What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-07 compared with 2025-05-07 · 240 added, 132 removed, 632 unchanged (37% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

($ in thousands, except share and per share amounts) (Unaudited)

Fixed maturity securities, available-for-sale, at fair value (amortized cost of $ 1,410,269 and $ 1,320,266 , respectively)

Fixed maturity securities, available-for-sale, at fair value (net of allowance for credit losses of $ 6,150 and $ 0 , respectively) (amortized cost of $ 1,638,973 and $ 1,320,266 , respectively)

$ 1,629,464 $ 1,292,218

39 unchanged sentences

AND COMPREHENSIVE INCOME (UNAUDITED)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

($ in thousands, except share and per share amounts) 2025 2024 2025 2024

2 unchanged sentences

Net investment income 18,589 22,034 37,927 40,331

Net investment gains 6,841 8,303

Other income 13 —

Net investment gains (losses) 3,205 ( 1,721 ) 10,039 6,582

Other income (loss) 7 ( 7 ) 20 ( 7 )

Total revenues 319,903 279,942 648,430 544,910

26 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

Three months ended March 31,

Three months ended June 30,

($ in thousands, except share amounts) 2025 2024

Common shares:

Balance at beginning of period 40,402,879 39,995,027

Issuance of shares 83,777 101,105

Balance at June 30 40,486,656 40,096,132

Common stock:

Balance at beginning of period $ 404 $ 400

Issuance of common stock 1 1

Balance at June 30 $ 405 $ 401

Additional paid-in capital:

Balance at beginning of period $ 721,186 $ 711,309

Issuance of common stock 2,973 2,233

Balance at June 30 $ 724,159 $ 713,542

Stock notes receivable:

Balance at beginning of period $ — $ ( 5,234 )

Employee equity transactions — 1

Balance at June 30 $ — $ ( 5,233 )

Accumulated other comprehensive loss:

Balance at beginning of period $ ( 10,047 ) $ ( 29,279 )

Other comprehensive income (loss), net of tax 7,381 ( 1,857 )

Balance at June 30 $ ( 2,666 ) $ ( 31,136 )

Retained earnings:

Balance at beginning of period $ 139,178 $ 15,076

Net income 38,839 30,970

Balance at June 30 $ 178,017 $ 46,046

Total stockholders’ equity $ 899,915 $ 723,620

The accompanying notes are an integral part of the consolidated financial statements.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

Six months ended June 30,

($ in thousands, except share amounts) 2025 2024

Common shares:

Balance at beginning of year 40,127,908 39,863,756

Issuance of shares 358,748 232,376

Balance at March 31 40,402,879 39,995,027

Balance at June 30 40,486,656 40,096,132

Common stock:

1 unchanged sentence

Issuance of common stock 4 2

Balance at March 31 $ 404 $ 400

Balance at June 30 $ 405 $ 401

Additional paid-in capital:

1 unchanged sentence

Issuance of common stock 5,561 2,687

Balance at March 31 $ 721,186 $ 711,309

Balance at June 30 $ 724,159 $ 713,542

Stock notes receivable:

1 unchanged sentence

Employee equity transactions — 329

Balance at March 31 $ — $ ( 5,234 )

Balance at June 30 $ — $ ( 5,233 )

Accumulated other comprehensive loss:

1 unchanged sentence

Other comprehensive income (loss), net of tax 19,454 ( 8,183 )

Balance at March 31 $ ( 10,047 ) $ ( 29,279 )

Balance at June 30 $ ( 2,666 ) $ ( 31,136 )

Retained earnings (accumulated deficit):

1 unchanged sentence

Net income 80,897 67,754

Balance at March 31 $ 139,178 $ 15,076

Balance at June 30 $ 178,017 $ 46,046

Total stockholders’ equity $ 899,915 $ 723,620

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three months ended March 31,

Six months ended June 30,

($ in thousands) 2025 2024

7 unchanged sentences

Purchase of equity method investments ( 2,839 ) ( 1,100 )

Purchase of intangible assets and goodwill ( 2,000 ) —

Investment in direct and indirect loans 13,435 14,224

13 unchanged sentences

Payments on long term borrowings and trust preferred — ( 59,794 )

Net cash (used in) provided by financing activities — ( 9,466 )

Net increase (decrease) in cash and cash equivalents and restricted cash ( 4,019 ) 14,933

Net cash used in financing activities — ( 9,465 )

Net increase in cash and cash equivalents and restricted cash 15,639 7,931

Cash and cash equivalents and restricted cash at beginning of period (1)

4 unchanged sentences

Cash paid for interest $ 3,234 $ 4,835

Cash paid for federal income taxes $ 20,330 $ 13,980

(1) The sum of cash and cash equivalents and restricted cash from the consolidated balance sheets

16 unchanged sentences

Actual results could differ materially from these estimates.

