What changed in Palomar Holdings, Inc.'s 10-K — 2024 vs 2025

Item 1: Financial Statements Palomar Holdings, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except shares and par value data) December 31, December 31, 2025 2024 Assets Investments: Fixed maturity securities available for sale, at fair value (amortized cost: $ 1,227,605 in 2025; $ 973,330 in 2024) $ 1,224,187 $ 939,046 Equity securities, at fair value (cost: $ 81,772 in 2025; $ 32,987 in 2024) 99,333 40,529 Equity method investment — 2,277 Other investments 28,503 5,863 Total investments 1,352,023 987,715 Cash and cash equivalents 106,875 80,438 Restricted cash 17 101 Accrued investment income 11,545 8,440 Premiums receivable 452,908 305,724 Deferred policy acquisition costs, net of ceding commissions and fronting fees 127,718 94,881 Reinsurance recoverable on paid losses and loss adjustment expenses 56,428 47,076 Reinsurance recoverable on unpaid losses and loss adjustment expenses 412,273 348,083 Ceded unearned premiums 355,918 276,237 Prepaid expenses and other assets 110,896 91,086 Deferred tax assets, net 761 8,768 Property and equipment, net 2,551 429 Goodwill and intangible assets, net 61,054 13,242 Total assets $ 3,050,967 $ 2,262,220 Liabilities and stockholders’ equity Liabilities: Accounts payable and other accrued liabilities $ 115,663 $ 70,079 Reserve for losses and loss adjustment expenses 688,231 503,382 Unearned premiums 988,143 741,692 Ceded premium payable 271,413 190,168 Funds held under reinsurance treaty 44,850 27,869 Total liabilities 2,108,300 1,533,190 Stockholders’ equity: Preferred stock, $ 0.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2025 and December 31, 2024 — — Common stock, $ 0.0001 par value, 500,000,000 shares authorized, 26,520,417 and 26,529,402 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 3 3 Additional paid-in capital 523,168 493,656 Accumulated other comprehensive loss ( 2,506 ) ( 26,845 ) Retained earnings 422,002 262,216 Total stockholders’ equity 942,667 729,030 Total liabilities and stockholders’ equity $ 3,050,967 $ 2,262,220 See accompanying notes. 74 Table of Contents Palomar Holdings, Inc. and Subsidiaries Consolidated Statements of Income and Comprehensive Income (in thousands, except shares and per share data) Year Ended December 31, 2025 2024 2023 Revenues: Gross written premiums $ 2,028,252 $ 1,541,962 $ 1,141,558 Ceded written premiums ( 1,064,230 ) ( 897,111 ) ( 731,531 ) Net written premiums 964,022 644,851 410,027 Change in unearned premiums ( 161,387 ) ( 134,164 ) ( 64,114 ) Net earned premiums 802,635 510,687 345,913 Net investment income 56,005 35,824 23,705 Net realized and unrealized gains on investments 11,831 4,568 2,941 Commission and other income 5,496 2,784 3,367 Total revenues 875,967 553,863 375,926 Expenses: Losses and loss adjustment expenses 228,594 134,759 72,592 Acquisition expenses, net of ceding commissions and fronting fees 217,133 149,657 107,745 Other underwriting expenses 176,458 117,113 88,172 Interest expense 392 1,138 3,775 Total expenses 622,577 402,667 272,284 Income before income taxes 253,390 151,196 103,642 Income tax expense 56,320 33,623 24,441 Net income $ 197,070 $ 117,573 $ 79,201 Other comprehensive income, net: Net unrealized gains (losses) on securities available for sale 24,339 ( 2,854 ) 12,524 Total comprehensive income $ 221,409 $ 114,719 $ 91,725 Per Share Data: Basic earnings per share $ 7.40 $ 4.61 $ 3.19 Diluted earnings per share $ 7.17 $ 4.48 $ 3.13 Weighted-average common shares outstanding: Basic 26,639,733 25,520,343 24,822,004 Diluted 27,485,250 26,223,842 25,327,091 See accompanying notes. 75 Table of Contents Palomar Holdings, Inc. and Subsidiaries Consolidated Statements of Stockholders ’ Equity (in thousands, except share data) Number of Accumulated Common Additional Other Total Shares Common Paid-In Comprehensive Retained Stockholders’ Outstanding Stock Capital Income (Loss) Earnings Equity Balance at December 31, 2022 25,027,467 $ 3 $ 333,558 $ ( 36,515 ) $ 87,708 $ 384,754 Other comprehensive income, net of tax — — 12,524 — 12,524 Stock-based compensation — 14,913 — — 14,913 Issuance of common stock via employee stock purchase plan 17,080 — 799 — — 799 Issuance of common stock via equity incentive plan 147,341 — 1,237 — — 1,237 Policy holder contribution to surplus — 90 — — 90 Repurchases of common stock ( 418,901 ) — — — ( 22,266 ) ( 22,266 ) Net income — — — — 79,201 79,201 Balance at December 31, 2023 24,772,987 $ 3 $ 350,597 $ ( 23,991 ) $ 144,643 $ 471,252 Other comprehensive loss, net of tax — — — ( 2,854 ) — ( 2,854 ) Stock-based compensation — — 16,685 — — 16,685 Issuance of common stock