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Greetings, welcome to the Kingstone Companies' first quarter 2026 earnings conference call. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Stefan Norbom, Kingstone Companies' Investor Relations Representative. You may begin.

Thank you. Good morning, everyone. Joining us today on the call will be President and Chief Executive Officer, Meryl Golden, and Vice President and Chief Financial Officer, Randy Patten. On behalf of the company, I would like to note that this conference call may contain forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from projected results. Forward-looking statements speak only as of the date on which they are made, and Kingstone undertakes no obligation to update the information discussed. For more information, please refer to the section entitled Risk Factors in part one, Item 1A of the company's latest Form 10-K. Additionally, today's remarks may include references to non-GAAP measures.

For a reconciliation of these non-GAAP measures to GAAP figures, please see the tables in the latest earnings release available on the company's website at www.kingstonecompanies.com. With that, it's my pleasure to turn the call over to Meryl Golden. Meryl.

Thanks, Stefan. Good morning, everyone, thanks for joining our call. Let me start with the headlines. Our GAAP net combined ratio for the first quarter was 112. We had a net loss of $5.8 million or $0.40 per diluted share. The quarter's results were driven by 11 winter catastrophe events across the Northeast, contributing 26 points to the loss ratio. The winter storm season in the first quarter was exceptionally severe for downstate N.Y. and ranked as the coldest and snowiest in 11 years. I'm extremely proud of the way our claims organization handled these catastrophe events, with many staff members working nights and weekends for months to be accessible and help our policyholders return to their pre-loss condition. This level of catastrophe activity was contemplated in our full year guidance.

Now let me turn to what I believe is the more important story this quarter, the health of our underlying business. Last quarter, we introduced the underlying combined ratio as our primary operating metric, specifically to give investors a clearer view of the business we control, separated from the inherent volatility of catastrophe events. That framework was designed for exactly this type of quarter, and when you look at what we control, every key metric improved. Our underlying combined ratio improved by 5.1 points year-over-year to 88.3. The underlying loss ratio improved by over four points to 57.9. The expense ratio improved by about one point to 30.4. Direct premiums written grew by almost 20%. Net premiums earned grew by 28%.

Investment income increased by 63%, and policies in force were up over 7% from the prior year quarter and up 2.5% from year end. Let me give you more insight into the quarter. The 20% growth in direct premium written was driven by continued momentum in our New York personal lines business, with new business policies growing 19% year-over-year, average renewal premium up 10% and retention increasing by about a point. Policies in force grew over 7% to more than 82,000. Our renewal rights deal contribute approximately $2.5 million in direct premiums written for the quarter, so inorganic growth contributed about 4% and our organic growth in New York was a very strong 16%.

While policy volume was more moderate in January and February, likely due to the severe weather, March represented one of our strongest months of new business volume, reflecting sustained demand and the competitiveness of our product offering. The downstate New York market is still hard. While we have seen a few new market entrants and a bit of softening, we continue to see strong demand for our products from our producers. Net premiums earned growth remains a powerful tailwind, increasing 28% in the quarter, primarily due to our reduced quota share, which allows us to retain a greater share of premiums and underwriting profits. As a reminder, for the 2026 treaty year, we reduced our quota share from 16% to 5% for our core New York business, reflecting our confidence in the quality of the book.

Non-catastrophe claim frequency continues to be very low, but up modestly from the prior year quarter and in line with the full year 2025. Adjusted for inflation, non-cat severity was comparable to the prior year quarter. During the quarter, we also recognized 2.3 points of favorable prior year reserve development. On an inception to date basis, our Select homeowner claim frequency continues to be phenomenal and more than 33% lower than our legacy product, which bodes well for the future as Select is only 60% of our policies in force today. Our expense ratio improved by 0.9 points to 30.4%, reflecting continued operating leverage as we scale.

Underwriting expense dollars are growing at a slower pace than the growth in net earned premium. To put this in context, from full year 2023 to full year 2025, we improved the combined ratio from 105 to 75, grew direct premiums written by nearly 40%, built a balance sheet with no long-term debt, and positioned the company for its next phase of growth. One elevated winter quarter does not change that trajectory. The structural improvements we have made in risk selection, in our operating model, and in our claims organization are durable. Turning to our strategic initiatives, we remain on track to enter California in the second quarter on an excess and surplus lines basis. As we outlined in our shareholder letter in April, California is one of the largest homeowner markets in the country, with the fastest-growing excess and surplus lines market for homeowners.