The following tables set forth the amortized cost and the fair value by investment category at March 31, 2025 and December 31, 2024:

Updates to Significant Accounting Policies

The following accounting policy has been updated to align with reporting of peer companies.

Available-for-sale

The allowance for credit losses is limited to the amount by which fair value is below amortized cost.

Prior to June 30, 2025, changes in the allowance for credit losses were recognized in net investment income on the consolidated statements of operations.

As of June 30, 2025, changes in the allowance for credit losses are recognized in net investment gains (losses).

Prior periods have been updated to conform to the current period presentation.

Credit losses that are limited by the fair value of the security are recognized in stockholders’ equity, net of taxes, as a component of accumulated other comprehensive (loss) income.

Unrealized losses that are not credit-related continue to be recognized in stockholders’ equity, net of taxes, as a component of accumulated other comprehensive (loss) income.

Held to maturity

Investments in fixed maturity securities that are held-to-maturity are carried at amortized cost net of an allowance for credit losses.

The allowance for credit losses represents the current estimate of expected credit losses.

The Company develops a historical loss rate from Moody’s multi-year cumulative loss rates for asset backed securities.

The historical loss rate is adjusted for current conditions and reasonable and supportable forecasts.

Prior to June 30, 2025, changes in the allowance for credit losses were recognized in net investment income on the consolidated statements of operations.

As of June 30, 2025, changes in the allowance for credit losses are recognized in net investment gains (losses).

Prior periods have been updated to conform to the current period presentation.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth the amortized cost and the fair value by investment category at June 30, 2025 and December 31, 2024:

($ in thousands) Amortized

Losses Allowance for Credit Losses Fair Value

March 31, 2025

June 30, 2025

Fixed maturity securities, available-for-sale:

9 unchanged sentences

Total fixed maturity securities, held-to-maturity $ 35,521 $ 1,856 $ ( 11 ) $ ( 268 ) $ 37,098

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investments (continued)

($ in thousands) Amortized

12 unchanged sentences

Total fixed maturity securities, held-to-maturity $ 39,396 $ — $ ( 436 ) $ ( 243 ) $ 38,717

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at March 31, 2025:

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investments (continued)

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at June 30, 2025:

($ in thousands) Amortized

9 unchanged sentences

Also, changing interest rates, tax considerations or other factors may result in portfolio sales prior to maturity.

The Company’s fixed maturity securities, held-to-maturity, at March 31, 2025 consisted entirely of asset backed securities that were not due at a single maturity date.

At March 31, 2025, the Company had U.S.

The Company’s fixed maturity securities, held-to-maturity, at June 30, 2025 consisted entirely of asset backed securities that were not due at a single maturity date.

At June 30, 2025, the Company had U.S.

government agencies mortgage-backed fixed maturity securities, with a carrying value of approximately $ 65.7 million pledged as collateral for a loan (the “FHLB Loan”) from the Federal Home Loan Bank of Dallas (“FHLB”) pursuant to an Advances and Security Agreement between the Company and FHLB (the “Advances and Security Agreement”).

In accordance with the terms of the FHLB Loan, the Company retains all rights regarding these pledged securities.

At March 31, 2025, the Company had assets with fair values of approximately $ 32.7 million pledged as collateral for the performance obligations under reinsurance agreements.

At June 30, 2025, the Company had assets with fair values of approximately $ 51.5 million pledged as collateral for the performance obligations under reinsurance agreements.

In accordance with the terms of the trust agreements, the Company retains all rights regarding these securities, of which $ 43.7 million are residential mortgage-backed securities, $ 5.6 million of cash and cash equivalents and other assets and $ 2.2 million of short-term investments.

3 unchanged sentences

Investments (continued)

The following tables set forth the gross unrealized losses and the corresponding fair values of investments, aggregated by length of time that individual securities had been in a continuous unrealized loss position as of March 31, 2025 and 2024:

Less than 12 Months 12 Months or More Total

($ in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses

March 31, 2025

June 30, 2025

Fixed maturity securities, available-for-sale:

34 unchanged sentences

Among the factors that management considers for fixed maturity securities are the financial condition of the issuer including receipt of scheduled principal and interest cash flows, and intent to sell, including if it is more likely than not that the Company will be required to sell the investments before recovery.