in stock offering, net of offering costs 1,380,000 — 115,724 — — 115,724 Issuance of common stock via employee stock purchase plan 17,100 — 902 — — 902 Issuance of common stock via equity incentive plan 359,315 — 6,990 — — 6,990 Policy holder contribution to surplus — — 2,758 — — 2,758 Net income — — — — 117,573 117,573 Balance at December 31, 2024 26,529,402 $ 3 $ 493,656 $ ( 26,845 ) $ 262,216 $ 729,030 Other comprehensive income, net of tax — — — 24,339 — 24,339 Stock-based compensation — — 21,014 — — 21,014 Issuance of common stock via employee stock purchase plan 12,426 — 1,165 — — 1,165 Issuance of common stock via equity incentive plan 287,006 — 3,755 — — 3,755 Policy holder contribution to surplus — — 3,719 — — 3,719 Offering costs (related to prior year offering) — — ( 141 ) — — ( 141 ) Repurchases of common stock ( 308,417 ) — — — ( 37,284 ) ( 37,284 ) Net income — — — — 197,070 197,070 Balance at Balance at December 31, 2025 26,520,417 $ 3 $ 523,168 $ ( 2,506 ) $ 422,002 $ 942,667 See accompanying notes 76 Table of Contents Palomar Holdings, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Operating activities Net income $ 197,070 $ 117,573 $ 79,201 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 21,013 16,685 14,913 Depreciation and amortization expense 8,927 5,106 4,503 Loss on asset disposal 31 — — Net realized and unrealized gains on investments ( 11,831 ) ( 4,568 ) ( 2,941 ) Amortization of premium on fixed maturity securities ( 61 ) ( 945 ) ( 9 ) Deferred income tax expense (benefit) 1,874 2,110 ( 2,826 ) Changes in operating assets and liabilities: Accrued investment income ( 2,969 ) ( 3,158 ) ( 1,505 ) Premium receivable ( 147,066 ) ( 43,752 ) ( 99,114 ) Deferred policy acquisition costs ( 31,175 ) ( 33,891 ) ( 4,250 ) Reinsurance recoverables ( 73,542 ) ( 118,365 ) ( 83,181 ) Ceded unearned premiums ( 79,681 ) ( 10,429 ) ( 61,724 ) Prepaid expenses and other assets 26,210 ( 15,704 ) ( 24,885 ) Accounts payable and other accrued liabilities ( 6,891 ) 29,178 15,666 Reserve for losses and loss adjustment expenses 178,061 161,107 110,860 Unearned premiums 240,859 144,589 125,789 Ceded premiums payable 81,245 8,426 35,615 Funds held under reinsurance treaty 16,981 14,450 2,739 Income taxes payable — ( 7,255 ) 7,255 Net proceeds from (purchases of) derivative contracts ( 9,934 ) — — Net cash provided by operating activities 409,121 261,157 116,106 Investing activities Purchases of property and equipment ( 137 ) ( 243 ) ( 15 ) Proceeds from sale of property and equipment 346 — — Capitalized software costs ( 6,090 ) ( 5,803 ) ( 6,744 ) Purchases of fixed maturity securities ( 848,358 ) ( 601,410 ) ( 233,770 ) Purchases of equity securities ( 55,550 ) ( 202 ) ( 945 ) Purchase of equity method investment — — ( 3,000 ) Sales and maturities of fixed maturity securities 614,616 301,847 120,285 Sales of equity securities 12,956 9,014 295 Change in securities receivable or payable, net ( 1,025 ) ( 1,475 ) 950 Investments in limited partnerships ( 11,244 ) ( 5,485 ) — Acquisitions, net of cash acquired ( 58,591 ) — ( 5,534 ) Purchase of policy renewal rights ( 905 ) ( 2,487 ) — Net cash used in investing activities ( 353,982 ) ( 306,244 ) ( 128,478 ) Financing activities Payments on Line of Credit ( 15,000 ) ( 52,600 ) — Proceeds from Line of Credit 15,000 — 16,200 Proceeds from common stock issued via employee stock purchase plan 1,165 902 799 Proceeds from common stock issued via stock option exercises 3,755 6,990 1,237 Policy holder contribution to surplus 3,719 2,758 90 Repurchase of common stock ( 37,284 ) — ( 22,266 ) Proceeds from stock offering, net of offering costs ( 141 ) 115,724 — Net cash provided by (used in) financing activities ( 28,786 ) 73,774 ( 3,940 ) Net increase (decrease) in cash, cash equivalents and restricted cash 26,353 28,687 ( 16,312 ) Cash, cash equivalents and restricted cash at beginning of period 80,539 51,852 68,164 Cash, cash equivalents and restricted cash at end of period $ 106,892 $ 80,539 $ 51,852 Supplementary cash flow information: Cash paid for federal income taxes $ 57,961 $ 37,810 $ 20,640 Cash paid for state income taxes $ 1,124 $ 644 $ 484 Cash paid for interest $ 287 $ 1,048 $ 3,682 77 Table of Contents The following table summarizes our cash and cash equivalents and restricted cash within the consolidated balance sheets (in thousands): December 31, December 31, 2025 2024 Cash and cash equivalents $ 106,875 $ 80,438 Restricted cash 17 101 Cash and cash equivalents and restricted cash $ 106,892 $ 80,539 See accompanying notes. 78 Table of Contents Palomar Holdings, Inc. and Subsidiaries Notes to Consolidated Financial Statements 1.

