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The following tables present the changes in the Level 3 fair value category for the periods presented in 2026 and 2025. Octave classifies financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly. Thus, the gains and losses presented below include changes in the fair value related to both observable and unobservable inputs.
Level 3 - Financial Assets and Liabilities Accounted for at Fair Value
InvestmentsDerivativesTotal
Three Months Ended March 31, 2026:
Balance, beginning of period$— $— $— 
Total gains/(losses) realized and unrealized:
Included in earnings— — — 
Included in other comprehensive income— — — 
Purchases— — — 
Settlements— — — 
Balance, end of period$— $— $— 
The amount of total gains/(losses) included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the reporting date$— $— $— 
The amount of total gains/(losses) included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the reporting date$— $— $— 
Three Months Ended March 31, 2025:
Balance, beginning of period$— $— $— 
Total gains/(losses) realized and unrealized:
Included in earnings— — — 
Included in other comprehensive income— — — 
Purchases— — — 
Settlements— — — 
Balance, end of period$— $— $— 
The amount of total gains/(losses) included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the reporting date$— $— $— 
The amount of total gains/(losses) included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the reporting date$—$—$—
Level 3 - Financial Assets and Liabilities Accounted for at Fair Value
InvestmentsDerivativesTotal
Three Months Ended March 31, 2026:
Balance, beginning of period$— $— $— 
Total gains/(losses) realized and unrealized:
Included in earnings— — — 
Included in other comprehensive income— — — 
Settlements— — — 
Balance, end of period$— $— $— 
The amount of total gains/(losses) included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the reporting date$— $— $— 
The amount of total gains/(losses) included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the reporting date$— $— $— 
Three Months Ended March 31, 2025:
Balance, beginning of period$— $— $— 
Total gains/(losses) realized and unrealized:
Included in earnings— — — 
Included in other comprehensive income— — — 
Settlements— — — 
Balance, end of period$— $— $— 
The amount of total gains/(losses) included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the reporting date$— $— $— 
The amount of total gains/(losses) included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the reporting date$— $— $— 
————————————————————————————————————————————————————————————————————————————nono
Gains and losses (realized and unrealized) relating to Level 3 assets and liabilities included in earnings for the three months ended March 31, 2026 and 2025 are reported as follows:
Three Months Ended March 31, 2026Three Months Ended March 31, 2025
Net
Investment
Income		Net Gains
(Losses) on
Derivative
Contracts		Other
Income or
(Expense)		Net
Investment
Income		Net Gains
(Losses) on
Derivative
Contracts		Other
Income or
(Expense)
Total gains (losses) included in earnings for the period$—$—$—$—$—$—
Changes in unrealized gains (losses) relating to financial instruments still held at the reporting date——————
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2026
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number:
1-10777
Octove Logo Jpeg.jpg
OCTAVE SPECIALTY GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware13-3621676
(State of incorporation)(I.R.S. employer identification no.)
40 Wall StreetNew YorkNY10005
(Address of principal executive offices)(Zip code)
(212)
658-7470
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock par value $0.01 per shareOSGNew York Stock Exchange
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes ☒    No  ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act): (Check one):
Large accelerated filer☐Accelerated filer☒Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐    No  ☒
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ☒    No  ☐
As of May 4, 2026, 45,013,592 shares of common stock, par value $0.01 per share, of the Registrant were outstanding.


OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of 1995
Item NumberPageItem NumberPage
PART I. FINANCIAL INFORMATIONPART I (CONTINUED)
1Unaudited Consolidated Financial Statements of Octave Specialty Group, Inc. and Subsidiaries
3
4
PART II. OTHER INFORMATION
1
21A
Overview2
3
5Other Information
6Exhibits
Ambac Financial Group, Inc.i
     First Quarter 2026 Form 10-Q
Table of Contents
CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Management has included in Parts I and II of this Quarterly Report on Form 10-Q, statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “plan,” “believe,” “anticipate,” “intend,” “planned,” “potential” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may,” or the negative of those expressions or verbs, identify forward-looking statements. We caution readers that these statements are not guarantees of future performance. Forward-looking statements are not historical facts, but instead represent only our beliefs regarding future events, which may by their nature be inherently uncertain and some of which may be outside our control. These statements may relate to plans and objectives with respect to the future, among other things, which may change. We are alerting you to the possibility that our actual results may differ, possibly materially, from the expected objectives or anticipated results that may be suggested, expressed or implied by these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those indicated in the forward-looking statements include, among others, those discussed under “Risk Factors.” in Part I, Item 1A of the 2025 Annual Report on Form 10-K and in Part II, Item 1A of this Quarterly Report on Form 10-Q.
Any or all of management’s forward-looking statements, whether contained herein or in other publications, may prove to be incorrect and are based on management’s current belief or opinions. Octave Specialty Group’s (“OSG”) and its subsidiaries’ (collectively, “Octave” or the “Company”) actual results may differ materially from those expressed in, or implied by, these forward-looking statements, and there are no guarantees about the performance of Octave’s securities. Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the high degree of volatility in the price of OSG’s common stock; (2) uncertainty concerning the Company’s ability to achieve value for holders of its securities from the specialty property and casualty insurance business, the insurance distribution business, or related businesses; (3) greater than expected underwriting losses in the Company’s specialty property and casualty insurance business resulting in inadequacy of loss and loss expense reserves and the possibility that changes in reserves may result in further volatility of earnings or financial results; (4) credit risk throughout Octave’s business, including but not limited to issuers of securities in our investment portfolios, and exposures to reinsurers; (5) the Company’s level of indebtedness, including its ability to generate sufficient cash to service obligations, refinance existing debt, or obtain additional financing on acceptable terms, and the resulting impact on financial condition and operating flexibility; (6) dependence on third parties, including specialty insurance program partners, reinsurers, distribution relationships, and other service providers, and the risk of failures or disruptions in their performance; (7) inability to obtain reinsurance coverage on economic terms; (8) loss of key relationships for the production of business in our specialty property and casualty and insurance distribution businesses or the inability to secure such additional relationships to produce expected results; (9) the impact of catastrophic public health events, environmental or natural events, or political events, including as a result of global or regional conflicts; (10) restrictive covenants in agreements and instruments that impair Octave’s ability to pursue or achieve its business strategies; (11) regulatory risks, including disagreements with insurance regulators, changes in laws or regulations, and the Company’s ability to adapt to an evolving regulatory environment; (12) risks related to changes in the composition, valuation, or performance of the Company’s investment portfolio, including interest rate and foreign currency exchange rate fluctuations; (13) events or circumstances that result in the impairment of our intangible assets and/or goodwill that were recorded in connection with Octave’s acquisitions; (14) the risk of litigation,
regulatory inquiries, investigations, claims or proceedings, and the risk of adverse outcomes in connection therewith; (15) system security risks, data protection breaches and cyberattacks; (16) our inability to attract and retain qualified executives, senior managers and other employees, or the loss of such personnel; (17) greater competition for our specialty property and casualty insurance business and/or our insurance distribution business; (18) loss or lowering of the AM Best rating for our property and casualty insurance company subsidiaries; (19) disintermediation within the insurance industry or greater competition from technology-based insurance solutions or non-traditional insurance markets; (20) changes in law or in the functioning of the healthcare market that impair the business model of our accident and health managing general agents; (21) failure to successfully execute business expansion initiatives, integrate acquired businesses, or realize anticipated benefits from such efforts and significant obligations under put rights granted in completed acquisitions; and (22) other risks and uncertainties that have not been identified at this time.
Octave Specialty Group, Inc.
1
     First Quarter 2026 Form 10-Q
Table of Contents
PART I.    FINANCIAL INFORMATION
Item 1.     Unaudited Financial Statements of Octave Specialty Group, Inc. and Subsidiaries
OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
March 31,December 31,
(Dollars in thousands, except share data) (March 31, 2026 (Unaudited))20262025
Assets:
Investments:
Fixed maturity securities - available-for-sale, at fair value (amortized cost of $139,242 and $123,414)
$137,092 $122,295 
Short-term investments, at fair value (amortized cost of $92,295 and $146,434)
92,295 146,442 
Other investments (includes $7,454 and $7,454 at fair value)
24,971 24,971 
Total investments (net of allowance for credit losses of $0 and $0)
254,358 293,708 
Cash and cash equivalents (including $46,634 and $40,754 of restricted cash)
93,537 68,440 
Premium receivables (net of allowance for credit losses of $500 and $500)
87,653 75,085 
Commission and fees receivable106,198 86,549 
Reinsurance recoverable on paid and unpaid losses (net of allowance for credit losses of $100 and $100)
469,859 436,092 
Deferred ceded premium145,420 146,365 
Policy acquisition costs16,451 9,732 
Intangible assets, less accumulated amortization458,380 474,998 
Goodwill533,497 540,345 
Other assets (net of allowance for credit losses of $350 and $350)
101,673 92,003 
Total assets2,267,026 2,223,317 
Liabilities and Stockholders’ Equity:
Liabilities:
Unearned premiums$198,681 $187,178 
Loss and loss adjustment expense reserves487,261 459,990 
Ceded premiums payable89,148 80,561 
Deferred program fees and reinsurance commissions6,929 6,978 
Commissions payable118,086 115,555 
Deferred taxes60,553 65,217 
Short-term debt— — 
Long-term debt117,062 117,558 
Accrued interest payable1,305 1,343 
Other liabilities158,458 102,771 
Total liabilities1,237,483 1,137,151 
Commitments and contingencies (See Note 14)
Redeemable noncontrolling interest195,969 252,981 
Stockholders’ equity:
Preferred stock, par value $0.01 per share; 20,000,000 shares authorized shares; issued and outstanding shares—none
— — 
Common stock, par value $0.01 per share; 130,000,000 shares authorized; issued shares: 48,876,882 and 48,876,882
489 489 
Additional paid-in capital380,263 369,860 
Accumulated other comprehensive income1,224 8,483 
Retained earnings363,751 370,431 
Treasury stock, shares at cost: 3,863,290 and 3,871,598
(33,109)(33,473)
Total Octave Specialty Group, Inc. stockholders’ equity 712,618 715,790 
Nonredeemable noncontrolling interest120,956 117,395 
Total stockholders’ equity 833,574 833,185 
Total liabilities, redeemable noncontrolling interest and stockholders’ equity$2,267,026 $2,223,317 
See accompanying Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc.
2
     First Quarter 2026 Form 10-Q
Table of Contents
-OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Loss) (Unaudited)
Three Months Ended March 31,
(Dollars in thousands, except share data)20262025
Revenues:
Commissions$68,178 $36,771 
Servicing and other fees9,362 4,964 
Net premiums earned20,001 15,678 
Program fees3,644 3,652 
Investment income2,355 2,815 
Other630 (1,124)
Total revenues104,170 62,756 
Expenses:
Commissions14,005 10,365 
Losses and loss adjustment expenses19,679 10,496 
Policy acquisition costs6,371 3,841 
General and administrative53,155 38,531 
Intangible amortization and depreciation12,214 9,176 
Interest2,090 5,454 
Total expenses107,514 77,863 
Pretax income (loss) from continuing operations(3,344)(15,107)
Provision (benefit) for income taxes from continuing operations(481)(617)
Net income (loss) from continuing operations(2,863)(14,490)
Net income (loss) from discontinued operations, net of tax (including loss on disposal of $14,497 for the three months ended March 31, 2025)
— (30,247)
Net income (loss)(2,863)(44,737)
Net (gain) loss attributable to noncontrolling interest(3,988)(1,654)
Net income (loss) attributable to shareholders$(6,851)$(46,391)
Net income (loss) attributable to shareholders
Continuing operations$(6,851)$(16,144)
Discontinued operations— (30,247)
Total$(6,851)$(46,391)
Net income (loss) from continuing operations per share attributable to stockholders
Basic$(0.13)$(0.57)
Diluted$(0.13)$(0.57)
Net income (loss) from discontinued operations per share attributable to stockholders
Basic$— $(0.64)
Diluted$— $(0.64)
Net income (loss) per share attributable to stockholders
Basic$(0.13)$(1.21)
Diluted$(0.13)$(1.21)
Weighted-average number of common shares outstanding:
Basic45,302,933 47,313,012 
Diluted45,302,933 47,313,012 
See accompanying Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc.
3
     First Quarter 2026 Form 10-Q
Table of Contents
OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
Three Months Ended March 31,
(Dollars in thousands, except share data)20262025
Net income (loss)$(2,863)$(44,737)
Unrealized gains (losses) on securities, net of income tax provision (benefit) of $0 and $645
(1,039)18,606 
Gains (losses) on foreign currency translation, net of income tax provision (benefit) of $0 and $0
(12,590)44,720 
Credit risk changes of fair value option liabilities, net of income tax provision (benefit) of $0 and $147
— 442 
Total other comprehensive income (loss), net of income tax(13,629)63,768 
Total comprehensive income (loss), net of income tax(16,492)19,031 
Less: net (gain) loss attributable to noncontrolling interest(3,988)(1,654)
Less: (gain) loss on foreign currency translation attributable to noncontrolling interest6,370 (10,361)
Total comprehensive income (loss) attributable to shareholders$(14,110)$7,016 
See accompanying Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc.
4
     First Quarter 2026 Form 10-Q
Table of Contents
OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity (Unaudited)
Three months ended March 31, 2026 and 2025
Stockholders' EquityMezzanine
Octave Specialty Group, Inc.Equity
(Dollars in thousands)TotalPreferred
Stock		Common
Stock		Additional Paid-in
Capital		Accumulated
Other
Comprehensive
Income		Retained
Earnings		Common
Stock Held
in Treasury,
at Cost
Non-
redeemable
NCI (1)
Redeemable
NCI (1)
Balance at December 31, 2025$833,185 $— $489 $369,860 $8,483 $370,431 $(33,473)$117,395 $252,981 
Total net income (loss) (4,843)— — — — (6,851)— 2,008 1,980 
Total other comprehensive income (loss)(9,436)— — — (7,259)— — (2,177)(4,193)
Stock-based compensation4,722 — — 4,722 — — — — — 
Cost of shares repurchased— — — — — — — — — 
Cost of shares (acquired) issued under equity plan(272)— — — — (636)364 — — 
Changes to noncontrolling interest10,218 — — 5,681 — 807 — 3,730 (54,799)
Balance at March 31, 2026$833,574 $— $489 $380,263 $1,224 $363,751 $(33,109)$120,956 $195,969 
Balance at December 31, 2024$996,119 $— $489 $331,007 $(188,436)$683,643 $(28,339)$197,755 $199,402 
Total net income (loss) (44,995)— — — — (46,391)— 1,396 258 
Total other comprehensive income (loss)58,110 — — — 53,407 — — 4,703 5,658 
Stock-based compensation2,349 — — 2,349 — — — — — 
Cost of shares repurchased(3,122)— — — — (3,122)— — 
Cost of shares (acquired) issued under equity plan(1,605)— — — — (3,121)1,516 — — 
Changes to noncontrolling interest(40,852)— — — — (10,825)— (30,027)40,143 
Balance at March 31, 2025$966,004 $— $489 $333,356 $(135,029)$623,306 $(29,945)$173,827 $245,461 
(1) NCI = Noncontrolling interest
See accompanying Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc.
5
     First Quarter 2026 Form 10-Q
Table of Contents
OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended March 31,
(Dollars in thousands)20262025
Cash flows from operating activities:
Net income (loss)$(2,863)$(44,737)
Net income (loss) from discontinued operations— (30,247)
Net income (loss) from continuing operations(2,863)(14,490)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Intangible amortization and depreciation12,214 9,176 
Share-based compensation4,722 2,349 
Deferred income taxes(4,664)(393)
Unearned premiums, net12,448 2,327 
Losses and loss expenses, net(6,496)(20,876)
Ceded premiums payable8,587 28,356 
Premium and commissions receivables(32,204)(18,813)
Commissions payable2,531 9,586 
Corporate costs reallocated to continuing operations— 2,763 
Other, net(4,354)(12,597)
Net cash provided by (used in) operating activities from continuing operations(10,079)(12,612)
Cash flows from investing activities:
Proceeds from matured bonds11,492 8,488 
Purchases of bonds(27,258)(10,990)
Change in short-term investments54,169 25,972 
Other, net(695)(2,131)
Net cash provided by (used in) investing activities from continuing operations37,708 21,339 
Cash flows from financing activities:
Payments for purchases of common stock held in treasury— (3,122)
Payments for long-term debt(625)— 
Tax payments related to shares withheld for share-based compensation plans(572)(1,606)
Distributions to noncontrolling interest holders(553)(708)
Acquisitions of noncontrolling interest shares(383)— 
Net cash provided by (used in) financing activities from continuing operations(2,133)(5,436)
Effect of foreign exchange on cash and cash equivalents - continuing operations(399)1,094 
Net cash provided by (used in) continuing operations25,097 4,385 
Cash, cash equivalents, and restricted cash at beginning of period - continuing operations68,440 47,275 
Cash, cash equivalents, and restricted cash at end of period - continuing operations93,537 51,660 
Net cash provided by (used in) operating activities from discontinued operations— 43,904 
Net cash provided by (used in) investing activities from discontinued operations— 13,150 
Net cash provided by (used in) financing activities from discontinued operations— (48,369)
Effect of foreign exchange on cash and cash equivalents - discontinued operations— 225 
Net cash provided by (used in) discontinued operations— 8,910 
Cash, cash equivalents, and restricted cash at beginning of period - discontinued operations— 66,077 
Cash, cash equivalents, and restricted cash at end of period - discontinued operations$— $74,987 
Cash paid during the period for:
Interest on debt$1,999 $3,819 
Income taxes$1,483 $1,885 
Non-cash investing and financing activities:
Noncontrolling interests acquired in connection with put / call option exercises$43,644 $— 
See accompanying Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc.
