| Schedule II. Condensed Financial Information of Registrant |
SCHEDULE II. CONDENSED FINANCIAL INFORMATION OF REGISTRANT Condensed Balance Sheets
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December 31, |
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2025 |
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2024 |
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Assets |
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Fixed maturities, available-for-sale, at fair value |
$ |
1,964 |
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$ |
1,454 |
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Other investments |
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125 |
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118 |
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Cash and cash equivalents |
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32,394 |
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34,377 |
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Accrued investment income |
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108 |
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114 |
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Investment in subsidiaries |
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462,589 |
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477,072 |
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Other assets |
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52,436 |
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45,461 |
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Assets held for sale |
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— |
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775 |
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Total Assets |
$ |
549,616 |
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$ |
559,371 |
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Liabilities |
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Intercompany payable |
$ |
40,897 |
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$ |
150,012 |
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Accounts payable and accrued expenses |
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41,801 |
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24,679 |
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Notes payable |
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149,353 |
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149,020 |
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Total Liabilities |
$ |
232,051 |
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$ |
323,711 |
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Stockholders' Equity |
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Common stock |
$ |
5 |
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$ |
5 |
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Additional paid-in capital |
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439,742 |
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436,524 |
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Treasury shares |
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(431 |
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(431 |
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Accumulated other comprehensive loss |
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(7,242 |
) |
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(15,666 |
) |
Retained earnings (deficit) |
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(114,509 |
) |
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(184,772 |
) |
Total Stockholders' Equity |
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317,565 |
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235,660 |
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Total Liabilities and Stockholders' Equity |
$ |
549,616 |
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$ |
559,371 |
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SCHEDULE II. CONDENSED FINANCIAL INFORMATION OF REGISTRANT, CONTINUED Condensed Statements of Comprehensive Income
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Year Ended December 31, |
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2025 |
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2024 |
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2023 |
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REVENUE: |
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Net income from subsidiaries (equity method) |
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$ |
114,612 |
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$ |
84,549 |
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$ |
94,990 |
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Net investment income |
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1,439 |
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1,124 |
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99 |
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Net realized investment gains (losses) |
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5 |
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(3 |
) |
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— |
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Net unrealized gains on equity securities |
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— |
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— |
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1 |
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Total revenues |
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116,056 |
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85,670 |
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95,090 |
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EXPENSES: |
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General and administrative expenses |
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1,266 |
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1,044 |
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1,314 |
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Interest expense |
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10,817 |
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10,875 |
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10,875 |
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Total expenses |
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12,083 |
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11,919 |
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12,189 |
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Income before other income |
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103,973 |
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73,751 |
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82,901 |
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Other income (loss) |
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5 |
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— |
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(214 |
) |
Income before income taxes |
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103,978 |
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73,751 |
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82,687 |
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Benefit for income taxes |
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(2,817 |
) |
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(2,568 |
) |
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(2,517 |
) |
Income from continuing operations, net of tax |
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106,795 |
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76,319 |
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85,204 |
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Income (loss) from discontinued operations, net of tax |
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42 |
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(601 |
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224,707 |
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Net income |
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$ |
106,837 |
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$ |
75,718 |
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$ |
309,911 |
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Unrealized gain on investments |
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9,806 |
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3,355 |
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5,998 |
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Reclassification adjustments - gains (losses) |
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(1,382 |
) |
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124 |
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6,808 |
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Total comprehensive income |
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$ |
115,261 |
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$ |
79,197 |
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$ |
322,717 |
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SCHEDULE II. CONDENSED FINANCIAL INFORMATION OF REGISTRANT, CONTINUED Condensed Statements of Cash Flows
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Year Ended December 31, |
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2025 |
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2024 |
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2023 |
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OPERATING ACTIVITIES |
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Net income |
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$ |
106,837 |
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$ |
75,718 |
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$ |
309,911 |
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Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
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Dividends received from subsidiaries |
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23,000 |
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14,300 |
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— |
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Earnings from subsidiaries |
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(114,455 |
) |
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(82,943 |
) |
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(80,757 |
) |
Loss on sale of subsidiary |
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148 |
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— |
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— |
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Disposition of former subsidiary |
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— |
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(1,006 |
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(238,440 |
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Depreciation and amortization |
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333 |
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332 |
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333 |
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Bond amortization and accretion |
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2 |
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6 |
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7 |
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Net realized losses (gains) on investments |
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(5 |
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3 |
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— |
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Net unrealized gains on equity securities |
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— |
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(1 |
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(2 |
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Deferred income taxes, net |
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258 |
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141 |
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157 |
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Stock based compensation |
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4,299 |
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2,545 |
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1,318 |
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Fixed asset and intangible asset disposals |
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— |
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— |
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215 |
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Changes in operating assets and liabilities: |
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Accrued investment income |
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6 |
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(79 |
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(13 |
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Other assets |
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(5,818 |
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4,154 |
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(47,848 |
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Accounts payable and accrued expenses |
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(19,454 |
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24,207 |
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(3 |
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Intercompany payable |
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1,997 |
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(8,062 |
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47,624 |
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Operating lease liability |
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— |
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— |
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(369 |
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Net cash provided by (used in) operating activities |
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(2,852 |
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29,315 |
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(7,867 |
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INVESTING ACTIVITIES |
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Proceeds from sales of investments available-for-sale |
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513 |
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590 |
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406 |
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Purchases of investments available-for-sale |
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(973 |
) |
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— |
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— |
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Investment in subsidiaries |
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(23,269 |
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(1,265 |
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(676 |
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Proceeds from sale of subsidiary |
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25,679 |
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— |
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— |
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Net cash provided by (used in) investing activities |
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1,950 |
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(675 |
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(270 |
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FINANCING ACTIVITIES |
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Tax withholding payment related to net settlement of equity awards |
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(1,855 |
) |
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(1,359 |
) |
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(24 |
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Dividends |
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— |
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(24,102 |
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— |
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Proceeds from issuance of common stock, including exercise of stock options |
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774 |
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11,621 |
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26,793 |
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Net cash provided by (used in) financing activities |
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(1,081 |
) |
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(13,840 |
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26,769 |
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Increase (decrease) in cash and cash equivalents |
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(1,983 |
) |
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14,800 |
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18,632 |
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Cash and cash equivalents at beginning of period |
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34,377 |
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19,577 |
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945 |
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Cash and cash equivalents at end of period |
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$ |
32,394 |
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$ |
34,377 |
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$ |
19,577 |
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In addition to the cash flows outlined above, the Company's subsidiaries forgave historical borrowing totaling $111,112,000 during the year ended December 31, 2025. This transaction was a non-cash transaction and lowered the Company's investment in its subsidiaries by the same $111,112,000. Notes to Condensed Financial Statements - Basis of Presentation The Company’s investment in subsidiaries is stated at cost plus equity in the undistributed earnings of subsidiaries since the date of acquisition. The Company’s share of net income of its subsidiaries is included in income using the equity method. These financial statements should be read in conjunction with ACIC’s consolidated financial statements contained in Part II, Item 8 of this Form 10-K.
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