons, we compare our prices to actual reported trade data for like securities. No changes to the fair values supplied by our pricing services have occurred as a result of our reviews. Based on these assessments, we have determined that the fair values of our Level 2 fixed income securities provided by our pricing services are reasonable. 10 ​ Table of Contents ​ Equity Securities: As of March 31, 2026, nearly all of our equity holdings were traded on an exchange. Exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). Pricing for the equity securities not traded on an exchange is provided by a third-party pricing source using observable inputs and are classified as Level 2. Pricing for equity securities not traded on an exchange rely on one or more unobservable inputs and are classified as Level 3. ​ Due to the relatively short-term nature of cash, short-term investments, accounts receivable and accounts payable, their carrying amounts are reasonable estimates of fair value. Our investments in private funds, classified as other invested assets, are measured using the investments’ net asset value per share and are not categorized within the fair value hierarchy. ​ ​ 2. INVESTMENTS ​ Our investments are primarily composed of fixed income debt securities and common stock equity securities. We carry our equity securities at fair value and categorize all of our debt securities as available-for-sale, which are carried at fair value. ​ Realized gains and losses on disposition of investments are based on the specific identification of the investments sold on the settlement date. The following is a summary of the disposition of fixed income and equity securities for the three-month periods ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ Proceeds ​ Gross Realized ​ Net Realized (in thousands) From Sales Gains Losses Gain (Loss) 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities - available-for-sale ​ $ 64,810 ​ $ 1,022 ​ $ ( 1,466 ) ​ $ ( 444 ) Equity securities ​ ​ 18,205 ​ ​ 10,355 ​ ​ ( 102 ) ​ ​ 10,253 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities - available-for-sale ​ $ 10,473 ​ $ 62 ​ $ ( 205 ) ​ $ ( 143 ) Equity securities ​ ​ 26,679 ​ ​ 15,140 ​ ​ ( 62 ) ​ ​ 15,078 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Calls/Maturities ​ ​ ​ ​ Gross Realized ​ Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities - available-for-sale ​ $ 118,547 ​ $ 385 ​ $ — ​ $ 385 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities - available-for-sale ​ $ 101,454 ​ $ 9 ​ $ ( 71 ) ​ $ ( 62 ) ​ FAIR VALUE MEASUREMENTS ​ Assets measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, 2026 ​ ​ Quoted Prices in ​ Significant Other ​ Significant ​ ​ ​ ​ ​ Active Markets for ​ Observable ​ Unobservable ​ ​ ​ ​ ​ Identical Assets ​ Inputs ​ Inputs ​ ​ ​ (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government ​ $ — ​ $ 307,140 ​ $ — ​ $ 307,140 U.S. agency ​ ​ — ​ ​ 27,288 ​ ​ — ​ ​ 27,288 Non-U.S. government & agency ​ ​ — ​ ​ 14,191 ​ ​ 2,095 ​ ​ 16,286 Agency MBS ​ ​ — ​ ​ 600,802 ​ ​ — ​ ​ 600,802 ABS/CMBS/MBS* ​ ​ — ​ ​ 710,301 ​ ​ — ​ ​ 710,301 Corporate ​ ​ — ​ ​ 1,382,742 ​ ​ 121,663 ​ ​ 1,504,405 Municipal ​ ​ — ​ ​ 362,470 ​ ​ — ​ ​ 362,470 Total fixed income securities - available-for-sale ​ $ — ​ $ 3,404,934 ​ $ 123,758 ​ $ 3,528,692 Equity securities ​ ​ 856,689 ​ ​ — ​ ​ 8,223 ​ ​ 864,912 Total ​ $ 856,689 ​ $ 3,404,934 ​ $ 131,981 ​ $ 4,393,604 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities 11 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2025 ​ ​ Quoted Prices in ​ Significant Other ​ Significant ​ ​ ​ ​ ​ Active Markets for ​ Observable ​ Unobservable ​ ​ ​ ​ ​ Identical Assets ​ Inputs ​ Inputs ​ ​ ​ (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government ​ $ — ​ $ 335,223 ​ $ — ​ $ 335,223 U.S. agency ​ ​ — ​ ​ 37,927 ​ ​ — ​ ​ 37,927 Non-U.S. government & agency ​ ​ — ​ ​ 11,417 ​ ​ 2,130 ​ ​ 13,547 Agency MBS ​ ​ — ​ ​ 610,675 ​ ​ — ​ ​ 610,675 ABS/CMBS/MBS* ​ ​ — ​ ​ 672,984 ​ ​ — ​ ​ 672,984 Corporate ​ ​ — ​ ​ 1,383,329 ​ ​ 108,177 ​ ​ 1,491,506 Municipal ​ ​ — ​ ​ 371,474 ​ ​ — ​ ​ 371,474 Total fixed income securities - available-for-sale ​ $ — ​ $ 3,423,029 ​ $ 110,307 ​ $ 3,533,336 Equity securities ​ ​ 890,622 ​ ​ — ​ ​ 8,254 ​ ​ 898,876 Total ​ $ 890,622 ​ $ 3,423,029 ​ $ 118,561 ​ $ 4,432,212 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities ​ The following table summarizes changes in the balance of securities whose fair value was measured using significant unobservable inputs (Level 3). ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, (in thousands) ​ 2026 2025 Beginning balance ​ $ 118,561 ​ $ 95,125 Net realized and unrealized gains (losses) ​ ​ ​ ​ ​ ​ Included in other comprehensive earnings (loss) ​ ​ ( 1,546 ) ​ ​ 893 Purchases ​ ​ 15,296 ​ ​ 5,070 Sales / Calls / Maturities ​ ​ ( 330 ) ​ ​ ( 2,143 ) Transfers into Level 3 ​ ​ — ​ ​ — Transfers out of Level 3 ​ ​ — ​ ​ — Balance as of March 31, ​ $ 131,981 ​ $ 98,945 Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings (loss) ​ $ ( 1,550 ) ​ $ 893 ​ The amortized cost and fair value of available-for-sale fixed income securities by contractual maturity as of March 31, 2026 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 (in thousands) Amortized Cost Fair Value Due in one year or less ​ $ 197,626 ​ $ 196,770 Due after one year through five years ​ ​ 737,002 ​ ​ 726,768 Due after five years through 10 years ​ ​ 855,922 ​ ​ 845,397 Due after 10 years ​ ​ 523,694 ​ ​ 448,654 ABS/CMBS/MBS* ​ ​ 1,355,677 ​ ​ 1,311,103 Total available-for-sale ​ $ 3,669,921 ​ $ 3,528,692 * Asset-backed, commercial mortgage-backed and mortgage-backed securities ​ The amortized cost and fair value of available-for-sale securities at March 31, 2026 and December 31, 2025 are presented in the tables below. Amortized cost does not include accrued interest receivable of $ 29 million as of March 31, 2026 and $ 29 million as of December 31, 2025. ​ 12 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ Cost or ​ Allowance ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ for Credit ​ Unrealized ​ Unrealized ​ Fair (in thousands) Cost Losses Gains Losses Value U.S. government ​ $ 305,863 ​ $ — ​ $ 2,333 ​ $ ( 1,056 ) ​ $ 307,140 U.S. agency ​ ​ 27,280 ​ ​ — ​ ​ 264 ​ ​ ( 256 ) ​ ​ 27,288 Non-U.S. government & agency ​ ​ 16,882 ​ ​ — ​ ​ 102 ​ ​ ( 698 ) ​ ​ 16,286 Agency MBS ​ ​ 629,029 ​ ​ — ​ ​ 2,587 ​ ​ ( 30,814 ) ​ ​ 600,802 ABS/CMBS/MBS* ​ ​ 726,648 ​ ​ ( 377 ) ​ ​ 1,684 ​ ​ ( 17,654 ) ​ ​ 710,301 Corporate ​ ​ 1,535,290 ​ ​ ( 161 ) ​ ​ 7,861 ​ ​ ( 38,585 ) ​ ​ 1,504,405 Municipal ​ ​ 428,929 ​ ​ — ​ ​ 687 ​ ​ ( 67,146 ) ​ ​ 362,470 Total Fixed Income ​ $ 3,669,921 ​ $ ( 538 ) ​ $ 15,518 ​ $ ( 156,209 ) ​ $ 3,528,692 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ Cost or ​ Allowance ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ for Credit ​ Unrealized ​ Unrealized ​ Fair (in thousands) Cost Losses Gains Losses Value U.S. government ​ $ 331,233 ​ $ — ​ $ 4,909 ​ $ ( 919 ) ​ $ 335,223 U.S. agency ​ ​ 37,379 ​ ​ — ​ ​ 677 ​ ​ ( 129 ) ​ ​ 37,927 Non-U.S. government & agency ​ ​ 13,831 ​ ​ — ​ ​ 274 ​ ​ ( 558 ) ​ ​ 13,547 Agency MBS ​ ​ 634,349 ​ ​ — ​ ​ 4,718 ​ ​ ( 28,392 ) ​ ​ 610,675 ABS/CMBS/MBS* ​ ​ 685,126 ​ ​ ( 470 ) ​ ​ 3,640 ​ ​ ( 15,312 ) ​ ​ 672,984 Corporate ​ ​ 1,502,843 ​ ​ ( 358 ) ​ ​ 16,951 ​ ​ ( 27,930 ) ​ ​ 1,491,506 Municipal ​ ​ 437,601 ​ ​ — ​ ​ 1,068 ​ ​ ( 67,195 ) ​ ​ 371,474 Total Fixed Income ​ $ 3,642,362 ​ $ ( 828 ) ​ $ 32,237 ​ $ ( 140,435 ) ​ $ 3,533,336 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities ​ Allowance for Credit Losses and Unrealized Losses on Fixed Income Securities ​ A reversible allowance for credit losses is recognized on available-for-sale fixed income securities, if applicable. Several criteria are reviewed to determine if securities in the fixed income portfolio should be included in the allowance for expected credit loss evaluation, including: ​ ● Changes in technology that may impair the earnings potential of the investment, ​ ● The discontinuance of a segment of business that may affect future earnings potential, ​ ● Reduction of or non-payment of interest and/or principal, ​ ● Specific concerns related to the issuer’s industry or geographic area of operation, ​ ● Significant or recurring operating losses, poor cash flows and/or deteriorating liquidity ratios and ​ ● Downgrades in credit quality by a major rating agency. ​ If changes in interest rates and credit spreads do not reasonably explain the unrealized loss for an available-for-sale security, or if any of the criteria above indicate a potential credit loss, the security is subjected to a discounted cash flow analysis. Inputs into the discounted cash flow analysis include prepayment assumptions for structured securities, default rates and recoverability rates based on credit rating. The allowance for any security is limited to the amount that the security’s fair value is below amortized cost. As of March 31, 2026, the discounted cash flow analysis resulted in an allowance for credit losses on 8 securities. The following table presents changes in the allowance for expected credit losses on available-for-sale securities: 13 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ (in thousands) 2026 2025 Beginning balance ​ $ 828 ​ $ 197 ​ Increase to allowance from securities for which credit losses were not previously recorded ​ ​ 24 ​ ​ 21 ​ Reduction from securities sold during the period ​ ​ ( 65 ) ​ ​ — ​ Reductions from intent to sell securities ​ ​ ( 180 ) ​ ​ — ​ Net increase (decrease) from securities that had an allowance at the beginning of