Our approach is to grow in a very deliberate and controlled fashion as we learn more about our pricing and risk selection. We'll be starting with a small number of agencies, all of whom are existing Kingstone partners in New York. Out of an abundance of conservatism, we have a 30% quota share in place for California. While the initial contribution to our results will be modest, with most of our volume continuing to come from New York, we believe California can become a significant contributor to our growth and profit long term. We also recently incorporated Kingstone America Insurance Company, a new subsidiary domiciled in Connecticut that gives us flexibility to write business on both an admitted and non-admitted basis. We expect to begin writing admitted homeowners business in Connecticut in the third quarter.

These initiatives are important milestones in our five-year plan to reach $500 million in direct written premium by year end 2029. A quick comment on the insurance bills introduced by Governor Hochul earlier this year focused on insurance affordability. To date, all activity has been focused on auto insurance. As such, I am optimistic that there will be no changes during the budget process impacting property insurance this year. What continues to set Kingstone apart is clear. First, our Select product continues to drive low claim frequency through improved risk selection and a low loss ratio by matching rate to risk. Second, our producer relationships generate strong retention and consistent new business flow. Third, our operating efficiency with an expense ratio now at 30% provides durable margin advantage. Last, our conservative reinsurance program ensures that catastrophe events are an earnings event, not a capital event.

We will recover under our winter storm and catastrophe reinsurance programs during the quarter and are grateful to our reinsurance partners for their support. As far as our outlook, we are reaffirming all elements of our full 2026 guidance, which was issued on March 5th. Our guidance for direct premiums written growth of 15%-20%, an underlying combined ratio of 74%-76%, a catastrophe loss ratio of seven to 10 points, diluted earnings per share of $2.20-$2.90, and return on equity of 24%-30% remain unchanged. The first quarter catastrophe activity was within the scenario set embedded in our guidance.

As a reminder, each one point of catastrophe loss ratio has an approximate $0.13 per share impact on diluted earnings per share, which we provided last quarter to give investors the tools to model different scenarios. I want to emphasize that the earnings power of this franchise is concentrated in the second through fourth quarters, consistent with typical seasonality for our business. Our underlying performance trends, combined with continued rate adequacy and disciplined growth, position us well to deliver on our full year outlook. With that, I'll turn the call over to Randy Patten, our Chief Financial Officer, for a more detailed review of our results. Randy?

Thank you, Meryl. Good morning again, everyone. The first quarter of 2026 was impacted by losses from 11 winter catastrophe events. During the quarter, we reported a net loss of $5.8 million, a diluted loss per share of $0.40, a 112% combined ratio, and an annualized return on equity of -19.6%. Catastrophe losses added 26 points to the combined ratio in the first quarter of 2026 versus 1.7 points in the prior year quarter. We also recognized 2.3 points of favorable reserve development during the first quarter of 2026, compared to 1.4 points in the prior year quarter.

Removing the impact from catastrophe losses and favorable reserve development, our underlying combined ratio in the first quarter of 2026 improved 5.1 points to 88.3% from 93.4% in the first quarter of 2025. The underlying loss ratio of 57.9% improved over four points from the prior year quarter. Including catastrophes alone, the loss ratio improved 5.1 points to 55.6%. This improvement in the underlying loss ratio is supported by low non-catastrophe loss frequency, higher average premium, and continued discipline in underwriting. These results reinforce the structural profitability improvements we have made over the past several years.

Net premiums earned grew 28% to $55.9 million in the quarter, primarily reflecting the continued growth in direct premiums written, along with the reduced quota share cession Meryl described. As a financial matter, the reduction in the quota shares contributed approximately $0.20 of incremental earnings per share for the full year is incorporated in our 2026 guidance. To bring it together, our reported net combined ratio of 112% compared to 93.7% in the prior year quarter reflects an exceptionally severe winter season. Removing catastrophe losses, the underlying combined ratio of 88.3% improved 5.1 points year-over-year. As Meryl mentioned, we introduced the underlying combined ratio last year specifically to isolate the performance we control from catastrophe volatility.

The first quarter is precisely the type of quarter for which the metric was designed. Our net investment income for the quarter increased 63% to $3.3 million, up from $2 million in the same quarter last year. The momentum continues to be driven by robust cash generation from operations over the last year, which enabled us to grow our investment portfolio to $313.4 million, we benefited from higher fixed income yields. While we remain conservative in our investment strategy, we are actively seeking opportunities to enhance our portfolio's yield. As of March 31st, 2026, our portfolio yield is 4.3%, up from 3.7% at March 31, 2025, an increase of 60 basis points with an effective duration of 4.3 years.