6
     First Quarter 2026 Form 10-Q
Table of Contents

OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Background and Business DescriptionNote 9. Debt
Note 2. Segment InformationNote 10. Revenues From Contracts with Customers
Note 3. Discontinued OperationsNote 11. Comprehensive Income (Loss)
Note 4. InvestmentsNote 12. Net Income Per Share
Note 5. Fair Value MeasurementsNote 13. Income Taxes
Note 6. Insurance ContractsNote 14. Commitments and Contingencies
Note 7. Derivative Instruments
Note 8. Goodwill and Intangible Assets
Octave Specialty Group, Inc.
7
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
1.    BACKGROUND AND BUSINESS DESCRIPTION
Business
The following description provides an update of Note 1. Background and Business Description and Note 2. Basis of Presentation and Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and should be read in conjunction with the complete descriptions provided in the Form 10-K. Capitalized terms used, but not defined herein, and in the other footnotes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q shall have the meanings ascribed thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Octave Specialty Group, Inc. (“OSG”), headquartered in New York City, is a financial services holding company incorporated in the state of Delaware on April 29, 1991. References to “Octave,” "OSG", the “Company,” “we,” “our,” and “us” are to OSG and its subsidiaries, as the context requires. Octave operates two principal businesses:
•Insurance Distribution — Octave's specialty property and casualty ("P&C") insurance underwriting and distribution business, includes Managing General Agents and Underwriters (collectively "MGAs" or "MGA/Us"); an insurance broker; and other distribution, underwriting and related businesses. On October 31, 2025, the Company completed the acquisition of ArmadaCorp Capital, LLC and its subsidiaries (collectively, "ArmadaCorp"), a leading specialty accident and health MGA. Octave's insurance distribution platform operates in the following lines of business: property, niche specialty risk, accident & health, miscellaneous specialty, reinsurance, surety, marine & energy, specialty auto, Excess & Surplus ("E&S") commercial package, professional lines and Directors & Officers ("D&O") .
•Specialty Property & Casualty Insurance — Octave's Specialty Property & Casualty Insurance program insurer business currently includes five carriers (collectively, “Everspan”). Everspan carriers have an A.M. Best rating of 'A-' (Excellent), which was affirmed on July 17, 2025.
The Company reports these two business operations as segments; see Note 2. Segment Information for further information.
Basis of Presentation
The Company has disclosed its significant accounting policies in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The accompanying unaudited consolidated financial statements have been prepared on the basis of U.S. generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and disclosures required by GAAP for annual periods. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025. The accompanying consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (U.S.), but in the opinion of management such financial statements include all adjustments necessary for the fair presentation of the Company’s consolidated financial position and results of operations. The results of operations for the three months ended March 31, 2026, may not be indicative of the results that may be expected for the year ending December 31, 2026 due to seasonality within the Insurance Distribution segment and other factors. The December 31, 2025, consolidated balance sheet was derived from audited financial statements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions could change in the future as more information becomes available or actual amounts become determinable, which could affect the amounts reported and disclosed herein, at which point the recorded estimates are revised and reflected in operating results. Actual results could differ from those estimates.
Consolidation
The consolidated financial statements include the accounts of OSG and all other entities in which OSG (directly or through its subsidiaries) has a controlling financial interest. All significant intercompany balances have been eliminated. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity.
Discontinued Operations
On September 29, 2025, the Company completed the sale of its Legacy Financial Guarantee business, inclusive of Ambac Assurance Corporation ("AAC") and its wholly owned subsidiary Ambac Assurance UK Limited. The results of discontinued operations for all periods to the date of sale are reported separately as Net income (loss) from discontinued operations within the Consolidated Statements of Income (Loss) for the prior periods. Assets and liabilities of AAC prior to the date of sale are presented as Assets of discontinued operations and Liabilities of discontinued operations. AAC's cash flows for all periods to the date of sale are reflected as Net cash provided by (used in) discontinued operations within the Consolidated Statements of Cash Flows.
Refer to Sale of Ambac Assurance Corporation in Note 3. Discontinued Operations for further information.
Octave Specialty Group, Inc.
8
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Foreign Currency
The impact of non-functional currency transactions and the remeasurement of non-functional currency assets and liabilities into the respective subsidiaries' functional currency (collectively "foreign currency transactions gains/(losses)") are $1,189 and $(1,582) for the three months ended March 31, 2026 and 2025, respectively. Foreign currency transaction gains/(losses) are primarily the result of Octave Ventures transactions in currencies (primarily the U.S. dollar) other than its functional currency (the British Pound Sterling).
Noncontrolling Interests ("NCI")
Nonredeemable NCI
The total Nonredeemable NCI as of March 31, 2026, and December 31, 2025, was $120,956 and $117,395, respectively, for the NCI share in certain Octave Ventures' operating units that are minority owned by the units' respective management teams that do not have associated put options. At the beginning of 2025, there were no put options associated with any of these minority interests, and as such, the aggregate amount was classified as nonredeemable NCI on the balance sheet. During the three months ended March 31, 2025, certain NCI shares were reclassified from nonredeemable to redeemable NCI as further described under "Redeemable NCI" below. When redeemable NCI shares are no longer redeemable, such as when put options expire unused, the NCI shares are reclassified to nonredeemable NCI with no change in carrying value.
Redeemable NCI
During the three months ended March 31, 2026, the minority owners of Octave Ventures exercised put options and certain Option Shares were also exercised. In addition, Octave purchased certain redeemable NCI shares from a minority interest owner of CMC.
Ownership Percentage
CompanyMarch 31,
2026		December 31,
2025
Capacity Marine87%80%
Octave Ventures (1)
70%60%
(1)Octave Ventures' majority interests in its underlying MGAs ranges from 51% to 100% at March 31, 2026, and 60% to 100% at December 31, 2025, together with Octave's direct ownership in some underlying MGAs, resulting in Octave's interest ranging from 36% to 70% at March 31, 2026 and 36% to 60% at December 31, 2025, respectively, in each underlying MGA/U.
Under the terms of applicable agreements, Octave has call options to purchase the remaining NCI from the minority owners and the minority owners have put options to sell their interests to Octave. Because the exercise of the put options is outside of Octave's control, in accordance with the Distinguishing Liabilities from Equity Topic of the ASC, Octave reports redeemable NCI in the mezzanine section of its consolidated balance sheet. In addition, during the three months ended March 31, 2025, Octave entered into put options with certain minority owners of the MGA/U operating entities that are majority owned by Octave Ventures. These put options are embedded in the associated NCI shares ("Option Shares"), resulting in remeasurement of the shares at fair value inclusive of the put options, and reclassification of the
Option Shares from nonredeemable NCI to redeemable NCI. The change in carrying value resulting from revaluation of $10,276 was recorded as an offset to retained earnings, with a corresponding impact on earnings per share for the three months ended March 31, 2025. During the three months ended March 31, 2026 and 2025, put options on certain Option Shares expired, resulting in reclassification of the associated redeemable NCI balances of $3,841 and $1,877, respectively, to nonredeemable NCI.
During the three months ended March 31, 2026, Octave acquired redeemable NCI with a carrying value of $49,214 as a result of the exercise of put options by the minority owners of Octave Ventures and of certain Option Shares. The aggregate consideration payable for these shares of $43,644 is included in Other liabilities on the Consolidated Balance Sheets as of March 31, 2026, and was subsequently settled in cash in April 2026. The difference between the consideration paid and carrying value of the redeemable NCI is recorded as an adjustment to additional paid-in capital. Additionally, during the three months ended March 31, 2026, Octave paid $383 to purchase certain redeemable NCI shares from a minority interest owner of CMC, resulting in a $494 decrease to redeemable NCI. During the three months ended March 31, 2025, there was no activity related the exercise of the put options on the Option Shares.
The acquisition date valuation method used to determine the fair value of redeemable NCI and related put and call options was a Monte Carlo Simulation. The significant fair value assumptions used in the simulation include the exercise thresholds, EBITDA forecasts, discount rate and long-term growth rates. The redeemable NCI is remeasured each period as the greater of:
i.the carrying value under ASC 810, which attributes a portion of consolidated net income (loss) to the redeemable NCI, and
ii.the redemption value of the put option under ASC 480.
At each reporting period, the redeemable NCI balance increases or decreases due to activity related to net income and distributions. Management calculates the redemption value of the put options under ASC 480 on an annual basis using prior-year EBITDA and related adjustments as prescribed by the terms of the relevant redemption provisions, or when otherwise required based on the terms of the redemption provisions. Management evaluates the redemption value and would record adjustments other than annually upon a change in contractual terms.
Any increase or (decrease) in the carrying value of the redeemable NCI as a result of adjusting to the redemption value of the put option is recorded as an offset to retained earnings. The impact of such differences on earnings per share are presented in Note 12. Net Income Per Share.
Octave Specialty Group, Inc.
9
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Following is a rollforward of redeemable NCI interest for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
2026
2025
Beginning balance
$
252,981 
$
199,402 
Net income attributable to redeemable NCI (ASC 810)1,980 258 
Gain (loss) on foreign currency translation attributable to redeemable NCI
(4,193)
5,658 
Reclassification from nonredeemable NCI, including remeasurement at fair value
— 
42,180 
Reclassification to nonredeemable NCI(3,841)(1,877)
Put / call option exercise
(49,708)
— 
Distributions(443)(708)
Adjustment to redemption value (ASC 480 )(807)548 
Ending balance$195,969 $245,461 
Immaterial Correction of Prior Period Error
The Company previously identified an immaterial prior period error for the three months ended March 31, 2025, related to the redeemable NCI redemption value adjustment recorded under ASC 810-10. In accordance with the U.S. Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” and ASC 250, Accounting Changes and Error Corrections, the Company assessed the impact of this error correction on its previously issued consolidated financial statements and concluded that the error is not material to any prior period. The immaterial error impacts the Consolidated Balance Sheet, Consolidated Statement of Comprehensive Income (Loss), Consolidated Statement of Stockholders' Equity and Earnings (Loss) Per Share.
The error was identified subsequent to the filing of the Company's Quarterly Reports on Form 10-Q for the three months ended March 31, 2025, June 30, 2025 and September 30, 2025, and prior to the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The impact of the correction for the three months ended March 31, 2025 is shown below.
Corrected Consolidated Statement of Comprehensive Income (Loss):
Three Months Ended March 31, 2025
As ReportedImmaterial CorrectionAs Corrected
Gain on foreign currency translation, net of income tax provision$36,220 $8,500 $44,720 
(Gain) loss on foreign currency translation attributable to noncontrolling interest$(4,252)$(6,109)$(10,361)
Total comprehensive income (loss) attributable to shareholders$4,625 $2,391 $7,016 
Corrected Consolidated Statement of Stockholders’ Equity:
Three Months Ended March 31, 2025
As ReportedImmaterial CorrectionAs Corrected
Balance at December 31, 2024$1,054,661 $(58,542)$996,119 
Total net income (loss)— (44,995)(44,995)
Total other comprehensive income (loss)— 58,110 58,110 
Total comprehensive income (loss)8,877 (8,877)— 
Stock-based compensation2,349 — 2,349 
Cost of shares repurchased(3,122)— (3,122)
Cost of shares (acquired) issued under equity plan(1,605)— (1,605)
Changes to noncontrolling interest(35,112)(5,740)(40,852)
Balance at March 31, 2025$1,026,048 $(60,044)$966,004 
Corrected Earnings (Loss) Per Share:
Three Months Ended March 31, 2025
As ReportedImmaterial CorrectionAs Corrected
Net income (loss) from continuing operations per share attributable to stockholders
Basic$(0.58)$0.01 $(0.57)
Diluted$(0.58)$0.01 $(0.57)
Net income (loss) per share attributable to shareholders
Basic$(1.22)$0.01 $(1.21)
Diluted$(1.22)$0.01 $(1.21)
Corrected rollforward of redeemable NCI:
Three Months Ended March 31, 2025
As ReportedImmaterial CorrectionAs Corrected
Beginning balance$140,860 $58,542 $199,402 
Reclassification from nonredeemable NCI, including remeasurement at fair value42,180 — 42,180 
Reclassification to nonredeemable NCI(1,877)— (1,877)
Net income attributable to redeemable NCI (ASC 810)258 — 258 
Distributions(708)— (708)
Adjustment to redemption value (ASC 480)907 (359)548 
Gain (loss) on foreign currency translation attributable to redeemable NCI3,797 1,861 5,658 
Ending balance$185,417 $60,044 $245,461 
Octave Specialty Group, Inc.
10
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Reclassifications and Rounding
Reclassifications may have been made to prior years' amounts to conform to the current year's presentation. Certain amounts and tables in the consolidated financial statements and associated notes may not add due to rounding.
Adopted Accounting Standards
Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025-05, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in the ASU provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions under Topic 606. The practical expedient allows entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.
Octave has adopted the practical expedient allowed under this ASU for the measurement of expected credit losses on current accounts receivable and current contract assets arising from transactions under Topic 606 for interim and annual reporting periods beginning January 1, 2026. The standard did not have a material impact on Octave's financial statements.
There have been no other new accounting standards adopted during the three months ended March 31, 2026.
Future Application of Accounting Standards and Required Disclosures
Goodwill and Other — Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, Intangibles— Goodwill and Other— Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal Use Software. This standard is intended to increase the operability of the accounting guidance for internal-use software development costs considering the evolution of software development methods. Amendments remove references to prescriptive and sequential project stages, requiring entities to
start capitalizing costs when: (i) management has authorized and committed to funding the project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.
The ASU is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. Octave has not determined if it will early adopt this ASU and is evaluating the ASU's potential impact on Octave's financial statements.
Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The enhanced disclosures requirements include the following:
•Disclose the amounts of certain expense categories included in each relevant expense caption. Those categories applicable to Octave include employee compensation, depreciation, and intangible asset amortization. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed above.
•Include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements.
•Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.
•Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.
The ASU is effective for annual periods beginning after December 15, 2026 and for interim reporting periods after December 15, 2027 with early adoption permitted. Octave has not determined if it will early adopt this ASU and is evaluating the potential impact on Octave's financial statements.

Octave Specialty Group, Inc.
11
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
2.    SEGMENT INFORMATION
The Company reports its results of continuing operations in two segments: Specialty Property and Casualty Insurance and Insurance Distribution ("ID"). These reportable segments offer distinct products and services as further described in Note 1. Background and Business Description. The operating entities within each segment are wholly or majority owned by separate intermediate holding companies: Everspan Holdings, LLC for Specialty Property and Casualty Insurance and Octave Partners LLC for ID. The Company's segments have separate management teams with incentive compensation structures based on segment level performance. Financial reporting for each segment is regularly provided to the Company's Chief Executive Officer, who is the chief operating decision maker ("CODM") for purposes of monitoring the businesses, assessing performance and allocating resources.
The following tables summarize the components of the Company’s total revenues and expenses and pretax income (loss) by reportable business segment for the three months ended March 31, 2026 and 2025 as well as segment assets as of March 31, 2026 and 2025. Information provided below for “Corporate and Other” primarily relates to the operations of OSG, which include investment income on its investment portfolio and costs to maintain the operations of OSG, including public company reporting, capital management and business development costs for the acquisition and development of new business initiatives. As a result of the Company reporting the results of operations of AAC as discontinued operations, certain corporate costs charged to AAC totaling $2,763 for the three months ended March 31, 2025, have been reported in Net income from continuing operations on the Consolidated Statements of Income (Loss) and included in Corporate and Other in the tables below.
Octave Specialty Group, Inc.
