What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-10 compared with 2025-03-27 · 458 added, 341 removed, 704 unchanged (53% of the section changed)

Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Index to TWFG, Inc.

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Income for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023 and 2022

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Stockholders’/Members’ Equity for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Balance Sheets

Consolidated Statement of Changes in Redeemable Noncontrolling Interest and Stockholders ’ /Members ’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

Organization and Ba sis of Presentation

Summary of Significant Accounting Policies

Intangible Assets and Acquisi tions

Operating Leases

Other Current Liab ilities

Debt and Deferred Acquisition Payables

Fair Value Measurements

Stockhold ers ’ Equity

Stock-Based Compensation

Defined Contribution Plan

Related Party Transactions

Earnings Per Share

Discontinued Operation

Litigation and Contingencies

Subsequent Events

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

We have audited the accompanying Consolidated Balance Sheets of TWFG, Inc.

and subsidiaries (the "Company") as of December 31, 2024, and 2023, the related consolidated statements of income, comprehensive income (loss), stockholders’/members’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

and subsidiaries (the "Company") as of December 31, 2025, and 2024, the related Consolidated Statements of Income, Consolidated Statements of Comprehensive Income (Loss), Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Stockholders’/Members’ Equity and Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

19 unchanged sentences

(Amounts in thousands, except share and per share data)

Years Ended December 31,

2025 2024 2023

8 unchanged sentences

Total revenues 248,512 203,760 172,043

203,760 172,043 153,875

Commission expense 133,518 118,086 116,847

15 unchanged sentences

41,166 28,592 25,262

Net income (loss) from discontinued operation, net of tax

— 834 ( 2,733 )

Net income from discontinued operation, net of tax — — 834

41,166 28,592 26,096

7 unchanged sentences

Earnings per share (see Note 15):

Basic $ 0.53 $ 0.19

Diluted $ 0.53 $ 0.19

See Notes to the Consolidated Financial Statements

1 unchanged sentence

(Amounts in thousands)

2024 2023 2022

Years Ended December 31,

2025 2024 2023

Other comprehensive income (loss), net of tax:

Unrealized (loss) gain on investments of discontinued operation during the period (net of tax expense of $ 0 for 2024, $ 44 for 2023 and benefit of $ 250 for 2022)

$ 41,166 $ 28,592 $ 26,096

Unrealized (loss) gain on derivative instruments during the period 214 109 803

Reclassification of realized gains on derivative instruments included in net income during the period ( 321 ) ( 409 ) ( 90 )

Total other comprehensive income (loss), net of tax ( 107 ) ( 135 ) ( 355 )

Other comprehensive loss, net of tax:

Unrealized gain on investments of discontinued operation (net of tax expense 2025- $ 0 , 2024- $ 0 and 2023- $ 44 )

Unrealized (loss) gain on derivative instruments ( 15 ) 214 109

Reclassification of realized losses on derivative instruments included in net income ( 181 ) ( 321 ) ( 409 )

Total other comprehensive income, net of tax ( 196 ) ( 107 ) ( 135 )

Comprehensive income

11 unchanged sentences

Accounts receivable 7,469 7,839

Deferred offering costs — 2,025

Other current assets, net 12,827 1,619

6 unchanged sentences

Total assets $ 372,335 $ 323,428

Liabilities and Equity

Liabilities, Redeemable Noncontrolling Interest and Equity

Current liabilities

1 unchanged sentence

Carrier liabilities 13,811 12,392

Operating lease liabilities, current 1,013 882

Operating lease liabilities 1,320 1,013

Short-term bank debt 1,972 1,912

Deferred acquisition payable, current 601 5,369

Deferred acquisition payables 1,505 601

Other current liabilities 10,308 9,851

1 unchanged sentence

Non-current liabilities

Operating lease liabilities, net of current portion 3,372 1,518

Operating lease liabilities 2,897 3,372

Long-term bank debt 2,035 4,007

Deferred acquisition payable, non-current 1,122 1,037

Deferred acquisition payables 6,669 1,122

Other non-current liabilities — 24

1 unchanged sentence

Commitment and contingencies (see Note 17)

Stockholders'/Members' Equity

Class A, B and C common units ( 631,750 units issued and outstanding at December 31, 2023)

Class A common stock ($ 0.01 par value per share - 300,000,000 authorized, 14,811,874 shares issued and outstanding at December 31, 2024)

Class B common stock ($ 0.00001 par value per share - 100,000,000 authorized, 7,277,651 shares issued and outstanding at December 31, 2024)

Class C common stock ($ 0.00001 par value per share - 100,000,000 authorized, 33,893,810 shares issued and outstanding at December 31, 2024)

Redeemable noncontrolling interest 17,901 —

Stockholders' Equity

Class A common stock ($ 0.01 par value per share - 300,000,000 authorized 15,028,681 and 14,811,874 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively)

Class B common stock ($ 0.00001 par value per share - 100,000,000 authorized 7,277,651 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively)

Class C common stock ($ 0.00001 par value per share - 100,000,000 authorized 33,893,810 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively)

Additional paid-in capital 59,951 58,365

2 unchanged sentences

Total stockholders' equity attributable to TWFG, Inc.

/members’ equity

83,382 73,884

Noncontrolling interests

Total stockholders'/members' equity

215,367 201,402

Total liabilities and equity

Total stockholders' equity 298,749 275,286

Total liabilities, redeemable noncontrolling interest, and equity

$ 372,335 $ 323,428

See Notes to the Consolidated Financial Statements

Consolidated Statements of Stockholders’/Members’ Equity

Consolidated Statements of Changes in Redeemable

Noncontrolling Interest and Stockholders’/Members’ Equity

(Amounts in thousands, except share/unit data)

Members’ Equity

Class A Common Stock Class B Voting Stock Class C Voting Stock

Units Amount Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings

Class A Common Stock

Class B Voting Stock

Class C Voting Stock

Amount Shares

Amount Additional Paid-In Capital Retained Earnings

Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Attributable to TWFG, Inc./ Members' Equity

Noncontrolling Interests

Total Stockholders’/Members' Equity

Noncontrolling Interests Total Stockholders’ Equity Redeemable Noncontrolling Interest

Balance at December 31, 2024 14,811,874 $ 148 7,277,651 $ — 33,893,810 $ — $ 58,365 $ 15,288 $ 83 $ 73,884 $ 201,402 $ 275,286 $ —

Net income — — — — — — — 1,338 — 1,338 5,515 6,853 —

Shares issued 27,689 28 – — – — – — 30,018 — — 30,046 — 30,046

Cash distributions to members — — — — — — — — — — ( 2,024 ) ( 2,024 ) —

Other comprehensive income

– — – — – — – — — — 23 23 — 23

Other comprehensive loss — — — — — — — — ( 18 ) ( 18 ) ( 50 ) ( 68 ) —

Stock-based compensation — — — — — — 1,204 — — 1,204 — 1,204 —

Vesting of restricted stock units 134,018 1 — — — — — — — 1 — 1 —

Tax withholding on vesting of equity awards ( 41,809 ) — — — — — ( 1,195 ) — — ( 1,195 ) — ( 1,195 ) —

Balance at March 31, 2025 14,904,083 $ 149 7,277,651 $ — 33,893,810 $ — $ 58,374 $ 16,626 $ 65 $ 75,214 $ 204,843 $ 280,057 $ —

2 unchanged sentences

Other comprehensive loss — — — — — — — — ( 13 ) ( 13 ) ( 37 ) ( 50 ) —

Acquisition of TWFG MGA FL, LLC — — — — — — — — — — — — 9,688

Stock-based compensation — — — — — — 1,515 — — 1,515 — 1,515 —

Vesting of restricted stock units — — — — — — — — — — — — —

Balance at June 30, 2025 14,904,083 $ 149 7,277,651 $ — 33,893,810 $ — $ 59,889 $ 18,583 $ 52 $ 78,673 $ 200,537 $ 279,210 $ 9,761

Net income prior to the Reorganization Transactions and IPO (see Note 1) – — – — – — – — — 1,290 $ — 1,290 — 1,290

Other comprehensive loss prior to the Reorganization Transactions and IPO – — – — – — – — — — ( 33 ) ( 33 ) — ( 33 )

Balance prior to the Reorganization Transactions 659,439 $ 660 – $ — – $ — – $ — $ 55,132 $ 12,543 $ 434 $ 68,769 $ — $ 68,769

Effect of the Reorganization Transactions ( 659,439 ) ( 660 ) 2,161,874 22 7,277,651 — 33,893,810 — ( 191,733 ) — ( 319 ) ( 192,690 ) 192,690 —

Issuance of Class A common stock at the IPO, net of underwriting costs – — 12,650,000 126 – — – — 200,548 — — 200,674 — 200,674

Capitalized offering costs – — – — – — – — ( 7,800 ) — — ( 7,800 ) — ( 7,800 )

Net income after the Reorganization Transactions and IPO – — – — – — – — — 1,154 — 1,154 4,449 5,603

Other comprehensive loss after the Reorganization Transactions and IPO – — – — – — – — — — ( 33 ) ( 33 ) ( 91 ) ( 124 )

Net income — — — — — — — 1,722 — 1,722 7,033 8,755 865

Cash distributions to members – — — — — — — — — — ( 2,587 ) ( 2,587 ) —

Other comprehensive loss – — – — – — — — ( 12 ) ( 12 ) ( 29 ) ( 41 ) —

Acquisition of TWFG MGA FL, LLC – — – — – — — — — — — — 801

Stock-based compensation – — – — – — 987 — — 987 — 987 —

Vesting of restricted stock units 151,174 1 – — – — — — — 1 — 1 —

Tax withholding on vesting of equity awards ( 49,831 ) — – — – — ( 1,562 ) — — ( 1,562 ) — ( 1,562 ) —

Shelf registration costs – — – — – — ( 445 ) — — ( 445 ) — ( 445 ) —

Balance at September 30, 2025 15,005,426 $ 150 7,277,651 $ — 33,893,810 $ — $ 58,869 $ 20,305 $ 40 $ 79,364 $ 204,954 $ 284,318 $ 11,427

1 unchanged sentence

Cash distributions to members – – – – – – — — — — ( 12 ) ( 12 ) —

Other comprehensive income – – – – – – – – — — 1 1 1 2

Other comprehensive loss – – – – – – — — ( 10 ) ( 10 ) ( 27 ) ( 37 ) —

Acquisition of TWFG MGA FL, LLC – — – — – — — — — — — — 4,179

Stock-based compensation – — – — – — 872 — — 872 — 872 —

Vesting of restricted stock units – — – — – — — — — — — — —

Tax withholding on vesting of equity awards – — – — – — ( 389 ) — — ( 389 ) — ( 389 ) —

Equity issuance per acquisitions 23,255 — – — – — 599 — — 599 — 599 —

Balance at December 31, 2025 15,028,681 $ 150 7,277,651 $ — 33,893,810 $ — $ 59,951 $ 23,251 $ 30 $ 83,382 $ 215,367 $ 298,749 $ 17,901

See Notes to the Consolidated Financial Statements

Consolidated Statements of Stockholders’/Members’ Equity (Continued)

Consolidated Statements of Changes in Redeemable

Noncontrolling Interest and Stockholders’/Members’ Equity

(Amounts in thousands, except share/unit data)

8 unchanged sentences

Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Attributable to TWFG, Inc./ Members' Equity

Noncontrolling Interests

Total Stockholders’/Members' Equity

Balance at December 31, 2021 631,750 $ 632 – $ — – $ — – $ — $ 25,114 $ 32,124 $ 215 $ 58,085 — 58,085

Net income – — – — – — – — — 20,614 — 20,614 — 20,614

Distributions to members – — – — – — – — — ( 20,558 ) — ( 20,558 ) — ( 20,558 )

Other comprehensive loss – — – — – — – — — — ( 355 ) ( 355 ) — ( 355 )

Noncontrolling Interests Total Stockholders’ Equity

Balance at December 31, 2023 631,750 $ 632 — $ — — $ — — $ — $ 25,114 $ 4,805 $ 500 $ 31,051 $ — $ 31,051