For the first quarter of 2026, we reported an expense ratio of 30.4%, an improvement of 0.9 percentage points from the first quarter of 2025. We continue to be diligent with expense management, realizing economies of scale as we continue to grow. As a reminder, the company's expense ratio was 41% in 2021. In less than five years, we have lowered it by 10 points, we see opportunity to improve further as we gain scale. Moving on to our capital position, as a reminder, we have no debt at the holding company. Shareholders' equity ended the quarter at $114.5 million, a decrease of $8.2 million during the quarter, a 39% increase in the first quarter of 2025.

Book value per diluted share was $7.70 at March 31st, 2026, a decrease of $0.58 from December 31, 2025, but an increase of 38% from $5.57 at March 31, 2025. Excluding accumulated other comprehensive income, book value per diluted share was $8.23, an increase of 32% from the prior year. During April 2026, we declared our fourth consecutive quarterly dividend and have ample capital to fund the disciplined growth initiatives that we have outlined, including our entry into California in the second quarter and our launch of Kingstone America Insurance Company in Connecticut later this year.

To wrap up our prepared remarks, it is not uncommon for Kingstone to experience its greatest level of catastrophe losses in the first quarter every year being a Northeast writer. The first quarter of 2026 was one of the coldest and snowiest winters in the last 11 years after experiencing two of the more unusually mild winters in the previous two years. Looking beyond the catastrophe losses, the trajectory of the business has not changed. We continue to execute on our strategy. In the first quarter, we delivered improvements in underwriting, growth in premiums, an increased investment income, and continued diligent expense management, which will all carry through the rest of the year. Our capital position gives us the flexibility to execute against our growth plan without compromising balance sheet strength, and therefore we are reaffirming all metrics in our 2026 projections.

With that, operator, we are ready for questions.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Again, that is star one to ask questions. One moment please, while we poll for your questions. Our first questions come from the line of Bob Farnam with Brean Capital. Please proceed with your questions.

Hey there. Good morning.

Hi, Bob.

I had several questions here. One question I had was, how much of the cats got into the reinsurance layer. It sounded like you're gonna have some sort of recovery from the reinsurance company, so it sounds like it did. Can you give us an idea of what kind of gross losses look like relative to net losses?

Sure. If you recall, we bought first event winter storm coverage, so that is a $5 million recovery. We have, roughly $4 million, maybe $5 million going into the reinsurance tower. Our gross loss was about $25 million.

Okay. net was $14.5, and something along those lines?

Yeah. 26 points. Yeah.

Okay. I don't want to get too much into forward-looking stuff, but you said the policy count growth was, you know, accelerated in March. Can you give us an idea of how did that continue into April, or is that something that you don't want to touch at this point?

Yes, I can tell you that our growth has continued into the second quarter. We're at a even a slightly higher premium growth than we've been experiencing. I feel really good about our position in New York.

Okay, great. One quick question for, I guess, for probably for Randy. Other operating expenses was higher than I expected, and I wasn't sure if that was consulting fees, you know, re-related to get into California or something like that. I just want to know if that was more of a run rate or is that a one-off, relative to, you know, the last year's, it seems like it was a lot higher?

Hi, Bob. This is Randy. Other operating expenses. That was a one-time expense, and that was really related to some board-level projects, so we don't expect that to continue in future.

Okay, great. The last one I have, California. It, it's probably more of a all-encompassing question. All, all I hear over the last, you know, several months is, you know, X company getting into California on an excess and surplus lines basis. X MGAs getting into California, and then, G, you know, excess and surplus lines spaces. You know, it, I'm not sure what this does to the competitive environment in California, but I just kind of want to have an idea from you whether or not, you know, if the increased competition has an impact on your business plans, how amenable are you to tweaking your business plans? I just, I just want to get, maybe get a feel for kind of what the California situation is going to be looking like.

Sure. Let's not forget that the California market is $15 billion in homeowners premium, and it's the largest E&S homeowners market in the U.S. And lots of the admitted companies have pulled back. There is a huge need for capacity in California. I have heard of lots of different companies and/or MGAs entering on an E&S basis. I really don't think it is gonna change the demand for our product, given the need for capacity. If you recall, our plan was to enter in a very conservative way. We're anticipating that California volume will be less than 5% for 2026, so I don't think there will be any implications on our plan in California at this point.

You know, Kingstone is a very nimble company, and we will change our strategy in order to win in California, so we'll do what we need to do. Right now, I don't think there's any change that we need to make.

Okay. you know, I know I've asked you before, in the competitive environment in California, what does Kingstone offer that will give agents, you know, the option to say, "Hey, look, we're gonna put you with Kingstone over 30 other companies that might be looking for this business"?

Sure. Our strategy in California is to capitalize on the same strengths that we have demonstrated in the New York market. The first is that we created a Select product specific for California, so we'll have a very highly segmented product to match rate to risk. You know, potentially our price could be a reason that an agent puts business with us. You know, second, we are a company, not an MGA, so and we are very much committed to the long term in California. We are committed to independent agents, and our plan is to enter the state and offer ease of use to the independent agents. We want their business, and we want a long-term relationship with them, which is different than some of the entrants who are just looking to capitalize on short-term market opportunities.