12
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)

Three Months Ended March 31, 2026Three Months Ended March 31, 2025
Reportable SegmentsReportable Segments
Specialty Property & Casualty InsuranceInsurance DistributionCorporate & OtherTotalSpecialty Property & Casualty InsuranceInsurance DistributionCorporate & OtherTotal
Revenues:
Net premiums earned$20,001 $20,001 $15,678 $15,678 
Commissions$68,178 68,178 $36,771 36,771 
Servicing and other fees9,362 9,362 4,964 4,964 
Program fees3,644 3,644 3,652 3,652 
Investment income1,649 308 $398 2,355 1,842 376 $597 2,815 
Other5 678 (53)630 (1)(1,113)(10)(1,124)
Total revenues from continuing operations25,299 78,526 345 104,170 21,171 40,998 587 62,756 
Less:
Losses and loss adjustment expenses19,679 19,679 10,496 10,496 
Policy acquisition costs6,371 6,371 3,841 3,841 
Commissions14,005 14,005 10,365 10,365 
Intangible amortization and depreciation11,942 272 12,214 8,872 304 9,176 
Interest2,090 2,090 5,454 5,454 
Compensation expense5,298 24,983 6,763 37,044 3,510 13,533 5,844 22,887 
Non-compensation expense2,234 8,721 5,156 16,111 1,821 5,017 8,806 15,644 
Total expenses from continuing operations33,581 61,741 12,192 107,514 19,668 43,241 14,954 77,863 
Segment pretax income (loss)(8,282)16,785 (11,847)(3,344)1,503 (2,243)(14,367)(15,107)
Segment income tax expense (benefit)(592)(368)479 (481)78 (500)(195)(617)
Segment net income (loss)(7,690)17,153 (12,326)(2,863)1,425 (1,743)(14,172)(14,490)
Segment net (income) loss attributable to NCI— (3,988)(3,988)— (1,654)(1,654)
Net income (loss) attributable to shareholders$(7,690)$13,165 $(12,326)(6,851)$1,425 $(3,397)$(14,172)(16,144)
Reconciliation to consolidated net income (loss) attributable to shareholders
Discontinued operations— (30,247)
Net income (loss) attributable to shareholders$(6,851)$(46,391)
Reconciliation of segment assets to consolidated total assets
Total assets$933,974 $1,264,704 $68,348 $2,267,026 $802,856 $929,172 $129,250 $1,861,278 
Discontinued operations6,392,004 
Total consolidated assets$8,253,282 
EBITDA Reconciliation
Segment net income (loss)$(7,690)$17,153 $(12,326)$(2,863)$1,425 $(1,743)$(14,172)$(14,490)
Adjustments:
Interest expense— 2,090 — 2,090 — 5,454 — 5,454 
Income tax expense (benefit)(592)(368)479 (481)78 (500)(195)(617)
Depreciation expense— 295 272 567 — 109 304 413 
Intangible amortization expense— 11,647 — 11,647 — 8,763 — 8,763 
EBITDA(8,282)30,817 (11,575)10,960 1,503 12,083 (14,063)(477)
Impact of noncontrolling interests— (7,350)(7,350)— (5,000)(5,000)
EBITDA attributable to shareholders$(8,282)$23,467 $(11,575)$3,610 $1,503 $7,083 $(14,063)$(5,477)
(1)Inter-segment revenues and inter-segment pretax income (loss) amounts are insignificant and are not presented separately.
3.    DISCONTINUED OPERATIONS
Sale of Ambac Assurance Corporation ("AAC")
On September 29, 2025, the Company completed the sale of AAC. See Note 5. Discontinued Operation in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for further information regarding the sale.
Octave Specialty Group, Inc.
13
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
The following table summarizes the major line items constituting net income (loss) from discontinued operations reconciled to net income (loss) from discontinued operations presented in the Consolidated Statements of Income (Loss) for the three months ended March 31, 2025:
Three months ended March 31,2025
Revenues:
Net premiums earned$4,763 
Net investment income20,700 
Net investment gains (losses), including impairments(5,954)
Net gains (losses) on derivative contracts(533)
Other revenues7,821 
Total revenues26,797 
Expenses:
Loss and loss adjustment expenses (benefit)10,735 
Intangible amortization5,826 
General & administrative and other expenses9,082 
Interest expense15,951 
Total expenses41,594 
Pretax income (loss)(14,797)
Provision for income taxes953 
Loss on disposal (1)
(14,497)
Net income (loss) from discontinued operations$(30,247)
(1)     Loss on disposal reflects changes to the difference between the fair value of net consideration to be received and the carrying value of net assets held-for-sale, less expected closing costs.
4.    INVESTMENTS
Octave's invested assets are primarily comprised of (i) fixed maturity securities classified as available for sale, (ii) an investment in a limited partnership and (iii) preferred equity investments. The investments in the limited partnership interest and preferred equity investments are reported within Other investments on the Consolidated Balance Sheets. The limited partnership, which holds pooled investments, is reported using the equity method.
Fixed Maturity Securities:
The amortized cost and estimated fair value of available-for-sale investments, at March 31, 2026 and December 31, 2025, were as follows:
March 31, 2026:December 31, 2025:
Amortized
Cost		Allowance for Credit Losses Gross UnrealizedEstimated
Fair Value		Amortized
Cost		Allowance for Credit LossesGross UnrealizedEstimated
Fair Value
GainsLossesGainsLosses
Fixed maturity securities:
Municipal obligations$10,606 $87 $217 $10,476 $11,697 — $121 $228 $11,590 
Corporate obligations78,891 298 2,249 76,940 67,881 — 634 1,942 66,573 
U.S. government obligations39,094 166 218 39,042 35,190 — 365 131 35,424 
Residential mortgage-backed securities2,643 5 21 2,627 1,604 — — 7 1,597 
Commercial mortgage-backed securities5,002 23 40 4,985 3,307 — 42 8 3,341 
Collateralized debt obligations1,626 5 1 1,630 1,963 — 12 — 1,975 
Other asset-backed securities1,380 12 — 1,392 1,772 — 23 — 1,795 
Total fixed maturity securities139,242 — 596 2,746 137,092 123,414 — 1,197 2,316 122,295 
Short-term investments92,295 — — — 92,295 146,434 — 8 — 146,442 
Total available-for-sale investments$231,537 $— $596 $2,746 $229,387 $269,848 — $1,205 $2,316 $268,737 

Octave Specialty Group, Inc.
14
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
The amortized cost and estimated fair value of available-for-sale investments, by contractual maturity, were as follows:
March 31, 2026
Amortized
Cost		Estimated
Fair Value
Due in one year or less$117,446 $117,313 
Due after one year through five years47,546 45,845 
Due after five years through ten years55,344 55,042 
Due after ten years550 553 
220,886 218,753 
Residential mortgage-backed securities2,643 2,627 
Commercial mortgage-backed securities5,002 4,985 
Collateralized debt obligations1,626 1,630 
Other asset-backed securities1,380 1,392 
Total available-for-sale investments$231,537 $229,387 
December 31, 2025
Amortized
Cost		Estimated
Fair Value
Due in one year or less$180,013 $179,824 
Due after one year through five years32,409 31,588 
Due after five years through ten years47,801 47,619 
Due after ten years979 998 
261,202 260,029 
Residential mortgage-backed securities1,604 1,597 
Commercial mortgage-backed securities3,307 3,341 
Collateralized debt obligations1,963 1,975 
Other asset-backed securities1,772 1,795 
Total$269,848 $268,737 
Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.
Unrealized Losses on Fixed Maturity Securities
The following table shows gross unrealized losses and fair values of Octave's available-for-sale investments, which at March 31, 2026 and December 31, 2025, did not have an allowance for credit losses under the CECL standard. This information is aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Less Than 12 Months12 Months or MoreTotalLess Than 12 Months12 Months or MoreTotal
Fair ValueGross
Unrealized
Loss		Fair ValueGross Unrealized LossFair ValueGross Unrealized LossFair 
Value		Gross
Unrealized
Loss		Fair 
Value		Gross
Unrealized
Loss		Fair 
Value		Gross
Unrealized
Loss
Fixed maturity securities:
Municipal obligations$532 $20 $4,904 $197 $5,436 $217 $535 $16 $5,820 $212 $6,355 $228 
Corporate obligations22,033 249 26,654 2,000 48,687 2,249 1,807 10 30,751 1,932 32,558 1,942 
U.S. government obligations14,522 124 6,770 94 21,292 218 2,206 14 9,491 117 11,697 131 
Residential mortgage-backed securities473 8 1,454 13 1,927 21 — — 1,596 7 1,596 7 
Commercial mortgage-backed securities2,518 40 — — 2,518 40 763 8 — — 763 8 
Collateralized debt obligations68 — — 1 68 1 — — — — — — 
Other asset-backed securities— — — — — — — — — — — — 
40,146 441 39,782 2,305 79,928 2,746 5,311 48 47,658 2,268 52,969 2,316 
Short-term— — — — — — — — — — — — 
40,146 441 39,782 2,305 79,928 2,746 5,311 48 47,658 2,268 52,969 2,316 
Total temporarily impaired securities$40,146 $441 $39,782 $2,305 $79,928 $2,746 $5,311 $48 $47,658 $2,268 $52,969 $2,316 
Management has determined that the securities in the above table do not have credit impairment as of March 31, 2026 and December 31, 2025, based upon (i) no actual or expected principal and interest payment defaults on these securities and (ii) analysis of the creditworthiness of the issuer.
Octave's assessment about whether a security is credit impaired reflects management’s current judgment regarding facts and circumstances specific to the security and other factors. If that judgment changes, Octave may record a charge for credit impairment in future periods.
The declines in fair value and resultant unrealized losses across asset classes as of March 31, 2026, included in the above table resulted primarily from the impact of increasing interest rates
since the securities were purchased. Management has determined that the securities with unrealized losses are not credit impaired. Additionally, management does not intend to sell and it is not more likely than not that the Company will be required to sell the securities with unrealized losses before recovery of their amortized cost basis. Further discussion of management's assessment with respect to security categories with larger unrealized loss balances is below.
Corporate obligations
The gross unrealized losses on corporate obligations as of March 31, 2026, resulted primarily from an increase in interest rates since the securities were purchased. Management believes that the full and timely receipt of all principal and interest
Octave Specialty Group, Inc.
15
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
payment on corporate obligations with unrealized losses as of March 31, 2026, is probable.
Accrued interest receivable for available-for-sale investments, excluded from amortized cost above and included in Other assets on the Consolidated Balance Sheets, at March 31, 2026 and December 31, 2025 was $1,494 and $1,432, respectively. Accrued interest receivable is not measured for credit impairment and is written off by reversing interest income when the receivable becomes 90 days past due.
Investment Income (Loss)
Net investment income (loss) was comprised of the following for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,20262025
Fixed maturity securities$1,211 $1,400 
Short-term investments1,244 1,457 
Loans— 35 
Investment expense(100)2 
Securities available-for-sale and short-term2,355 2,894 
Other investments— (79)
Total net investment income (loss)$2,355 $2,815 
Net investment income (loss) from Other investments primarily represents changes in the fair value of equity securities, including income from investment limited partnerships, and other equity interests accounted for under the equity method.
Net Investments Gains (Losses), including Impairments
Realized gains and losses on the sale of investments are determined on a first-in-first-out basis. The following table details amounts included in net investment gains (losses) and impairments included in Revenues, other, on the Consolidated Statements of Income (Loss) for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,20262025
Gross realized gains on securities$5 $— 
Gross realized losses on securities(2)(3)
Credit impairments— — 
Net investment gains (losses), including impairments$3 $(3)
Octave did not purchase any financial assets with credit deterioration for the three months ended March 31, 2026 and 2025.
Deposits with Regulators and Other Restrictions
Securities with a carrying value of $37,507 and $34,016, at March 31, 2026 and December 31, 2025, respectively, were deposited by Octave's insurance subsidiaries with governmental authorities or designated custodian banks as required by laws affecting insurance companies. Fixed maturity securities with a carrying value of $152 and $153, at March 31, 2026 and December 31, 2025, respectively, were deposited as security in connection with a letter of credit issued for a corporate office lease. Fiduciary funds held by Octave's insurance distribution subsidiaries, carried at $1,691 and $2,656, at March 31, 2026 and December 31, 2025, respectively, are included in invested assets.
Other Investments
Octave's investment portfolio includes a limited partnership interest in a private equity fund that seeks to generate long-term capital appreciation through investments in private equity, equity-related and other instruments. The fair value of Octave's investment in the fund was $7,454 and $7,454 as of March 31, 2026 and December 31, 2025, respectively, determined using net asset value ("NAV") as a practical expedient. Redemptions may be made quarterly with 90 days notice subject to withdrawal limitations and/or redemption fees, which vary with the timing and notification of withdrawal provided by the investor. Octave's unfunded commitments total $1,501 on this private equity fund at March 31, 2026.
Other investments also include preferred equity investments with a carrying value of $17,517 and $17,517 as of March 31, 2026 and December 31, 2025, respectively, that do not have readily determinable fair values and are carried at cost, less any impairments as permitted under the Investments — Equity Securities Topic of the ASC. There were no impairments recorded on these investments in the three months ended March 31, 2026 and 2025.
Octave Specialty Group, Inc.
16
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
5.    FAIR VALUE MEASUREMENTS
The Fair Value Measurement Topic of the ASC establishes a framework for measuring fair value and disclosures about fair value measurements.
Fair Value Hierarchy
The Fair Value Measurement Topic of the ASC specifies a fair value hierarchy based on whether the inputs to valuation techniques used to measure fair value are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Company-based assumptions. The fair value hierarchy has three broad levels as follows:
lLevel 1Quoted prices for identical instruments in active markets. Assets and liabilities classified as Level 1 include US Treasury and other foreign government obligations traded in highly liquid and transparent markets, and money market funds.
lLevel 2Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Assets and liabilities classified as Level 2 generally include investments in fixed maturity securities and certain derivatives valued using only market observable data.
lLevel 3
Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the use of observable market data when available. Financial instruments classified as Level 3 includes debt.
The Fair Value Measurement Topic of the ASC permits, as a practical expedient, the estimation of fair value of certain investments in funds using the net asset value per share of the investment or its equivalent (“NAV”). Investments in funds valued using NAV are not categorized as Level 1, 2 or 3 under the fair value hierarchy. The Investments — Equity Securities Topic of the ASC permits the measurement of certain equity securities without a readily determinable fair value at cost, less impairment, and adjusted to fair value when observable price changes in identical or similar investments from the same issuer occur (the "measurement alternative"). The fair values of investments measured under this measurement alternative are not included in the below disclosures of fair value of financial instruments.
The following table sets forth the carrying amount and fair value of Octave's financial assets and liabilities as of March 31, 2026 and December 31, 2025, including the level within the fair value hierarchy at which fair value measurements are categorized. As required by the Fair Value Measurement Topic of the ASC, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
March 31, 2026December 31, 2025
Carrying
Amount		Total Fair
Value		Fair Value Measurements Categorized as:Carrying
Amount		Total Fair
Value		Fair Value Measurements Categorized as:
Level 1Level 2Level 3Level 1Level 2Level 3
Financial assets:
Fixed maturity securities:
Municipal obligations$10,476 $10,476 $— $10,476 $— $11,590 $11,590 $— $11,590 $— 
Corporate obligations76,940 76,940 — 76,940 — 66,573 66,573 — 66,573 — 
U.S. government obligations39,042 39,042 39,042 — — 35,424 35,424 35,424 — — 
Residential mortgage-backed securities2,627 2,627 — 2,627 — 1,597 1,597 — 1,597 — 
Commercial mortgage-backed securities4,985 4,985 — 4,985 — 3,341 3,341 — 3,341 — 
Collateralized debt obligations1,630 1,630 — 1,630 — 1,975 1,975 — 1,975 — 
Other asset-backed securities1,392 1,392 — 1,392 — 1,795 1,795 — 1,795 — 
Short term investments92,295 92,295 92,295 — — 146,442 146,442 146,442 — — 
Other investments (1)
24,971 7,454 — — — 24,971 7,454 — — — 
Cash, cash equivalents and restricted cash93,537 93,537 93,537 — — 68,440 68,440 68,440 — — 
Other assets-loans— — — — — — — — — — 
Derivative assets:
FX forward contracts— — — — — — — — — — 
Total financial assets$347,895 $330,378 $224,874 $98,050 $— $362,148 $344,631 $250,306 $86,871 $— 
Financial liabilities:
Short-term debt, including accrued interest$— $— $— $— $— $— $— $— $— $— 
Long term debt, including accrued interest118,367 118,367 — — 118,367 118,901 121,343 — — 121,343 
Derivative liabilities:
FX forward contracts426 426 — 426 — 8 8 — 8 — 
Total financial liabilities$118,793 $118,793 $— $426 $118,367 $118,909 $121,351 $— $8 $121,343 
(1)Excluded from the fair value measurement categories in the table above are investment funds of $7,454 and $7,454 as of March 31, 2026 and December 31, 2025, respectively, which are measured using NAV as a practical expedient. Also excluded from the fair value amounts in the table above are equity securities with a carrying value of $17,517 and $17,517 as of March 31, 2026 and December 31, 2025, respectively, that do not have readily determinable fair values and have carrying amounts determined using the measurement alternative.
Octave Specialty Group, Inc.
17
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Determination of Fair Value
When available, Octave uses quoted active market prices specific to the financial instrument to determine fair value, and classifies such items within Level 1. The determination of fair value for financial instruments categorized in Level 2 or 3 involves judgment due to the complexity of factors contributing to the valuation. Third-party sources from which we obtain independent market quotes also use assumptions, judgments and estimates in determining financial instrument values and different third parties may use different methodologies or provide different values for financial instruments. In addition, the use of internal valuation models may require assumptions about hypothetical or inactive markets. As a result of these factors, the actual trade value of a financial instrument in the market, or exit value of a financial instrument position by Octave, may be significantly different from its recorded fair value.