Cumulative effect of change in accounting principle (see Note 2) – — – — – — – — — ( 271 ) — ( 271 ) — ( 271 )

Adjusted balance at December 31, 2022 631,750 632 – — – — – — 25,114 31,909 ( 140 ) 57,515 — 57,515

Net income — — — — — — — — — 6,629 — 6,629 — 6,629

Shares issued 27,689 28 — — — — — — 30,018 — — 30,046 — 30,046

Cash distributions to members — — — — — — — — — ( 2,420 ) — ( 2,420 ) — ( 2,420 )

Other distributions to members – — – — – — – — — ( 16,599 ) — ( 16,599 ) — ( 16,599 )

Other comprehensive income — — — — — — — — — — 23 23 — 23

Impact of discontinued operation on accumulated other comprehensive income – — – — – — – — — — 775 775 — 775

Balance at March 31, 2024 659,439 $ 660 — $ — — $ — — $ — $ 55,132 $ 9,014 $ 523 $ 65,329 $ — $ 65,329

1 unchanged sentence

Cash distributions to members — — — — — — — — — ( 4,679 ) — ( 4,679 ) — ( 4,679 )

Other distributions to members – — – — – — – — — ( 3,195 ) — ( 3,195 ) — ( 3,195 )

Other comprehensive income – — – — – — – — — — 48 48 — 48

Balance at June 30, 2023 631,750 $ 632 – $ — – $ — – $ — $ 25,114 $ 14,824 $ 722 $ 41,292 $ — $ 41,292

Net income – — – — – — – — — 7,608 — 7,608 — 7,608

Cash distributions to members – — – — – — – — — ( 2,599 ) — ( 2,599 ) — ( 2,599 )

Other comprehensive loss — — — — — — — — — — ( 56 ) ( 56 ) — ( 56 )

Balance at June 30, 2024 659,439 $ 660 — $ — — $ — — $ — $ 55,132 $ 11,253 $ 467 $ 67,512 $ — $ 67,512

Net income prior to the Reorganization Transactions and IPO (see Note 1) — — — — — — — — — 1,290 — 1,290 — 1,290

Other comprehensive loss prior to the Reorganization Transactions and IPO — — — — — — — — — — ( 33 ) ( 33 ) — ( 33 )

Balance at Balance Prior to the Reorganization Transactions 659,439 $ 660 — $ — — $ — — $ — $ 55,132 $ 12,543 $ 434 $ 68,769 $ — $ 68,769

Effect of the Reorganization Transactions ( 659,439 ) ( 660 ) 2,161,874 22 7,277,651 — 33,893,810 — ( 191,733 ) — ( 319 ) ( 192,690 ) 192,690 —

Issuance of Class A common stock at the IPO, net of underwriting costs — — 12,650,000 126 — — — — 200,548 — — 200,674 — 200,674

Capitalized offering costs — — — — — — — — ( 7,800 ) — — ( 7,800 ) — ( 7,800 )

Net income after the Reorganization Transactions and IPO — — — — — — — — — 1,154 — 1,154 4,449 5,603

Other comprehensive loss after the Reorganization Transactions and IPO — — — — — — — — — — ( 33 ) ( 33 ) ( 91 ) ( 124 )

Stock-based compensation — — — — — — — — 1,012 — — 1,012 — 1,012

Balance at September 30, 2024 — $ — 14,811,874 $ 148 7,277,651 $ — 33,893,810 $ — $ 57,159 $ 13,697 $ 82 $ 71,086 $ 197,048 $ 268,134

1 unchanged sentence

Cash distributions to members — — — — — — — — — — — — ( 2,208 ) ( 2,208 )

Other comprehensive loss – — – — – — – — — — ( 187 ) ( 187 ) — ( 187 )

Other comprehensive income — — — — — — — — — — 1 1 1 2

Stock-based compensation — — — — — — — — 1,206 — — 1,206 — 1,206

Balance at December 31, 2024 – $ — 14,811,874 $ 148 7,277,651 $ — 33,893,810 $ — $ 58,365 $ 15,288 $ 83 $ 73,884 $ 201,402 $ 275,286

2 unchanged sentences

(Amounts in thousands)

Years Ended December 31,

2025 2024 2023

1 unchanged sentence

Net income $ 41,166 $ 28,592 $ 26,096

Net income (loss) from discontinued operation, net of tax — 834 ( 2,733 )

Net income from discontinued operation, net of tax — — 834

Net income from continuing operations 41,166 28,592 25,262

1 unchanged sentence

Depreciation and amortization 18,353 12,020 4,862

(Gains) losses on sale of intangible assets and property and equipment — ( 84 ) ( 890 )

Net gain on sales of intangible assets and property and equipment ( 1,119 ) — ( 84 )

Stock-based compensation expense

4,578 2,219 —

Non-cash lease expense 1,358 1,041 704

4 unchanged sentences

Commissions payable 1,320 1,360 2,984

Accounts payable — 127 ( 67 )

Operating lease liabilities ( 1,209 ) ( 1,085 ) ( 755 )

3 unchanged sentences

Net cash provided by operating activities 53,501 40,479 30,154

40,479 30,154 25,755

Cash Flows from Investing Activities

Proceeds from disposition of intangible assets — 928 2,401

Proceeds from disposition of property and equipment — — 40

Proceeds from sale of books of business 1,841 — 928

Proceeds from sale of property and equipment 49 — —

Purchase of intangible assets ( 61,912 ) ( 21,854 ) ( 15,387 )

Purchase of property and equipment ( 356 ) ( 3,201 ) ( 260 )

Capital contribution to a subsidiary presented as a discontinued operation — — ( 5,000 )

Other investing activities — — ( 88 )

Other investment ( 10,000 ) — —

Net cash (used in) investing activities from continuing operations ( 70,378 ) ( 25,055 ) ( 14,719 )

1 unchanged sentence

Net cash (used in) investing activities ( 70,378 ) ( 25,055 ) ( 14,655 )

( 25,055 ) ( 14,655 ) ( 14,504 )

Cash Flows from Financing Activities

4 unchanged sentences

Net proceeds from IPO, net of underwriting costs

Payment of shelf registration costs ( 445 ) — —

Payment of deferred offering costs — — ( 796 )

Payment of equity issuance costs — ( 38 ) —

Tax withholding on vesting of equity awards ( 3,146 ) — —

Increase in carrier liabilities 2,899 4,754 209

1 unchanged sentence

Payment of deferred acquisition payable ( 600 ) ( 1,000 ) ( 14 )

Net cash provided by (used in) financing activities from continuing operations

143,431 1,610 ( 20,264 )

Net cash provided by (used in) financing activities from discontinued operation — ( 11,305 ) 5,000

Net cash provided by (used in) financing activities

143,431 ( 9,695 ) ( 15,264 )

Net cash (used in) provided by financing activities from continuing operations ( 20,546 ) 143,431 1,610

Net cash (used in) financing activities from discontinued operation — — ( 11,305 )

Net cash (used in) provided by financing activities ( 20,546 ) 143,431 ( 9,695 )

See Notes to the Consolidated Financial Statements

Consolidated Statement of Cash Flows (continued )

Consolidated Statements of Cash Flows (continued )

(Amounts in thousands)

Years Ended December 31,

2025 2024 2023

8 unchanged sentences

Cash, cash equivalents and restricted cash from continuing operations - ending balance $ 167,900 $ 205,323 $ 46,468

$ 205,323 $ 46,468 $ 30,262

Reconciliation of cash, cash equivalents and restricted cash, end of period:

6 unchanged sentences

Net change in cash, cash equivalents and restricted cash $ ( 37,423 ) $ 158,855 $ 5,804

$ 158,855 $ 5,804 $ ( 4,013 )

Supplemental disclosures of cash flow information:

Cash paid for interest $ 194 $ 2,298 $ 832

Non-cash investing and financing activities:

Cash paid for taxes $ 3,268 $ — $ —

Non-cash investing activities:

Additions to intangible assets and offsetting additions to deferred acquisition payable $ 7,052 $ 840 $ 6,420

1 unchanged sentence

Additions to intangible assets and offsetting additions to other current liabilities $ — $ 8 $ —

Additions to intangible assets and offsetting to redeemable noncontrolling interest $ 14,688 $ — $ —

Non-cash financing activities:

Settlement of deferred acquisition payable through the issuance of Class A common units $ — $ 4,524 $ —

19 unchanged sentences

TWFG CA Premium Finance Company (“TWFG-CA PF”) is an intermediary insurance premium financing company that offers premium financing for personal and commercial insurance Clients that purchase insurance from licensed California insurance agents.

TWFG MGA FL, LLC (“TWFG-MGA FL”) is a Managing General Agency that distributes personal lines insurance products to independent agents in the State of Florida.

PSN Business Processing Inc.

1 unchanged sentence

PSN is engaged in the business of providing back-office support to TWFG agents and the TWFG corporate office, specifically insurance-related and various administrative services.

Evolution Agency Management LLC (“EVO”) is a software services company that offers agents complete agency management systems solutions.

In May 2023, the Company distributed its equity interest in EVO to the owners of the Company.

The distribution of EVO did not meet the criteria for discontinued operation reporting.

The Company has a software licensing agreement with EVO, which allows TWFG-IS and TWFG-GA to use EVO’s proprietary agency management system on a fixed annual fee.

The Woodlands Insurance Company (“TWICO”) is a Texas domiciled insurance company, formed in 2014, which currently writes homeowner’s policies.

TWICO is licensed in Texas and Louisiana.

In 2023, the Company distributed its equity interest in TWICO to the owners of the Company.

TWICO became a related party to the Company post-distribution.

The Company has presented TWICO as a discontinued operation in the consolidated financial statemen ts.

See Note 13 for additional information about the related party transactions between the Company and TWICO and Note 15 for the discontinued operation.

common unit interests, Class B common unit interests and Class C common unit interests, were owned beneficially by Bunch Family Holdings, LLC (“Bunch Holdings”), which is owned by Richard F.

Prior to the consummation of the Reorganization Transactions and the IPO, substantially all of TWFG Holding’s outstanding ownership interests in the form of limited liability company units (the “LLC Units”), including its Class A common unit interests, Class B common unit interests and Class C common unit interests, were owned beneficially by Bunch Family Holdings, LLC (“Bunch Holdings”), which is owned by Richard F.

(“Gordy”) Bunch III, the Chief Executive Officer, Chairman and Director of the Company, RenaissanceRe Ventures U.S.

2 unchanged sentences

On January 1, 2024, TWFG Holding issued a total of 27,689 new Class A common units to separate individuals and entities (collectively, the “New Members”) in connection with separate asset purchase agreements.

See Note 4 for more information about the asset purchases.

In 2025, 23,255 shares of Class A Commons Stock were issued as part of acquisitions.

In addition, 193,552 shares of Class A Common Stock were issued upon vesting of restricted stock units (“RSUs”) in accordance with the Company's 2024 Omnibus Incentive Plan (the “2024 Incentive Plan”) as of December 31, 2025.

See Note 11 Stock-Based Compensation.

Reorganization Transactions

In connection with the IPO, TWFG Holding completed the following series of transactions to implement an internal reorganization on July 19, 2024, which are collectively referred to as the Reorganization Transactions.

The Pre-IPO LLC Members who retained their equity ownership in the LLC Units, following the consummation of the Reorganization Transactions are referred to as “Continuing Pre-IPO LLC Members”.

• The Company, TWFG Holding and each of the Pre-IPO LLC Members entered into the third amended and restated TWFG Holding LLC agreement (the “TWFG LLC Agreement”), which, among other things, appointed the Company as the sole managing member of TWFG Holding and modified the TWFG Holding capital structure by reclassifying the interests held by the Pre-IPO LLC Members and the New Members into a single new class of non-voting common interest units;

• TWFG’s certificate of incorporation authorizes the issuance of three classes of common stock:

Class A Common Stock, non-economic Class B common stock (“Class B Common Stock” or “Class B Voting Stock”) and non-economic Class C common stock (“Class C Common Stock” or “Class C Voting Stock”).

Each share of Class A Common Stock entitles its holder to one vote per share on all matters submitted to a vote of the stockholders, each share of Class B Voting Stock entitles its holder to one vote per share on all matters submitted to a vote of the stockholders and each share of Class C Common Stock initially entitles its holder to ten votes per share on all matters submitted to a vote of the stockholders.