We feel pretty good that we'll be able to succeed in California.

Great. Thanks for the color.

My pleasure.

Thank you. Our next question has come from the line of Gabriel McClure. Please proceed with your questions.

Good morning, Meryl.

Hi, Gabe.

Hi. I was gonna ask you if there's any color updates on the AmGUARD opportunity.

Sure. For those that don't know, we did sign a renewal rights agreement with AmGUARD. We started writing business last September, and the business is being non-renewed over a three year period in N.Y., consistent with the minimum policy term. We offer a quote to our producers, you know, when the business is renewing. We've been writing about $800,000 a month since last September. In the first quarter, we wrote $2.5 million. It represented about 4% of our growth in the quarter.

Okay, great. Are you doing any investing or work around AI right now?

Sure. We do a lot in AI. We don't talk about it much, but everything we're doing is about improving the productivity of our staff. I'll give you some examples. On the claims side, we are about to elevate AI, an agentic AI for first notice of loss. That would be very helpful in the event of a catastrophe, which we hope we don't have any more this year. We've had enough. But there will be no limit on the number of losses that can be taken at any point in time. We also use a system to generate all of the coverage letters for the claims adjusters, and we use AI in terms of the contents claims process, which has been very successful in improving the customer experience as well as reducing indemnity costs.

On the underwriting side, we use AI to evaluate property condition and also to identify inconsistencies between all the different sources the underwriters use to evaluate an individual property. I could go on and on, like it's evolving and changing, and I would say while we're doing a lot, just like many companies, we're early on, and we look forward to enhancing our usage of AI in the future.

Okay. Thanks. That sounds really, really good.

Excellent.

Yeah. I think Bob asked you about the increased pace of growth in the first quarter, just to kind of reaffirm, you said that the pace was continuing to be brisk, if not a little bit brisker in this quarter, if I heard right. I was gonna also ask you know, I live out here in Arizona, so, stupid question, but, do you guys have any cat activity in Q2 so far?

I think the answer is no. We experienced all that we could handle in Q1. Typically, Q2 is a very low cat quarter, and as far as I know, so far this quarter, there have been no catastrophe events.

Okay. Okay, very good. I want to ask you about Connecticut. You kind of announced that we're going in on an admitted basis. I was just kind of wondering about your thinking on going in on admitted basis versus a non-admitted basis when, you know, you have a few more strings tied to you when you go in on an admitted basis.

Yes. You know, on any individual state entry, we evaluate whether we should do it on an admitted or a non-admitted basis. You know, the Connecticut Insurance Department is pretty, you know, insurance company friendly. We've operated here before. They move pretty quickly on filings. They're very reasonable. Really feedback we received from producers is that we would be adversely selected against as an E&S writer. You know, there is, you know, an opportunity is on the admitted side. It's really a combination of a friendly regulatory environment along with the needs in the marketplace, and we think we can be successful in Connecticut on an admitted basis.

Okay. Okay, thanks for the color there. If I could just one last question, maybe for Randy. There was a $2 million loss in the AOCI. Was that tied to higher interest rates marking down the bonds?

Yeah, that's exactly right, Gabe. Yeah, that's correct.

Okay. All right. That's all for me. Thanks, guys.

Thanks, Gabe. See you in Las Vegas.

Yeah, see you in Vegas.

At Planet MicroCap.

Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. I'm showing no further questions at this time. I'd now like to hand the call back over to Meryl Golden, President and CEO, for any closing remarks.

Thanks for joining the call today. We're gonna continue to execute with discipline, manage catastrophe exposure prudently, and invest in scalable growth opportunities to deliver long-term value to our shareholders. We look forward to updating you as the year progresses. Have a good day.

Ladies and gentlemen, thank you so much. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

Greetings, and welcome to the Kingstone Companies, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Stefan Norbum, Kingstone Companies, Inc. Investor Relations representative. Thank you. You may begin.

Thank you and good morning everyone. Joining us on the call today will be President and Chief Executive Officer, Meryl Golden, and Chief Financial Officer, Randy Patten. On behalf of the company, I would like to note this conference may contain forward-looking statements, which involve known and unknown risks and uncertainties, and other factors that may cause actual results to be materially different from projected results. Forward-looking statements speak only as of the date on which they are made, and Kingstone Companies, Inc. undertakes no obligation to update the information discussed. For more information, please refer to the section entitled “Risk Factors” in Part I, Item 1A of the company's latest Form 10-Ks. Additionally, today's remarks may include references to non-GAAP measures. For a reconciliation of these non-GAAP measures to GAAP figures, please see the tables in the latest earnings release available at the company's website at https://www.kingstonecompanies.com. With that, it is my pleasure to turn the call over to Meryl Golden. Meryl?