Octave's financial instruments carried at fair value are mainly comprised of investments in fixed maturity securities, short-term investments, an investment in a limited partnership, and derivative instruments. Valuation of financial instruments is performed by Octave's finance group using methods approved by senior financial management with consultation from risk management and third-party portfolio managers as appropriate. Preliminary valuation results are discussed internally and with third-party portfolio managers as necessary quarterly to assess consistency with market transactions and trends as applicable. Market transactions such as trades or negotiated settlements of similar positions, if any, are reviewed to validate fair value model results. However, financial instruments valued using significant unobservable inputs have very little or no observable market activity. Methods and significant inputs and assumptions used to determine fair values across portfolios are reviewed quarterly by senior financial management. Other valuation control procedures specific to particular portfolios are described further below.
Fixed Maturity Securities:
The fair values of fixed maturity investment securities are based primarily on market prices received from independent pricing sources. Because many fixed maturity securities do not trade on a daily basis, pricing sources apply available market information through processes such as matrix pricing to calculate fair value. Such prices generally consider a variety of factors, including recent trades of the same and similar securities. In those cases, the items are classified within Level 2. For those fixed maturity investments where quotes were not available or cannot be reasonably corroborated, fair values are based on internal valuation models. Key inputs to the internal valuation models generally include maturity date, coupon and yield curves for asset-type and credit rating characteristics that closely match those characteristics of the specific investment securities being valued. Items valued using valuation models are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be significant inputs that are readily observable. Longer (shorter) expected maturities or higher (lower) yields used in the valuation model will, in isolation, result in decreases (increases) in fair value. Generally, lower credit ratings or longer expected maturities will be accompanied by higher yields used to value a security.
Octave performs various review and validation procedures to quoted and modeled prices for fixed maturity securities, including price variance analyses, missing and static price reviews, overall valuation analysis by portfolio managers and finance managers and reviews associated with our ongoing impairment analysis. Unusual prices identified through these procedures will be evaluated further against alternative third-party quotes (if available), internally modeled prices and/or other relevant data, and the pricing source values will be challenged as necessary. Price challenges generally result in the use of the pricing source’s quote as originally provided or as revised by the source following their internal diligence process. A price challenge may result in a determination by either the pricing source or Octave management that the pricing source cannot provide a reasonable value for a security or cannot adequately support a quote, in which case Octave would resort to using either other quotes or internal models. Results of price challenges are reviewed by portfolio managers and finance managers.
Other Investments:
Other investments includes an investment in a limited partnership, which holds pooled investment funds, that is carried under the equity method using NAV as a practical expedient as permitted under the Fair Value Measurement Topic of the ASC. Refer to Note 4. Investments for additional information about such investments in pooled funds that are reported at fair value using NAV as a practical expedient.
Derivative Instruments:
At March 31, 2026 and December 31, 2025, Octave has foreign exchange ("FX") forward contracts and holds warrants to purchase preferred stock of a development stage company. The fair value of FX forward contracts are determined using valuation models with observable market inputs. Fair value of the warrants are determined using a standard warrant valuation model with internally developed input assumptions.
Debt:
Debt consists of Secured Overnight Financing Rate ("SOFR")-indexed borrowing. The fair value of debt approximates its carrying value.
6.    INSURANCE CONTRACTS
Premiums
The effect of reinsurance on premiums written and earned for the three months ended March 31, 2026 and 2025 was as follows:

Three Months Ended March 31,
20262025
WrittenEarnedWrittenEarned
Direct$95,043 $85,003 $77,191 $80,446 
Assumed8,672 7,209 9,724 7,529 
Ceded71,266 72,211 68,911 72,297 
Net premiums
$32,449 $20,001 $18,004 $15,678 
Octave Specialty Group, Inc.
18
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Premium Receivables, including Credit Impairments
Premium receivables at March 31, 2026 and December 31, 2025, were $87,653 and $75,085, respectively. Management evaluates premium receivables for expected credit losses ("credit impairment") in accordance with the CECL standard, which is further described in Note 2. Basis of Presentation and Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Below is a rollforward of the premium receivable allowance for credit losses for the three months ended March 31, 2026 and 2025.
Three Months Ended March 31,20262025
Beginning balance$500 $142 
Current period provision— — 
Write-offs of the allowance— — 
Recoveries of previously written-off amounts— — 
Ending balance$500 $142 
At three months ended March 31, 2026 and 2025, $11,683 and $5,690, respectively, of premiums were past due.
Loss and Loss Adjustment Expense Reserves
Below is the loss and loss reserve expense rollforward, net of subrogation recoverable and reinsurance, for the three months ended March 31, 2026 and 2025.
Three Months Ended March 31,20262025
Beginning gross loss and loss adjustment expense reserves$459,990 $349,062 
Reinsurance recoverable375,722 270,081 
Beginning balance of net loss and loss adjustment expense reserves84,268 78,981 
Losses and loss expenses:
Current year10,689 10,325 
Prior years8,990 171 
Total (1)
19,679 10,496 
Loss and loss adjustment expenses paid (recovered):
Current year534 1,120 
Prior years7,504 10,172 
Total8,038 11,292 
Ending net loss and loss adjustment expense reserves 95,909 78,185 
Reinsurance recoverable (2)
391,352 294,920 
Ending gross loss and loss adjustment expense reserves$487,261 $373,105 
(1)Total losses and loss adjustment expense (benefit) is net of $(45,601) and $(45,778) for the three months ended March 31, 2026 and 2025, respectively, related to ceded reinsurance.
(2)Represents reinsurance recoverable on future loss and loss adjustment expense. Additionally, the Balance Sheet line "Reinsurance recoverable on paid and unpaid losses" includes reinsurance recoverables of $78,507 and $56,190 as of March 31, 2026 and 2025, respectively, related to previously paid loss and loss adjustment expense.
Prior accident years losses incurred development for the three months ended March 31, 2026, was primarily driven by $2,125 of net losses and $5,787 of LAE (legal expenses) from the
settlement of a potential litigation matter related to an insurance claim, whereas prior accident years losses incurred development for the three months ended March 31, 2025, was nominal.
Specialty Property & Casualty Loss Reserves
Claims Development
The following is a summary of loss and loss adjustment expense reserves, including certain components, for the Company’s major product lines by reporting segment at March 31, 2026.
March 31, 2026Net Loss and Loss Adjustment Expense Reserves
Reinsurance Recoverables on Unpaid Losses (1)
Loss and Loss Adjustment Reserves (1)
Commercial auto$29,446 $133,407 $162,853 
Excess liability18,764 109,617 128,381 
General liability12,750 49,641 62,391 
Workers compensation19,752 — 19,752 
Non-standard personal auto2,704 191 2,895 
Professional liability3,388 44,831 48,219 
Multi-peril / business owners (BOP)2,328 8,918 11,246 
Surety1,060 9,707 10,767 
Unallocated loss adjustment expense reserves5,546 9,969 15,515 
Other171 25,071 25,242 
Total$95,908 $391,352 $487,261 
(1)Other includes $21,273 related to legacy liabilities obtained from the acquisitions of Providence Washington Insurance Company, Greenwood Insurance Company, and Consolidated Specialty Insurance Company. All legacy liabilities remain obligations of affiliates of the sellers through reinsurance and contractual indemnities.
Reinsurance Recoverables, Including Credit Impairments:
Everspan’s reinsurance assets, including deferred ceded premiums and reinsurance recoverables on losses, amounted to $615,279 at March 31, 2026. Credit exposure existed at March 31, 2026, with respect to reinsurance recoverables to the extent that any reinsurer may not be able to reimburse Everspan under the terms of these reinsurance arrangements. At March 31, 2026, there were ceded reinsurance balances payable of $89,148 offsetting this credit exposure. Contractually ceded reinsurance payables can only be offset against amounts owed from the same reinsurer in the event that such reinsurer is unable to meet its obligations to reimburse Everspan.
To minimize its credit exposure to losses from reinsurer insolvencies, Everspan (i) is entitled to receive collateral from its reinsurance counterparties in certain reinsurance contracts and (ii) has certain cancellation rights that can be exercised by Everspan in the event of rating agency downgrades of a reinsurer (among other events and circumstances). Everspan held letters of credit and collateral amounting to $80,351 from its reinsurers at March 31, 2026. For those reinsurance counterparties that do not currently post collateral, Everspan's reinsurers are well capitalized, highly rated, authorized capacity providers. Additionally, while legacy liabilities from the Providence Washington Insurance Company ("PWIC") acquisition and the
Octave Specialty Group, Inc.
19
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
admitted carriers previously acquired by Everspan on January 3, 2022, (Greenwood Insurance Company and Consolidated Specialty Insurance Company), were fully ceded to certain reinsurers, Everspan also benefits from an unlimited, uncapped indemnity from Enstar Holdings (US) and 21st Century Premier Insurance Company to mitigate any residual risk to these reinsurers.
At March 31, 2026, our top five reinsurers represented 52.1% of our total reinsurance recoverables on paid and unpaid losses. These reinsurance recoverables were primarily from reinsurers with applicable ratings of A or better. The following table sets forth our five most significant reinsurers by amount of reinsurance recoverables as of March 31, 2026.
Reinsurers
Rating
 (1)
Reinsurance
Recoverable
(2)
Unsecured
Recoverable
(3)
General Reinsurance CompanyA++$128,406 $100,301 
Munich Reinsurance CompanyA+65,092 63,828 
QBE Insurance CorporationA17,989 17,989 
Everest Reinsurance CompanyA+17,776 18,256 
Swiss Reinsurance America CorporationA+15,512 14,788 
All other reinsurers
225,084 112,773 
Total recoverables
$469,859 $327,935 
(1)Represents financial strength ratings from AM Best.
(2)Represents reinsurance recoverables on paid and unpaid losses. Unsecured amounts from QBE Insurance Corporation are also
supported by an unlimited, uncapped indemnity from Enstar Holdings (US).
(3)Reinsurance recoverables reduced by ceded premiums payables due to reinsurers, letters of credit, and collateral posted for the benefit of Everspan.
As of March 31, 2026 and December 31, 2025, Everspan has uncollateralized credit exposure to reinsurers of $327,935 and $311,795, respectively, and has recorded an allowance for credit losses of less than a million at March 31, 2026 and December 31, 2025. The uncollateralized credit exposure to reinsurers includes legacy liabilities obtained from the acquisitions of PWIC and the admitted carriers acquired by Everspan on January 3, 2022, of $21,273 and $23,530 at March 31, 2026 and December 31, 2025, respectively. All legacy liabilities remain with affiliates of sellers through reinsurance and contractual indemnities.
7.    DERIVATIVE INSTRUMENTS
The following table summarizes the location and gross fair values of individual derivative instruments and the impact of legal rights of offset as reported in the Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Gross
Amounts of
Recognized
Assets /
Liabilities		Gross
Amounts
Offset in the
Consolidated
Balance Sheet		Net Amounts
of Assets/
Liabilities
Presented
in the Consolidated
Balance Sheet		Gross Amount
of Collateral
Received /
Pledged not
Offset in the
Consolidated
Balance 
Sheet		Net
Amount		Gross
Amounts of
Recognized
Assets /
Liabilities		Gross
Amounts
Offset in the
Consolidated
Balance Sheet		Net Amounts
of Assets/
Liabilities
Presented
in the Consolidated
Balance Sheet		Gross Amount
of Collateral
Received /
Pledged not
Offset in the
Consolidated
Balance 
Sheet		Net
Amount
Other assets:
FX forwards3 3 — — — — — — — — 
Total derivative assets$3 $3 $— $— $— $— $— $— $— $— 
Other liabilities:
FX forwards429 3 426 — 426 8 — 8 — 8 
Total derivative liabilities$429 $3 $426 $— $426 $8 $— $8 $— $8 
The following table summarizes the location and amount of gains and losses of derivative contracts in the Consolidated Statements of Income (Loss) for the three months ended March 31, 2026 and 2025:
Location of Gain (Loss)
Recognized in
Consolidated Statements of Income (Loss)		Amount of Gain (Loss) Recognized in Consolidated Statements of Income (Loss)
Three Months Ended March 31,
20262025
Derivatives:
FX forwardsRevenues, other$(519)$427 
Total derivatives$(519)$427 

Octave Specialty Group, Inc.
20
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Octave Ventures utilizes FX forward contracts to partially hedge its foreign currency exposure. Octave Ventures' functional currency is the British Pound, but a significant portion of its revenues are generated in currencies other than the British Pound, particularly the US Dollar. Octave Ventures, therefore, typically enters into forward contracts to partially hedge its exposure to fluctuations in exchange rates relative to the British Pound.
Octave also holds warrants to purchase equity shares of a development stage company.

Information about FX forward contracts as of March 31, 2026 and December 31, 2025, is summarized below:
Derivative TypeWeighted-Average
Remaining
Term
(years)		Face
Amount
(Buy)		Face
Amount
(Sell)		Fair Value
Asset
(Liability)
March 31, 2026
FX Forwards-Buy GBP/Sell USD1.2332,134 42,700 (429)
FX Forwards-Buy GBP/Sell CAD0.561,149 2,400 3 
December 31, 2025
FX Forwards-Buy GBP/Sell USD1.3917,876 24,000 (6)
FX Forwards-Buy GBP/Sell CAD0.731,5302,800(2)
Octave Specialty Group, Inc.
21
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
8.    GOODWILL AND INTANGIBLE ASSETS
Below is a rollforward of the Company's goodwill.

March 31,
2026		December 31,
2025
Beginning balance$540,345 $418,234 
Business acquisitions— 95,357 
Foreign exchange(6,848)26,754 
Ending balance$533,497 $540,345 
Intangible assets consisted of the following as of March 31, 2026 and December 31, 2025:
Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
March 31, 2026
Finite-lived intangible assets:
Customer relationships$503,392 $72,629 $430,763 
Non-compete agreements1,350 1,350 — 
Trade names19,225 2,821 16,404 
Total finite-lived intangible assets523,967 76,800 447,167 
Indefinite-lived intangible assets:
Insurance licenses11,213 — 11,213 
Total intangible assets535,180 76,800 458,380 
December 31, 2025
Finite-lived intangible assets:
Customer relationships$509,197 $62,362 $446,835 
Non-compete agreements1,350 1,350 — 
Trade names19,383 2,433 16,950 
Total finite-lived intangible assets529,930 66,145 463,785 
Indefinite-lived intangible assets:
Insurance licenses11,213 — 11,213 
Total intangible assets541,143 66,145 474,998 
9.    DEBT
2025 Credit Facility
In connection with the acquisition of ArmadaCorp Capital, LLC on October 31, 2025, Octave Partners LLC and certain of its subsidiaries entered into a credit agreement providing for a $100,000 term loan and a $20,000 revolving credit facility (together, the "2025 Credit Facility"), both maturing October 31, 2030. Refer to Note 12. Debt in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, for a full description of the terms and conditions of the 2025 Credit Facility.
On April 1, 2026, the Company entered into the First Amendment to the 2025 Credit Facility, which provided an additional term loan of $40,000, constituting the same class, type and tranche as the existing term loan, with the same maturity date, and fully fungible therewith. Following the scheduled principal repayment on the term loan of $625 on March 31, 2026, the total principal amount outstanding on the term loan was $139,375 as of April 1, 2026. Proceeds from the additional term loan were used to help fund the acquisition of redeemable NCI on April 9, 2026 (refer to Note 1. Background and Business Description for additional
details regarding the acquisition of redeemable NCI). In connection with the First Amendment, the Company pledged its ownership interests in the capital stock of Everspan Holdings, LLC as additional collateral.
10.    REVENUES FROM CONTRACTS WITH CUSTOMERS
As further described in the Revenue Recognition section of Note 2. Basis of Presentation and Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, the ID businesses have contracts that are subject to the Revenue from Contracts with Customers Topic of the ASC ("ASC 606").
The following table presents ID commission income disaggregated by policy type for the three months ended March 31, 2026 and 2025.
Three Months Ended March 31,20262025
Accident & Health$32,067 $8,151 
Specialty Auto5,930 5,172 
Other Professional3,528 3,223 
Marine & Energy1,645 1,848 
Niche Specialty Risks3,693 4,027 
Property6,781 5,184 
Reinsurance1,576 1,734 
Environmental2,093 3,942 
Professional D&O1,779 1,527 
Surety4,569 2,136 
Misc. Specialty4,518 (173)
Total$68,179 $36,771 
For the three months ended March 31, 2026 and 2025, revenue of $9,362 and $4,964, respectively, was recognized in accordance with ASC 606 and reported in Servicing and other fees on the Consolidated Statements of Income (Loss).
During the three months ended March 31, 2026 and 2025, the amount of revenue recognized related to performance obligations satisfied in a previous period, inclusive of changes due to estimates was approximately $2,940 and $1,981, respectively.