Each share of non-economic Class C Common Stock is entitled to one vote per share automatically (i) 12 months following the death or disability of Richard F.

(“Gordy”) Bunch III or (ii) upon the first trading day on or after such date that the outstanding shares of non-economic Class C Common Stock represent less than 10% of the then-outstanding Class A Common Stock, non-economic Class B Common Stock and non-economic Class C Common Stock, which, in either instance, may be extended to 18 months upon affirmative approval of a majority of the independent directors;

• 342,362 LLC Units held by Bunch Holdings were exchanged into 342,362 shares of Class A Common Stock of the Company;

• Bunch Holdings was issued 33,893,810 shares of non-economic Class C Common Stock, RenRe was issued 5,457,417 shares of non-economic Class B Common Stock;

GHC was issued 1,820,234 shares of non-economic Class B Common Stock;

and the New Members were issued 1,819,512 shares of Class A Common Stock, each in an amount equal to the number of LLC Units previously held by each such Pre-IPO LLC Member and New Members;

• Under the TWFG LLC Agreement, the Pre-IPO LLC Members have the right, from and after the completion of the IPO, to require TWFG Holding to redeem all or a portion of their LLC Units for, at the Company’s election, newly-issued shares of Class A Common Stock on a one -for-one basis or a cash payment equal to the volume weighted average market price of one share of Class A Common Stock for each LLC Unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the TWFG LLC Agreement.

Additionally, in the event of a redemption request by a holder of LLC Units, the Company may, at its option, effect a direct exchange of cash or Class A Common Stock for LLC Units in lieu of such a redemption.

Shares of non-economic Class B Common Stock or non-economic Class C Common Stock, as applicable, will be cancelled on a one -for-one basis if the Company, following a redemption request of a holder of LLC Units, redeems or exchanges LLC Units of such holder of LLC Units pursuant to the terms of the TWFG LLC Agreement.

Except for transfers to the Company pursuant to the TWFG LLC Agreement or to certain permitted transferees, the holders of LLC Units are not permitted to sell, transfer or otherwise dispose of any LLC Units or shares of non-economic Class B Common Stock or non-economic Class C Common Stock;

• The Company used the net proceeds from the IPO (including the net proceeds received from the underwriters exercising their option to purchase additional shares of Class A Common Stock) to acquire a number of newly-issued LLC Units equal to the number of shares of Class A Common Stock issued in the IPO from TWFG Holding, at a purchase price per LLC Unit equal to the initial public offering price of Class A Common Stock after underwriting discounts and commissions;

• The Company caused TWFG Holding to use the proceeds it received from the sale of LLC Units to the Company to pay fees and expenses of approximately $ 7.8 million in connection with the IPO and the Reorganization Transactions and to repay in full outstanding debt under the Revolving Credit Agreement in the amount of $ 41.0 million.

As part of the Reorganization Transactions, the Company entered into a Tax Receivable Agreement that obligates the Company to make payments to the other holders of LLC Units generally equal to 85 % of the applicable cash savings that the Company actually realizes as a result of certain tax basis adjustments resulting from the purchase of LLC Units from any of the other holders of LLC Units using the net proceeds from any future offering, future taxable redemptions or exchanges of LLC Units by the holders of LLC Units and from payments made under the Tax Receivable Agreement, as well as tax benefits related to imputed interest resulting from payments made under the Tax Receivable Agreement.

The Company retains the benefit of the remaining 15 % of these tax savings.

The corporate structure following the completion of the IPO and Reorganization Transactions, as described above, is commonly referred to as an “Up-C” structure, which is used by partnerships and limited liability companies when they undertake an IPO of their business.

The Up-C structure will allow the other holders of LLC Units to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through” entity, for income tax purposes following the IPO.

On July 19, 2024, in connection with the Reorganization Transactions, immediately prior to the IPO, the Company issued (i) 2,161,874 shares of Class A Common Stock in exchange for 342,362 LLC Units held by Bunch Holdings and 1,819,512 LLC Units held by the New Members, (ii) 7,277,651 shares of Class B Common Stock to RenRe and GHC for consideration of $ 0.00001 per share and (iii) 33,893,810 shares of Class C Common Stock for consideration of $ 0.00001 per share to Bunch Holdings.

Immediately following the closing of the IPO, TWFG Holding is the predecessor of the Company for financial reporting purposes.

As sole managing member of TWFG Holding, the Company has sole authority to determine the amount and timing of distributions from TWFG Holding.

Because the Company manages and operates the business and controls the strategic decisions and day-to-day operations of TWFG Holding and also has a substantial financial interest in TWFG Holding, the Company consolidates the financial results of TWFG Holding, and a portion of the Company’s net income is allocated to the noncontrolling interests to reflect the entitlement of the Continuing Pre-IPO LLC Members to a portion of TWFG Holding’s net income.

In addition, because TWFG Holding is under the control of Bunch Holdings before and after the Reorganization Transactions, the Company accounts for the Reorganization Transactions as a reorganization of entities under common control and initially measured the assets and liabilities of TWFG Holding at their carrying amounts as of the date of the completion of these Reorganization Transactions.

In connection with the Company’s IPO in July 2024, the Company completed a series of Reorganization Transactions that resulted in the establishment of an Up-C organizational structure.

As a result of these transactions, TWFG Holding became the predecessor for financial reporting purposes.

The Reorganization Transactions were accounted for as a reorganization of entities under common control.

Accordingly, the consolidated financial statements reflect the historical carrying amounts of the assets and liabilities of TWFG Holding and its subsidiaries, with no step-up in basis, no recognition of goodwill, and no gain or loss recorded as a result of the transactions.

Following the completion of the Reorganization Transactions, TWFG, Inc.

became the sole managing member of TWFG Holding and consolidates TWFG Holding for financial reporting purposes.

The ownership interests in TWFG Holding not held by the Company are reflected as noncontrolling interests in the consolidated financial statements.

Net income is allocated between the Company and the noncontrolling interest holders based on their respective ownership interests.

The Reorganization Transactions did not result in any changes to the underlying operations of the business and had no impact on the Company’s consolidated results of operations other than the allocation of net income between controlling and noncontrolling interests.

The effects of the Reorganization Transactions are reflected in the consolidated financial statements beginning on the date of completion.

Additional details regarding the legal structure and mechanics of the Reorganization Transactions are described in the Company’s Registration Statement on Form S-1 and related filings with the Securities and Exchange Commission.

Basis of Presentation

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The consolidated financial statements include all normal recurring adjustments necessary to present fairly the Company’s consolidated balance sheets, results of operations, and cash flows for all periods presented.

Reclassification

Certain amounts previously reported in the 2023 financial statements have been reclassified for comparative purposes to conform to the current period’s presentation.

We reclassified amounts between “Other income” and

“Interest income” in the Consolidated Statements of Income.

We disaggregated the interest earned on funds held in a fiduciary capacity and those not held in a fiduciary capacity.

Use of Estimates

The preparation of the consolidated financial statements and notes thereto requires management to make estimates, judgements, and assumptions that affect the amounts reported in the consolidated financial statements and in the notes thereto.

The preparation of the consolidated financial statements and notes thereto requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and in the notes thereto.

Such estimates and assumptions could change in the future as circumstances change or more information becomes available, which could affect the amounts reported and disclosed herein.

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The Company incurs costs to fulfill contracts primarily through sales commissions paid to agents.

In circumstances in which the contract is one year or less the costs incurred to place the contract is expensed as a practical expedient.

The Company incurs costs to place the contracts, primarily through commissions paid to agents.

The Company’s customers are insurance carriers, as the Company acts as an agent to the insureds to identify a policy and carrier that best meets the needs of the insured.

In circumstances in which the contract is one year or less, the costs incurred to place the contract are expensed as a practical expedient.

The Company’s customers are insurance carriers, as the Company acts as an agent to assist the insureds to identify a policy and carrier that best meets the needs of the insured.

The Company contracts with various insurance carriers and earns commissions for the initial term of the policy on policies placed with insurance carriers.

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Additionally, the Company has concluded that they are required to “re-sell” the policy on an annual basis.

As a result, a performance obligation exists for each policy term.

As a result, a single performance obligation exists for each policy term.

This coincides with the efforts of placing renewed policies with the insurance carrier.

Costs to obtain insurance contracts, including producer commissions and other incremental acquisition costs, are expensed as incurred as the amortization period of the related asset would be one year or less.

Commission Income - Assumed

Commission income related to insurance policies assumed through takeout programs represents consideration earned for providing ongoing servicing and administrative support for in-force policies.

Because the Company did not place the original insurance contract between the carrier and the insured, the Company’s performance obligation relates to the ongoing servicing over the life of the policies.

The Company satisfies this performance obligation over time as policyholders simultaneously receive and consume the benefits of servicing.

Accordingly, commission income associated with assumed policies is recognized ratably over the remaining policy coverage period, which represents the Company’s measure of progress in transferring services.

The transaction price is the total commission the Company expects to receive from the insurance carrier for the current term of the policy.

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The Company utilizes the expected value approach to estimate contingent income that incorporates a combination of historical payment data by insurance carriers and the current-year production forecast data used to estimate the amount of contingent income expected to be received from the insurance carriers.

Because of the uncertainty regarding the amount estimated to be received, the Company limits the recognition of contingent income until information from the insurance carrier regarding the amount owed by the insurance carriers to the Company is received and is probable to avoid reversal of contingent income in the future period.

Company is received and is probable to avoid reversal of contingent income in the future period.

The uncertainty regarding the estimated contingent income is primarily in the profitability of the insurance policies placed, as determined by the loss ratios maintained by the insurance carriers.

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Allowance for Credit Losses

On January 1, 2023, the Company adopted the current expected credit losses methodology (“CECL”) for estimating allowances for credit losses for most financial assets.

Th e Company adopted the CECL methodology using a modified retrospective method, which requires a cumulative effect adjustment to its opening retained earnings.

Upon adoption of the CECL methodology, the Company recorded a total allowance for credit losses of $ 0.3 million, which was primarily related to Receivables from agents and Commissions receivable.

The Company’s receivables are shown net of an allowance for credit losses, which are based on a combination of credit quality indicators, including, but not limited to, payment status, historical charge-offs, and financial strength of the insurance carriers for Commissions receivable, and production performance and age of balances for Receivables from agents.

S ee Note 3 fo r additional information about the Company’s Allowance for Credit Losses.

S ee Note 3 Revenues fo r additional information about the Company’s Allowance for Credit Losses.

Intangible Assets, net and Acquisitions

Intangible assets are stated at cost, less accumulated amortization, and consist of computer software development costs, non-compete agreements, and purchased customer lists.

Intangible assets are stated at cost, less accumulated amortization, and consist of computer software development costs, non-compete agreements, purchased customer lists, and customer relationships.

Computer software development costs are amortized on the straight-line method over three or five years .

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Customer lists are amortized on the straight-line method over eight to ten years .

Customer relationships represent the amount paid by the Company to acquire TWFG MGA FL.

The Company realizes an income stream from commissions related to the acquired interest.

The customer relationship asset is amortized on the straight-line method over six years .

The Company acquires intangible assets in connection with acquisition transactions.

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The Company accounts for asset acquisitions using the cost accumulation and allocation model, whereby the costs of acquisition are allocated to the assets acquired on a relative fair value basis in accordance with the Company’s accounting policies.

The asset is recorded in accordance with the cost accumulation method based on the determined purchase price, it is then amortized over the established useful life.

The asset is initially recorded in accordance with the cost accumulation method based on the determined purchase price and, is then amortized over its estimated useful life.

Intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable.

If indicators of impairment exist, the Company assesses the recoverability of its intangible assets by reviewing the estimated future undiscounted cash flows generated by the

corresponding asset or asset group.

If indicators of impairment exist, the Company assesses the recoverability of its intangible assets by reviewing the estimated future undiscounted cash flows generated by the corresponding asset or asset group.

If based on the assessment, the Company determines that the intangible assets are impaired, such assets are written down to their fair values with the related impairment losses recognized in the Consolidated Statements of Income.