Thanks, Stefan. Good morning, everyone, and thanks for joining our call. I am delighted to share the results of our most profitable quarter and year in Kingstone Companies, Inc.’s history. I want to thank the amazing Kingstone Companies, Inc. team and our select producers for making it possible. Let me start with the headlines. In the fourth quarter, we delivered net income of $14.8 million, diluted earnings per share of $1.30, diluted operating earnings per share of $1.80, a GAAP net combined ratio of 64.2%, and an annualized return on equity of 51%. For the full year, net income more than doubled to $40.8 million, diluted earnings per share increased 95% to $2.88, and our return on equity was 43%. These results exceeded the guidance we provided in November. I am particularly proud that from year-end 2023 to year-end 2025, we grew direct premiums written 39% while improving our combined ratio by 30 points. These results are structural, not simply weather-driven, and they validate the transformation we have executed. What sets Kingstone Companies, Inc. apart and what drove these results is clear. First, our Select product, now 57% of policies in force compared to 45% one year ago, continues to improve risk selection, properly matching rate to risk and driving lower claims frequency. Second, our producer relationships generate strong retention and consistent new business flow. Third, our operating efficiency, with a net expense ratio that improved from 41% in 2021 to 30% in 2025, provides durable margin advantage. And last, our conservative financial position, with no debt and robust reinsurance, means we can grow with confidence. Turning to the quarter, direct premiums written grew 14% to $82.8 million, driven by higher average premiums and strong retention. For the full year, direct premiums written grew 15% to $277.8 million, and our New York personal lines policies in force grew over 7%. The hard market conditions in our Downstate New York footprint have not changed materially. Demand from our producers remains strong, supported by policies from the GARD Renewable Rights Agreement which we began writing in September. New business policy count has increased sequentially from Q2, and in Q4 grew 25% over Q3. In this environment, what separates the winners from the rest is straightforward: highly segmented products to better assess risk, low expenses, claims execution, and deep producer relationships. We have built these advantages; we will not chase volume at the expense of underwriting discipline. Net earned premium growth remains a powerful tailwind. Net premiums earned increased 38% in the fourth quarter and 46% for the full year, primarily due to our reduced quota share, which allows us to retain a greater share of premium and underwriting profits. The decision to reduce our quota share reflects our confidence in the quality of our book and that our underwriting results warrant retaining more premium. As such, we have reduced our quota share even further for 2026, and net earned premium growth will continue to be a tailwind. On underwriting, our fourth quarter net combined ratio of 64.2% reflects exceptional performance across the board. The underlying loss ratio was 34.7%, an improvement of over 14 points from the prior-year quarter, driven by meaningfully lower claim frequency. The improvement in frequency, particularly for non-weather water, our largest peril, is a trend we have shared throughout the year, and we attribute it to the effectiveness of risk selection in our Select product. During the quarter, we also recognized the benefit from continuing improvements in our claims operations, with faster cycle times and providing earlier visibility into ultimate property claims cost. For the full year, our underlying loss ratio improved nearly 4 points to 44.4%, and our catastrophe loss ratio was just 1.2 points. I want to be direct. While we benefited from very low catastrophe activity in 2025, our underlying performance improved materially. Even with a normalized catastrophe load, our full-year combined ratio would have been in the low 80s, reflecting the differentiated platform we have built. As we shared in the second quarter, we have set a five-year goal of $500 million in direct premiums written by year-end 2029, approximately doubling the size of the company through continued growth in New York, measured expansion into new markets, and strategic inorganic opportunities. I am pleased to share that our first new market will be California, which we will be entering in 2026 on an excess and surplus (E&S) lines basis. California is one of the largest homeowners markets with $15 billion in written premium, almost double the size of New York, and the largest E&S homeowners market in the country, where the supply-demand imbalance for homeowners coverage continues to grow. The E&S approach gives us the flexibility to price wildfire risk using forward-looking models to set prices to achieve our margin requirements and to apply strict underwriting standards, including rigorous property-level risk selection and real-time accumulation management. We will start small, consistent with our disciplined approach, and scale as we gain confidence in our pricing and product. The initial contribution from California will be modest, less than 5% of our 2026 premium, with the vast majority of our volume continuing to come from New York. But the opportunity is enormous, and California will become a large contributor to our growth over time. Turning to our outlook for 2026, I want to explain an important change in how we are reframing our outlook for this year because we think it will help investors better understand our business. Starting this year, we are introducing the underlying combined ratio, which excludes catastrophe losses and prior-year reserve development, as our primary operating lens. We define it as the underlying loss ratio plus the net expense ratio. This metric isolates the performance we control, including pricing, risk selection, claims management, and operating efficiency, from the inherent volatility of catastrophe events. In 2025, our underlying combined ratio was 74.4%, an improvement of 5.1 points from 79.5% in 2024. That improvement is structural. It reflects Select product penetration, earned rate adequacy, and operating leverage, and is independent of catastrophic weather events. At the same time, our record combined ratio of 75% benefited from an outlier low catastrophe loss ratio of just 1.2 points. To put that in context, the six-year average cat loss ratio from 2019 through 2024 is 7.1 points. Both 2024 and 2025 were well below the average, including two consecutive mild winters. So when you look at our 2026 guidance, I want to be very clear about the bridge. The headline year-over-year change in earnings per share and return on equity is driven almost entirely by our assumption of a higher-than-normal catastrophe load, not by any deterioration in our underlying business. In fact, our underlying combined ratio guidance of 74% to 76% is comparable to 2025. The headline story is straightforward: the controllable business is healthy and growing; the year-over-year change reflects cat normalization. Here is our updated guidance for fiscal year 2026: direct premiums written growth of 16% to 20%; an underlying combined ratio, excluding catastrophes and prior-year reserve development, of 74% to 76%; a catastrophe loss assumption of 7 to 10 points, which is at or above the six-year historical average and reflects the elevated winter storm activity we experienced in 2026; and a net combined ratio of 81% to 86%. Diluted earnings per share of $2.20 to $2.90, with a midpoint of $2.55, reflects an increase at the midpoint relative to our initial outlook and the benefit of a lower quota share cession for 2026. The 16% to 20% direct premium growth target helps keep us on pace toward our five-year goal of $500 million in direct premiums written by year-end 2029. I want to give investors the tools to model different catastrophe scenarios. On an illustrative basis, and this is not guidance, each one point of catastrophe loss ratio has approximately a $0.13 impact on diluted earnings per share. So if you want to see what our earnings power looks like at fiscal year 2025 cat levels of 1.2 points, the illustrative answer is approximately $3.53 per diluted share, which represents 23% growth year over year. That is the underlying trajectory of this business. I want to emphasize that weather is unpredictable, and our 2026 guidance assumes a higher-than-average catastrophe year given the winter weather in 2026. As a reminder, our catastrophe reinsurance program limits our maximum first event loss to $5 million pretax, or approximately $0.27 per share after tax, whether from a hurricane or a winter storm. We will refine our outlook as the year unfolds. Before I hand it to Randy, I want to briefly address the regulatory proposals in New York regarding homeowner insurer profitability. We share the goal of affordability for consumers, and we are monitoring these proposals closely and engaging constructively through industry bodies. We believe any final legislation will need to account for the inherent volatility of catastrophe-exposed property insurance and the importance of maintaining carrier capacity and availability for New York homeowners. We will continue to execute with discipline, advance our measured expansion roadmap, and allocate capital prudently to drive sustained profitable growth. I remain highly confident in Kingstone Companies, Inc.’s strategic direction and fully committed to creating long-term shareholder value. With that, I will turn the call over to Randy Patten, our Chief Financial Officer, for a more detailed review of our results. Randy?