the period ​ ​ ( 69 ) ​ ​ ( 61 ) ​ Balance as of March 31, ​ $ 538 ​ $ 157 ​ ​ We recognized $ 1 million of losses on securities for which we no longer had the intent to hold until recovery during the first three months of 2026. No such losses were recognized during the first three months of 2025. ​ As of March 31, 2026, in addition to the securities included in the allowance for credit losses, the fixed income portfolio contained 1,328 securities with an unrealized loss position for which an allowance for credit losses had not been recorded. The $ 156 million in associated unrealized losses represents 4 percent of the fixed income portfolio’s cost basis and 3 percent of total invested assets. Isolated to these securities, unrealized losses increased through the first three months of 2026, as interest rates increased during the period. Of the total 1,328 securities, 777 have been in an unrealized loss position for 12 consecutive months or longer. The following table illustrates the total value of fixed income securities that were in an unrealized loss position as of March 31, 2026 and December 31, 2025 after factoring in the allowance for credit losses. All fixed income securities continue to pay the expected coupon payments and we believe we will recover the amortized cost basis of available-for-sale securities that remain in an unrealized loss position. 14 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ December 31, 2025 (in thousands) < 12 Mos. 12 Mos. & Greater Total < 12 Mos. 12 Mos. & Greater Total U.S. government ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 13,965 ​ $ 61,176 ​ $ 75,141 ​ $ 8,610 ​ $ 80,088 ​ $ 88,698 Amortized cost ​ ​ 14,113 ​ ​ 62,084 ​ ​ 76,197 ​ ​ 8,620 ​ ​ 80,997 ​ ​ 89,617 Unrealized loss ​ $ ( 148 ) ​ $ ( 908 ) ​ $ ( 1,056 ) ​ $ ( 10 ) ​ $ ( 909 ) ​ $ ( 919 ) U.S. agency ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 7,741 ​ $ 8,934 ​ $ 16,675 ​ $ — ​ $ 19,797 ​ $ 19,797 Amortized cost ​ ​ 7,923 ​ ​ 9,008 ​ ​ 16,931 ​ ​ — ​ ​ 19,926 ​ ​ 19,926 Unrealized loss ​ $ ( 182 ) ​ $ ( 74 ) ​ $ ( 256 ) ​ $ — ​ $ ( 129 ) ​ $ ( 129 ) Non-U.S. government ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 7,210 ​ $ 4,204 ​ $ 11,414 ​ $ — ​ $ 4,244 ​ $ 4,244 Amortized cost ​ ​ 7,310 ​ ​ 4,802 ​ ​ 12,112 ​ ​ — ​ ​ 4,802 ​ ​ 4,802 Unrealized Loss ​ $ ( 100 ) ​ $ ( 598 ) ​ $ ( 698 ) ​ $ — ​ $ ( 558 ) ​ $ ( 558 ) Agency MBS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 238,880 ​ $ 197,811 ​ $ 436,691 ​ $ 34,783 ​ $ 239,581 ​ $ 274,364 Amortized cost ​ ​ 241,035 ​ ​ 226,470 ​ ​ 467,505 ​ ​ 34,917 ​ ​ 267,839 ​ ​ 302,756 Unrealized loss ​ $ ( 2,155 ) ​ $ ( 28,659 ) ​ $ ( 30,814 ) ​ $ ( 134 ) ​ $ ( 28,258 ) ​ $ ( 28,392 ) ABS/CMBS/MBS* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 354,186 ​ $ 136,541 ​ $ 490,727 ​ $ 110,600 ​ $ 142,903 ​ $ 253,503 Amortized cost ​ ​ 356,597 ​ ​ 151,784 ​ ​ 508,381 ​ ​ 110,826 ​ ​ 157,989 ​ ​ 268,815 Unrealized loss ​ $ ( 2,411 ) ​ $ ( 15,243 ) ​ $ ( 17,654 ) ​ $ ( 226 ) ​ $ ( 15,086 ) ​ $ ( 15,312 ) Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 517,300 ​ $ 477,322 ​ $ 994,622 ​ $ 146,177 ​ $ 545,897 ​ $ 692,074 Amortized cost ​ ​ 525,093 ​ ​ 508,114 ​ ​ 1,033,207 ​ ​ 148,444 ​ ​ 571,560 ​ ​ 720,004 Unrealized loss ​ $ ( 7,793 ) ​ $ ( 30,792 ) ​ $ ( 38,585 ) ​ $ ( 2,267 ) ​ $ ( 25,663 ) ​ $ ( 27,930 ) Municipal ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 26,282 ​ $ 301,492 ​ $ 327,774 ​ $ 3,759 ​ $ 324,235 ​ $ 327,994 Amortized cost ​ ​ 26,625 ​ ​ 368,295 ​ ​ 394,920 ​ ​ 3,789 ​ ​ 391,400 ​ ​ 395,189 Unrealized loss ​ $ ( 343 ) ​ $ ( 66,803 ) ​ $ ( 67,146 ) ​ $ ( 30 ) ​ $ ( 67,165 ) ​ $ ( 67,195 ) Total fixed income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 1,165,564 ​ $ 1,187,480 ​ $ 2,353,044 ​ $ 303,929 ​ $ 1,356,745 ​ $ 1,660,674 Amortized cost ​ ​ 1,178,696 ​ ​ 1,330,557 ​ ​ 2,509,253 ​ ​ 306,596 ​ ​ 1,494,513 ​ ​ 1,801,109 Unrealized loss ​ $ ( 13,132 ) ​ $ ( 143,077 ) ​ $ ( 156,209 ) ​ $ ( 2,667 ) ​ $ ( 137,768 ) ​ $ ( 140,435 ) * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities ​ The following table shows the composition of the fixed income securities in unrealized loss positions, after factoring in the allowance for credit losses, at March 31, 2026 by the National Association of Insurance Commissioners (NAIC) rating and the generally equivalent Standard & Poor’s (S&P) and Moody’s ratings. The vast majority of the securities are rated by S&P and/or Moody’s. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equivalent ​ Equivalent ​ (dollars in thousands) ​ ​ ​ NAIC S&P Moody’s ​ Amortized ​ ​ ​ ​ Unrealized ​ Percent ​ Rating Rating Rating Cost Fair Value Loss to Total ​ 1 ​ AAA/AA/A ​ Aaa/Aa/A ​ $ 1,987,281 ​ $ 1,850,834 ​ $ ( 136,447 ) ​ 87.3 % 2 ​ BBB ​ Baa ​ ​ 423,761 ​ ​ 407,998 ​ ​ ( 15,763 ) ​ 10.1 % 3 ​ BB ​ Ba ​ ​ 50,929 ​ ​ 49,650 ​ ​ ( 1,279 ) ​ 0.8 % 4 ​ B ​ B ​ ​ 43,657 ​ ​ 41,522 ​ ​ ( 2,135 ) ​ 1.4 % 5 ​ CCC ​ Caa ​ ​ 3,625 ​ ​ 3,040 ​ ​ ( 585 ) ​ 0.4 % 6 ​ CC or lower ​ Ca or lower ​ ​ — ​ ​ — ​ ​ — ​ 0.0 % ​ ​ ​ ​ Total ​ $ 2,509,253 ​ $ 2,353,044 ​ $ ( 156,209 ) ​ 100.0 % ​ Other Invested Assets ​ We had $ 61 million of other invested assets at March 31, 2026, compared to $ 59 million at December 31, 2025. Other invested assets include investments in low-income housing tax credit partnerships (LIHTC) and historic tax credit partnerships (HTC), membership in the Federal Home Loan Bank of Chicago (FHLBC), and investments in private funds. Our LIHTC and 15 ​ Table of Contents HTC investments are carried at amortized cost and our investment in FHLBC stock is carried at cost. Due to the nature of the LIHTC, HTC and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investment’s net asset value. ​ Our LIHTC interests were $ 13 million at March 31, 2026, compared to $ 14 million at December 31, 2025. Our LIHTC interests recognized amortization of less than $ 1 million as a component of income tax expense and a total tax benefit of $ 1 million during the first quarter of 2026 and 2025. Our unfunded commitment for our LIHTC investments was $ 8 million at March 31, 2026 and will be paid out in installments through 2040. ​ Our HTC investment had a balance of $ 10 million at March 31, 2026, compared to $ 11 million at December 31, 2025. Our HTC investment recognized less than $ 1 million of amortization as a component of income tax expense and a total tax benefit of $ 1 million during the first quarter of 2026, the same as in 2025. Our unfunded commitment for our HTC investments was $ 4 million at March 31, 2026 and will be paid out in installments through 2027. ​ At March 31, 2026, $ 52 million of investments were pledged as collateral with the FHLBC to ensure timely access to the secured lending facility that ownership of FHLBC stock provides. At March 31, 2026, $ 50 million of borrowings were outstanding with the FHLBC. ​ Our investments in private funds totaled $ 19 million at March 31, 2026, up from $ 18 million at December 31, 2025, and had $ 2 million of associated unfunded commitments at March 31, 2026. Our interest in private funds is generally restricted from being transferred or otherwise redeemed without prior consent by the respective entities, and the timed dissolution of the partnerships would trigger redemption. ​ Investments in Unconsolidated Investees ​ Our investment in Prime Holdings Insurance Services, Inc. was $ 56 million at March 31, 2026, compared to $ 54 million at December 31, 2025. ​ Cash and Short-Term Investments ​ Cash consists of uninvested balances in bank accounts. Short-term investments primarily consist of money market funds and fixed income securities with a contractual maturity of one year or less at the time of acquisition. Short-term investments are carried at cost, which approximates fair value. We had a cash and short-term investment balance of $ 49 million and $ 386 million, respectively, at March 31, 2026, compared to $ 52 million and $ 121 million, respectively, at December 31, 2025. ​ 3. DEBT ​ Outstanding debt totaled $ 347 million as of March 31, 2026, consisting of $ 297 million of long-term debt, net of unamortized discount and debt issuance costs, and $ 50 million of short-term debt. ​ On March 3, 2026, we completed a public debt offering, issuing $ 300 million of senior notes maturing June 1, 2036 , with interest payable semi-annually at a rate of 5.375 percent. The notes were issued at a discount, resulting in proceeds of $ 297 million after deducting the discount and issuance costs. The discount is being amortized to interest expense over the life of the debt using the effective interest method. The average rate on long-term debt was 5.38 percent for the three months ended March 31, 2026. The estimated fair value of the senior notes was $ 288 million as of March 31, 2026. The fair value of our long-term debt is based on limited observable prices and is therefore classified as a Level 2 liability within the fair value hierarchy. ​ We repaid $ 50 million that was outstanding under our revolving credit facility with PNC Bank, N.A. (PNC) on February 20, 2026, which had been drawn in 2023. The borrowing carried an adjustable interest rate of 5.27 percent as of February 20, 2026. The credit facility with PNC, which was entered into during the first quarter of 2023, provided borrowing capacity of $ 100 million and had a three -year term that was scheduled to expire on May 29, 2026 . On February 26, 2026, we entered into an amended and restated credit agreement with PNC to extend the maturity date to February 26, 2031 . The amended agreement provides borrowing capacity of $ 150 million and may be increased to $ 200 million under certain conditions. ​ On November 12, 2025, we borrowed $ 50 million from the Federal Home Loan Bank of Chicago (FHLBC), which replaced the $ 50 million borrowed in 2024. The borrowing matures on November 12, 2026 , but may be repaid early at set quarterly dates. Interest is paid monthly at an annualized rate of 4.21 percent. 