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Upon closing of the IPO on July 19, 2024, total deferred offering costs of $ 7.8 million were recorded to additional paid-in capital to offset the IPO proceeds.

The Company had no deferred offering costs as of December 31, 2024.

The Company had no deferred offering costs as of December 31, 2025 and 2024.

Commissions Payable

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The Company determines the lease term by assessing the renewal options with the lessor and includes lease extension (or termination) options only when options are reasonably certain of being exercised.

All of the Company’s real estate and office equipment leases are recognized

as operating leases.

All of the Company’s real estate and office equipment leases are recognized as operating leases.

The Company has no material financing leases.

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For a derivative not designated as a hedge, changes in the derivative’s fair value and any income received or paid on derivatives at the settlement date are included in earnings.

S ee Note 6 fo r additional information about the Company’s derivative instruments.

S ee Note 6 Derivatives fo r additional information about the Company’s derivative instruments.

The Company discontinues hedge accounting prospectively when:

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When hedge accounting is discontinued, the derivative continues to be carried on the Consolidated Balance Sheets at fair value, with changes in fair value recognized in earnings.

Contingent Consideration

The Company accounts for contingent consideration relating to asset acquisitions as a Deferred Acquisition Payable liability and an increase to the cost of the acquired assets on a relative fair value basis at the date of acquisition.

Once recognized, the Deferred Acquisition Payable liability is not derecognized until the contingency is resolved and the consideration is issued or becomes issuable.

If the amount initially recognized as a liability exceeds the fair value of the contingent consideration issued or issuable, the entity recognizes that amount as a reduction to the cost of the acquired assets.

The Deferred Acquisition Payable is continually remeasured at each balance sheet date by recording changes in the fair value as an adjustment to the acquired asset in the Consolidated Balance Sheets.

The ultimate settlement of Deferred Acquisition Payable liabilities relating to asset acquisitions may be for amounts that are materially different from the amounts initially recorded.

The Company determines the fair value of contingent consideration liabilities based on future cash flow projections under various potential scenarios and weighs the probability of these outcomes as discussed further in Note 9 Fair Value Measurements .

Fair Value Measurements

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Noncontrolling Interests

Pursuant to the Reorganization Transactions, as described in Note 1, the Company is organized in an “Up-C” structure with the Company owning only a portion of its consolidated subsidiaries.

Pursuant to the Reorganization Transactions, as described in Note 1 Organization and Basis of Presentation , the Company is organized in an “Up-C” structure with the Company owning only a portion of its consolidated subsidiaries.

Noncontrolling interests represent the economic interests in TWFG Holding held by the Continuing Pre-IPO LLC Members.

Income or loss is attributed to the noncontrolling interests based on the weighted average Pre-IPO Members’ LLC Unit interests outstanding during the period.

The noncontrolling interests can be exchanged at the election of the Company, for shares of Class A Common Stock on a one -for-one basis or a cash payment equal to the volume weighted average

market price of one share of Class A Common Stock for each LLC Unit exchanged.

The noncontrolling interests can be exchanged at the election of the Company, for shares of Class A Common Stock on a one -for-one basis or a cash payment equal to the volume weighted average market price of one share of Class A Common Stock for each LLC Unit exchanged.

The noncontrolling interests' ownership percentage can fluctuate over time as the Continuing Pre-IPO LLC Members elect to exchange their LLC Units, together with their corresponding shares of Class B and Class C Common Stock, for Class A Common Stock.

Because redemptions for cash is solely within the control of the Company, noncontrolling interests are presented in permanent equity.

Because redemption for cash is solely within the control of the Company, noncontrolling interests are presented in permanent equity.

Redeemable Noncontrolling Interest

ASC Topic 480, Distinguishing Liabilities from Equity , requires noncontrolling interests that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (i) at a fixed or determinable price on a fixed or determinable date, (ii) at the option of the holder, or (iii) upon the occurrence of an event that is not solely within the control of the issuer.

Redeemable noncontrolling interests are reported at estimated redemption value measured as the greater of estimated fair value at the end of each reporting period or the historical cost basis of the redeemable noncontrolling interest adjusted for cumulative earnings or loss allocati ons.

The resulting increases or decreases to redemption value, if applicable, are recognized as adjustments to retained earnings.

See Note 10 Stockholders’ Equity for more information relating to the redeemable noncontrolling interest.

Stock-Based Compensation

The Company has granted restricted stock units (“RSUs”) under its 2024 Omnibus Incentive Plan.

The Company has RSUs under its 2024 Omnibus Incentive Plan.

The Company measures all RSUs granted to employees, directors and non-employees at fair value at each grant date based on the price of the Company’s common stock at the date of grant.

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The Company accounts for forfeitures as they occur.

The Company has granted performance and service based awards to certain key employees, in the form of Performance Stock Unit (“PSUs”), which are earned based on the achievement of certain performance targets and continuous service.

The PSUs are subject to a two-year measurement period during which the number of Class A Common Stock to be issued in settlement of the PSUs remains uncertain until the end of the measurement period and will cliff vest based on the level of achievement with respect to the applicable performance criteria.

The PSUs are divided into two tranches:

50 % EBITDA PSUs and 50 % Revenue PSUs.

The EBITDA PSUs performance vest based on the achievement of certain cumulative EBITDA targets over the performance period.

The Revenue PSUs performance vest based on the achievement of certain cumulative organic revenue targets over the performance period.

In addition, the PSUs granted to certain employees are contingent generally upon the employee’s continuous service with the Company through the third anniversary of the grant date.

Subsequent to such measurement period, the vesting of PSUs is subject to certification by the compensation committee of the Company’s board of directors (the “Board”).

If the vesting conditions of the PSUs are not met the awards will be forfeited.

All stock-based compensation expense is recorded in Salaries and employee benefits in the Consolidated Statements of Income.

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The computation of net income (loss) attributable to the Company is computed by deducting net income or loss attributable to noncontrolling interests from the consolidated net income or loss.

Shares of Class B Common Stock and Class C Common Stock do not share in the earnings or losses of the Company and are therefore not participating securities.

Shares of non-economic Class B common stock, par value $ 0.00001 per share (“Class B Common Stock” or “Class B Voting Stock”), and non-economic Class C common stock, par value $ 0.00001 per share (“Class C Common Stock” or “Class C Voting Stock”) do not share in the earnings or losses of the Company and are therefore not participating securities.

As such, separate presentation of basic and diluted earnings (loss) per share of Class B and Class C Common Stock under the two-class method has not been presented.

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Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company evaluates the realizability of its deferred tax assets and has recorded a valuation allowance to the extent it has determined that it is more likely than not that such deferred tax assets will not be realized.

In making this determination, the Company considers all available positive and negative evidence, including estimates of future taxable income and prudent and feasible tax-planning strategies.

Income tax expense was $ 3.3 million for the year ended December 31, 2025.

The estimated effective tax rate was 5.0 % for the year ended December 31, 2024, which is different from the 21% statutory rate primarily because

prior to the completion of the Reorganization Transactions, the Company was taxed as a partnership and the taxable income was included in the taxable income of its members.

The estimated effective tax rate was 7.4 % for the year ended December 31, 2025, which is different from the 21% statutory rate primarily because prior to the completion of the Reorganization Transactions, the Company was taxed as a partnership and the taxable income was included in the taxable income of its members.

As a result, a provision or liability for federal income tax is not reflected in the consolidated financial statements of the Company for the year ended December 31, 2023.

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The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

The Company has determined there are no material uncertain tax positions as of December 31, 2024.

Tax Receivable Agreement

The Company’s purchase of TWFG Holding units in connection with the IPO, as well as the anticipated future redemptions or exchanges of LLC Units by the Pre-IPO LLC Members for shares of our Class A Common Stock or cash, are expected to result in an increase in the Company’s share of the tax basis in the tangible and intangible assets of the TWFG Holding.

assets of the TWFG Holding.

This increase in tax basis is expected to generate additional tax depreciation and amortization deductions that would not have otherwise been available to the Company, thereby reducing the Company’s future cash tax obligations.

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Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-07, Segment Reporting (“Topic 280”) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”) to enhance the disclosure requirements for reportable segments.

ASU 2023-07 requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”), as well as an aggregate amount of other segment items included within segment profit or loss and a description of its composition.

Additionally, ASU 2023-07 requires disclosure of the title and position of the CODM and a description of how the CODM utilizes the reported measure of segment profit or loss to assess segment performance.

ASU 2023-07 requires segment disclosures under Topic 280 on an annual and interim basis.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-09, Improvement to Income Tax Disclosures that requires disaggregated income tax disclosures for specific categories on the effective tax rate reconciliation, and additional information about federal, state, local and foreign income taxes.

The standard also requires annual disclosure of income taxes paid (net of refunds received), disaggregated by jurisdiction.

This guidance is effective for fiscal year end December 31, 2025.

The Company has adopted this standard as disclosed in Note 17 Segment.

The standard was applied on a retrospective basis.

The Company has adopted this standard as disclosed in Note 12 Income Tax .

Recent Accounting Pronouncements Not Yet Adopted

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The Company is currently evaluating the impacts at this time.

In December 2023, the FASB issued ASU 2023-09, Improvement to Income Tax Disclosures that requires disaggregated income tax disclosures for specific categories on the effective tax rate reconciliation, and additional information about federal, state, local and foreign income taxes.

The standard also requires annual disclosure of income taxes paid (net of refunds received), disaggregated by jurisdiction.

This guidance is effective for fiscal years

beginning after December 15, 2024, with early adoption permitted.

The standard is to be applied on a prospective basis, although optional retrospective application is permitted.

The Company is still evaluating the specific impacts on our consolidated financial statements and disclosures related to the adoption.

The following table presents the disaggregation of revenues by major source (in thousands):

Years Ended December 31,

2025 2024 2023

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The following table presents the disaggregation of revenues by offerings (in thousands):

Years Ended December 31,

2025 2024 2023

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The change in the Commission receivable balance was due to increased revenue for the year ended December 31, 2025.

As of December 31, 2024, 75.2 % of the commissions receivable balance is current and as of December 31, 2023, 73.2 % of the commission receivable balance is current.

The Company has no contract liabilities as of December 31, 2025, December 31, 2024, and January 1, 2024.

The Company’s allowance for credit losses is based on a combina tion of factors, credit quality indicators, including, but not limited to, payment status, historical charge-offs, and financial strength of the insurance carriers for Commissions receivable, and production performance and age of balances for Receivables from agents.

The following table provides a summary of changes in the Company’s allowance for expected credit losses (in thousands):

Years Ended December 31,

Beginning of period $ 415 $ 312

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accounted for 10 % of total revenue for the year ended December 31, 2023.

For the year ended December 31, 2022, no customers individually accounted for 10% or more of the Company’s total revenues.

No other customers individually accounted for 10% or more of the Company’s total revenues for the years ended December 31, 2025, 2024, and 2023.

INTANGIBLE ASSETS AND ACQUISITIONS

In January 2024, the Company acquired the assets of nine of its independent branches and converted those independent branches to corporate branches.

The transactions resulted in the Company recording an increase in customer list intangible assets of $ 40.8 million.

The Company issued equity and paid cash amounting to $ 40.8 million in settlement for the total purchase price.

The Company previously acquired partial interests in the assets of American Insurance Strategies, LLC (“AIS”), Luczkowski Insurance Agency Inc.

(“Luczkowski”) and Jim Kelly Insurance Agency Inc.

(“Kelly”) and operated them as corporate branches.

In January 2024, the Company acquired the remaining interests in the assets of AIS, Luczkowski, and Kelly for a total purchase price of $ 5.2 million, converting them to wholly owned corporate branches.

The Company paid the total purchase price related to these asset acquisitions through the issuance of equity.

In addition to the acquisitions described above, the Company purchased customer lists intangible assets totaling $ 1.6 million for the year ended December 31, 2024 and $ 0.9 million for the year ended December 31, 2023, representing purchases of assets with annualized revenue of less than $ 0.5 million.

In April 2023, the Company purchased the assets of Ralph E.

Wade Insurance Agency Inc.

(“Wade”), for total consideration of $ 4.3 million, fully in cash.