As of March 31, 2025, the Company had 631 lots of fixed maturity securities in an unrealized loss position.

As of June 30, 2025, the Company had 613 lots of fixed maturity securities in an unrealized loss position.

The Company does not have an intent to sell these securities and it is not more likely than not that the Company will be required to sell these securities before maturity or recovery of its cost basis.

The Company reviewed its investments at March 31, 2025 and determined that no credit impairment existed in the gross unrealized holding losses, due to the reasons discussed below:

The Company reviewed its investments at June 30, 2025 and determined that for two available-for-sale securities in the “corporate securities and miscellaneous” category, credit impairments existed, based on new recovery analysis that showed deteriorating conditions raising credit concerns.

Other than the securities discussed previously, the Company determined that no other credit impairment existed in the gross unrealized holding losses, due to the reasons discussed below:

government securities and municipal securities :

4 unchanged sentences

Therefore, the Company does not consider these impaired securities.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investments (continued)

• Corporate securities and miscellaneous :

5 unchanged sentences

Therefore, the Company does not consider these impaired securities.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investments (continued)

• Residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities :

2 unchanged sentences

Therefore, the Company does not consider these impaired securities.

The following table sets forth the components of net investment gains for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the changes in the allowance for credit losses on available-for-sale securities and held-to-maturity securities during the six months ended June 30, 2025 and 2024:

Fixed Maturity Securities, Available-For-Sale Fixed Maturity Securities, Held-to-Maturity

Balance at December 31, 2024 $ — $ 243

Current period provision for credit losses — 7

Balance at March 31, 2025 $ — $ 250

Current period provision for credit losses 6,150 18

Balance at June 30, 2025 $ 6,150 $ 268

Fixed Maturity Securities, Held-to-Maturity

Balance at December 31, 2023 $ 329

Balance at March 31, 2024 $ 329

Recoveries of amounts previously written off ( 104 )

Balance at June 30, 2024 $ 225

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investments (continued)

The following table sets forth the components of net investment gains (losses) for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

2 unchanged sentences

Equity securities 15,441 493 17,186 1,574

Other 596 104 600 122

Total 16,489 928 18,691 2,526

8 unchanged sentences

Other 5,918 — 10,395 —

Net investment gains

Net investment gains (losses)

$ 3,205 $ ( 1,721 ) $ 10,039 $ 6,582

The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the six months ended June 30, 2025 and 2024:

Six months ended June 30,

($ in thousands) 2025 2024

1 unchanged sentence

Equity securities 67,495 17,760

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investments (continued)

The following table sets forth the components of net investment income for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the components of net investment income for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

10 unchanged sentences

Net investment income $ 18,589 $ 22,034 $ 37,927 $ 40,331

The following table sets forth the change in net unrealized gains (losses) on the Company’s investment portfolio, net of deferred income taxes, included in other comprehensive loss for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investments (continued)

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

2 unchanged sentences

Total $ 7,381 $ ( 1,857 ) $ 19,454 $ ( 8,183 )

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements

21 unchanged sentences

These represent Level 2 fair value inputs.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements (continued)

Fixed maturity securities, available for sale and equity securities classified as Level 3

3 unchanged sentences

This rate represents Level 3 fair value inputs.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements (continued)

The following table sets forth the range of the discount rate as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

The following table sets forth the range of the discount rate as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

High 10.54 % 8.00 %

6 unchanged sentences

The spread represents the incremental cost of capital based on the borrower’s ability to make future payments and the value of the collateral relative to the loan balance and is subject to judgement and uncertainty.

The following table sets forth the range and weighted average, weighted by relative fair value, of the spread as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

The following table sets forth the range and weighted average, weighted by relative fair value, of the spread as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

High 9.34 % 10.00 %

3 unchanged sentences

Included in other long-term investments is an investment in a limited partnership with RedBird Capital Partners, which invests in Bishop Street Underwriters, LLC (“Bishop Street”), a managing general agent (MGA).

The investment had a fair value of $ 32.6 million at March 31, 2025, which was determined using the net asset value.

The investment had a fair value of $ 41.4 million at June 30, 2025, which was determined using the net asset value.