Thank you, Meryl, good morning again, everyone. The fourth quarter was our most profitable quarter in the company's history and our ninth consecutive quarter of profitability. During the quarter, we reported net income of $14.8 million, diluted earnings per share of $1.03, a 64.2% combined ratio, and an annualized return on equity of 51%. For the full year, net income was $40.8 million, more than doubling the prior year and the most profitable in company history. Performance is driven by strong net earned premium growth as our reduced quota share and our 2024 new business surge continue to earn in. This was combined with very low catastrophe losses, favorable frequency trends, and lower expenses, aided by adjustments to the sliding-scale ceding commissions due to both an improvement in the attritional loss ratio and low catastrophe losses. As a reminder, the quota share reduction from 27% to 16% for the 2025 treaty year reflected the improved quality of our book and increased our projected earnings per share by approximately $0.25 for 2025. For the 2026 treaty year, we have further reduced our quota share cession from 16% to 5%, reflecting continued confidence in the quality of our underwriting portfolio and capital position to support our growth. This reduction is expected to increase projected earnings per share by approximately $0.20 for 2026, as incorporated in our updated guidance ranges. Our net investment income for the quarter increased 55% to $3.0 million, up from $1.9 million last year. For the full year, we achieved a 44% increase, reaching $9.8 million. The momentum is due to robust cash generation from operations, which has enabled us to grow our investment portfolio to $309.7 million and benefit from higher fixed income yields. We also continue to reposition a portion of the portfolio to capitalize on attractive new money yields of 4.7% in the fourth quarter. While we remain conservative in our investment strategy, we are actively seeking opportunities to enhance our portfolio yield and duration. As of 12/31/2025, our fixed income yield is 4.3% with an effective duration of 4.4 years, up from 3.7% and 3.9 years at 12/31/2024, an increase of 60 basis points and a half year, respectively. During the quarter, we recognized an additional $1.0 million in sliding-scale contingent ceding commissions under our quota share treaty, with about half coming from lower attritional losses and half from lower catastrophe losses, which contributed a 1.9 percentage point decrease in the 27.9% expense ratio reported in the fourth quarter. For the full year of 2025, we reported an expense ratio of 30%, an improvement of 1.3 percentage points from the prior year. Reaching 30% for the expense ratio is an important milestone for the company. As a reminder, the company's expense ratio was 41% in 2021, and in four years we have successfully lowered the expense ratio by 11 points through several expense initiatives. I would now like to provide some detail on the guidance framework Meryl introduced. For the full year 2025, our underlying combined ratio was 74.4%, comprised of a 44.4% underlying loss ratio and a 30% expense ratio. This was a 5.1 point improvement from 79.5% in the prior year. For the full year of 2026, we are guiding to an underlying combined ratio of 74% to 76%, reflecting continued benefits from our Select product and operating leverage. Our full-year 2025 catastrophe loss ratio of 1.2 points was well below the six-year historical average of 7.1 points for the 2019 through 2024 period. Our full-year 2026 guidance includes 7 to 10 catastrophe loss points, which is above our historical average and incorporates the elevated winter storm activity experienced during 2026. The difference between our full-year 2025 reported combined ratio of 75% and our full-year 2026 guided range of 81% to 86% is mostly attributable to the inclusion of above-average catastrophe losses and minimal change to our underlying combined ratio. I will conclude my portion of the call today discussing our capital position. We have no debt at the holding company. Shareholder equity ended the year at $122.7 million, an increase of 84% during the year. Book value per diluted share increased 75% to $8.28, and book value excluding accumulated other comprehensive income increased 56% to $8.69. For 2025, return on equity is 43%, an increase of nearly seven percentage points from the prior year. Given this foundation and our outlook, we declared our third consecutive quarterly dividend during 2026 and have ample capital to fund the disciplined growth initiatives that Meryl outlined. With that, I will now turn the call back to Meryl for closing remarks.