The acquisition was accounted for as an asset acquisition under the cost accumulation model.

The Company recognized a customer list intangible asset of $ 4.3 million.

Immediately following the asset purchase, the Company sold 10.9 % interest in the asset purchased from Wade to AIS for a total consideration of $ 0.5 million.

In May 2023, the Company purchased 50.1 % of the assets of Luczkowski and Kelly, fully in cash.

The acquisition was accounted for as an asset acquisition under the cost accumulation model.

The Company recognized intangible assets of $ 0.6 million from the Luczkowski asset purchase and $ 1.1 million from the Kelly asset purchase.

In October 2023, the Company purchased the assets of Jeff Kincaid Insurance Agency, Inc.

(“Kincaid”), for total consideration of $ 11.8 million, $ 8.2 million in cash and $ 3.6 million in equity.

The acquisition was accounted for as an asset acquisition under the cost accumulation model.

The Company recognized a customer list intangible asset of $ 11.8 million.

The equity consideration was transferred in January 2024.

In December 2023, the Company purchased the assets of Brinson, Inc.

(“Brinson”), for total consideration of $ 2.0 million, $ 1.0 million in cash and $ 1.0 million in equity.

The acquisition was accounted for as an asset acquisition under the cost accumulation model.

The Company recognized a customer list intangible asset for $ 2.0 million.

The equity consideration was transferred in January 2024.

Customer Lists and Software Acquisitions

During the year ended December 31, 2025, the Company acquired customer lists and computer software totaling to $ 54.8 million, of which $ 52.2 million was paid in cash at closings.

The additional $ 2.0 million and $ 0.6 million relates to future contingent cash payments for the acquired customer lists which are recorded in the Deferred Acquisition Payables and additional paid-in capital on the Consolidated Balance Sheets.

During the year ended December 31, 2024, the Company acquired customer lists and computer software totaling $ 48.3 million, of which $ 21.9 million was paid in cash at closings.

The additional $ 25.6 million and $ 0.8 million relates to equity issuance and acquisition payables for the acquired customer lists which are recorded in the Deferred Acquisition Payables on the Consolidated Balance Sheets.

Acquisition of TWFG MGA FL, LLC

During the second quarter of 2025, the Company acquired a 50.1 % equity interest in TWFG MGA FL for a total cash consideration of $ 9.7 million at closing.

The acquisition agreement also provides for a contingent payment of up to $ 5.0 million, payable upon achievement of defined performance metrics within one year of closing, and includes a put option for the remaining 49.9 % interest held by AIH Sub, Inc.

The transaction was accounted for as an asset acquisition under the cost accumulation model, with the acquired customer relationship intangible asset identified as the single substantive asset acquired.

The Company recognized a customer relationship intangible asset with an acquisition-date fair value of $ 29.4 million , and a redeemable noncontrolling interest of $ 14.7 million , representing the fair value of the ownership interest held by AIH Sub, Inc.

The customer relationship intangible asset is being amortized on a straight-line basis over six years .

Additionally, the Company acquired 5.7 % equity interest in AIH Sub, Inc., an unconsolidated related party, for $ 0.3 million in cash;

as a result of this transaction.

See Note 10 Stockholders’ Equity for more information regarding the redeemable noncontrolling interest.

As of December 31, 2025, TWFG MGA FL is expected to result in achievement of the full $ 5.0 million earn out.

Therefore, the Company recognized the full earn out as a Deferred Acquisition Payable in the Consolidated Balance Sheets for the year ended December 31, 2025.

Net Gains on Disposals

Occasionally, the Company will sell Books of Business that it believes to be in its best interest to dispose.

For the year ended December 31, 2025, t he Company recognized a $ 1.1 million net gain on sales of Books of Business to third parties.

The following table presents information about the Company’s intangible assets (in thousands):

December 31, 2024 December 31, 2023

Customer Lists Computer Software Non-Compete Agreements Total Customer Lists Computer Software Non-Compete Agreements Total

December 31, 2025

December 31, 2024

Customer Lists

Computer Software

Non-Compete Agreements

Customer Relationship

Customer Lists Computer Software Non-Compete Agreements Total

Balance, beginning of period $ 96,553 $ 8,564 $ 275 $ — $ 105,392 $ 48,997 $ 7,858 $ 275 $ 57,130

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$ 109,519 $ 1,852 $ — $ 27,261 $ 138,632 $ 71,071 $ 1,904 $ 3 $ 72,978

Customer Lists Computer Software Non-Compete Agreements Total Customer Lists Computer Software Non-Compete Agreements Total

Customer Lists

Computer Software

Non-Compete Agreements

Customer Relationship

Customer Lists Computer Software Non-Compete Agreements Total

Years Ended December 31,

Amortization expense $ 14,971 $ 704 $ 3 $ 2,134 $ 17,812 $ 10,703 $ 976 $ 42 $ 11,721

(1) The acquired customer lists in 2024 and 2023 have a weighted average amortization period of 8 years.

(2) For the year ended December 31, 2023, the Company recognized $ 0.01 million loss on sale of customer lists and $ 1.74 million loss on disposal of computer software was recognized by the Company.

(1) Customer list, computer software, and customer relationship intangible assets acquired during the year ended December 31, 2025 have a weighted average amortization period of 7.3 years, 4.3 years, and 5.3 years, respectively.

The weighted-average amortization period for all intangible assets acquired in 2025 is 7.0 years.

(2) For the year ended December 31, 2025, the Company recognized a net gain of $ 1.1 million on the sale of customer lists.

The following table presents the future amortization for intangible assets as of December 31, 2025 (in thousands):

Customer Lists Computer Software Non-Compete Agreements

Customer Lists Computer Software Customer Relationship

2026 $ 17,341 $ 661 $ 4,981

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The interest rate swap agreement entered on July 30, 2019 with the original notional amount of $ 4.0 million matured on July 30, 2024.

As of December 31, 2024 and 2023, the interest rate swaps continue to be effective hedges.

The notional amount of the interest rate swaps as of December 31, 2025 and 2024 is $ 13.0 million and $ 13.0 million, respectively.

As of December 31, 2025 and 2024, the interest rate swaps continue to be effective hedges.

The fair value of the interest rate swaps as of December 31, 2025 and 2024 was $ 0.1 million and $ 0.3 million, respectively, which was included in Other non-current assets , except for the portion that relates to maturities within the next twelve months which are included in Other current assets.

The fair value of derivative assets as of December 31, 2024 and 2023 was determined using the Level II inputs described in Note 2.

For determining the fair valu e of the interest rate swap we use significant other observable

market data or assumptions (Level 2 inputs) that we believe market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk.

The fair value of derivative assets as of December 31, 2025 and 2024 was determined using the Level II inputs described in Note 2 Summary of Significant Accounting Policies .

For determining the fair valu e of the interest rate swap we use significant other observable market data or assumptions (Level 2 inputs) that we believe market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk.

Our fair value estimates reflect an income approach based on the terms of the interest rate swap contract and inputs corroborated by observable market data including interest rate curves.

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$ 10,308 $ 9,851

The following is a summary of the Company’s outstanding debt (in thousands):

5 -year term loan, periodic interest and monthly principal payments, Daily Simple SOFR + 0.11448 % SOFR adjustment, matures July 30, 2024

DEBT AND DEFERRED ACQUISITION PAYABLES

The following is a summary of the Company’s outstanding debt and Deferred Acquisition Payables (in thousands):

7 -year term loan, periodic interest and monthly principal payments, Daily Simple SOFR + 0.11448 % SOFR adjustment, matures December 6, 2027

Total term loans

Revolving Facility

5 -year revolving credit facility, periodic interest payments, Term SOFR + 0.10 % SOFR adjustment + 2 % up to 2.75 % applicable margin based on the consolidated leverage ratio, plus commitment fees of 0.20 % up to 0.35 % based on the consolidated leverage ratio, matures May 23, 2028

Deferred acquisition payable 1,723 1,381

Current maturities ( 2,513 ) ( 2,781 )

Long-term debt

$ 4,007 $ 5,919

Future maturities of the Company’s outstanding debt as of December 31, 2024, were as follows (in thousands):

Total bank debt 4,007 5,919

current bank debt ( 1,972 ) ( 1,912 )

Total long-term bank debt $ 2,035 $ 4,007

Deferred Acquisition Payables (1) :

Acquisition notes payables $ 1,122 $ 1,723

Contingent considerations 7,052 —

Total Deferred Acquisition Payables 8,174 1,723

current acquisition notes payables ( 593 ) ( 601 )

current contingent considerations ( 912 ) —

Total long-term Deferred Acquisition Payables (2)

$ 6,669 $ 1,122

long-term contingent considerations ( 6,140 ) —

Total long-term Deferred Acquisition Payables- notes $ 529 $ 1,122

(1) See Note 4 Intangible Assets and Acquisitions and Note 9 Fair Value Measurements.

(2) Total long-term Deferred Acquisition Payables consists of long-term acquisition notes and long-term contingent considerations.

Future maturities of the Company’s total outstanding bank debt and Deferred Acquisition Payables- notes as of December 31, 2025, were as follows (in thousands):

For the years ended December 31, 2025 and 2024, the Company incurred interest expense of $ 0.3 million and $ 2.2 million, respectively.

The 5-year term loan was entered into on July 30, 2019, with the original principal of $ 4.0 million, which was fully repaid by its maturity on July 30, 2024, while the 7-year term loan was entered into on December 4, 2020, with the original principal of $ 13.0 million.

The 7-yea r term loan was entered into on December 4, 2020 , with the original principal of $ 13.0 million , which matures on December 6, 2027 .

The Company entered into interest rate swap agreements to manage its exposure to interest rate fluctuations related to its term loans.

See Note 6 for more information relating to the interest rate swaps associated with these loans.

See Note 6 Derivatives for more information relating to the interest rate swaps associated with these loans.

Revolving Credit Agreement

On May 23, 2023, TWFG Holding, the guarantors party thereto, the lenders party thereto, PNC Bank, National Association (the “Agent”) and PNC Capital Markets LLC entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”) which provides a revolving credit facility to the Company, with commitments in an aggregate principal amount not to exceed $ 50.0 million, which was amended on June 20, 2024 (as so amended, the “Revolving Facility”).

On August 6, 2024, in accordance with the Revolving Facility, we became a guarantor of, and granted security interest to secure, the Revolving Facility.

TWFG Holding and the guarantors to the Revolving Credit Facility entered into a letter agreement, dated October 3, 2024, with the Agent and the lenders party thereto to make changes relating to the debt covenant calculation.

Borrowings constituting revolving loans under the Revolving Credit Agreement incur interest at the Term SOFR Rate (as defined therein) for the applicable interest period plus a margin based on the consolidated leverage ratio of the Company between 2 % and 2.75 % , and a 0.10 % adjustment.

On August 6, 2024, in accordance with the Revolving Facility, we became a guarantor of, and granted security interest to secure,

the Revolving Facility.

TWFG Holding and the guarantors to the Revolving Credit Agreement entered into a letter agreement, dated October 3, 2024, with the Agent and the lenders party thereto to make changes relating to the debt covenant calculation.

The borrowings under the Revolving Facility will be used by the Company for permitted acquisitions, working capital and general corporate purposes.

The Company pays a commitment fee on undrawn amounts under the Revolving Facility of 0.20 % to up to 0.35 % based on the consolidated leverage ratio.

On August 5, 2024, the Company repaid the outstanding balance of its Revolving Facility amounting to $ 41.0 million using a portion of the net proceeds from the IPO (see Note 1).

On August 5, 2024, the Company repaid the outstanding balance of its Revolving Facility amounting to $ 41.0 million using a portion of the net proceeds from the IPO ( see Note 1 Organization and Basis of Presentation ).

As of December 31, 2025 and 2024, the unused capacity under the Revolving Facility was $ 50.0 million and $ 50.0 million, respectively.

Borrowings under the term loans and the Revolving Facility are secured by substantially all assets constituting personal property of TWFG and its subsidiaries, including receivables, inventory, equipment, and intellectual property, subject to certain exceptions.