16 ​ Table of Contents ​ Due to the lack of marketability and short tenor of our short-term borrowings, its fair value approximates carrying value. The average rate on short-term debt was 4.61 percent during the first quarter of 2026, compared to 5.18 percent during the first quarter of 2025. The weighted average interest rate on short-term debt outstanding was 4.21 percent as of March 31, 2026. ​ 4. HISTORICAL LOSS AND LAE DEVELOPMENT ​ The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the first three months of 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ ​ Ended March 31, (in thousands) 2026 2025 Unpaid losses and LAE at beginning of year ​ ​ ​ ​ ​ ​ Gross ​ $ 2,886,819 ​ $ 2,693,470 Ceded ​ ​ ( 746,798 ) ​ ​ ( 755,425 ) Net ​ $ 2,140,021 ​ $ 1,938,045 ​ ​ ​ ​ ​ ​ ​ Increase (decrease) in incurred losses and LAE ​ ​ ​ ​ ​ ​ Current accident year ​ $ 228,708 ​ $ 208,243 Prior accident years ​ ​ ( 35,464 ) ​ ​ ( 31,005 ) Total incurred ​ $ 193,244 ​ $ 177,238 ​ ​ ​ ​ ​ ​ ​ Loss and LAE payments for claims incurred ​ ​ ​ ​ ​ ​ Current accident year ​ $ ( 10,045 ) ​ $ ( 9,827 ) Prior accident years ​ ​ ( 135,794 ) ​ ​ ( 115,040 ) Total paid ​ $ ( 145,839 ) ​ $ ( 124,867 ) ​ ​ ​ ​ ​ ​ ​ Net unpaid losses and LAE at March 31, ​ $ 2,187,426 ​ $ 1,990,416 ​ ​ ​ ​ ​ ​ ​ Unpaid losses and LAE at March 31, ​ ​ ​ ​ ​ ​ Gross ​ $ 2,927,929 ​ $ 2,743,245 Ceded ​ ​ ( 740,503 ) ​ ​ ( 752,829 ) Net ​ $ 2,187,426 ​ $ 1,990,416 ​ For the first three months of 2026, incurred losses and LAE included $ 35 million of favorable development on prior years’ loss reserves, primarily related to accident years 2018, 2019, 2022, 2024 and 2025. Favorable development was driven by commercial property, marine, executive products, professional services and commercial transportation. While personal umbrella experienced adverse development, no products had significant adverse development. ​ For the first three months of 2025, incurred losses and LAE included $ 31 million of favorable development on prior years’ loss reserves, primarily related to accident years 2019 through 2022 and 2024. Favorable development was driven by marine, surety, commercial property, commercial excess liability, general liability and our mortgage reinsurance program. Personal umbrella and commercial transportation had adverse development related to auto exposures, but no products experienced significant adverse development. ​ 5. INCOME TAXES ​ Our effective tax rate for the three months ended March 31, 2026 was 18.5 percent, compared to 19.6 percent for the same period in 2025. Effective rates are dependent upon components of pretax earnings and the related tax effects. The decrease in the effective tax rate for the three-month period in 2026 was primarily due to higher levels of tax credit utilization. ​ Income tax expense attributable to income from operations for the three-month periods ended March 31, 2026 and 2025 differed from the amounts computed by applying the U.S. federal tax rate of 21 percent to pretax income by the items detailed in the table below. In interim periods, income taxes are adjusted to reflect the effective tax rate we anticipate for the year, with adjustments flowing through the other items, net line. ​ 17 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended March 31, ​ ​ ​ 2026 ​ 2025 ​ (in thousands) Amount % Amount % U.S. federal statutory tax rate ​ $ 14,142 ​ 21.0 % $ 16,513 ​ 21.0 % State and local income taxes, net of federal income tax effect ​ ​ 538 ​ 0.8 % ​ 555 ​ 0.7 % Tax credit ​ ​ ( 2,766 ) ​ ( 4.1 ) % ​ ( 645 ) ​ ( 0.8 ) % Nontaxable or Nondeductible Items: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Excess tax benefit on share-based compensation ​ ​ ( 1,851 ) ​ ( 2.7 ) % ​ ( 2,750 ) ​ ( 3.5 ) % Other nontaxable or nondeductible items ​ ​ 2,393 ​ 3.5 % ​ 1,744 ​ 2.2 % Total tax expense ​ $ 12,456 ​ 18.5 % $ 15,417 ​ 19.6 % ​ We have recorded our deferred tax assets and liabilities using the statutory federal tax rate of 21 percent. We believe it is more likely than not that all deferred tax assets will be recovered, given the carry back availability as well as the result of future operations, which we believe will generate sufficient taxable income to realize the deferred tax asset. ​ ​ 6. STOCK BASED COMPENSATION ​ Our 2015 RLI Corp. Long-Term Incentive Plan (2015 LTIP) was in place from 2015 to 2023. The 2015 LTIP provided for equity-based compensation, including stock options and restricted stock units, up to a maximum of 8,000,000 