Receivables, Contract Assets and Liabilities
The balances of receivables, contract assets and contract liabilities with customers as of March 31, 2026 and December 31, 2025, were as follows:
March 31, 2026December 31, 2025
Receivables$106,198 $86,609 
Contract assets41,657 31,757 
Contract liabilities5,230 2,954 
Contract assets and Contract liabilities are reported in Other assets and Other liabilities, respectively, on the Consolidated Balance Sheets.
Octave Specialty Group, Inc.
22
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Insurance Distribution
Contract assets represent estimated future consideration related to base commissions and profit-sharing commissions that were recognized as revenue upon the placement of the policy, but are not yet billable or collectable. The Company does not have the right to bill or collect payment on (i) base commissions until the related premiums from policyholders have been collected nor (ii) profit-sharing commissions until after the contract year is completed.
Contract liabilities include estimated future sub-producer commissions recognized as expense upon placement of the
policy, but not yet due. Contract liabilities also include payments received in advance of performance under the contract before the transfer of a good or service to the customer, primarily related to claims servicing performed under certain MGA contracts, which typically occurs between 17 and 20 months from contract inception. During the three months ended March 31, 2026 and 2025, the Company recognized revenue that was included in the contract liability balance as of the beginning of the periods of $235 and $182, respectively.
11.    COMPREHENSIVE INCOME (LOSS)
The following tables detail the changes in the balances of each component of Accumulated other comprehensive income (loss) ("AOCI") for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, 2026Three Months Ended March 31, 2025
Unrealized Gains
(Losses) on
Available-for-Sale Securities (1)
Gain (Loss) on Foreign 
Currency
Translation (1)
Credit Risk Changes of Fair Value Option Liabilities
 (1) (2)
Total
Unrealized Gains
(Losses) on
Available- for-Sale Securities (1)
Gain (Loss) on Foreign 
Currency
Translation (1)
Credit Risk Changes of Fair Value Option Liabilities
 (1) (2)
Total
Beginning balance$(1,492)$9,975$—$8,483$(21,136)$(166,191)$(1,109)$(188,436)
Other comprehensive income (loss) before reclassifications(1,041)(6,221)—(7,262)14,14734,359—48,506
Amounts reclassified from AOCI3——34,459—4424,901
Net current period other comprehensive income (loss)(1,038)(6,221)—(7,259)18,60634,35944253,407
Ending balance$(2,530)$3,754$—$1,224$(2,530)$(131,832)$(667)$(135,029)
(1)All amounts are net of tax and NCI. Amounts in parentheses indicate reductions to AOCI.
(2)Represents the changes in fair value attributable to instrument-specific credit risk of liabilities for which the fair value option is elected.
Reclassifications out of AOCI and into earnings for the three months ended March 31, 2026 and 2025 were as follows:
Details about AOCI ComponentsAmount Reclassified from 
AOCI		Affected Line Item in the
Consolidated Statements of Income (Loss)
Three Months Ended March 31,
20262025
Unrealized gains (losses) on available-for-sale securities
$3$5,957 Revenues, other
—(1,498)Provision for income taxes
$3$4,459 Net of tax and noncontrolling interest
Credit risk changes of fair value option liabilities
$—$589 Credit risk changes of fair value option liabilities
—(147)Provision for income taxes
—— Net loss on discontinued operations
$—$442 Net of tax and noncontrolling interest
Total reclassifications for the period$3$4,901 Net of tax and noncontrolling interest 
12.    NET INCOME PER SHARE
As of March 31, 2026, 45,013,592 shares of OSG's common stock (par value $0.01) and a warrant entitling the holder to acquire up to 5,092,707 shares of common stock at an exercise price of $18.50 per share were issued and outstanding. The warrant was issued September 29, 2025 and allows the holder to convert the warrant at its Black-Sholes value, settleable in shares of OSG common stock or cash at OSG's election. Common shares outstanding increased by 8,308 during the three months ended
March 31, 2026, due to shares issued in connection with employee stock compensation.
Share Repurchases
On November 12, 2024, Octave's Board of Directors authorized a share repurchase program, under which Octave may opportunistically repurchase up to $50,000 of the Company’s common shares at management’s discretion over the period ending on December 31, 2026.
Octave Specialty Group, Inc.
23
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
The following table shows shares repurchased by year.
($ in thousands,
except per share)
Year Ended December 31,
YTD
2026
20242025
Shares repurchased937,1413,434,7450
Total cost$11,678 $29,942 $— 
Average purchase price per share$12.48 $8.72 $— 
Unused authorization amount$8,449 
Earnings Per Share Calculation
The numerator of the basic and diluted earnings per share computation represents net income (loss) attributable to common stockholders adjusted by the retained earnings impacts of the noncontrolling adjustment to redemption value under ASC 480, or amendments resulting in revaluation to fair value and reclassification of NCI shares to redeemable NCI. Adjustments to the carrying value of redeemable noncontrolling interest are further described in the Redeemable NCI section of Note 1. Background and Business Description.
The following table provides a reconciliation of net income (loss) from continuing operations attributable to common stockholders to the numerator in the basic and diluted earnings (loss) per share calculation, together with the resulting earnings (loss) per share ("EPS") amounts for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,20262025
Net income (loss) attributable to common stockholders$(6,851)$(46,391)
Adjustment to redemption value (ASC 480)807 (10,825)
Numerator of basic and diluted EPS$(6,044)$(57,216)
Per share:
Basic$(0.13)$(1.21)
Diluted$(0.13)$(1.21)
The denominator of the basic earnings (loss) per share computation represents the daily weighted-average common shares ("WASO") outstanding plus vested restricted stock units and performance stock units (together, "Basic Weighted-Average Shares Outstanding"). The denominator of diluted earnings (loss) per share adjusts the basic WASO for all potential dilutive common shares outstanding during the period. All potential dilutive common shares outstanding consider common stock deliverable pursuant to warrants, employee options, unvested restricted stock units and unvested performance stock units granted under existing compensation plans.
In determining diluted net income (loss) per share, whether net income from continuing operations is positive or negative controls whether dilutive shares are included in the determination. For all periods presented, net income from continuing operations was negative, a net loss. Accordingly, since including dilutive shares would dilute the loss from continuing operations, no dilutive shares are included in any of the per share calculations.
The following table provides a reconciliation of the weighted-average shares used for basic net income (loss) per share to the weighted-average diluted shares used for diluted net income
(loss) per share for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,20262025
Basic WASO denominator45,302,933 47,313,012 
Effect of potential dilutive shares :
Restricted stock units— — 
Performance stock units (1)
— — 
Diluted WASO denominator 45,302,933 47,313,012 
Anti-dilutive shares excluded from the above reconciliation:
Warrants (2)
5,092,707 
— 
Options (2)
1,134,500 
— 
Restricted stock units
603,675 
411,433 
Performance stock units (1)
239,720 
145,197 
(1)    Performance stock units are reflected based on the performance metrics through the balance sheet date. Vesting of these units is contingent upon meeting certain performance metrics. Although a portion of these performance metrics have been achieved as of the respective period end, it is possible that awards may no longer meet the metric at the end of the performance period.
(2)    Options require the OSG's stock price to exceed certain market price hurdles to vest, none of which have been met. Warrants have an exercise price above the market price of OSG stock during the period. Amounts shown reflect the maximum number of shares issuable upon exercise, weighted for the time outstanding during the periods.
13.    INCOME TAXES
OSG files a consolidated U.S. federal income tax return with its 80% or more owned domestic subsidiaries ("Consolidated Tax Subsidiaries"). Octave Ventures' U.S. subsidiaries file separate U.S. federal income tax returns as they are not directly owned by Octave for tax purposes. OSG and its Consolidated Tax Subsidiaries also file separate or combined income tax returns in various states, local and foreign jurisdictions.
In accordance with the Income Tax Topic of the ASC, a valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some, or all, of the deferred tax asset will not be realized. As a result of the risks and uncertainties associated with future operating results, management believes it is more likely than not that the Company will not generate sufficient U.S. federal, state and/or local taxable income to recover its deferred tax operating assets and therefore maintains a full valuation allowance on OSG's U.S. net deferred tax assets.
Consolidated Pretax Income (Loss)
U.S. and foreign components of pretax income (loss) from continuing operations for the three months ended March 31, 2026 and 2025 were as follows:
Three Months Ended March 31,20262025
U.S.$(6,941)$(11,153)
Foreign3,597 (3,954)
Total$(3,344)$(15,107)
Octave Specialty Group, Inc.
24
     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Provision (Benefit) for Income Taxes
The components of the provision (benefit) for income taxes from continuing operations for the three months ended March 31, 2026 and 2025 were as follows:
Three Months Ended March 31,20262025
Current taxes
U.S. state and local$— $— 
Foreign2,609 1,154 
Total Current taxes2,609 1,154 
Deferred taxes
U.S.federal and state
222 (1,042)
Foreign(3,312)(729)
Total Deferred taxes(3,090)(1,771)
Provision (benefit) for income taxes
$(481)$(617)
14.    COMMITMENTS AND CONTINGENCIES
The Company periodically receives various regulatory inquiries and requests for information with respect to investigations and inquiries that such regulators are conducting. The Company has complied with all such inquiries and requests for information.
The Company is involved from time to time in various routine legal proceedings, including proceedings related to litigation with present or former employees. Although such litigation is routine and incidental to the conduct of its business, such litigation can potentially result in large monetary awards when a civil jury is allowed to determine compensatory and/or punitive damages.
Everspan may be subject to disputes with policyholders or other third parties regarding the scope and extent of coverage offered under Everspan's policies, including disputes relating to Everspan’s course of conduct in the handling of claims and settling or failing to settle claims (which can lead to bad faith and other forms of extra-contractual liability); be required to defend claimants in suits against its policyholders for covered liability claims; or enter into commercial disputes with its reinsurers, MGA/Us or third party claims administrators regarding their respective contractual obligations and rights. Under some circumstances, the results of such disputes or suits may lead to liabilities beyond those which are anticipated or reserved, including liabilities in excess of applicable policy limits.
Everspan may from time to time be threatened with litigation in connection with the handling of claims, through third-party administrators, or other matters. Adjudication of any such claims against Everspan could require extensive litigation unless settled or dismissed based on available legal defenses. Damages claimed against Everspan could be material and the outcome of such cases could have an adverse impact on our results of operations and financial condition.
In the ordinary course of their businesses, certain of Octave's subsidiaries assert claims in legal proceedings against third parties to recover losses already paid and/or mitigate future losses. The amounts recovered and/or losses avoided which may result from these proceedings is uncertain, although recoveries and/or losses avoided in any one or more of these proceedings during any quarter or fiscal year could be material to Octave's results of operations in that quarter or fiscal year.
From time to time, Octave is subject to allegations concerning its corporate governance, including the manner in which it exercises control and oversight of its subsidiaries, that may lead to litigation, including derivative litigation. While the monetary impacts of addressing such allegations outside of litigation may not be material, these charges may distract management and the Board of Directors from their principal focus on Octave's business, strategy and objectives.
It is not reasonably possible to predict whether suits in addition to those described below will be filed or whether additional inquiries or requests for information will be made, and it is also not possible to predict the outcome of litigation, inquiries or requests for information. It is possible that there could be unfavorable outcomes in these or other proceedings. Legal accruals for litigation against the Company with losses that are probable and reasonably estimable are not material to the operating results or financial position of the Company. For the litigation matters the Company is defending that do not meet the “probable and reasonably estimable” accrual threshold and where no loss estimates have been provided below, management is unable to make a meaningful estimate of the amount or range of loss that could result from unfavorable outcomes. Under some circumstances, adverse results in any such proceedings could be material to our business, operations, financial position, profitability or cash flows. The Company believes that it has substantial defenses to the claims described below and, to the extent that these actions proceed, the Company intends to defend itself vigorously; however, the Company is not able to predict the outcomes of these actions.
Current Litigation
Dwight Jereczek and Stanley Elliott, individually and on behalf of all others similarly situated v. MBIA Inc., Ambac Financial Group, Inc., Ambac Assurance Corporation, MBIA Insurance Corporation, and National Public Finance Guarantee Corporation (United States District Court for the District of Connecticut, filed on February 12, 2025) (the "COFINA Case"). This putative class action complaint is brought by alleged former holders of bonds issued by the Puerto Rico Sales Tax Financing Corporation (“COFINA”) allegedly insured by defendants under financial guaranty insurance policies. On behalf of themselves and all persons and entities that owned such bonds between October 19, 2018, and February 12, 2019, plaintiffs allege that, in connection with the restructuring of COFINA under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act, defendants orchestrated a scheme to improperly use their role in the Title III process to alter contracts with insured COFINA bondholders, resulting in such bondholders receiving less than what they contracted for under the financial guaranty insurance policies. Plaintiffs assert claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and bad faith refusal to pay first-party benefits under an insurance contract. Plaintiffs seek an unspecified amount of damages with interest thereon, disgorgement of profits, a declaratory judgment of plaintiffs’ rights and defendants’ responsibilities, and a permanent injunction against violations of law. On November 14, 2025, the Court found that Defendants were entitled to a stay of discovery. On February 13, 2026, the Court entered an order dismissing Plaintiffs' claims against Ambac Financial Group, Ambac Assurance Corporation, MBIA
Octave Specialty Group, Inc.
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     First Quarter 2026 Form 10-Q
Table of Contents
Notes to Unaudited Consolidated Financial Statements
Octave Specialty Group, Inc. and Subsidiaries
(Dollar Amounts in Thousands, Except Per Share Amounts)
Insurance Corporation, and National Public Finance Guarantee Corporation for lack of personal jurisdiction; and dismissing, without prejudice, claims against MBIA Inc. for failure to state a claim. On March 6, 2026, plaintiffs filed a second amended complaint in the District of Connecticut, asserting claims solely against MBIA Inc. On April 20, 2026, MBIA Inc. moved to dismiss the second amended complaint or, in the alternative, to transfer the action to the Title III court. Plaintiffs may seek to refile their claims against the Company, Ambac Assurance Corporation, and other dismissed defendants in an appropriate forum.
Octave Specialty Group, Inc.
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     First Quarter 2026 Form 10-Q
Table of Contents
Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations ($ in thousands)
The objectives of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are to provide users of our consolidated financial statements with the following:
•A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;
•Context to the unaudited consolidated financial statements; and
•Information that allows assessment of the likelihood that past performance is indicative of future performance.
The following discussion should be read in conjunction with our consolidated financial statements in Part I, Item 1 and the matters described under Part II, Item 1A. Risk Factors in this Quarterly Report and under Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025. Refer to Item 1. Business and Note 1. Background and Business Description in our Annual Report on Form 10-K for the year ended December 31, 2025, for a description of our business and our key strategies to achieve our primary goal to maximize shareholder value.
Unless otherwise noted, this Management's Discussion and Analysis of Financial Condition and Results of Operations relates solely to our continuing operations and does not include the operations of the Legacy Financial Guarantee business. See "Sale of AAC" below and "Sale of Ambac Assurance Corporation" in Note 5. Discontinued Operations of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2025 for additional information about the divestiture of the Legacy Financial Guarantee business.
Organization of Information
MD&A includes the following sections:
Page
Strategies to Enhance Shareholder Value
Overview
Critical Accounting Estimates
Results of Operations
Liquidity and Capital Resources
Balance Sheet
Accounting Standards
U.S. Insurance Statutory Basis Financial Results
Non-GAAP Financial Measures
Strategies to Enhance Shareholder Value
The Company's primary goal is to maximize long-term shareholder value through the execution of targeted strategies for its Insurance Distribution and Specialty Property and Casualty Insurance businesses.
Insurance Distribution and Specialty Property and Casualty Insurance strategic priorities include:
•Growing and expanding our Insurance Distribution business based on deep domain knowledge in specialty and niche classes of risk which generate attractive margins at scale. This will be achieved through establishing new businesses “de-novo,” organic growth and diversification, and select acquisitions supported by a centralized technology-led shared services offering;
•Growing our Specialty Property and Casualty Insurance business to generate underwriting profits from a diversified portfolio of commercial and personal liability risks accessed primarily through affiliated and non-affiliated program administrators. In addition, we may seek strategic relationships and/or partnerships with unaffiliated parties in order to expand our product offerings, access to reinsurance capacity and other business or operational advantages.

Octave continuously evaluates opportunities to acquire businesses and assets for its ID business, some of which may be material to our financial condition and operations and/or may involve raising capital to finance. There can be no assurance that we will agree to acquire any business or assets, or that we can obtain the necessary financing or complete any acquisition in a timely manner or at all.
Octave Specialty Group, Inc.
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     First Quarter 2026 Form 10-Q
Table of Contents
OVERVIEW
($ in thousands)
The Company's continuing operations include two segments, financial highlights of which are summarized below along with other recent developments.