The Company employs procedures to assess the reasonableness of the fair value of the investment including obtaining and reviewing the audited financial statements.

The unfunded commitment related to the investment was $ 24.4 million at March 31, 2025.

The unfunded commitment related to the investment was $ 21.5 million at June 30, 2025.

The Company may sell its interest in the investment with the appropriate prior written notice and approval by the general partner.

4 unchanged sentences

Fair Value Measurements (continued)

The following tables set forth the Company’s investments within the fair value hierarchy at March 31, 2025 and December 31, 2024:

March 31, 2025

The following tables set forth the Company’s investments within the fair value hierarchy at June 30, 2025 and December 31, 2024:

June 30, 2025

($ in thousands) Level 1 Level 2 Level 3 Total

44 unchanged sentences

Total $ 406,505 $ 1,188,976 $ 143,127 $ 1,738,608

The following tables set forth the changes in the fair value of instruments carried at fair value with a Level 3 measurement during the three months ended March 31, 2025 and 2024:

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements (continued)

The following tables set forth the changes in the fair value of instruments carried at fair value with a Level 3 measurement during the six months ended June 30, 2025 and 2024:

($ in thousands) Fixed Maturity Securities, Available-For-Sale Mortgage Loans

Balance at December 31, 2024 $ 77,920 $ 26,490

Total losses for the period recognized in net investment gains ( 110 ) ( 66 )

Total losses for the period recognized in net investment gains (losses) ( 110 ) ( 66 )

Issuances — 5

4 unchanged sentences

Balance at March 31, 2025 $ 83,457 $ 16,012

Total losses for the period recognized in net investment gains attributable to the change in unrealized gains or losses relating to assets held as of period end $ — $ ( 84 )

Total losses for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end $ — $ ( 84 )

Total losses for the period recognized in net investment (losses) gains ( 4,081 ) 330

Issuances — 8

Settlements — ( 6,182 )

Transfers into Level 3 6,144 —

Purchases 8,838

Sales/Disposals ( 237 ) —

Total unrealized gains for the period recognized in accumulated comprehensive income (loss) 747 —

Balance at June 30, 2025 $ 94,868 $ 10,168

Total gains for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end $ — $ 92

($ in thousands) Mortgage Loans

Balance at December 31, 2023 $ 50,070

Total gains for the period recognized in net investment gains 971

Total gains for the period recognized in net investment gains (losses) 971

Issuances 187

1 unchanged sentence

Balance at March 31, 2024 $ 44,309

Total gains for the period recognized in net investment gains attributable to the change in unrealized gains or losses relating to assets held as of period end $ 952

Total gains for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end $ 952

Total losses for the period recognized in net investment gains (losses) ( 1,030 )

Issuances 449

Settlements ( 58 )

Balance at June 30, 2024 $ 43,670

Total losses for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end $ ( 1,031 )

The transfers into Level 3 during the three and six months ended June 30, 2025 were the result of securities that began receiving valuations from asset managers that utilized unobservable inputs at the end of the period.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

11 unchanged sentences

Fixed maturity securities, held-to-maturity consists of senior and junior notes with target rates of return.

As of March 31, 2025, the Company determined the fair value of these instruments using the income approach utilizing inputs that are unobservable (Level 3).

As of June 30, 2025, the Company determined the fair value of these instruments using the income approach utilizing inputs that are unobservable (Level 3).

Notes payable:

4 unchanged sentences

The Company determines the fair value of these instruments using the income approach utilizing inputs that are observable (Level 2).

The following table sets forth the Company’s carrying and fair values of notes payable and subordinated debt as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

The following table sets forth the Company’s carrying and fair values of notes payable and subordinated debt as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

($ in thousands) Carrying

10 unchanged sentences

The Company has invested in Separately Managed Accounts (“SMA1” and “SMA2”).

As of March 31, 2025 and December 31, 2024, the Company held direct investments in mortgage loans from various creditors through SMA1 and SMA2.

As of June 30, 2025 and December 31, 2024, the Company held direct investments in mortgage loans from various creditors through SMA1 and SMA2.

The Company’s mortgage loan portfolios are primarily senior loans on real estate across the U.S.

The loans earn interest at a fixed spread above a prime rate, mature in approximately 2 years to 4 years from loan origination and the principal amounts of the loans range between 64 % to 65 % of the property’s appraised value at the time the loans were made.

The loans earn interest at a fixed spread above a prime rate and mature in approximately 2 to 4 years from loan origination.