Thanks, Randy. I just want to underscore one thing. The results we are sharing today reflect the durable competitive advantages we have built in underwriting, in our producer relationships, and in our operating model. We are entering 2026 with a strong foundation, a clear roadmap for profitable growth, and the financial flexibility to execute. We look forward to updating you as the year progresses. Operator, we are ready for questions.

Thank you. We will now open for questions. Our first question today is coming from Robert Farnam of Brean Capital. Please go ahead.

Hey there and good morning. I have a couple of questions. One, let us just talk about California first, because obviously California risks are not quite the same as Downstate New York risks. So I kind of wanted to know, and I think this is going to be your first foray into kind of the excess and surplus lines basis of writing things. So I just want to know, how do you see the differences in the risks? How do you expect performance-wise? I am just trying to get a little bit more color as to how California may be different from New York.

Sure. So we hired an actuarial consulting firm earlier this year to look at the landscape of all the catastrophe-exposed property markets for Kingstone Companies, Inc. to expand, and California came out on top because it is a very large market, it is dislocated, and it is completely diversifying for Kingstone Companies, Inc. relative to New York. So our plan is to enter with the same differentiators as we have in New York. We are going to be using our Select product, and that same firm that helped us build the Select product is helping us modify it to be appropriate for the California market. We are entering E&S so we can have a highly segmented product and use best-in-class models for underwriting and rating of wildfire risk and for risk aggregation. And we are fortunate that we have some underwriters and some claims employees that have experience in California, so that will be really helpful to us. But mostly, the point I want to make about our entry into California is that we will be disciplined. Our plan is to enter small, less than 5% of our premium for 2026, make sure we understand the market and we are doing everything right before we expand.

And if I read right in the presentation, you have a 30% quota share on the California business. Is that right?

That is correct. Out of an abundance of caution, we have a 30% quota share for California initially.

Okay. And are you looking to write all across California, or are you looking, like, Northern California, Southern California? Or coastal California? You know, where the wildfires could possibly be? I am just kind of curious. Obviously, in New York, you have a specific targeted area, so I did not know if California would be similar.