In addition, the term loan agreement contains covenants that restrict the Company’s ability to make certain distributions or dividend payments, incur additional debt, engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates, change the Company’s business or make investments.

In addition, the term loan agreement requires the Company to maintain certain financial ratios.

Borrowings under the term loans and the Revolving Facility are secured by substantially all assets constituting personal property of TWFG and its subsidiaries, including receivables, equipment, and intellectual property, subject to certain exceptions.

In addition, the term loan agreement and Revolving Facility contains covenants that restrict the Company’s ability to make certain distributions or dividend payments, incur additional debt, engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates, change the Company’s business or make investments.

In addition, the term loan agreement and Revolving require the Company to maintain certain financial ratios.

As of December 31, 2025 and 2024, the Company was in compliance with these covenants.

Because the Company’s term loans and borrowings under the Revolving Facility have variable interest rates, the outstanding debt as of December 31, 2024 and 2023 approximates fair value.

Deferred Acquisition Payable

The carrying amount of the Company’s variable rate debt as of December 31, 2025 and December 31, 2024 approximates fair value due to the short-term reset of the interest rate based on SOFR and the absence of a credit spread.

Deferred Acquisition Payables- Notes

In April 2023, the Company acquired customer list intangible assets for a total consideration of $ 4.3 million, of which $ 3.0 million was paid in cash at closing.

The remaining balance was settled through the issuance of a note payable monthly over three years beginning in April 2024 and bears an annual interest of 3.75 %.

In March 2024, the Company acquired customer list intangible assets, of which approximately $ 0.4 million of the purchase price was settled through the issuance of a non-interest bearing note and was recorded as deferred acquisition payable.

The note is payable monthly over a period of 70 months.

The Deferred Acquisition Payable was recorded at fair value with an annual imputed interest rate of 5.00 %.

In October 2024, the Company acquired customer list intangible assets, of which approximately $ 0.4 million of the purchase price was settled through the issuance of a non-interest bearing note and was recorded as deferred acquisition payable.

The note is payable monthly over a period of 60 months.

The Deferred Acquisition Payable was recorded at fair value with an annual imputed interest rate of 4.69 %.

The portion of the Company’s acquisition-related notes due within 12 months or less from the financial statement date is reported in the Consolidated Balance Sheets as Deferred acquisition payable, current, while the amount due after 12 months from the financial statement date is included in Deferred acquisition payable, non-current.

See Notes 4 and 13 for more information regarding the purchase of the customer list intangible assets.

Fair value information about financial instruments not measured at fair value

The following table presents the Company’s debt that is not measured at fair value on a recurring basis:

Years Ended December 31,

Carrying Value Fair Value Carrying Value Fair Value

Current Portion of long-term debt

The portion of the Company’s acquisition-related notes due within 12 months or less from the financial statement date is reported in the Consolidated Balance Sheets as Deferred Acquisition Payables, current, while the amount due after 12 months from the financial statement date is included in Deferred Acquisition Payables, non-current.

See Notes 4 Intangible Assets and Acquisitions for more information regarding the purchase of the customer list intangible assets.

FAIR VALUE MEASUREMENTS

ASC Topic 820, Fair Value Measurement (“Topic 820”) established a framework for measuring fair value.

That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy under Topic 820 are described below:

Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Inputs to the valuation methodology are quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The fair value measurement level for assets and liabilities within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The carrying value of cash and cash equivalents, accrued interest, all current receivable and all payable accounts approximate their fair values because of the short maturity or duration of these instruments.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis within each level of the fair value hierarchy (in thousands):

Fair Value Hierarchy

Level 1 Level 2 Level 3

December 31, Years Ended

2025 2024 2025 2024 2025 2024

Long-term debt (1)

Interest rate swap (1)

$ — $ — $ 116 $ 312 $ — $ —

Deferred acquisition payable (2)

Total assets measured at fair value $ — $ — $ 116 $ 312 $ — $ —

Contingent Considerations (2)

$ — $ — $ — $ — $ 7,052 $ —

Total liabilities measured at fair value $ — $ — $ — $ — $ 7,052 $ —

(1) See Note 6 Derivatives for additional information related to the interest rate swap.

(2) The future contingent considerations are recorded in the current and non-current Deferred Acquisition Payables accounts of the Consolidated Balance Sheet.

Contingent Considerations

Level 3 fair value measurements rely on limited unobservable inputs, which may not reflect net realizable value or future fair values.

Although the Company believes its valuation methods align with market practices, different assumptions or methodologies could lead to varying fair value results at the reporting date.

The fair value of contingent consideration liabilities is based on projected performance of the acquired entities, which are reassessed each reporting period.

Based on the Company’s ongoing assessment of the fair value of its contingent consideration, the Company recorded a net increase in the estimated fair value of liabilities of $ 7.1 million and none for the years ended December 31, 2025 and 2024, respectively.

The Company has assessed the most likely exposure to the contingent consideration to be $ 7.1 million at December 31, 2025.

The following table sets forth a summary of the changes in the fair value of the Company’s future contingent considerations, which are measured at fair value on a recurring basis utilizing Level 3 assumptions in their valuation (in thousands):

Year Ended December 31,

Carrying Value Fair Value

Balance at beginning of year — —

Change in fair value of contingent consideration — —

Fair value of current contingent consideration issuances 1,912 1,912

Fair value of long-term contingent consideration issuances 6,140 5,910

settlement of contingent considerations ( 1,000 ) ( 1,000 )

Balance at end of year $ 7,052 $ 6,822

There were no transfers in or out of the Level 3 hierarchy.

Fair value information about financial instruments not measured at fair value

The following table presents the Company’s debt that is not measured at fair value on a recurring basis:

Year Ended December 31,

Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Value

Current bank debt Level 2 $ 1,972 $ 1,972 $ 1,912 $ 1,912

Long-term bank debt (1)

Level 2 $ 2,035 $ 2,035 $ 4,007 $ 4,007

Deferred Acquisition Payables- notes (2) :

Current Deferred Acquisition Payables- notes Level 2 $ 593 $ 593 $ 601 $ 601

Long-term Deferred Acquisition Payables- notes Level 2 $ 529 $ 529 $ 1,122 $ 1,068

(1) The carrying value of the Company’s borrowings under various credit agreements approximates its fair value due to the variable interest rate based upon adjusted SOFR.

(2) The acquisition payable is cash payments that are due to the seller paid out over a future period.

The fair value of the acquisition payable is based on an estimate using a discounted cash flow analysis and current finance rates for similar types of financing arrangements.

(2) The Deferred Acquisition Payables- notes are cash payments that are due to the seller paid out over a future period.

The fair value of Deferred Acquisition Payables- notes are based on current market rates for similar types of financing arrangements .

STOCKHOLDERS’ EQUITY

The Company’s board of directors (the “Board”) approved an amended and restated certificate of incorporation (the “Restated Certificate of Incorporation”), which became effective on July 17, 2024 in connection with the IPO.

The Board approved an amended and restated certificate of incorporation (the “Restated Certificate of Incorporation”), which became effective on July 17, 2024 in connection with the IPO.

The Restated Certificate of Incorporation authorizes the issuance of three classes of common stock:

Class A Common Stock, non-economic Class B Common Stock and non-economic Class C Common Stock, and preferred stock.

As described in Note 1, in connection with the IPO on July 19, 2024, the Company issued 11,000,000 shares of Class A Common Stock, at a price of $ 17.00 per share.

Class A Common Stock, Class B Common Stock, Class C Common Stock, and preferred stock.

As described in Note 1 Organization and Basis of Presentation , in connection with the IPO on July 19, 2024, the Company issued 11,000,000 shares of Class A Common Stock, at a price of $ 17.00 per share.

On July 23, 2024, the underwriters purchased an additional 1,650,000 shares of Class A Common Stock in connection with the underwriters’ full exercise of their option to purchase additional shares, at a price of $ 17.00 per share.

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Immediately after the IPO and the Reorganization Transactions, 14,811,874 shares of Class A Common Stock were outstanding, including 12,650,000 shares issued in the IPO plus 342,362 shares issued to Bunch Holdings and 1,819,512 shares issued to New Members, and 7,277,651 shares of Class B Common Stock and 33,893,810 shares of Class C Common Stock were outstanding.

In 2025 , 23,255 shares of Class A Commons Stock were issued as part of acquisitions.

In addition, 193,552 shares of Class A Common Stock were issued upon vesting of RSUs in accordance with the 2024 Incentive Plan as of December 31, 2025 .

See Note 11 Stock-Based Compensation.

The following table summarizes the capitalization and voting rights of the Company’s classes of stock after the completion of the IPO and the Reorganization Transactions and as of December 31, 2025:

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(“Gordy”) Bunch III or (ii) upon the first trading day on or after such date that the outstanding shares of non-economic Class C Common Stock represent less than 10 % of the then-outstanding Class A Common Stock, non-economic Class B Common Stock and non-economic Class C Common Stock, which, in either instance, may be extended to 18 months upon affirmative approval of a majority of the independent directors.

The Board is authorized to direct the Company to issue shares of preferred stock in one or more series and has the discretion to determine the number and designation of such series and the powers, rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation

preferences, of each series of preferred stock.

Through December 31, 2025, no shares of preferred stock have been issued.

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56,200,142 100.0 %

Redeemable noncontrolling interest

In the second quarter of 2025, the Company completed the acquisition of a 50.1 % controlling interest in TWFG MGA FL.

The remaining interest is held by an AIH Sub, Inc.

with a right to put its interest to the Company beginning in 2030 and ending in 2033.

The put right consideration to be paid is based on operational performance of TWFG MGA FL as determined at the time the right is exercised.

See Note 4 Intangible Assets and Acquisitions for additional information.

Cash Distributions to Members Related to Their Income Tax Liabilities

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federal income taxes, as these taxes are primarily the obligations of its members.

Under the TWFG LLC Agreement, TWFG Holding is required to distribute cash, to the extent that TWFG Holding has cash available, on a pro rata basis to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to each member’s share of net taxable income of TWFG Holding.

Under the third amended and restated TWFG Holding LLC Agreement, TWFG Holding is required to distribute cash, to the extent that TWFG Holding has cash available, on a pro rata basis to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to each member’s share of net taxable income of TWFG Holding.

TWFG Holding makes such tax distributions to its members quarterly, based on an estimated tax rate and projected year-to-date taxable income, with a final accounting once actual taxable income or loss has been determined.

Prior to the IPO, TWFG Holding made tax distributions to its members totaling approximatel y $ 6.1 million, $ 9.5 million, and $ 6.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Post the completion of the IPO.

TWFG Holding made tax distributions to its members totaling approximately $ 3.0 million.

TWFG Holding made tax distributions to its members totaling approximately $ 15.5 million and n on-tax distributions in the amounts of $ 6.1 million were made for the year ended December 31, 2025.

Prior to the IPO, TWFG Holding made tax distributions to its members totaling approximatel y $ 6.1 million.

Following the completion of the IPO, TWFG Holding made tax and non-tax distributions to its members totaling approximately $ 3.0 million and $ 1.0 million, respectively, for the year ended December 31, 2024.

STOCK-BASED COMPENSATION

2024 Omnibus Incentive Plan

On July 17, 2024, the Company adopted the 2024 Omnibus Incentive Plan (the “2024 Incentive Plan”) for its directors, officers, employees, consultants and advisors.

On July 17, 2024, the Company adopted the 2024 Incentive Plan for its directors, officers, employees, consultants and advisors.

The 2024 Incentive Plan authorizes the granting of stock options, restricted stock, RSUs, stock appreciation rights, and other stock-based awards.

The Company has reserved 4,346,667 shares of Class A Common Stock for issuance under the 2024 Incentive Plan, subject to annual increases pursuant to the terms of the 2024 Incentive Plan.

During the year ended December 31, 2024, the Company granted 429,190 RSUs under the 2024 Incentive Plan, and 3,917,477 shares of Class A Common Stock remain available for future grant.

The Company has reserved 4,346,667 shares of Class A Common Stock for issuance under the 2024 Incentive Plan, with an option to increase the reserve annually pursuant to the terms of the 2024 Incentive Plan.