shares of common stock (subject to adjustment for changes in our capitalization and other events). Between 2015 and 2023, we granted 6,582,776 awards under the 2015 LTIP. The 2015 LTIP was replaced in 2023. ​ In 2023, our shareholders approved the 2023 RLI Corp. Long-Term Incentive Plan (2023, LTIP), which provides for equity-based compensation. In conjunction with the adoption of the 2023 LTIP, effective May 4, 2023, awards are no longer granted under the 2015 LTIP. Awards under the 2023 LTIP may be in the form of restricted stock, restricted stock units, stock options (incentive or non-qualified), stock appreciation rights, performance units as well as other stock-based awards. Eligibility under the 2023 LTIP is limited to employees, directors, consultants and independent contractors of the Company or any affiliate. The granting of awards under the 2023 LTIP is solely at the discretion of the Human Capital and Compensation Committee of the board of directors or its delegate. The maximum number of shares of common stock available for distribution under the 2023 LTIP is 8,009,782 shares (subject to adjustment for changes in our capitalization and other events). Since the plan’s approval in 2023, we have granted 1,225,263 awards under the 2023 LTIP, including 44,625 thus far in 2026. ​ Compensation expense is based on the probable number of awards expected to vest. The total compensation expense related to equity awards was $ 2 million in the three-month periods ended March 31, 2026 and 2025. The total income tax benefit was less than $ 1 million for the three-month periods ended March 31, 2026 and 2025. Total unrecognized compensation expense relating to outstanding and unvested awards was $ 5 million, which will be recognized over the weighted average vesting period of 2.47 years. ​ Stock Options ​ Under the 2023 LTIP, as under the 2015 LTIP, we grant stock options for shares with an exercise price equal to the fair market value of the shares at the date of grant (subject to adjustments for changes in our capitalization, special dividends and other events as set forth in such plans). Options generally vest and become exercisable over a five-year period and expire eight years after grant. ​ For most participants, the requisite service period and vesting period will be the same. For participants who are retirement eligible, defined by the plan as those individuals whose age and years of service equals 75 or greater, the requisite service period is deemed to be met and options are immediately expensed on the date of grant. For participants who will become retirement eligible during the vesting period, the requisite service period over which expense is recognized is the period between the grant date and the attainment of retirement eligibility. Shares issued upon option exercise are newly issued shares. ​ 18 ​ Table of Contents The following tables summarize option activity for the three-month period ended March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Aggregate ​ ​ ​ ​ Weighted ​ Average ​ Intrinsic ​ ​ ​ ​ Average ​ Remaining ​ Value ​ Options Exercise Price Contractual Life (in 000’s) Outstanding options at January 1, 2026 ​ 2,986,614 ​ $ 55.69 ​ ​ ​ ​ ​ Options granted ​ 44,375 ​ ​ 58.74 ​ ​ ​ ​ ​ Options exercised ​ ( 60,486 ) ​ ​ 39.38 ​ ​ ​ ​ ​ Options canceled/forfeited ​ ( 2,000 ) ​ ​ 65.89 ​ ​ ​ ​ ​ Outstanding options at March 31, 2026 ​ 2,968,503 ​ $ 56.06 ​ 3.86 ​ $ 17,285 Exercisable options at March 31, 2026 ​ 1,894,941 ​ $ 50.46 ​ 2.77 ​ $ 16,509 ​ The intrinsic value of options exercised, which is the difference between the fair value and the exercise price, was $ 1 million and $ 2 million during the first three months of 2026 and 2025, respectively. ​ The fair value of options was estimated using a Black-Scholes based option pricing model with the following weighted average grant-date assumptions and weighted average fair values as of March 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 2025 ​ Weighted-average fair value of grants ​ $ 11.35 ​ $ 16.09 ​ Risk-free interest rates ​ ​ 3.70 % ​ 4.18 % Dividend yield ​ ​ 2.81 % ​ 2.31 % Expected volatility ​ ​ 23.21 % ​ 23.13 % Expected option life ​ ​ 5.16 years ​ 5.15 years ​ The risk-free rate was determined based on U.S. treasury yields that most closely approximated the options’ expected life. The dividend yield was determined based on the average annualized quarterly dividends paid during the most recent five-year period and incorporated a consideration for special dividends paid in recent history. The expected volatility was calculated based on the median of the rolling volatilities for the expected life of the options. The expected option life was determined based on historical exercise behavior and the assumption that all outstanding options will be exercised at the midpoint of