The principal amounts of the loans are approximately 64 % of the property’s appraised value at the time the loans were made.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

2 unchanged sentences

Mortgage Loans (continued)

The following table sets forth the carrying value of the Company’s mortgage loans as of March 31, 2025 and December 31, 2024:

($ in thousands) March 31, 2025 December 31, 2024

The following table sets forth the carrying value of the Company’s mortgage loans as of June 30, 2025 and December 31, 2024:

($ in thousands) June 30, 2025 December 31, 2024

Commercial $ 3,496 $ 8,474

2 unchanged sentences

$ 10,168 $ 26,490

The following table sets forth the Company’s gross investment income for mortgage loans for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the Company’s gross investment income for mortgage loans for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

5 unchanged sentences

The Company writes off the uncollectible amount in the period it was determined to be uncollectible.

There was no write-off for uncollectible amounts during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025 $ 4.5 million of mortgage loans were in the process of foreclosure and there were no mortgage loans that were not producing income for the previous 12 months.

As of December 31, 2024, no mortgage loans were in the process of foreclosure and there were no mortgage loans that were not producing income for the previous 12 months.

There was no write-off for uncollectible amounts during the three and six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025 and as of December 31, 2024, no mortgage loans were in the process of foreclosure and there were no mortgage loans that were not producing income for the previous 12 months.

Equity Method Investments and Other

The following table sets forth the carrying value and ownership percentage of the Company’s equity method investments as of March 31, 2025 and December 31, 2024:

($ in thousands) March 31, 2025 December 31, 2024

The following table sets forth the carrying value and ownership percentage of the Company’s equity method investments as of June 30, 2025 and December 31, 2024:

($ in thousands) June 30, 2025 December 31, 2024

Carrying Value Ownership % Carrying Value Ownership %

11 unchanged sentences

Equity Method Investments and Other (continued)

The following table sets forth the components of net investment (loss) income from equity method investments for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the components of net investment (loss) income from equity method investments for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

Brewer Lane Ventures Fund II LP $ 170 $ ( 32 )

RISCOM $ 1,055 $ 389 $ 927 $ 675

Dowling Capital Partners LP units 203 40 216 1,382

Brewer Lane Ventures Fund II LP ( 27 ) ( 24 ) 143 ( 56 )

Hudson Ventures Fund II LP units 90 210 65 158

RISCOM ( 128 ) 286

JVM Funds LLC ( 304 ) ( 535 ) ( 515 ) ( 1,019 )

Arena Special Opportunities Fund, LP units ( 551 ) ( 251 )

Arena SOP LP units ( 218 ) 390 ( 1,474 ) 679

Arena Special Opportunities Fund, LP units ( 1,697 ) 2,172 ( 2,248 ) 1,921

$ ( 898 ) $ 2,642 $ ( 2,886 ) $ 3,740

The following table sets forth the unfunded commitment of equity method investments as of March 31, 2025 and December 31, 2024:

($ in thousands) March 31, 2025 December 31, 2024

The following table sets forth the unfunded commitment of equity method investments as of June 30, 2025 and December 31, 2024:

($ in thousands) June 30, 2025 December 31, 2024

Brewer Lane Ventures Fund II LP units $ 3,570 $ 4,077

1 unchanged sentence

Hudson Ventures Fund 2 LP units 266 397

Red Bird Capital Partners LP units 21,506 24,400

$ 25,728 $ 29,260

3 unchanged sentences

The Company amortizes this difference over a 15 -year useful life.

The following table sets forth the Company’s recorded investment in RISCOM compared to its share of underlying equity as of March 31, 2025 and December 31, 2024:

($ in thousands) March 31, 2025 December 31, 2024

The following table sets forth the Company’s recorded investment in RISCOM compared to its share of underlying equity as of June 30, 2025 and December 31, 2024:

($ in thousands) June 30, 2025 December 31, 2024

Investment in RISCOM:

2 unchanged sentences

Recorded investment balance $ 3,941 $ 5,013

The following table sets forth the Company’s recorded investment in JVM Funds LLC compared to its share of underlying equity as of March 31, 2025 and December 31, 2024:

($ in thousands) March 31, 2025 December 31, 2024

The following table sets forth the Company’s recorded investment in JVM Funds LLC compared to its share of underlying equity as of June 30, 2025 and December 31, 2024:

($ in thousands) June 30, 2025 December 31, 2024

Investment in JVM Funds LLC:

7 unchanged sentences

Investment in Indirect Loans and Loan Collateral

As of March 31, 2025 and December 31, 2024, the Company held indirect investments in collateralized loans and loan collateral through SMA1 and SMA2.