Summary of Operations and Basis of Presentation Summary of Operations Palomar Holdings, Inc. (the “Company”) is a Delaware incorporated insurance holding company that was founded in 2014. The Company has several wholly owned subsidiaries including an Oregon domiciled insurance company, Palomar Specialty Insurance Company (“PSIC”), a Bermuda based reinsurance company, Palomar Specialty Reinsurance Company Bermuda Ltd.

(“PSRE”), an Arizona domiciled surplus lines insurance company, Palomar Excess and Surplus Insurance Company (“PESIC”), a California domiciled property and casualty insurance agency, Palomar Insurance Agency, DBA Palomar General Insurance Agency (“PGIA”), and a Delaware incorporated management company, Palomar Underwriters Exchange Organization, Inc.

PSIC is licensed to underwrite insurance on an admitted basis in 50 states in the United States, as of December 31, 2025, mainly through managing general insurance agencies, wholesale brokers, and independent agents. PSRE is a Bermuda captive reinsurance company that has historically been used to reinsure certain premiums on a quota share basis exclusively for PSIC.

As a general insurance agency, PGIA assists in developing insurance products, underwriting insurance policies, and receiving and disbursing funds from premium and loss transactions under contracts on behalf of insurance companies. PGIA earns commissions from the product development, marketing, and servicing of the insurance companies’ programs. PGIA also earns fee income from policyholder transactions.

PUEO is a Delaware corporation that was formed in 2023 and provides management services to Laulima Exchange (“Laulima”), a Hawaii domiciled reciprocal exchange, as its attorney-in-fact. Laulima was formed in 2023 and is comprised of an unincorporated association of Hawaii homeowners (“subscribers”) that agree to insure one another. FIA is a New Jersey-domiciled insurance carrier specializing in surety bonds.

FIA was founded in 1979 and provides surety bond products across multiple states. PCIS is a Delaware-incorporated insurance management company. PCIS provides management and related services supporting insurance products for American farmers.

Segment Reporting The Company has a single operating segment, the property and casualty insurance business. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer . The CODM reviews the Company’s consolidated net income as reported under GAAP, which is the primary measure of segment profit or loss.

The CODM also reviews the individual measures and significant segment expenses that contribute to net income including gross written premiums, net earned premiums, losses and loss adjustment expenses, acquisition and underwriting expenses, and net investment income. The CODM reviews these measures, comparing them to prior periods and forecasted expectations, and makes resource allocation decisions based on the analysis.

The significant segment expenses provided to the CODM are consistent with the categories shown in the Company’s Consolidated Statements of Income and Comprehensive Income and there are no other segment items used by the CODM.

While the Company’s 79 Table of Contents CODM also reviews the revenue streams attributable to individual products, operations are managed, resources are allocated, and financial performance is evaluated on a consolidated basis.

Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. The consolidated financial statements also include the accounts of Laulima, as Laulima is a variable interest entity (“VIE”) for which the Company is the primary beneficiary.

All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes.

Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. All revisions to accounting estimates are recognized in the period in which the estimates are revised.