Three Months Ended March 31, 2026Three Months Ended March 31, 2025
Reportable SegmentsReportable Segments
Specialty Property & Casualty InsuranceInsurance
Distribution		Corporate & OtherConsolidatedSpecialty Property & Casualty InsuranceInsurance
Distribution		Corporate & OtherConsolidated
Premiums placed$426,833 $426,833 $233,186 $233,186 
Gross premiums written$103,716 103,716 $86,915 86,915 
Net premiums written32,449 32,449 18,004 18,004 
Total revenues25,299 78,526 $345 104,170 21,171 40,998 $587 62,756 
Total expenses33,581 61,741 12,192 107,514 19,668 43,241 14,954 77,863 
Pretax income (loss)(8,282)16,785 (11,847)(3,344)1,503 (2,243)(14,367)(15,107)
EBITDA(8,282)30,817 (11,575)10,960 1,503 12,083 (14,063)(477)
Adjusted EBITDA1,618 32,995 (6,889)27,724 1,589 12,112 (9,988)3,713 
Net income (loss) attributable to shareholders(7,690)$13,165 $(12,326)(6,851)1,425 $(3,397)$(14,172)(16,144)
EBITDA attributable to shareholders(8,282)23,467 (11,575)3,610 1,503 7,083 (14,063)(5,477)
Adjusted EBITDA attributable to shareholders$1,618 25,340 $(6,889)20,069 $1,589 7,112 $(9,988)(1,287)
Sale of AAC
On September 29, 2025 the Company completed the sale of AAC. Refer to Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and Note 5. Discontinued Operations of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2025, for further details on the sale of AAC.
For all periods leading up to the sale, AAC's results of operations and OSG's loss on sale are reported within Net income (loss) from discontinued operations before tax on the Consolidated Statement of Comprehensive Income (Loss).
Acquisition of ArmadaCorp
On October 31, 2025, the Company closed on the acquisition of ArmadaCorp for a purchase price of $250,000. The Company purchased all of the issued and outstanding limited liability company interests in ArmadaCorp from Sirius Re Holdings, Inc. and Sirius Acquisitions Holding Company, funded in part by $120,000 of loans obtained under new credit facilities. Refer to Note 4. Business Combinations of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2025, for further details on the acquisition of ArmadaCorp.
ArmadaCorp includes an MGA/U that focuses on supplemental health and benefit products for C-suite executives and other key talent. ArmadaCorp creates and distributes supplemental benefit solutions and insurance products. ArmadaCorp's differentiated product offering in the A&H market provides both line of business and product diversification to the Company, while also increasing exposure to non-correlated A&H business lines. ArmadaCorp also provides clients with tools to navigate the healthcare system, including services that help match individuals with physicians suited to their personal needs, and maintains a provider of third-party administration services for insurance carriers that distribute the benefit products and handle claims.
Pivix
Effective September 1, 2025, OSG's wholly owned subsidiary, Octave Partners, LLC ("Octave Partners"), exercised its option to convert its $3,500 convertible note investment in Pivix Specialty Insurance Services ("Pivix"), an excess and surplus lines MGA/U, into common stock. As a result, Octave Partners now has an approximately 74% controlling stake in Pivix when combined with its previous 17% minority equity interest, and includes Pivix in its consolidated financial statements.
Acquisitions of additional ownership of ID subsidiaries
During the first quarter of 2026 certain holders exercised their put options. See Note 1. Background and Business Description - Redeemable Noncontrolling Interest for further information.
SEC Final Rules on Climate Related Information
On March 6, 2024, the SEC adopted The Enhancement and Standardization of Climate-Related Disclosures for Investors ("Final Rule"), which will require registrants to disclose extensive climate-related information in their Form 10-K annual reports and registration statements. The Final Rule was scheduled to become effective May 28, 2024; however, the SEC has voluntarily stayed the rule’s effective date pending judicial review of legal challenges. In March 2025, the SEC ended its defense of the Final Rule, and in September 2025, the Eighth Circuit ordered that the litigation would be held in abeyance until such time that the SEC reconsiders or renews its defense of the Final Rule.
Octave Specialty Group, Inc.
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     First Quarter 2026 Form 10-Q
Table of Contents
CRITICAL ACCOUNTING ESTIMATES
Octave's Unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which require the use of material estimates and assumptions. For a discussion of Octave's critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Octave's Annual Report on Form 10-K for the year ended December 31, 2025.
Results of Operations
Consolidated Results
A summary of our financial results is shown below:
Three Months Ended March 31,20262025
Gross premiums written$103,716 $86,915 
Net premiums written32,449 18,004 
Revenues:
Net premiums earned$20,001 $15,678 
Commissions68,178 36,771 
Servicing and other fees9,362 4,964 
Program fees3,644 3,652 
Investment income2,355 2,815 
Other630 (1,124)
Expenses:
Losses and loss adjustment expenses19,679 10,496 
Policy acquisition costs6,371 3,841 
Commissions14,005 10,365 
General and administrative53,155 38,531 
Intangible amortization and depreciation12,214 9,176 
Interest2,090 5,454 
Total expenses107,514 77,863 
Provision (benefit) for income taxes from continuing operations(481)(617)
Net income (loss) from continuing operations(2,863)(14,490)
Net income (loss) from discontinued operations, net of income taxes— (30,247)
Net income (loss)(2,863)(44,737)
Net (gain) loss attributable to noncontrolling interest(3,988)(1,654)
Net income (loss) attributable to shareholders$(6,851)$(46,391)
Octave's results for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, were impacted by the following:
•Acquisitions within the ID segment have had a significant impact on the comparability of results between 2026 and 2025.
•Effective October 31, 2025, Octave acquired 100% of ArmadaCare.
•Effective September 1, 2025, Octave exercised its option to convert its $3,500 convertible note investment in Pivix and now owns approximately 74%.
•On September 29, 2025, Octave completed the sale of AAC. AAC's results, including Octave's loss on the sale of AAC are reported within discontinued operations. Refer to Note 4.
Discontinued Operations of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and Note 5. Discontinued Operations of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2025, and for further details on the sale and results for the three months ended March 31, 2025. As a result of the sale, Octave repaid all of the outstanding debt used to acquire Octave Ventures, amounting to $150,000, and purchased AAC's co-investment in Octave Ventures of $62 million. Concurrent with the sale, OSG entered into a number of transactions as discussed in the Annual Report on Form 10-K for the year ended December 31, 2025, including transactions intended to lower the long term run-rate of corporate operating expenses.
The following describes the consolidated results of continuing operations of Octave and its subsidiaries for the three months ended March 31, 2026 and 2025.
Gross Premiums Written Gross premiums written increased $16,801 for the three months ended March 31, 2026 compared to the same period in the prior year.
The increase is primarily driven by growth in new and existing programs partially offset by the non-renewal of certain programs.
Net Premiums Written Net premiums written increased $14,445 for the three months ended March 31, 2026 compared to the same period in the prior year.
The increase is primarily driven by growth in new and existing programs, including certain programs with a high retention ratio partially offset by the non-renewal of certain programs.
Net Premiums Earned Net premiums earned increased $4,323 for the three months ended March 31, 2026 compared to the same period in the prior year.
The increase is primarily driven by growth in new and existing programs, including certain programs with a high retention ratio partially offset by the non-renewal of certain programs.
Commission Income and Commission Expense Commission increased $31,407 for the three months ended March 31, 2026 as compared to the same period in the prior year.
The increase was primarily due to organic growth in premiums placed as well as the acquisition of ArmadaCare in October of 2025. Commission income included profit commissions (based on underwriting performance) of $6,188 for the three months ended March 31, 2026, and $4,691 for the three months ended March 31, 2025. The increase for the three months ended March 31, 2026, was primarily driven by increase at Octave Ventures and Xchange Benefits.
Commission expense increased $3,640 for the three months ended March 31, 2026 as compared to the same period of the prior year. Commission expense represented approximately 22% and 32% of commission income for the three months ended March 31, 2026 and 2025, respectively. The decrease in commission expense relative to commission income in 2026
Octave Specialty Group, Inc.
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     First Quarter 2026 Form 10-Q
Table of Contents
relative to 2025 is related to the Armada acquisition as majority of their business is produced internally and lower external broker commisison model as well as change in gross to net reporting at Octave Ventures. Because third parties are paid commissions to obtain business, the majority of Octave Ventures' commission income is reported net of any distribution and commission expenses, due to the nature of its program agreements. The majority of the ID segment's other MGA/Us report their commission income gross of distribution and commission expenses.
Program Fees Program fee revenues were $3,644 and $3,652 for the three months ended March 31, 2026 and 2025, respectively. Program fee revenues represent the recognition of ceding commissions in excess of direct acquisition costs received from reinsurers and minimum fees received from MGA/Us until related programs reach certain levels of premium ceded. Program fees are charged as a percentage of premiums ceded to reinsurers as a component of total ceding commissions. Program fees for three months ended March 31, 2026 are flat versus the three months ended March 31, 2025, due to growth in existing programs offset by impact of a shift to retained from fronted for certain programs.
Net Investment Income Net investment income consists of interest income, including the net effect of discount accretion and premium amortization, from fixed maturity securities classified as available for sale and net gains (losses) on pooled investment funds that are reported under the equity method. These funds and certain other investments are reported in Other investments on the Consolidated Balance Sheets. For further information about investment funds held, refer to Note 4. Investments of the Notes to Consolidated Financial Statements included this Quarterly Report on Form 10-Q.
Net investment income decreased $460 for the three months ended March 31, 2026 compared to the same period in the prior year due primarily to lower Corporate short-term investment yields and balances following the acquisition of ArmadaCare and lower average Everspan asset balances.
Servicing and Other Fees Servicing and other fees increased $4,398 for the three months ended March 31, 2026. Servicing and other fees include revenues earned for providing operational and administrative services to the Lloyd's syndicates managed by Octave Ventures as well as program administration, health connections, set-up and renewal fees related to ArmadaCare and Pivix.
Other Revenues Other revenues includes (i) net investment gains (losses) on securities sold or called, net of investment impairment charges; (ii) foreign exchange gains (losses) from the ID segment; and (iii) net gains (losses) on derivative contracts including FX forward contracts used to manage currency risk within the ID segment. Other revenues for the three months ended March 31, 2026, of $630 and for the three months ended March 31, 2025, of $(1,124) were driven primarily by by foreign exchange gains and (losses) on non-functional currency operations of Octave Ventures, net of the offsetting effects of FX forward contracts.
Losses and Loss Adjustment Expenses (Benefit)
Loss and loss adjustment expenses incurred increased $9,183 for the three months ended March 31, 2026 compared to the same period in the prior year.
The higher loss and loss adjustment expenses is due to the growth in existing and addition of new programs and prior period development primarily related to (i) $2,125 of net losses and $5,787 of LAE (legal expenses) from the settlement of a potential litigation matter related to an insurance claim, and (ii) slight reserve strengthening on an excess liability program and claim fees.
General and Administrative Expenses (G&A) The following table provides a summary of G&A expenses for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,20262025
Compensation$37,044 $22,887 
Non-compensation16,111 15,644 
Total G&A expenses$53,155 $38,531 
The increase of $14,157 in compensation expenses during the three months ended March 31, 2026, was driven primarily by higher compensation costs due to (i) the acquisitions of ArmadaCare and Pivix, (ii) changes in performance factors and timing of grants in 2025, (iii) expansion of Octave Venture's managing agency, and (iv) acceleration of RSUs & PSUs of terminated employees, and severance.
The increase of $467 in non-compensation G&A expenses for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, was driven primarily by integration expenses related to the ArmadaCare and Pivix acquisitions and costs associated with the build-out of the Octave Ventures managing agency, partially offset by a reduction in Corporate segment initiatives.
Intangible Amortization and Depreciation. The increase in intangible amortization and depreciation of $3,038 for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, was primarily due to the ArmadaCare acquisition.
Interest Expense The decrease in interest expense of $3,364 for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, was due to a lower loan balance, reduced interest rate, and prior year includes duration fees.
Provision for Income Taxes The provision (benefit) for income taxes primarily relates to international operations and was $(481) for the three months ended March 31, 2026 compared to $(617) for the three months ended March 31, 2025. The tax benefit recognized in the current year includes current tax expense associated with Octave Ventures UK operations, partially offset by deferred tax benefit related to the recognition of deferred tax assets generated by Octave Ventures US and amortization of finite-lived intangible assets associated with Octave Ventures UK and US operations.

Octave Specialty Group, Inc.
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     First Quarter 2026 Form 10-Q
Table of Contents
Results of Operations by Segment
Insurance Distribution
Three Months Ended March 31,20262025
Premiums placed$426,833 $233,186 
Revenues:
Commission income$68,178 $36,771 
Commission expense14,005 10,365 
Net commissions54,173 26,406 
Servicing and other fees9,362 4,964 
Investment income308 376 
Other revenue678 $(1,113)
Expenses:
General and administrative 33,704 18,550 
EBITDA30,817 12,083 
Interest expense2,090 5,454 
Depreciation295 109 
Intangible amortization11,647 8,763 
Pretax income (loss)$16,785 $(2,243)
Octave's stockholders equity (1)
$519,355 $214,431 
(1)    Represents the share of Octave stockholders equity for each subsidiary within the ID segment, including intercompany eliminations.
Octave's ID companies are compensated for their services primarily by commissions paid by insurance carriers for underwriting, structuring and/or administering polices, and in some cases, the managing of claims under an agency agreement. Commission revenues are usually based on a percentage of the premiums placed. In addition, we are eligible to receive profit sharing contingent commissions based on the underwriting results of certain programs underwritten by our MGA/Us. These profit commissions may fluctuate from period to period resulting in some variability in revenue and earnings.
Higher premiums placed were driven by the acquisition of ArmadaCare and organic growth.
For the three months ended March 31, 2026, the increase in premiums placed and changes to the mix of business written led to the growth in commission income and commission expense of 85% and (35.1)%, respectively.
The increase in G&A expenses of $15,154 for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, was primarily due to the acquisition of ArmadaCare, launch of Pivix as well as increase in staffing for the build out of new businesses at Octave Ventures.
ID pretax income for the three months ended March 31, 2026, was $16,785 compared to a loss of $(2,243) for the three months ended March 31, 2025. The higher pretax income for the three months ended March 31, 2026, compared to the prior year period mostly related to higher Net Commissions and Fees related to the ArmadaCare acquisition and organic growth as well as lower interest expense, partially offset by higher intangible amortization.
The ID EBITDA for the three months ended March 31, 2026, was $30,817 compared to $12,083 for the three months ended March
31, 2025. The increase was primarily driven by an increase in commission income due to acquisitions and organic growth.
ID businesses may experience seasonal impacts on their revenues and net results. For example, our A&H businesses collectively produce the majority of their business in the first quarter of each year resulting in revenue and earnings concentrations in the first quarter. Similar concentrations of production, revenue and earnings also occurs in the fourth quarter, driven by our non-A&H businesses, but generally to a lesser degree. Seasonal impacts on the ID segment, and therefore Octave's results, may increase or decrease and shift over time depending on the relative growth of certain classes of business, impact of acquisitions, impact of de-novo MGAs and market conditions.
Specialty Property and Casualty Insurance
Three Months Ended March 31,20262025
Gross premiums written$103,716 $86,915 
Net premiums written32,449 18,004 
Revenues:
Net premiums earned$20,001 $15,678 
Program fees3,644 3,652 
Investment income 1,649 1,842 
Other 5 (1)
Total25,299 21,171 
Expenses:
Losses and loss adjustment expenses 19,679 10,496 
Policy acquisition costs6,371 3,841 
General and administrative7,532 5,331 
Total33,581 19,668 
Pretax income (loss)$(8,282)$1,503 
EBITDA(8,282)1,503 
Retention Ratio (1)
31.3%20.7%
Loss and LAE Ratio (2)
98.4%66.9%
Expense Ratio (3)
51.3%35.2%
Combined Ratio (4)
149.7%102.1%
Octave's stockholders equity (5)
$132,714 $137,241 
(1)Retention ratio is defined as net premiums written divided by gross premiums written.
(2)Loss and LAE ratio is defined as losses and loss expenses incurred divided by net premiums earned.
(3)Expense Ratio is defined as acquisition costs and general and administrative expenses, reduced by program fees divided by net premiums earned.
(4)Combined ratio is defined as Loss and LAE ratio plus Expense Ratio.
(5)Represents Octave stockholders equity in the Specialty Property and Casualty Insurance segment, including intercompany eliminations.
The Specialty Property and Casualty Insurance segment has grown significantly since underwriting its first program in May 2021. Twenty-four programs were authorized to issue policies as of March 31, 2026, including Everspan participating in certain programs as a reinsurer. In 2026, Everspan's continues to see its production levels build with growth in new and existing programs. This growth has resulted in an increase in gross and net premiums written, net premiums earned, losses and loss
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     First Quarter 2026 Form 10-Q
Table of Contents
expenses incurred, policy acquisition costs and a shift in Everspan's retention ratio in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Although losses and loss expenses have increased, the shift in Everspan's net portfolio mix has led to an improved loss ratio on active programs.
