7. Stockholders’ Equity

As of June 30, 2026 and December 31, 2025, the Company had 5,000,000 preferred shares authorized with a par value of $0.0001 and no preferred shares issued and outstanding. As of June 30, 2026 and December 31, 2025, the Company had 500,000,000 common shares authorized and 26,186,979 and 26,520,417 common shares issued and outstanding, respectively, with a par value of $0.0001. Additional paid-in capital was $542.7 million as of June 30, 2026 and $523.2 million as of December 31, 2025.

Common stock reserved for future issuance

Stock based compensation

Stock-based compensation expense is recognized on a straight-line basis over the vesting period of equity-based awards. For performance stock units (“PSUs”), any changes to expense resulting from differences in actual performance versus target are recognized over the remaining vesting period of the awards. The Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. All stock-based compensation is included in other underwriting expenses in the Company’s unaudited condensed consolidated statement of income and comprehensive income.

2019 Equity Incentive Plan

On April 16, 2019, the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) became effective. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and units, and other cash-based or share-based awards. In addition, the 2019 Plan contains a mechanism through which the Company may adopt a deferred compensation arrangement in the future.

A total of 2,400,000 shares of common stock were initially authorized and reserved for issuance under the 2019 Plan. This reserve increases on January 1 of each year through 2029 by an amount equal to the smaller of: 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or an amount determined by the Board of Directors.

Stock Options

Recipients of stock options can purchase shares of the Company’s common stock at a price equal to the common stock’s fair market value on the grant date, determined by the closing price of the Company’s common stock on the grant date. Stock options vest over a period between two and four years with between 25% and 50% vesting on the first anniversary of the grant date and the remainder vesting monthly over the remaining period, subject to continued service to the Company. Stock options expire ten years after the grant date.

As of June 30, 2026, the Company had no unrecognized stock-based compensation expense related to stock options.

Restricted Stock Units

RSUs are valued using the closing price of the Company’s common stock on their grant date. The Company has issued RSUs with vesting periods of one to five years. Vesting is generally subject to continued service with the Company; however, certain employees who meet the requirements of the Company’s Equity Award Retirement Policy may continue to vest their RSUs following a qualified retirement.

As of June 30, 2026, the Company had approximately $37.0 million of total unrecognized stock-based compensation expense related to RSUs expected to be recognized over a weighted-average period of 1.9 years.

Performance Stock Units

The Company issues PSUs with a combination of service, performance, and market conditions.

The majority of PSUs were issued via grants made to certain executives during 2021 and are earned based on the achievement of stock price milestones. If the Company’s stock price reaches and remains at certain milestones for 30 days, the PSUs shall become earned units and will vest upon completion of a requisite service period of approximately five years from the date of grant. As of June 30, 2026, four stock price milestones have been achieved with respect to the PSU award granted to the Chief Executive Officer. Additionally, two stock price milestones have been achieved with respect to each of the PSU awards granted to four other executives. These PSUs have been earned, but will not vest until the fifth anniversary of the grant date, subject to continued service.

For other PSUs outstanding, vesting of PSUs requires a period of future service and the number of shares that vest depends on performance relative to predetermined targets of the Company’s gross written premiums and adjusted return on equity as set by the Compensation Committee. The PSU’s performance period is primarily a three-year period beginning with the grant date. At the end of the performance period, the actual results are measured against the predetermined targets to determine the number of PSUs to be earned as compensation. The earned PSUs are also subject to a required service period of approximately three years from the grant date before vesting and being issued as common stock.

Effective starting with 2025 grants, PSUs issued to executives include a relative total shareholder return (“RTSR”) modifier. The RTSR modifier adjusts PSU payouts up or down based on the Company’s shareholder return relative to the S&P 1500 Property & Casualty Insurance Index (the “Index”) over a three-year measurement period. These PSUs were valued using a Monte Carlo simulation with key valuation assumptions as follows:

The PSU grants above represent the number of shares that would vest based on achievement of all stock price milestones in the 2021 executive stock grants and the 100% achievement of the predetermined performance conditions for the other PSU grants. The actual number of PSUs which will vest is subject to adjustment based on the Company’s actual stock price performance and financial performance relative to the predetermined targets. As of June 30, 2026, the Company had approximately $27.7 million of total unrecognized stock-based compensation expense related to PSUs expected to be recognized over a weighted-average period of 0.8 years.

2019 Employee Stock Purchase Plan

On April 16, 2019, the Company’s 2019 Employee Stock Purchase Plan (the “2019 ESPP”) became effective. A total of 240,000 shares of common stock were initially authorized and reserved for issuance under the 2019 ESPP. In addition, the 2019 ESPP provides for annual increases in the number of shares available for issuance on January 1 of each year through 2029, equal to the smaller of 240,000 shares of the Company’s common stock or such other amount as may be determined by the Board of Directors.

Under the 2019 ESPP, employees can purchase Company stock at a discount via payroll withholdings. The 2019 ESPP is administered through employee participation in discrete offering periods. During each discrete offering period employee funds are withheld, and the stock purchase occurs upon the conclusion of the offering period. The Company issued 7,148 shares pursuant to the ESPP during the six months ended June 30, 2026.

Share repurchases

In July 2025, the Company’s Board of Directors approved a share repurchase program, (the “2025 Repurchase Program”) authorizing the repurchase of up to $150 million of outstanding shares of common stock through July 31, 2027. On April 30, 2026, the Company’s Board of Directors approved a share repurchase program, effective May 6, 2026, (the “2026 Repurchase Program”) which replaces the 2025 Repurchase Program, and authorizes the repurchase of up to $200 million of our outstanding common stock through May 6, 2028.

The Company repurchased 226,130 shares for $27.3 million at an average price of $120.65 per share under the 2025 Repurchase Program, and 332,844 shares for $36.8 million at an average price of $110.60 per share under the 2026 Repurchase Program, during the six months ended June 30, 2026. Approximately $163.2 million remains available for future repurchases under the 2026 Repurchase Program. The Company accounts for share repurchases by charging the excess of repurchase price over the common stock’s par value entirely to retained earnings. All repurchased shares are retired and become authorized but unissued shares.