the current date and remaining contractual term, adjusted for the demographics of the current year’s grant. ​ Restricted Stock Units ​ In addition to stock options, restricted stock units (RSUs) are granted with a value equal to the closing stock price of the Company’s stock on the dates the units are granted. For employees, these units generally have a three-year cliff vesting, but have an accelerated vesting feature for participants who are retirement eligible, defined by the plan as those individuals whose age and years of service equals 75 or greater. For directors, these units vest on the earlier of one year from the date of grant or the next annual shareholders meeting. In addition, the RSUs have dividend participation, which accrue as additional units and are settled with granted stock units at the end of the vesting period. The total fair value of restricted stock units that vested was less than $ 1 million during the first three months of 2026, while no RSUs vested in the first three months of 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ RSUs Fair Value Nonvested at January 1, 2026 ​ 93,559 ​ $ 71.65 Granted ​ 250 ​ ​ 62.78 Reinvested ​ 234 ​ ​ 61.48 Vested ​ ( 3,715 ) ​ ​ 68.03 Nonvested at March 31, 2026 ​ 90,328 ​ $ 71.75 ​ ​ 19 ​ Table of Contents 7. OPERATING SEGMENT INFORMATION The Company’s chief operating decision maker (CODM) is the chief executive officer. The Company’s CODM assesses the segments’ performance by using earnings before income taxes (underwriting income) and the combined ratio. Underwriting income and combined ratio are analyzed at the segment level and influence how resources are allocated. Decisions are made based on what is likely to provide the best long-term return to the Company. ​ Amortization of deferred acquisition costs represents the recognition of commission and premium taxes over the life of insurance polices, in proportion to premium revenue recognized. The other policy acquisition costs line item includes other expenses associated with underwriting, but that cannot be specifically associated with the successful acquisition of a policy, including, but not limited to, employment costs for underwriters and underwriting support as well as costs for policy acquisition systems. Insurance operating expenses reflect allocated costs from various support departments, such as corporate technology, accounting, human resources and facilities, among others. ​ Net investment income consists of the interest and dividend income streams from our investments in fixed income and equity securities. Interest expense represents the cost of debt and lines of credit. General corporate expenses include director and shareholder relation costs and other compensation-related expenses incurred for the benefit of the corporation, but not attributable to the operations of our insurance segments. Investee earnings represents our 23 percent share in earnings of Prime Holdings Insurance Services, Inc., a privately held insurance company which specializes in hard-to-place risks. Assets, and the revenues and expenses associated with investing and financing activities, are not managed at the segment level and therefore are not allocated to segments. ​ All segment revenues are from external customers and all long-lived assets are held domestically. We have no material foreign operations or customer concentrations and have no intersegment revenues. ​ The following table summarizes revenues by major product type within each operating segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Net Premiums Earned ​ Ended March 31, (in thousands) 2026 2025 Casualty ​ ​ ​ ​ ​ ​ Commercial excess and personal umbrella ​ $ 124,216 ​ $ 103,209 Commercial transportation ​ ​ 30,694 ​ ​ 30,259 Professional services ​ ​ 27,949 ​ ​ 26,587 General liability ​ ​ 26,208 ​ ​ 26,718 Small commercial ​ ​ 19,322 ​ ​ 19,915 Executive products ​ ​ 5,873 ​ ​ 5,943 Other casualty ​ ​ 14,304 ​ ​ 16,417 Total ​ $ 248,566 ​ $ 229,048 Property ​ ​ ​ ​ ​ ​ Commercial property ​ $ 72,960 ​ $ 82,812 Marine ​ ​ 39,219 ​ ​ 37,709 Other property ​ ​ 14,199 ​ ​ 12,023 Total ​ $ 126,378 ​ $ 132,544 Surety ​ ​ ​ ​ ​ ​ Transactional ​ $ 13,295 ​ $ 12,660 Commercial ​ ​ 12,635 ​ ​ 12,776 Contract ​ ​ 10,512 ​ ​ 11,317 Total ​ $ 36,442 ​ $ 36,753 Grand Total ​ $ 411,386 ​ $ 398,345 ​ 20 ​ Table of Contents The following tables present our operating results by segment, as evaluated by the CODM. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended March 31, 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ Casualty ​ ​ Property ​ ​ Surety ​ ​ Total Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net premiums earned ​ $ 248,566 ​ $ 126,378 ​ $ 36,442 ​ $ 411,386 Net investment income ​ ​ - ​ ​ - ​ ​ - ​ ​ 42,321 Net realized gains ​ ​ - ​ ​ - ​ ​ - ​ ​ 9,559 Net unrealized gains (losses) on equity securities ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 39,396 ) Consolidated revenue ​ $ 248,566 ​ $ 126,378 ​ $ 36,442 ​ $ 423,870 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Losses and settlement expenses ​ $ 152,832 ​ $ 33,854 ​ $ 6,558 ​ ​ ​ Amortization of deferred acquisition costs ​ ​ 47,482 ​ ​ 25,342 ​ ​ 12,735 ​ ​ ​ Other policy acquisition costs ​ ​ 24,232 ​ ​ 10,813 ​ ​ 11,471 ​ ​ ​ Insurance operating expenses ​ ​ 16,727 ​ ​ 8,184 ​ ​ 3,369 ​ ​ ​ Segment earnings before income taxes ​ $ 7,293 ​ $ 48,185 ​ $ 2,309 ​ $ 57,787 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ $ 1,597 ​ $ 538 ​ $ 365 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended March 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ Casualty ​ ​ Property ​ ​ Surety ​ ​ Total Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net premiums earned ​ $ 229,048 ​ $ 132,544 ​ $ 36,753 ​ $ 398,345 Net investment income ​ ​ - ​ ​ - ​ ​ - ​ ​ 36,726 Net realized gains ​ ​ - ​ ​ - ​ ​ - ​ ​ 14,912 Net unrealized gains (losses) on equity securities ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 42,318 ) Consolidated revenue ​ $ 229,048 ​ $ 132,544 ​ $ 36,753 ​ $ 407,665 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Losses and settlement expenses ​ $ 145,835 ​ $ 32,725 ​ $ ( 1,322 ) ​ ​ ​ Amortization of deferred acquisition costs ​ ​ 42,903 ​ ​ 26,976 ​ ​ 12,602 ​ ​ ​ Other policy acquisition costs ​ ​ 22,669 ​ ​ 7,957 ​ ​ 10,580 ​ ​ ​ Insurance operating expenses ​ ​ 15,570 ​ ​ 7,971 ​ ​ 3,333 ​ ​ ​ Segment earnings before income taxes ​ $ 2,071 ​ $ 56,915 ​ $ 11,560 ​ $ 70,546 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ $ 1,505 ​ $ 498 ​ $ 310 ​ ​ ​ ​ The following table reconciles segment earnings before income taxes to earnings before income taxes. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ ​ ​ Ended March 31, ​ (in thousands) 2026 2025 Reconciliation of earnings before income taxes ​ ​ ​ ​ ​ ​ ​ Segment earnings before income taxes ​ $ 57,787 ​ $ 70,546 ​ Net investment income ​ ​ 42,321 ​ ​ 36,726 ​ Net realized gains ​ ​ 9,559 ​ ​ 14,912 ​ Net unrealized gains (losses) on equity securities ​ ​ ( 39,396 ) ​ ​ ( 42,318 ) ​ Interest expense on debt ​ ​ ( 2,353 ) ​ ​ ( 1,335 ) ​ General corporate expenses ​ ​ ( 2,724 ) ​ ​ ( 2,948 ) ​ Equity in earnings of unconsolidated investees ​ ​ 2,147 ​ ​ 3,048 ​ Earnings before income taxes ​ $ 67,341 ​ $ 78,631 ​ ​ ​ ​ ​ 21 ​ Table of Contents 8. LEASES ​ Right-of-use (ROU) assets are included in the other assets line item and lease liabilities are included in the other liabilities line item of the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease ROU assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements may include options to extend or terminate. The options are exercised at our discretion and are included in operating lease liabilities if it is reasonably certain the option will be exercised. Lease agreements have lease and non-lease components, which are accounted for as a single lease component. Operating lease costs for future minimum lease payments are recognized on a straight-line basis over the lease terms. Variable lease costs are expensed in the period in which the obligations are incurred. Sublease income is recognized on a straight-line basis over the sublease term. ​ The Company’s operating lease obligations are for branch office facilities. The components of lease expense and other lease-related information, as of and during the three-month periods ended March 31, 2026 and 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ ​ ​ Ended March 31, ​ (in thousands) 2026 2025 Operating lease cost ​ $ 1,163 ​ $ 1,150 ​ Variable lease cost ​ ​ 341 ​ ​ 289 ​ Sublease income ​ ​ ( 42 ) ​ ​ ( 42 ) ​ Total lease cost ​ $ 1,462 ​ $ 1,397 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for amounts included in measurement of lease liabilities ​ ​ ​ ​ ​ ​ ​ Operating cash outflows from operating leases ​ $ 1,251 ​ $ 1,229 ​ ​ ​ ​ ​ ​ ​ ​ ​ ROU assets obtained in exchange for new operating lease liabilities ​ $ 3,486 ​ $ 13 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) March 31, 2026 December 31, 2025 ​ Operating lease ROU assets ​ $ 15,586 ​ $ 13,117 ​ Operating lease liabilities ​ $ 17,134 ​ $ 14,752 ​ Weighted-average remaining lease term - operating leases ​ ​ 5.84 years ​ 5.93 years Weighted-average discount rate - operating leases ​ ​ 3.44 % ​ 3.78 % ​ Future minimum lease payments under non-cancellable leases as of March 31, 2026 were as follows: ​ ​ ​ ​ ​ (in thousands) March 31, 2026 2026 ​ $ 3,448 2027 ​ ​ 4,087 2028 ​ ​ 2,619 2029 ​ ​ 2,450 2030 ​ ​ 1,870 2031 ​ ​ 1,815 Thereafter ​ ​ 3,132 Total future minimum lease payments ​ $ 19,421 Less imputed interest ​ ​ ( 2,287 ) Total operating lease liability ​ $ 17,134 ​ ​