Consistent with its strategy to generate sustainable and profitable, long-term specialty property and casualty program insurance business with a focus on diverse classes of risks, Everspan may source select programs as a reinsurer. Accessing programs as a reinsurer provides Everspan the ability to diversify its risk profile (temporarily or long-term), efficiently manage its exposure limits and underwrite programs in a cost efficient manner, amongst other benefits. Everspan may participate as a reinsurer on up to 30% of a program, which is in line with its strategy to retain up to 30% per program. Participation as a reinsurer will affect the retention ratio as Everspan's portion of assumed premiums is reflected fully in both Gross and Net premiums written.
The change in the Loss and LAE ratio during the three months ended March 31, 2026, was driven by $2,125 of net losses and $5,787 of LAE (legal expenses) from the settlement of a potential litigation matter related to an insurance claim, partially offset by a shirt in business mix. The three months ended March 31, 2026, contained prior years loss strengthening equating to 44.5% of which 39.6% relates this settlement. The remaining amount primarily relates to an excess liability claim and ULAE. The three months ended March 31, 2025, contained minimal prior years loss strengthening equating to 1.1%.
Loss and loss adjustment expenses incurred, and Everspan's associated Loss and LAE ratio, may be adversely impacted by economic and social inflation. The impact of inflation on ultimate loss reserves is difficult to estimate, particularly in light of recent disruptions to the judicial system, supply chains and labor markets. Going forward, we may not be able to offset the impact of inflation on our loss costs with sufficient price increases. The estimation of loss reserves may also be more difficult during extreme events, such as a pandemic, or during the persistence of volatile or uncertain economic conditions, due to, amongst other reasons, unexpected changes in behavior of judiciaries, claimants and policyholders, including fraudulent reporting of exposures and/or losses. Due to the inherent uncertainty underlying loss reserve estimates, the final resolution of the estimated liability for loss and loss adjustment expenses will likely be higher or lower than the related loss reserves at the reporting date. In addition, our estimate of losses and loss expenses may change. These additional liabilities or increases in estimates, or a range of either, could vary significantly from period to period.
In addition to the increase in the Loss and LAE ratio for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, there was a charge to acquisition costs resulting from sliding scale commission arrangements with program partners. Such charge increased the Specialty Property and Casualty Insurance segment's expense ratio by 1.4% and —% for the three months ended March 31, 2026 and 2025, respectively. Certain Everspan programs were structured to include sliding scale commission arrangements within a loss ratio range. These sliding scale arrangements help mitigate losses, protect underwriting results and limit earnings volatility.
The increase in G&A expenses of $2,201 for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, was primarily due to severance and accelerated incentive compensation in addition to higher premium taxes driven by increased premiums written.
Corporate
Corporate consists of our holding company and shared services operations ("Corporate"). Corporate provides financial, legal, technological and human resources to Octave's two segments and is responsible for the function of OSG as a publicly-traded company.
Corporate revenues totaled $345 and $587 for the three months ended March 31, 2026 and 2025, respectively. Corporate revenue is mostly generated from investment of OSG's liquid resources and investment results from its previously made strategic investments, including certain minority investments in MGA/Us and an insurtech fund. Investment revenues comprised of net investment income and net investment gains (losses), including impairments, were $398 and $597 for the three months ended March 31, 2026 and 2025, respectively. The decline is primarily due to lower average invested assets due to the use of funds for the acquisition of ArmadaCare and share repurchases in the fourth quarter of 2025, as well as lower yields on short-term invested assets in 2026.
Corporate expenses were $11,919 and $14,650 for the three months ended March 31, 2026 and 2025 respectively. The decrease is mainly due to cost reduction initiatives, including lower premise expenses following the corporate office re-location, and reduced acquisition-related costs.
LIQUIDITY AND CAPITAL RESOURCES
Holding Company Liquidity
OSG is organized as a legal entity separate and distinct from its operating subsidiaries. OSG's liquidity is dependent on its portfolio of cash and short-term investments totaling $39,155 as of March 31, 2026; investment income; distributions, tax and expense-sharing payments from its operating subsidiaries; sales of other assets; and potential third-party capital (e.g. credit facilities).
March 31,
2026		December 31, 2025
Cash and short-term investments$39,155 $49,471 
Other investments (1)
21,620 25,124 
Other net (liabilities) assets135 1,889 
Total$60,909 $76,484 
(1)Includes minority investments in insurance services businesses of $17,517 and $17,517 at March 31, 2026 and December 31, 2025, respectively.
The decrease in OSG's stand alone net assets, excluding its equity investments in subsidiaries, during the first three months of 2026 was driven primarily by net cash outflows from operating expenses, contributions to subsidiaries related to the acquisition of noncontrolling interests and share repurchases related to the settlement of taxes on equity compensation, partially offset by interest income and distributions received from subsidiaries.
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Everspan's ability to make dividend payments will depend on its future profitability relative to its capital needs to support its growth. Everspan did not pay dividends to OSG in 2025 and is not expected to pay dividends in 2026. However, Everspan makes tax payments to OSG in accordance with a Tax Sharing Agreement.
Octave Partners (i.e. business units within the Insurance Distribution segment) does not have any regulatory restrictions on its ability to make distributions. Our Insurance Distribution segment subsidiaries pay dividends either monthly, quarterly or annually, depending on the timing of their cash flows (which can be impact by seasonality), working capital requirements, and any other cash flow commitments.
OSG's principal uses of liquidity are: (i) the payment of G&A expenses, including costs to explore opportunities to grow and diversify Octave, (ii) making capital investments to acquire, grow and/or capitalize new and/or existing businesses, including through the acquisition of noncontrolling interests as a result of the exercise of outstanding puts and/or calls, (iii) potential capital contributions to subsidiaries to supplement debt service requirements, (iv) making investments in technology and other operational infrastructure to improve the operational effectiveness and efficiency of our business and to support its growth, and (v) share repurchases and warrant conversions. Funding puts, calls and other capital commitments could require payments from OSG, the magnitude of which will ultimately depend on the performance of the underlying businesses, whether or not the puts or calls are exercised, FX rates and other considerations, including whether OSG opts to settle put/call exercises or warrant conversions in its own common shares or cash. Between March 31, 2026 and April 9, 2026, OSG paid $43,869 (including stamp duty) to acquire noncontrolling interests primarily as a result of the exercise of puts. OSG funded these purchases with a combination of cash and incremental Octave Partners debt (refer to Note 9. Debt for details regarding the increase to the Credit Facility). OSG is seeking to fund future NCI puts and calls using internal funding, but may also seek additional debt or other funding sources. OSG may satisfy certain put/call obligations using common equity for up to 35% of the amount of the exercise value. The need for additional capital to fund future NCI puts and calls will depend on a number of considerations, including distribution levels from subsidiaries, the potential for additional acquisitions, other capital investment demands, stock repurchases and warrant conversions. In addition, the value of the noncontrolling interests puts and calls at the time of exercise will also have an impact on our need for additional funding. OSG may also provide short-term financial support, primarily in the form of loans, to its operating subsidiaries to support their operating requirements.
In connection with and pursuant to the Purchase Agreement related to the sale of Ambac Assurance Corporation, OSG issued to Buyer a warrant exercisable for 5,092,707 shares of common stock, par value $0.01, of OSG. The warrant has an exercise price per share of $18.50 and expires March 29, 2032. Under the terms of the Letter Agreement dated July 3, 2025, between the parties to the Purchase Agreement, the Buyer may convert the warrant at a value equal to its Black-Sholes value, over specified time periods, with the conversion value delivered in shares of OSG common stock or cash at OSG's election. Effective after March 31, 2026,
and during the six months ended September 30, 2026, the warrant holder may convert up to one-third or approximately 1,697,569 of the warrants at the Black-Sholes value. Subsequent to September 30, 2026, an additional third of the warrants may be converted in any three-month period. OSG estimates the Black-Scholes value of the warrants at $2.50 per warrant share as of April 2026.
In the opinion of the Company’s management, the net assets and expected funding sources of OSG are sufficient to meet OSG’s current liquidity requirements. However, events, opportunities, acquisitions, the exercise of puts and calls, the need to refinance outstanding debt, share repurchases, warrant conversions or other circumstances could require OSG to seek additional capital (e.g. through loans or the issuance of debt, equity convertible, hybrid or equity securities).
The Credit Facility entered into in connection with the 2025 acquisition of ArmadaCare and amended in connection with the 2026 acquisition of NCI includes covenants that restrict our ability to manage capital resources by requiring maintenance of certain financial ratios and restricting indebtedness, liens, mergers, sales of assets, investments, restricted payments (such as dividends), and affiliate transactions, among other restrictions. The Credit Facility also requires the prepayment of the borrowings thereunder with proceeds of certain asset sales, recovery events, issuances of indebtedness and indemnity payments. These requirements will impact our financial and operational flexibility while the Credit Facility remains in place.
Operating Companies' Liquidity
Insurance
Sources of liquidity for Everspan are primarily funds generated from premiums, reinsurance recoveries, fees, investment income and maturities and sales of investments.
Cash provided from these sources is used primarily for claim payments, loss expenses, acquisition costs, operating expenses, reinsurance payments and purchases of securities and other investments.
Everspan manages its liquidity risk by projecting cash flows and maintaining specified levels of cash and short-term investments at all times. It is the opinion of the Company’s management that the insurance subsidiaries’ near term liquidity needs will be adequately met from the sources described above.
Insurance Distribution
The liquidity requirements of our ID subsidiaries are met primarily by funds generated from commission (both base and profit commissions) and fees. Base commissions and fees are generally received monthly, whereas profit commissions are received only if the business underwritten is profitable. Cash provided from these sources is used primarily for commissions paid to sub-producers, operating expenses and distributions to OSG and other members.
Cash Held at Banks
Octave maintains cash and investment accounts, including premium trust accounts, at depository institutions in amounts in excess of the limits insured by the FDIC and in countries other than the U.S. Octave's cash balances held at banks were $93,537
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as of March 31, 2026, including cash of Octave's insurance distribution subsidiaries held in regional banks of $22,352 as of March 31, 2026.
Consolidated Cash Flow Statement Discussion
The following table summarizes the net cash flows for continuing operations for the periods presented.
Three Months Ended March 31,20262025
Cash provided by (used in):
Operating activities$(10,079)$(12,612)
Investing activities37,708 21,339 
Financing activities(2,133)(5,436)
Foreign exchange impact on cash and cash equivalents(399)225 
Net cash flow$25,097 $3,516 
Operating Activities for Continuing Operations
Operating cash flows for the three months ended March 31, 2026, were adversely impacted from the settlement of a potential litigation matter related to an insurance claim and interest payments on long-term debt, partially offset by cash collections from both the specialty P&C and insurance distribution businesses.
Future operating cash flows will primarily be impacted by net premium collections, investment coupon receipts, fee and net commission revenues, operating expenses, net claim and loss expense payments and debt interest payments.
Investing Activities for Continuing Operations
Investing activities for the three months ended March 31, 2026, were primarily driven by changes in short-term investments.
Financing Activities for Continuing Operations
Financing activities for the three months ended March 31, 2026, included tax payments related to shares withheld for share-based compensation plans, distributions to noncontrolling interest holders, and repayment of long-term debt.
Future financing cash flows will be primarily impacted by paydowns and maturities of debt; share repurchases; acquisitions of noncontrolling interest shares; other capital management activity and distributions to noncontrolling interests.
Cash Flows from Discontinued Operations
Cash flows pertaining to discontinued operations are reported separately on the Consolidated Statements of Cash Flows. The primary driver of the cash flows from discontinued operations was the continued runoff of the financial guarantee business, including the collection of premiums, interest income and subrogation, and the payment of claims, expenses and foreign taxes. Since the agreement to sell AAC, the operations were substantially separated and with the sale having been completed in September 2025, future reporting periods exclude any discontinued operations activity after September 30, 2025.
BALANCE SHEET
Total assets increased by $43,709 from December 31, 2025 to $2,267,026 at March 31, 2026, primarily due to increase in reinsurance recoverables resulting from growth in the specialty P&C business, together with increase in commission receivable from insurance distribution business.
Total liabilities increased by approximately $100,332 from December 31, 2025 to $1,237,483 as of March 31, 2026, primarily due the payable to acquire noncontrolling interests from the exercise of puts and an increase in loss and loss adjustment expense reserve and ceded premium payables from the specialty P&C businesses.
As of March 31, 2026, total stockholders’ equity was $712,618, compared with total stockholders’ equity of $715,790 at December 31, 2025. The decrease was primarily the result of the net loss attributable to common stockholders for the three months ended March 31, 2026 of $6,851, partially offset with increase in additional paid-in capital resulting from the acquisition of noncontrolling interests from the exercise of puts.
Assets:
Investment Portfolio
Octave's investment portfolio is managed under established guidelines designed to meet the investment objectives of the Everspan Group and OSG. The ID businesses investments are limited to cash sweep products, treasuries, certificates of deposit and money market funds. Refer to "Description of the Business – Investments and Investment Policy" located in Part I. Item 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for further description of Octave's investment policies and applicable regulations.
The following table summarizes the composition of Octave's investment portfolio, at carrying value at March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Specialty Property & Casualty InsuranceInsurance DistributionCorporate & OtherConsolidatedSpecialty Property & Casualty InsuranceInsurance DistributionCorporate & OtherConsolidated
Fixed maturity securities$136,940 $— $152 $137,092 $122,142 $— $153 $122,295 
Short-term36,980 32,174 23,141 92,295 71,286 35,812 39,344 146,442 
Other investments3,503 21,468 24,971 — — 24,971 24,971 
Total investments$177,423 $32,174 $44,761 $254,358 $193,428 $35,812 $64,468 $293,708 
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Octave invests in various asset classes in its fixed maturity securities portfolio. Refer to Note 4. Investments of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information about the composition of fixed maturity securities and other investments by asset class.
Premium Receivables
Octave's premium receivables increased to $87,653 at March 31, 2026 from $75,085 at December 31, 2025. The increase is primarily due to growth in the Specialty P&C Insurance segment, including receivables related to the programs where Everspan participates as a reinsurer.
Commission and Fees Receivable
Octave's commission and fee receivables increased to $106,198 at March 31, 2026 from $86,549 at December 31, 2025. The increase is primarily due to growth in the ID segment.
Reinsurance Recoverable on Paid and Unpaid Losses
Octave has reinsurance in place pursuant to surplus share treaties and facultative agreements. As of March 31, 2026 and December 31, 2025, reinsurance recoverable on paid and unpaid losses were $469,859 and $436,092, respectively, increasing primarily due to growth in the Specialty P&C Insurance Segment. To minimize its exposure to losses from reinsurers, Octave (i) monitors the financial condition of its reinsurers; (ii) is entitled to receive collateral from its reinsurance counterparties under certain reinsurance contracts; and (iii) has certain cancellation rights that can be exercised in the event of rating agency downgrades of a reinsurer (among other events and circumstances). Those reinsurance counterparties that do not currently post collateral are well capitalized, highly rated, authorized capacity providers. Octave benefited from letters of credit and collateral amounting to approximately $80,351 from its reinsurers at March 31, 2026.  Additionally, while legacy liabilities from Specialty P&C acquisitions were fully ceded to certain reinsurers, Everspan also benefits from an unlimited, uncapped indemnity from the respective sellers to mitigate any residual risk to these reinsurers.
Intangible Assets, net of Accumulated Depreciation
At March 31, 2026, intangible assets primarily include (i) intangible assets established as part of acquisitions in the ID business of $447,167 and (ii) indefinite-lived intangible assets in the Specialty P&C business as part of its acquisitions of $11,213.
As of March 31, 2026 and December 31, 2025, intangible assets were $458,380 and $474,998, respectively. The decrease is driven by foreign exchange rates (appreciation of the British pound), partially offset by amortization of $11,647.
Goodwill
As of March 31, 2026 and December 31, 2025, goodwill totaled $533,497 and $540,345 respectively. The decrease is primarily driven by foreign exchange rates (appreciation of the British pound). All of the goodwill was assigned to the ID segment.
Liabilities:
Loss and Loss Adjustment Expense Reserves
Loss and loss adjustment expense reserves are estimates of the ultimate liability for unpaid losses and loss expenses for claims that have been reported and incurred, but not yet reported as of the balance sheet date.
Loss and loss adjustment expense reserves by line of business were as follows as of March 31, 2026 and December 31, 2025:
March 31,
2026		December 31,
2025
LineGrossNetGrossNet
Commercial auto$162,853 $29,446 $159,194 $23,062 
Excess liability128,381 18,764 116,610 16,897 
General liability62,391 12,750 63,596 12,572 
Workers compensation19,752 19,752 17,798 17,798 
Non-standard personal auto2,895 2,704 3,826 3,635 
Professional liability48,219 3,388 40,846 2,851 
Multi-peril / business owners (BOP)11,246 2,328 6,185 1,519 
Surety10,767 1,060 12,233 94 
Unallocated loss adjustment expense reserves15,515 5,546 14,869 5,551 
Other (1)
25,242 171 24,833 289 
Loss and Loss Expense Reserves$487,260 $95,908 $459,990 $84,268 
(1)Includes $21,273 and $0 loss and loss expense reserves on a gross and net of reinsurance basis, respectively, at March 31, 2026, and $23,530 and $0 loss and loss expense reserves on a gross and net of reinsurance basis, respectively, at December 31, 2025, related to legacy liabilities obtained from the acquisitions of Providence Washington Insurance Company, Greenwood Insurance Company and Consolidated Specialty Insurance Company. All legacy liabilities remain obligations of affiliates of the sellers through reinsurance.