During the year ended December 31, 2025, the Company granted 52,079 RSUs under the 2024 Incentive Plan and 39,143 PSUs under the 2024 Incentive Plan , and 3,928,788 shares of Class A Common Stock remain available for future grant.

No other award types have been issued under the 2024 Incentive Plan to date.

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Stock-Based Compensation Expense

Stock-based compensation expense recorded in Salaries and employee benefits for the year ended December 31, 2024 was $ 2.2 million.

Stock-based compensation expense recorded in Salaries and employee benefits for the years ended December 31, 2025 and 2024 was $ 4.6 million and $ 2.2 million, respectively.

There was no equity or equity-based compensation plan maintained by the Company prior to its IPO on July 19, 2024.

See Note 1 for more information about the IPO.

See Note 1 Organization and Basis of Presentation for more information about the IPO.

Stock-Based Awards

The Company withholds and sells shares of Class A Common Stock associated with net settlements to cover tax withholding obligations upon the vesting of RSUs for certain employees under its 2024 Incentive Plan.

During the year ended December 31, 2025, 285,192 RSUs vested and the Company withheld 91,640 RSUs for $ 3.1 million, resulting in the net issuance of 193,552 shares of Class A Common Stock.

The vesting of RSUs is shown net of this withholding on the Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Stockholders’/Members’ Equity and Consolidated Statements of Cash Flows.

Stock-based awards granted in the period include RSUs with service-based vesting conditions.

Outstanding RSUs and related activity for the year ended December 31, 2024 were as follows:

Outstanding RSUs and related activity for the years ended December 31, 2025 and 2024 were as follows:

Number of Awards Weighted-Average Grant Date

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Granted 429,190 $ 17.00

Converted to shares of Class A Common Stock upon vesting — —

Forfeited ( 9,255 ) $ 17.00

Unvested balance - December 31, 2024 419,935 $ 17.00

419,935 $ 17.00

As of December 31, 2024, the Company had $ 4.9 million of unrecognized stock-based compensation costs related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.5 years.

Granted 52,079 $ 30.88

Vested ( 285,192 ) $ 17.00

Forfeited ( 1,638 ) $ 17.00

Unvested balance - December 31, 2025 185,184 $ 20.90

Outstanding PSUs and related activity for the year ended December 31, 2025 were as follows:

Number of Awards Weighted-Average Grant Date

Unvested balance - December 31, 2024 — $ —

Granted 39,143 $ 30.87

Unvested balance - December 31, 2025 39,143 $ 30.87

Summary of Unamortized Compensation Expense

For the year December 31, 2025, the Company estimated there to be $ 3.1 million of unamortized compensation expense related to all non-vested stock-based compensation arrangements granted under the Company’s stock-based compensation plans, based upon current projections of grants measu red against performance criteria.

This expense is expected to be recognized over a weighted-average period of 1.5 years .

Prior to the Reorganization Transactions, we were organized as Delaware limited liability companies and Delaware limited partnerships and were treated as flow-through entities for U.S.

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federal income and state tax on our allocable share of any taxable income of TWFG Holding’s income (loss) before provision for income taxes consisted of the following (in thousands):

Years Ended December 31,

Domestic $ 44,406 $ 29,970

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Income before provision for income tax $ 44,445 $ 30,087

The components of the provision for income taxes is as follows:

The components of the provision for income taxes is as follows (in thousands):

Years Ended December 31,

Current expense (benefit):

Federal $ 2,538 $ 1,090

State 749 382

Foreign ( 8 ) 23

Total current expense (benefit):

$ 3,279 $ 1,495

Deferred expense (benefit):

Total deferred expense (benefit):

Total income tax expense (benefit):

A reconciliation of the Company's statutory income tax rate to the Company’s effective income tax rate is as follows:

Federal income taxes statutory rate 21.0 % — %

Increase (decrease) in rate as a result of:

State current income tax provision, net of federal benefit 1.1 % — %

Income attributable to predecessor that was not subject to corporate income tax (1)

Total income tax expense:

$ 3,279 $ 1,495

The reconciliation of the Company’s statutory tax rate and effective tax rate is as follows (in thousands):

Years Ended December 31,

Amount Percent Amount Percent

Pretax income $ 44,445 $ 30,087

federal statutory tax rate

9,333 21.0 % 6,318 21.0 %

State and local income taxes, net of federal benefit

713 1.6 % 354 1.1 %

Foreign tax effects:

Foreign activity ( 16 ) — % ( 1 ) — %

Change in valuation allowance 270 0.6 % 273 1.0 %

Effective income tax rate 5.0 % — %

(1) During the years ended December 31, 2024 and 2023, the income attributable to predecessor was not subject to corporate income tax as we were organized as limited liability companies and limited partnerships that were treated as flow-through entities for U.S federal income tax purposes prior to the Reorganization Transactions.

Significant components of the Company's deferred income taxes were as follows (in thousands):

Nontaxable or nondeductible items:

Partnership income ( 7,031 ) ( 15.8 ) % ( 5,450 ) ( 18.1 ) %

Other 10 — % 1 — %

Total $ 3,279 7.4 % $ 1,495 5.0 %

The Company’s effective tax rate includes the effects of state and local income taxes, net of the federal income tax benefit, which is primarily attributable to Texas and California, where the Company has significant business activities.

Texas and California have higher effective tax rates compared to other jurisdictions where the Company operates, and together, account for more than half of the Company’s total state tax expense.

The components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

Years Ended December 31,

Deferred tax assets:

Outside Basis in TWFG Holding

Net operating loss carryforwards — —

Total deferred tax assets $ 31,481 $ —

$ 32,136 $ 31,481

Total deferred tax assets before valuation allowance

32,136 31,481

Valuation allowance

( 32,136 ) ( 31,481 )

Net deferred tax assets (liability)

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing future deductible amounts become deductible.

Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment.

After consideration of all the information available, management has recorded a valuation allowance against our deferred tax asset for our tax basis in TWFG Holding in excess of the carrying value of our investment in TWFG Holding.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states in which we operate or do business in.

ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits.

We record uncertain tax positions as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available.

Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities.

The future realization of the tax benefits from existing temporary differences and tax attributes ultimately depends on the existence of sufficient taxable income.

The Company assesses the realizability of its deferred tax assets at each balance sheet date.

In assessing the realization of its deferred tax assets, the Company considers whether it is

more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company considers the projected future taxable income, expected reversal of existing deferred tax liabilities, and tax planning strategies in making this assessment.

After consideration of all available evidence, both positive and negative, the Company determined that it is not more likely than not that its net deferred tax assets will be realized in the foreseeable future.

As a result, the Company has recorded a full valuation allowance as of December 31, 2025 and December 31, 2024.

The Company does not provide for U.S.

Federal, state, and applicable foreign income and withholding taxes on the financial reporting basis over the tax basis of its foreign subsidiary investment because the Company has the intention and ability to indefinitely reinvest the undistributed earnings of its foreign subsidiary.

As a result, deferred taxes have not been recorded for the outside basis differences in its foreign subsidiary as of December 31, 2025 to the extent such differences are expected to result in future taxable income upon repatriation.

The Company reviews its ability and intentions to indefinitely reinvest its foreign earnings at each balance sheet.

The Company records uncertain tax positions as liabilities in accordance with ASC 740-10 and adjusts these liabilities when judgment changes as a result of the evaluation of new information not previously available.

Since there is complexity in some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the unrecognized tax benefit liabilities.

These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying Consolidated Statements of Income.

As of December 31, 2024 and 2023, no accrued interest or penalties are included on the related tax liability line in the Consolidated Balance Sheets.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.

There are currently no pending tax examinations.

The Company's tax years are still open under statute from December 31, 2021, to the present.

The resolution of tax matters is not expected to have a material effect on the Company's consolidated financial statements.

The calculation and assessment of the Company's income tax exposures generally involves the uncertainties in the application of complex tax laws and regulations for federal, state, and foreign jurisdictions.

A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon local tax examination including resolutions of any related appeals or litigation on the basis of the technical merits.

The Company files income tax returns in the U.S.

and Philippines which are the Company's major jurisdictions where it is subject to tax examination by local tax authorities.

The Company is not currently under examination for income taxes, and is not aware of any issues under review that could result in significant payments, accruals or material deviation from its tax positions.

To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by local tax authorities to the extent utilized in a future period.

The statute of limitations for the Company has expired for tax years prior to December 31, 2022.

As of December 31, 2025 and 2024, we did not have any uncertain tax positions.

The following summarizes the Company’s income taxes paid (net of refunds received) for the years presented below (in thousands):

Years Ended December 31,

Federal $ 2,777 $ —

Foreign 2 $ —

Total $ 3,268 $ —

The following summarizes the jurisdictions that exceed 5% of the Company’s total income taxes paid (net of refunds) for the years presented below (in thousands):

Years Ended December 31,

California $ 227 *

Texas $ 218 *

*Jurisdiction below the threshold for the period presented

DEFINED CONTRIBUTION PLAN

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RELATED PARTY TRANSACTIONS

The Company provides administration services to and pays expenses on behalf of its subsidiaries as part of its management agreement with its subsidiaries.

These expenses are allocated to the subsidiaries based on the time expended by employees in each subsidiary.

For the years ended December 31, 2024 and 2023, the Company allocated general and administrative expenses related to the continuing operations totaling $ 5.9 million and $ 4.2 million, respectively.

These amounts are eliminated in the Consolidated Statements of Income.

TWICO pays TWFG-GA commissions and fee income, i.e., policy fees and TPA fees, for business written through TWFG-GA.

On September 1, 2024, TWICO and TWFG-GA amended their managing general agency and claims administration agreement, which reflects an increase in the percentage of commissions paid to TWFG-GA from 18 % to 20 % and requires TWICO to reimburse TWFG-GA for actual expenses incurred or allocated by TWFG-GA for licensing, statistical accounting and management services performed by TWFG-GA.

The transaction was approved by the Board pursuant to the Company’s Related Party Transaction Approval Policy and approved by Texas Department of Insurance.

As described in Note 1, in 2023, the Company distributed its equity interest in TWICO to the owners of the Company.

The Company enters into transactions with affiliated entities in the ordinary course of business, including technology and administrative service arrangements.

These transactions are conducted pursuant to agreements approved by management and are intended to approximate terms that would be obtained in arm’s-length transactions.

In 2023, the Company distributed its equity interest in The Woodlands Insurance Company (“TWICO”), then a wholly-owned subsidiary of the Company, to the owners of the Company.

As a result, the Company deconsolidated TWICO in January 2023.

For the years ended December 31, 2024 and 2023, TWFG-GA earned $ 9.6 million and $ 4.2 million in commissions, respectively, and $ 2.7 million and $ 1.6 million in fee income, respectively, from TWICO.

These amounts are not eliminated and are included in commission income and fee income in the Consolidated Statements of Income.

The Company earned $ 14.0 million, $ 9.6 million, and $ 4.2 million i n commissions, respectively, and $ 3.4 million, $ 2.7 million, and $ 1.6 million in fee income, respectively, from TWICO during the years ended December 31, 2025, 2024, and 2023 .

These amounts are included in commission income and fee income in the Consolidated Statements of Income.

In addition, TWFG Holding provides administration services to and pays expenses on behalf of TWICO as part of its management agreement with TWICO.

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See Note 16 for the Discontinued Operation.

As described in Note 1, in May 2023, the Company distributed its equity interest in EVO to the owners of the Company.

TWICO pays TWFG-GA commissions and fee income, i.e., policy fees and TPA fees, for business written through TWFG-GA.

On September 1, 2025, TWICO and TWFG-GA amended their managing general agency and claims administration agreement, which reflects an increase in the percentage of commissions paid to TWFG-GA from 20 % to 25 %, a profit sharing arrangement, and requires TWICO to reimburse TWFG-GA for actual expenses incurred or allocated by TWFG-GA for licensing, statistical accounting and management services performed by TWFG-GA.

The transaction was approved by the Audit Committee of the Board pursuant to the Company’s Related Party Transaction Approval Policy and approved by the Texas Department of Insurance.

In May 2023, the Company distributed its equity interest in Evolution Agency Management LLC (“EVO”), then a wholly-owned subsidiary of the Company, to the owners of the Company.