Yes. So in California, we are going to write all across the state. It is really important to manage our concentration in any area of California to manage the wildfire exposure, and we will be doing that in real time. And we are focused on low to moderate wildfire risk.

Okay. Same kind of target size value for homes as in New York? Or something?

Same as New York.

Okay. Just to change tack a little bit here. So your expense ratio—obviously, you have had a lot of progress getting it down to 30%. Do you see, like, where do you see a happy run rate as to where that expense ratio can get to? Are you pretty much where you should be, or do you think you could still squeak some improvement out of that?

Randy, do you want to take that?

Sure. Hey, Bob. Good morning.

Hey.

Yes. So reaching a 30% expense ratio is a huge milestone for the company. As you know, if you look back to 2021, we were at 41%. I think with some economies of scale, we can get that expense ratio down possibly another half to a full point. But it is kind of where we expect it to be—kind of in the 29% to 30% range is where ultimately we will be comfortable with that expense range.

Great. I just want to add, Bob, that most of the expense to enter California has already been incurred in terms of developing the product and programming the product, and we will likely need to add some staff, but a modest amount of staff as we continue to grow in California. So I think we are going to get scale economies, as the platform we have built is scalable.

Yes. Right. Yes. I saw that in the presentation. You are talking about your ability to scale up is not going to have a whole lot of impact on the expenses at this point. So that is great. Last question for me—I probably ask you every quarter—but obviously, with such profitable business, has there been a change in competition at this point in New York? It is just something that baffles me that you do not have a whole bunch of other companies trying to get into the same market to try to capture the same profitability.

Yes. I mean, we have been hearing lately about different companies planning to enter the state, but let us not forget that competition has come and gone in New York, and Kingstone Companies, Inc. has been able to execute regardless of the competitive environment. We are in a really good place in Downstate New York. We have our Select product that properly matches rate to risk, low expenses, we are providing great service to our producers and our policyholders, and we have very deep and broad producer relations. So I feel confident we can compete successfully with whoever is entering New York State.

Okay. Good. Good answer. Congrats on a great year. That is it for me.

Thanks, Bob.

Thank you. Next question is coming from Gabriel McClure, a Private Investor. Please go ahead.

Good morning and congrats on an outstanding quarter.

Thanks, Gabe. Yes. So—

I think Bob asked most of the questions that I had for you. Just wanted to circle back on the exposure limits on the policies in California. Can you remind us again what our exposure limits are on our New York policies?

Sure. We just, in New York, increased the available Coverage A, or value of the home, to $5 million. So we had been operating with a max of $3.5 million for all of last year, and we have just increased to $5 million. And that would be our plan for California as well. We are going to start off with a cap that is a bit lower, and as we gain confidence in our product, we will open up to $5 million as well.

Okay. Got it. And then I think in your prepared remarks, you made a little bit of reference to the winter storm that you all had a couple of weeks ago. Did we have some noticeable claim activity from that storm? It looked pretty bad from out here in Arizona.

Yes, Gabe, it is obvious you are not in the Northeast because it has been a bad winter. We have not just had one winter storm. There have actually been seven catastrophe events that have been declared since January 23. So the one thing I want to say is our claims department has been working so hard. I am so proud of the way they have managed this catastrophe event and the service that they have been able to provide to our policyholders. And our estimates for the winter storm losses have been included in our guidance for 2026. So we have mentioned that we are planning for an at or above average catastrophe loss year of 7 to 10 points, and that includes the catastrophe activity from Q1. Hopefully, the winter is over, and there will not be any more catastrophes declared.

Okay. Yes. I hope so. Got it. Okay. And then just last thing, the California opportunity is super exciting and interesting. I know Bob asked most of my questions already, but is there anything interesting or anecdotal that you have about the California market that you might want to share?

I think what is really important to understand is that the market is in need of capacity, and many people think that is because of wildfire. And certainly, wildfire is a major risk for California, but the primary issue in California is the regulatory environment, which precludes companies from charging adequate prices for the underlying exposure. So as an E&S writer, we are not subject to that same regulation, so it gives us a real advantage, and that is why you are seeing in California the E&S market for homeowners is growing faster than any other place in the United States. So I think it is a terrific opportunity to highlight the differentiators that Kingstone Companies, Inc. brings to the market, particularly relative to pricing sophistication and producer relationships, and I am really excited to start writing business there in Q2.

Sounds really good. That is all for me. Thanks, Meryl.

Thanks, Gabe. We are showing no additional questions in queue at this time. I would like to turn the floor back over to Ms. Golden for closing comments.

Great. Thank you, everyone, for joining us today. It is a really exciting time for Kingstone Companies, Inc., and we appreciate your support. Have a wonderful day.

Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.