The process for determining the level of loss and loss adjustment reserves is subject to certain estimates and judgments. Refer to the "Critical Accounting Policies and Estimates" and “Results of Operations” sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations, in addition to Basis of Presentation and Significant Accounting Policies and Loss Reserves sections included in Note 2. Basis of Presentation and Significant Accounting Policies and Note 8. Insurance Contracts, respectively, to the Consolidated Financial Statements included in Part II, Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for further information on loss and loss adjustment expenses.
Debt
In connection with the acquisition of ArmadaCare on October 31, 2025, Octave Partners LLC and certain of its subsidiaries (including ArmadaCare) entered into the 2025 Credit Facility to pay part of the purchase price for ArmadaCare. Refer to Note 10. Debt of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information.
Commission Payable
Commission payables are commissions due to sub-producers for placing insurance contracts on behalf of the MGAs and amounts due to UK Syndicates that provide advanced commissions to fund short term liquidity needs for MGAs. Commission payable at March 31, 2026 and December 31, 2025, was $118,086 and $115,555, respectively. The increase is primarily due to higher advance commissions due to Syndicates.
Other Liabilities
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Other liabilities at March 31, 2026 and December 31, 2025, was $158,458 and $102,771, respectively. The increase in Other liabilities is primarily due to consideration payable of $43,644 for the acquisition of redeemable NCI as a result of the exercise of put options by minority owners of Octave Ventures and of certain Option Shares in March 2026. The liability was settled in cash in April 2026.
Redeemable Noncontrolling Interest
The minority equity interests of Octave Ventures's majority-owned MGA/Us were classified within nonredeemable NCI at March 31, 2026. Changes to redeemable NCI during the three months ended March 31, 2026, relate primarily to the allocation of financial results to the minority interests, reclassification of certain interests to nonredeemable due to the expiration of related put options, the exercise of certain put options and the impact of foreign currency translation.
ACCOUNTING STANDARDS
Please refer to Note 1. Business and Basis of Presentation to the Unaudited Consolidated Financial Statements included in Part I, Item 1 in this Form 10-Q for a discussion of the impact of recent accounting pronouncements and the potential impact on Octave's financial condition and results of operations.
U.S. STATUTORY BASIS FINANCIAL RESULTS
OSG's U.S. insurance subsidiaries prepare financial statements under accounting practices prescribed or permitted by its domiciliary state regulator (“SAP”) for determining and reporting the financial condition and results of operations of an insurance company. The National Association of Insurance Commissioners (“NAIC”) Accounting Practices and Procedures manual (“NAIC SAP”) is adopted as a component of prescribed practices by each domiciliary state. For further information, see "Everspan Indemnity Insurance Company," in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Note 9. Insurance Regulatory Restrictions to the Consolidated Financial Statements included in Part II, Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Everspan Indemnity Insurance Company
Everspan Indemnity Insurance Company’s (EIIC) statutory policyholder surplus was $113,775 at March 31, 2026, as compared to $128,031 at December 31, 2025. The decrease in surplus was driven by a net loss at Everspan Indemnity Insurance Company, including its subsidiaries, of $14,406 during the three months ended March 31, 2026. The net loss was driven by loss and loss expenses incurred and an increase in commission costs. The increase in commission costs was a function of growth and the underwriting of programs with broad sliding scale commission structures. On a US Statutory basis, commission costs are expensed immediately whereas for US GAAP, such costs are deferred and recognized over the life of the respective policies. Each of Everspan's insurance carriers are a direct or indirect wholly-owned subsidiary of EIIC and therefore are included in EIIC's statutory policyholder surplus.
NON-GAAP FINANCIAL MEASURES
In addition to reporting the Company’s quarterly financial results in accordance with GAAP, the Company is reporting non-GAAP financial measures: EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, Organic Revenue Growth Rate (Insurance Distribution segment only), Adjusted Net Income and Adjusted Net Income Margin. These amounts are derived from our consolidated financial information, but are not presented in our consolidated financial results because they are not calculated in accordance with GAAP.
We present non-GAAP supplemental financial information because we believe such information is of interest to the investment community, and that it provides greater transparency and enhanced visibility into the underlying drivers and performance of our businesses on a basis that may not be otherwise apparent on a GAAP basis. We view these non-GAAP financial measures as important indicators when assessing and evaluating our performance on a segmented and consolidated basis, and they are presented to improve the comparability of our results between periods by eliminating the impact of the items that may not be representative of our core operating performance. These non-GAAP financial measures are not substitutes for the Company’s GAAP reporting, should not be viewed in isolation, and may differ from similar reporting provided by other companies, which may define non-GAAP measures differently.
Beginning December 31, 2024, Octave replaced the non-GAAP measure Adjusted Net Income with new non-GAAP measures Adjusted Net Income and Adjusted Net Income Margin and added Adjusted EBITDA and Adjusted EBITDA Margin to better align with other participants in the Property & Casualty insurance industry, including insurance carriers and other peers in the insurance distribution business.
The following paragraphs define each non-GAAP financial measure. A tabular reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure is also presented below.
EBITDA — EBITDA is net income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization of intangible assets.
EBITDA Margin — EBITDA divided by total revenues.
Adjusted EBITDA and Adjusted EBITDA Margin — We define Adjusted EBITDA as net income (loss) from continuing operations before interest expense, income taxes, depreciation, amortization of intangible assets, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, acquisition and integration related expenses, severance, and other exceptional or non-recurring items, including those related to capital raising. We believe that adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that may obfuscate business performance, and that the presentation of this measure enhances an investor's understanding of our financial performance.
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Three Months Ended March 31, 2026Three Months Ended March 31, 2025
Specialty Property & Casualty InsuranceInsurance DistributionCorporate & Other
Total
Specialty Property & Casualty InsuranceInsurance DistributionCorporate & Other
Total
Net income (loss) (Continuing Operations)$(7,690)$17,153 $(12,326)$(2,863)$1,425 $(1,743)$(14,172)$(14,490)
Adjustments:
Add: Interest expense— 2,090 — 2,090 — 5,454 — 5,454 
Add: Income tax expense (benefit)(592)(368)479 (481)78 (500)(195)(617)
Add: Depreciation expense— 295 272 567 — 109 304 413 
Add: Intangible amortization expense— 11,647 — 11,647 — 8,763 — 8,763 
EBITDA(8,282)30,817 (11,575)10,960 1,503 12,083 (14,063)(477)
Add: Impact of noncontrolling interests— (7,350)— (7,350)— (5,000)— (5,000)
EBITDA attributable to shareholders(8,282)23,467 (11,575)3,610 1,503 7,083 (14,063)(5,477)
Net income margin(30.4)%21.8 %NM(2.7)%6.7 %(4.3)%NM(23.1)%
Net income margin to shareholders(30.4)%16.8 %NM(6.6)%6.7 %(8.3)%NM(25.7)%
EBITDA margin(32.7)%39.2 %NM10.5 %7.1 %29.5 %NM(0.8)%
EBITDA margin to shareholders(32.7)%29.9 %NM3.5 %7.1 %17.3 %NM(8.7)%
Add: Acquisition and integration-related expenses— 1,404 1,064 2,468 — — 682 682 
Add: Equity-based compensation expense697 774 3,121 4,592 86 — 1,574 1,660 
Add: Severance and restructuring expense1,291 — 419 1,710 — 29 1,819 1,848 
Add: Other non-operating (income) losses7,912 — 82 7,994 — — — — 
Adjusted EBITDA$1,618 $32,995 $(6,889)$27,724 $1,589 $12,112 $(9,988)$3,713 
Impact of noncontrolling interest— (7,655)— (7,655)— (5,000)— (5,000)
Adjusted EBITDA to shareholders$1,618 $25,340 $(6,889)$20,069 $1,589 $7,112 $(9,988)$(1,287)
Adjusted EBITDA per diluted share— %— %— %— %3.0 %26.0 %(21.0)%8.0 %
Adjusted EBITDA shareholders per diluted share4.0 %56.0 %(15.0)%44.0 %3.0 %15.0 %(21.0)%(3.0)%
Adjusted EBITDA margin6.4 %42.0 %NM26.6 %7.5 %29.5 %NM5.9 %
Adjusted EBITDA margin to shareholders6.4 %32.3 %NM19.3 %7.5 %17.3 %NM(2.1)%
Organic Revenue Growth & Rate (Insurance Distribution Only) — Organic revenue is based on commissions and fees for the relevant period by excluding (i) the first twelve months of commissions and fees generated from acquisitions, (ii) commissions and fees from divestitures and (iii) other items such as contingent commissions, profit commissions and the impact of changes in foreign exchange rates.
Organic Revenue Growth is the change in organic revenue period-to-period, with prior period results adjusted to (i) include commissions and fees that were excluded from organic revenue in the prior period and reached the twelve-month owned mark in the current period, and (ii) exclude commissions and fees related to divestitures from organic revenue.
Organic Revenue Growth Rate to Total revenue growth rate, the most directly comparable GAAP measure, for each of the periods indicated is as follows (in percentages):
Three Months Ended March 31,20262025
% Growth
Total Insurance Distribution revenue & growth percentage (1)
$78,526 $40,998 91.5 %
Less: Acquired revenues(21,121)— 
Less: Profit commission and contingent commission income(6,188)(4,691)
Less: Other conforming adjustments
— (2,233)
Less: impact of F.X. rates(1,277)1,146 
Total Organic Revenue & Growth Percentage$49,940 $35,220 41.8 %
(1)Total Insurance Distribution revenue includes investment income.
Adjusted Net Income and Adjusted Net Income Margin — We define Adjusted net income as net income (loss) from continuing operations attributable to Ambac adjusted for amortization of intangible assets, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, acquisition and integration related expenses, severance and non-recurring income and loss items that, in the opinion of management, significantly affect the period-over-period assessment of operating results, and the related tax effect of those adjustments. Per share amounts exclude any impact of revaluing non-controlling interests as otherwise reported under GAAP earnings per share. We believe that
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     First Quarter 2026 Form 10-Q
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adjusted net income is an appropriate measure of operating performance because it eliminates the impact of income and expenses that may obfuscate business performance.
Three Months Ended March 31,
20262025
Specialty Property & Casualty InsuranceInsurance DistributionCorporate & OtherTotalSpecialty Property & Casualty InsuranceInsurance DistributionCorporate & OtherTotal
Net income (loss) (Continuing Operations)$(7,690)$17,153 $(12,326)$(2,863)$1,425 $(1,743)$(14,172)$(14,490)
Adjustments:
Add: Acquisition and integration-related expenses— 1,404 1,064 2,468 — — 682 682 
Add: Intangible amortization expense— 11,647 — 11,647 — 8,763 — 8,763 
Add: Equity-based compensation expense697 774 3,121 4,592 86 — 1,574 1,660 
Add: Severance and restructuring expense1,291 — 419 1,710 — 29 1,819 1,848 
Add: Other non-operating (income) losses7,912 — 82 7,994 — — — — 
Adjusted net income (loss) before tax and NCI2,210 30,978 (7,640)25,548 1,511 7,049 (10,097)(1,537)
Income tax effects(1,055)(2,229)1,055 (2,229)— — — — 
Adjusted net income (loss) before NCI1,155 28,749 (6,585)23,319 1,511 7,049 (10,097)(1,537)
Net (income) loss attributable to NCI— (6,704)— (6,704)— (4,500)— (4,500)
Adjusted net income (loss) to shareholders$1,155 $22,045 $(6,585)$16,615 $1,511 $2,549 $(10,097)$(6,037)
Three Months Ended March 31,
20262025
Specialty Property & Casualty InsuranceInsurance DistributionCorporate & OtherTotalSpecialty Property & Casualty InsuranceInsurance DistributionCorporate & OtherTotal
Net income (loss) margin (30.4)%21.8 %NM(2.7)%6.7 %(4.3)%NM(23.1)%
Adjusted Net income (loss) attributable to stockholders margin 4.6 %28.1 %NM15.9 %7.1 %6.2 %NM(9.6)%
Item 3.    Quantitative and Qualitative Disclosure About Market Risk
As of March 31, 2026, there are no material changes in the market risks that the Company is exposed to compared to December 31, 2025.
Item 4.     Controls and Procedures
In connection with the preparation of this first quarter Form 10-Q, an evaluation was carried out by Octave's management, with the participation of Octave's Chief Executive Officer and Chief Financial Officer, of the effectiveness of Octave's disclosure controls and procedures (as defined in rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-Q. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Based on its evaluation, Octave's Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2026, Octave's disclosure controls and procedures were effective.
There were no changes in our internal control over financial reporting during the first three months of 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
Please refer to Note 14. Commitments and Contingencies of the Unaudited Consolidated Financial Statements located in Part I, Item 1 in this Form 10-Q and Note 19: Commitments and Contingencies in Part II, Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion on legal proceedings against Octave and its subsidiaries.
Item 1A.    Risk Factors
You should carefully consider the risk factors set forth in the “Risk Factors” section, Item 1A to Part I in our Annual Report on Form 10-K for the year ended December 31, 2025, which is hereby incorporated by reference. These important factors may cause our actual results to differ materially from those indicated by our forward-looking statements, including those contained in this report. Please also see the section entitled “Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of 1995” in this quarterly report on Form 10-Q. There have been no material changes to the risk factors we have disclosed in the “Risk Factors” section of our aforementioned Annual Report on Form 10-K.
Octave Specialty Group, Inc.
38
     First Quarter 2026 Form 10-Q
Table of Contents
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
(a)    Unregistered Sales of Equity Securities — No matters require disclosure.
(b)    Purchases of Equity Securities By the Issuer and Affiliated Purchasers
On November 12, 2024, Octave's Board of Directors authorized a share repurchase program, under which Octave was authorized to opportunistically repurchase up to $50,000 of the Company’s common shares at management’s discretion over the period ending on December 31, 2026. Additionally, when restricted stock unit awards issued under Octave's Long Term Incentive Plan vest or settle, they become taxable compensation to employees. Shares withheld to cover the employee's portion of withholding taxes and are included in shares purchased.
The following table includes information about the Company's purchases of its common shares during the first quarter of 2026.
Jan-2026Feb-2026Mar-2026First Quarter 2026
Total Shares Purchased
— 6,296 96,344 102,640 
Average Price Paid Per Share$— $5.35 $5.59 $5.58 
Total Number of Shares Purchased as Part of Publicly Announced Plan— — — — 
Maximum Dollar Value That may Yet be Purchased Under the Plan$8,449 
The following table shows open market shares repurchased by year under Octave's November 12, 2024 share repurchase program.
($ in thousands,
except per share)		Year Ended
December 31,		YTD
2026
20242025
Shares repurchased937,1413,434,7450
Total cost$11,678 $29,942 $— 
Average purchase price per share$12.48 $8.72 $— 
Unused authorization amount$8,449 
Item 3.    Defaults Upon Senior Securities — No matters require disclosure.
Item 5.    Other Information — In the last fiscal quarter, none of our directors or executive officers adopted, terminated, or modified any Rule 10b5-1 trading arrangement, or any non-Rule 10b5-1 trading arrangement.
At the 2025 Annual Meeting of Stockholders held on May 28, 2025, the Company's stockholders recommended, by a non-binding advisory vote, that a stockholder vote to approve the compensation of our named executive officers should occur every year. In accordance with the stockholders' recommendation, the Company has determined that an advisory vote on the compensation of our named executive officers will be conducted every year, until the next required vote on the frequency of stockholder votes on the compensation of our named executive officers.
No other matters require disclosure.
Octave Specialty Group, Inc.
39
     First Quarter 2026 Form 10-Q
Table of Contents
Item 6.    Exhibits
Exhibit
Number		Description
Other exhibits, filed or furnished, as indicated:
3.1
3.2
10.1+
10.2+
10.3+
31.1+
31.2+
32.1++
101.INS
XBRL Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema Document.
101.CAL
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XBRL Taxonomy Extension Label Linkbase Document.
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104
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+ Filed herewith. ++ Furnished herewith.
* Certain schedules and other similar attachments to such agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish a copy of such omitted documents to the SEC upon request.
† Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10(iv)) of Regulation S-K. The registrant agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
OCTAVE SPECIALTY GROUP, INC.
Dated:May 6, 2026By:/s/ DAVID TRICK
Name:David Trick
Title:Chief Financial Officer and Treasurer
(Duly Authorized Officer and
Principal Financial Officer)
Octave Specialty Group, Inc.
40
     First Quarter 2026 Form 10-Q
ATTACHMENTS / EXHIBITS

ATTACHMENTS / EXHIBITS

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