As a result, the Company deconsolidated EVO effective on the distribution date.

TWFG-IS and TWFG-GA have software licensing agreements with EVO, which allow TWFG-IS and TWFG-GA to use EVO’s proprietary agency management system in exchange for a fixed annual fee.

In addition, TWFG Holding provides administration services to and pays expenses on behalf of EVO as part of its management agreement with EVO.

In addition, TWFG Holding provides administration services and pays expenses on behalf of EVO as part of its management agreement with EVO.

Prior to the deconsolidation of EVO, charges between the Company and EVO were eliminated upon consolidation.

For the year ended December 31, 2025, the Company incurred $ 3.1 million in license fees net of allocated general and administrative expenses related to EVO.

For the years ended December 31, 2024, and 2023 the Company incurred $ 1.9 million and $ 0.7 million in license fees respectively, and allocated general and administrative expenses related to EVO, totaling $ 0.4 million and $ 0.4 million, respectively.

These amounts are not eliminated and are included in Other administrative expenses in the Consolidated Statements of Income.

As described in Note 4, the Company purchased the assets of Wade for a total consideration of $ 4.3 million, of which $ 3.0 million was paid in cash, and the remaining balance of $ 1.3 million, was settled through the issuance of

an interest-bearing note, payable monthly, over three years beginning in April 2024.

The portion of the balance due within 12 months or less from the financial statement date is reported in the Consolidated Balance Sheets as Deferred acquisition payable, current, while the amount due after 12 months from the financial statement date is included in Deferred acquisition payable, non-current.

As described in Note 4, immediately following the asset purchase, the Company sold 10.9 % interest in the asset purchased from Wade to AIS for a total consideration of $ 0.5 million.

In connection with the Wade asset purchase, the branch agreement between TWFG-IS and AIS was amended to add Wade’s book of business into AIS, which changed to TWFG-IS ownership of the assets of AIS branch from 70 % to 76.9 %.

As described in Note 4, the Company acquired interests in the operations and assets of AIS, Luczkowski and Kelly.

All respective equity ownership with AIS, Luczkowski and Kelly following the respective asset purchases remained with the sellers, while TWFG-IS managed the ongoing operations of AIS, Luczkowski and Kelly.

In January 2024, the Company acquired the remaining interests in the assets of AIS, Luczkowski, and Kelly for a total purchase price of $ 5.2 million, converting them to wholly-owned corporate branches.

The Company issued equity to settle the total purchase price.

As described in Note 4, the Company purchased the assets of Kincaid and Brinson for a total consideration of $ 11.8 million and $ 2.0 million, respectively.

Upon closing, the Company paid $ 8.2 million in cash for the Kincaid asset purchase and $ 0.5 million in cash for the Brinson asset purchase.

The amount representing the unsettled portion of the total consideration as of December 31, 2024 and December 31, 2023 was reported as Deferred acquisition payable, current in the Consolidated Balance Sheets.

In January 2024, pursuant to the asset purchase agreements, the remaining balances of the total consideration associated with the Kincaid and Brinson asset purchases were settled through the issuance of the Company’s Class A common units, equivalent to $ 3.6 million for the Kincaid asset purchase, and the issuance of the Company’s Class A common units equivalent to $ 1.0 million and cash payment of $ 0.5 million for the Brinson asset purchase.

Effective January 1, 2026, TWFG-IS and TWFG-GA entered into amended software licensing agreements with EVO.

The amended agreements are effective January 1, 2026 to January 1, 2028 and require monthly payments of $ 0.3 million collectively, over the term of the agreements.

On November 12, 2024, the Company entered into a lease agreement with Parkwood 2, LLC (the “Lease”), a related party, for additional office space located in The Woodlands, Texas.

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See Note 5 Operating Leases for additional information.

On December 15, 2025, the Company entered into an amended lease agreement with Parkwood 2, LLC for additional office space located in the The Woodlands, Texas.

The lease term is expected to commence in the first quarter of 2026 with an initial term of 106 months with an option to renew.

The Company has the right to extend the term for an additional 120 months.

As of December 31, 2025, the Company has not recognized a right-of-use asset, lease liability, rent expense, or tenant improvement assets or obligations related to this lease.

RenaissanceRe Holdings Ltd., through its wholly-owned subsidiary RenaissanceRe Ventures U.S.

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Griffin Highline Capital, LLC, through its wholly-owned subsidiary, GHC Woodlands Holdings LLC, has been an investor in the Company since 2022.

Michael Doak serves on the Board and is the Chief Executive Officer and Managing Partner of Griffin Highline Capital.

Michael Doak is one of our directors and is the Chief Executive Officer and Managing Partner of Griffin Highline Capital.

EARNINGS PER SHARE

For the year ended December 31, 2024, basic earnings per share has been calculated by dividing net earnings attributable to Class A common stockholders for the period subsequent to the Reorganization Transactions as described in Note 1, by the weighted average number of shares of Class A Common Stock outstanding for the same period.

All earnings prior to July 19, 2024, the date of the Reorganization Transactions, were entirely allocable to the noncontrolling interests and, as a result, earnings per share information is not applicable for reporting periods prior to this date.

For the year ended December 31, 2025, basic earnings per share has been calculated by dividing net earnings attributable to Class A common stockholders for the period subsequent to the Reorganization Transactions as described in Note 1 Organization and Basis of Presentation , by the weighted average number of shares of Class A Common Stock outstanding for the same period.

Shares of Class A Common Stock are weighted for the portion of the period in which the shares were outstanding.

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The Company considered the calculation of earnings per unit for periods prior to the IPO and determined that it would not be meaningful to the users of these consolidated financial statements.

Therefore, earnings per share information has not been presented for the year ended December 31, 2023 and 2022.

The following tables set forth the computation of basic and diluted earnings per share for the year ended December 31, 2024 (in thousands, except share and per share amounts):

Therefore, earnings per share information has not been presented for the year ended December 31, 2023.

The following tables set forth the computation of basic and diluted earnings per share for the years ended December 31, 2025 and 2024 (in thousands, except share and per share amounts):

Years Ended December 31,

Net income attributable to TWFG, Inc.

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Net income attributable to common stockholders (diluted)

$ 8,022 $ 2,777

Weighted average common stock outstanding (basic)

14,914,346 14,772,115

Effect of potentially dilutive securities:

182,242 210,294

Weighted average common stock outstanding (diluted) 15,100,190 14,982,409

Earnings per share

Basic $ 0.53 $ 0.19

Diluted $ 0.53 $ 0.19

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Net income attributable to the noncontrolling interests would be added back to net income in the fully dilutive computation and adjusted for income taxes which would have been expensed had the income been recognized by the Company, a taxable entity.

All other potentially dilutive securities (such as unvested RSUs) are determined based on the treasury stock method.

All other potentially dilutive securities (such as unvested RSUs and PSUs) are determined based on the treasury stock method.

The Company excluded the following potential shares, presented based on amounts outstanding at period end, from the computation of diluted weighted average shares outstanding for the periods indicated because including them would have had an antidilutive effect:

Year Ended December 31,

Years Ended December 31,

Class B Voting Stock 7,277,651 7,277,651

Class C Voting Stock 33,893,810 33,893,810

41,171,461 41,171,461

DISCONTINUED OPERATION

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The TWICO Distribution represents a significant strategic shift in the operations of the Company and has met all criteria for discontinued operations reporting on the distribution date, i.e., February 2023.

After the TWICO Distribution, the Company retains significant continuing involvement in the operation of TWICO through TWICO’s existing agency agreement with TWFG-GA and the management agreement with the

See Note 13 for more information about the transactions between the Company, TWFG-GA and TWICO.

There was no income or loss applicable per this discontinued operation for the years ended

December 31, 2025 and 2024.

See Note 14 Related Party Transactions for more information about the transactions between the Company, TWFG-GA and TWICO.

The following is a reconciliation of the amounts of major classes of income from operations classified as discontinued operation in the Consolidated Statements of Income (in thousands):

Years Ended December 31,

2024 2023 2022

Year Ended December 31,

Revenue $ 1,240

Operating expenses 450

Operating income (loss) — 790 ( 2,451 )

Operating income 790

Income tax benefit ( 44 )

Net income (loss) from discontinued operation, net of tax

$ — $ 834 $ ( 2,733 )

Net income from discontinued operation, net of tax

LITIGATION AND CONTINGENCIES

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In the opinion of management, the ultimate resolution of legal actions and pending claims will not materially affect the consolidated financial statements of the Company.

The Company has one operating segment and therefore one reportable segment relating to its business as an independent distribution platform for personal and commercial insurance in the United States.

The Company operates as a single operating and reportable segment, which reflects its business as an independent distribution platform for personal and commercial insurance in the U.S.

All business activities and operations are reported in the one reportable segment, which applies accounting policies consistent with the consolidated entity.

The Company’s CODM, the CEO, manages the Company’s operations on a consolidated basis as one operating segment for the purpose of evaluating financial performance and allocating resources.

See Note 2 Revenue for products and major customers on an entity wide basis.

The segment derives its revenues primarily from the placement of insurance contracts between insurance carriers and insureds.

The CODM assesses the financial performance of the segment and decides how to allocate resources based on net income on a consolidated basis.

The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets.

Refer to Note 4 Intangibles Assets and Acquisitions for capital expenditures on an entity wide basis.

The CODM uses net income predominantly in the annual operating budget and in the strategic planning and forecasting process.

Such profit measure is used to monitor budget versus actual results on an ongoing basis by the CODM and determine how resources are allocated to the various activities of the Company.

The CODM also uses net income to evaluate the Company’s performance and assist in determination of management’s incentive compensation.

The Company’s Chief Executive Office (“CEO”) is the chief operating decision maker (“CODM”) and, manages the business on a consolidated basis for purposes of evaluating financial performance and allocating resources.

Revenues are generated primarily from the placement of insurance contracts between insurance carriers and insureds.

The CODM evaluates performance and allocates resources based on consolidated net income, which is also the measure used in the Company’s annual operating budget, strategic planning, and management incentive compensation process.

Total segment assets are represented by total consolidated assets as reported on the Consolidated Balance Sheets.

See Note 3, Revenues, for entity-wide disclosures related to products and major customers, and Note 4 Intangibles Assets and Acquisitions, for information on capital expenditures on an entity wide basis.

The following table provides a summary of the segment revenue, segment profit or loss, and significant segment expenses (in thousands):

Twelve Months Ended December 31,

Years Ended December 31,

2025 2024 2023

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Interest income ( 6,607 ) ( 4,376 ) ( 891 )

Other non-operating (income) expense, net ( 1,140 ) ( 9 ) 17

Income tax expense 3,279 1,495 —

Net income from continuing operations 41,166 28,592 25,262

Net Income (loss) from discontinued operation, net of tax — 834 ( 2,733 )

Net Income from discontinued operation, net of tax — — 834

Segment and consolidated net income $ 41,166 $ 28,592 $ 26,096

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SUBSEQUENT EVENTS

In January 2025, the Company completed two asset acquisitions for an aggregate cash purchase price of $ 10.2 million.

We have evaluated all other subsequent events throu gh March 27, 2025, the issuance date and determined that no events have occurred that require disclosure other than the events listed above.

Subsequent to the year ended December 31, 2025, the Company completed acquisitions and business partnerships in support of its ongoing growth strategy.

On February 23, 2026, our Board approved a share repurchase program that authorizes the Company to repurchase up to $ 50 million of its outstanding Class A common stock.

Share repurchases may be made from time to time on the open market, in privately negotiated transactions, using Rule 10b5-1 trading plans, or in any other manner that complies with the applicable securities law.

The timing of purchases and number of shares repurchased under the program will depend upon a variety of factors including the Company’s stock price, trading volume, working capital or other liquidity requirements, and market conditions.

The Company is not obligated to purchase any shares under the program and the program may be suspended or discontinued at any time without notice.

Subsequent to December 31, 2025, the Company received additional information from certain insurance carrier partners related to contingent commission arrangements associated with 2025 underwriting performance.

Based on this information, the Company recorded an adjustment of approximately $ 1.4 million to increase commission revenue for the year ended December 31, 2025.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data