The carrying value of the SMA1 and SMA2 as of March 31, 2025 and December 31, 2024 were as follows:

($ in thousands) March 31, 2025 December 31, 2024

As of June 30, 2025 and December 31, 2024, the Company held indirect investments in collateralized loans and loan collateral through SMA1 and SMA2.

The carrying value of the SMA1 and SMA2 as of June 30, 2025 and December 31, 2024 were as follows:

($ in thousands) June 30, 2025 December 31, 2024

SMA1 $ 17,495 $ 20,296

15 unchanged sentences

Segment (continued)

The following table presents gross written premiums by underwriting division for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table presents gross written premiums by underwriting division for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

5 unchanged sentences

Professional Lines 38,147 38,106 79,313 80,345

Programs 62,675 52,178

Specialty Programs 85,955 59,644 148,630 111,822

Surety 40,737 37,642 78,535 71,484

7 unchanged sentences

Segment (continued)

The following table presents information about reported segment net underwriting income, significant segment expenses and a reconciliation of net underwriting income to net income for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

19 unchanged sentences

Net income $ 38,839 $ 30,970 $ 80,897 $ 67,754

The following table presents annualized return on equity for the three months ended March 31, 2025 and 2024 and book value per share as of March 31, 2025 and December 31, 2024:

Three months ended March 31,

The following table presents annualized return on equity for the three and six months ended June 30, 2025 and 2024 and book value per share as of June 30, 2025 and December 31, 2024:

Three months ended June 30, Six months ended June 30,

2025 2024 2025 2024

Annualized return on equity 17.7 % 17.5 % 19.1 % 19.6 %

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Book value per share $ 22.23 $ 19.79

2 unchanged sentences

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the Company’s income tax expense and effective tax rates for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the Company’s income tax expense and effective tax rates for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

2 unchanged sentences

The effective tax rate will differ from the statutory rate of 21 percent due to permanent differences for disallowed expenses for tax and beneficial adjustments for tax-exempt income, dividends-received deduction, non-deductible expenses and discrete items.

The effective tax rate for the three months ended March 31, 2025 was impacted by certain discrete tax items, primarily tax benefits from stock-based compensation, which reduced the effective tax rate by 3.9 %.

The effective tax rate for the three and six months ended June 30, 2025 decreased 1.3 % and 2.3 %, respectively, when compared to the same 2024 periods.

The effective tax rate for the six months ended June 30, 2025 was impacted by certain discrete tax items, primarily tax benefits from stock-based compensation, which reduced the effective tax rate by 1.7 %.

The Company paid federal income taxes of $ 20.3 million during the three and six months ended June 30, 2025 and $ 14.0 million during the three and six months ended June 30, 2024.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company is currently assessing its impact on the consolidated financial statements.

Losses and Loss Adjustment Expenses

The following table sets forth the reconciliation of unpaid losses and loss adjustment expenses (“LAE”) as reported in the condensed consolidated balance sheets as of and for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

Six months ended June 30,

($ in thousands) 2025 2024

20 unchanged sentences

Commission and fee income is primarily generated from SUA for the placement of insurance policies on either a third-party insurance or reinsurance company.

The following table sets forth the Company’s disaggregated revenues from contracts with customers for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the Company’s disaggregated revenues from contracts with customers for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

3 unchanged sentences

Total commission and fee income $ 2,560 $ 2,053 $ 4,536 $ 4,079

The Company’s contract assets from commission and fee income as of March 31, 2025 and December 31, 2024 were $ 1.9 million and $ 1.4 million, respectively.

The Company’s contract assets from commission and fee income as of June 30, 2025 and December 31, 2024 were $ 2.7 million and $ 1.4 million, respectively.

Underwriting, Acquisition and Insurance Expenses

The following table sets forth the components of underwriting, acquisition and insurance expenses for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the components of underwriting, acquisition and insurance expenses for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

5 unchanged sentences

The Company remains obligated for amounts ceded in the event that the reinsurers do not meet their obligations.