Significant estimates reflected in the Company’s consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses, reinsurance recoverables on unpaid losses, and the fair values of investments. 2.

Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents include time deposits and marketable securities with original maturities of three months or less at acquisition and are stated at cost, which approximates fair value. The Company maintains cash balances in federally insured financial institutions. Restricted Cash Restricted cash includes cash on deposit with reinsurance carriers.

Restricted cash also includes cash held in a fiduciary capacity for the benefit of third-party insurance carriers. Investments All of the Company’s investments in fixed maturity securities are classified as available-for-sale and are carried at fair value. Investment income consists primarily of interest and dividends. Interest income is recognized on an accrual basis.

Premiums and discounts on mortgage-backed securities and asset-backed securities are amortized or accrued using the prospective method which considers anticipated prepayments at the date of purchase. To the extent that the estimated lives of such securities change as a result of changes in estimated prepayment rates, the adjustments are included in net investment income using the prospective method.

Equity securities are carried at fair value with unrealized gains and losses included as a component of net income on the Company’s consolidated statement of income and comprehensive income. The Company uses the specific-identification method to determine the cost of fixed maturity securities sold and the first-in, first-out method for lots of equity securities sold.

The Company previously held an equity method investment, with gains or losses recognized as a component of realized and unrealized gains or losses on investments. The Company did not hold any equity method investments as of December 31, 2025.

Gains or losses from other investments are recognized as a component of realized and unrealized gains or losses on investments in the Company's Statement of Income and Comprehensive Income. The Company reviews all securities with unrealized losses on a quarterly basis to assess whether the decline in the securities fair value necessitates the recognition of an allowance for credit losses.

Factors considered in the review include the extent to which the fair value has been less than amortized cost, and current market interest rates and whether the unrealized loss is credit-driven or a result of changes in market interest rates.

The Company also considers factors specific to the issuer including the general financial condition of the issuer, the issuers industry and future business prospects, any past failure of issuer to make scheduled interest or principal payments, and the payment structure of the investment and the issuers ability to make contractual payments on the investment. 80 Table of Contents The Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost.

When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs, and potential sales of investments to capitalize on favorable pricing.

For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, a credit-loss charge is recognized in net income based on the fair value of the security at the time of assessment.

For fixed-maturity securities that the Company has the intent and ability to hold, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security.

The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for credit losses.

Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income. The Company reports accrued interest receivable as a component of accrued investment income on its consolidated balance sheet which is presented separately from available-for-sale securities.

The Company does not measure an allowance for credit losses on accrued interest receivable and instead would write off accrued interest receivable at the time an issuer defaults or is expected to default on payments. Derivative Instruments The Company uses commodity derivatives to manage exposures arising from its insurance business.

The Company purchases exchange traded commodity put options which enables the Company to offset potential price changes to the underlying commodities.

The Company accounts for its derivatives in accordance with ASC Topic 815, Derivatives and Hedging, which requires all derivatives to be recorded at fair value on the Company’s balance sheet as either assets or liabilities, depending on their rights or obligations, with changes in fair value reflected in current earnings.

The lease for this space expires in 2027. 42 Table of Contents In addition, as part of the acquisition of FIA, we acquired office suites that we own and use for corporate operations, consisting of approximately 21,250 square feet, of which approximately 6,000 square feet are occupied for corporate operations and the remainder is leased to third parties.

We believe that our owned and leased facilities are adequate for our current needs. Item 3. Legal Proceedings We are subject to routine legal proceedings in the normal course of operating our insurance business.

We are not involved in any legal proceedings which reasonably could be expected to have a material adverse effect on our business, results of operations or financial condition. Item 4. Mine S afety Disclosures Not applicable. 43 Table of Contents PA RT II

Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon results of operations, financial condition, restrictions imposed by applicable law and other factors our Board of Directors deems relevant.

Repurchases under the program may be made from time to time in the open market or through privately negotiated transactions and may be suspended or discontinued at any time. The Company did not repurchase any shares of its common stock during the quarter ended December 31, 2025.

Such returns are based on historical results and are not indicative of future performance.

December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 Palomar Holdings, Inc $ 100.00 $ 72.91 $ 50.83 $ 62.47 $ 118.85 $ 151.69 Nasdaq Composite Index $ 100.00 $ 121.39 $ 90.33 $ 116.48 $ 149.84 $ 180.34 Nasdaq Insurance Index $ 100.00 $ 113.19 $ 103.77 $ 124.95 $ 155.08 $ 154.23 Item 6. [ Reserved] 45 Table of Contents