The following tables set forth the effects of reinsurance on written and earned premiums and losses and loss adjustment expenses for the three months ended March 31, 2025 and 2024:

The following tables set forth the effects of reinsurance on written and earned premiums and losses and loss adjustment expenses for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30,

($ in thousands) Written Earned Written Earned

8 unchanged sentences

Reinsurance (continued)

The following table sets forth the components of reinsurance recoverables and ceded unearned premium as of March 31, 2025 and December 31, 2024:

($ in thousands) March 31, 2025 December 31, 2024

Six months ended June 30,

($ in thousands) Written Earned Written Earned

Direct premiums $ 869,391 $ 778,215 $ 771,239 $ 662,570

Assumed premiums 250,849 165,147 183,624 132,972

Ceded premiums ( 437,756 ) ( 347,454 ) ( 370,634 ) ( 301,617 )

Net premiums $ 682,484 $ 595,908 $ 584,229 $ 493,925

Ceded losses and LAE incurred $ 273,905 $ 192,573

The following table sets forth the components of reinsurance recoverables and ceded unearned premium as of June 30, 2025 and December 31, 2024:

($ in thousands) June 30, 2025 December 31, 2024

Ceded unpaid losses and LAE $ 711,030 $ 670,846

6 unchanged sentences

These trust accounts provide the Company additional security to collect claim recoverables under reinsurance contracts and the Company does not carry these on the balance sheet because the Company will only have custody over these accounts upon the failure of the reinsurer to pay amounts due.

At March 31, 2025, the market value of these accounts was approximately $ 212.8 million.

At June 30, 2025, the market value of these accounts was approximately $ 225.7 million.

The trust amount will be adjusted periodically, by mutual agreement, based on claim payments and loss reserve recoverables.

Certain ceded reinsurance contracts that transfer only significant timing risk and do not transfer sufficient underwriting risk are accounted for using the deposit method of accounting.

The Company’s deposit asset at March 31, 2025 and December 31, 2024 was $ 24.7 million and $ 25.9 million, respectively, and was included in other assets on the condensed consolidated balance sheets.

The Company’s deposit asset at June 30, 2025 and December 31, 2024 was $ 10.7 million and $ 25.9 million, respectively, and was included in other assets on the condensed consolidated balance sheets.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Earnings Per Share

The following table sets forth the compilation of basic and diluted net earnings per share for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table sets forth the computation of basic and diluted net earnings per share for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

($ in thousands, except for share and per share amounts) 2025 2024 2025 2024

7 unchanged sentences

Diluted earnings per share $ 0.93 $ 0.75 $ 1.94 $ 1.65

The following table presents anti-dilutive instruments that were excluded from the calculation of diluted weighted-average common share equivalents during the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table presents anti-dilutive instruments that were excluded from the calculation of diluted weighted-average common share equivalents during the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

2025 2024 2025 2024

Stock units 49,540 21,813 109,359 135,027

Options 868 1,134 834 706

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Earnings Per Share (continued)

The following table presents common share equivalents of contingently issuable instruments that were excluded from basic earnings per share in the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table presents common share equivalents of contingently issuable instruments that were excluded from basic earnings per share in the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

2025 2024 2025 2024

Common shares — 866,428 — 866,428

4 unchanged sentences

The Company holds a 20 % ownership interest in RISCOM.

Net earned premium and gross commission expense related to these agreements for the three months ended March 31, 2025 and 2024 were as follows:

Three months ended March 31,

Net earned premium and gross commission expense related to these agreements for the three and six months ended June 30, 2025 and 2024 were as follows:

Three months ended June 30, Six months ended June 30,

($ in thousands) 2025 2024 2025 2024

1 unchanged sentence

Commissions 7,533 6,347 15,165 13,234

Premiums receivable as of March 31, 2025 and December 31, 2024 were $ 18.6 million and $ 12.6 million, respectively.

Advisory and professional services fees and expense reimbursements paid to various affiliated stockholders and directors for the three months ended March 31, 2025 were $ 0.2 million, compared to $ 2.0 million for the three months ended March 31, 2024.

See Note 4 and 5 for investments involving affiliated companies and additional related party transactions.

Premiums receivable as of June 30, 2025 and December 31, 2024 were $ 16.4 million and $ 12.6 million, respectively.

SKYWARD SPECIALTY INSURANCE GROUP, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Related Party Transactions (continued)

Advisory and professional services fees and expense reimbursements paid to various affiliated stockholders and directors for the three and six months ended June 30, 2025 were $ 0.1 million and $ 0.3 million, compared to $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2024.

See Note 5 for investments involving affiliated companies and additional related party transactions.

Commitments and Contingencies

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements