Form type: 10-Q
Period end: 2026-03-31
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Commission revenue | 1,276,750.00 | 3,252,404.00 |
| Net gains (losses) on investments | -1,015,347.00 | -137,979.00 |
| Net investment income | 3,337,581.00 | 2,048,596.00 |
| Net premiums earned | 55,868,814.00 | 43,523,063.00 |
| Other revenue | 307,938.00 | 1,812,691.00 |
| Total Revenue | ||
| Total COGS | ||
| Gross Profit | ||
| Commission expense | 10,195,412.00 | 9,312,880.00 |
| Income tax expense (benefit) | -1,592,992.00 | 835,681.00 |
| Interest expense, operating | 69,855.00 | 227,454.00 |
| Other operating costs | 2,260,547.00 | 1,035,737.00 |
| Other operating expenses | 46,289,891.00 | 27,798,941.00 |
| Other underwriting expenses | 8,361,273.00 | 7,405,422.00 |
| Total Expenses | ||
| Net Income | - | |
| Basic earnings per share | - |
| March 31, 2026 | December 31, 2025 | |
|---|---|---|
| Assets | ||
| Debt securities available for sale | 293,800,426.00 | 289,037,190.00 |
| Debt securities held to maturity | 6,041,016.00 | 6,042,348.00 |
| Deferred policy acquisition costs | 27,799,748.00 | 27,867,207.00 |
| Deferred tax assets | 6,318,887.00 | 4,179,559.00 |
| Intangible assets, net | 500,000.00 | 500,000.00 |
| Operating lease right-of-use assets | 128,036.00 | 136,209.00 |
| Other assets (derived) | 15,821,149.00 | 34,590,523.00 |
| Other invested assets | 9,839,800.00 | 10,056,595.00 |
| Other investments | 3,756,749.00 | 4,552,378.00 |
| Premiums receivable | 19,027,968.00 | 21,012,408.00 |
| Prepaid reinsurance premiums | 4,934,974.00 | 2,142,329.00 |
| Property, plant and equipment | 8,017,975.00 | 7,897,675.00 |
| Reinsurance recoverables | 57,996,924.00 | 33,232,000.00 |
| Restricted cash and equivalents | 11,355,391.00 | 12,178,730.00 |
| Total Assets | ||
| Liabilities | ||
| Accounts payable and accrued liabilities | 4,984,969.00 | 11,253,649.00 |
| Debt | 4,122,971.00 | 4,440,127.00 |
| Deposits | 0.00 | 765,172.00 |
| Operating lease liabilities, current | 128,036.00 | 136,209.00 |
| Other liabilities (derived) | 16,207,164.00 | 19,532,055.00 |
| Unearned premiums | 153,642,731.00 | 154,028,072.00 |
| Unpaid claims and claims adjustment expenses | 171,748,662.00 | 140,538,618.00 |
| Total Liabilities | ||
| Equity | ||
| Stockholders equity | 114,504,510.00 | 122,731,249.00 |
| Total Equity | ||
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Operating activities | ||
| Net income | -5,808,250.00 | 3,882,660.00 |
| Depreciation and amortization | 715,507.00 | 623,863.00 |
| Stock-based compensation | 653,984.00 | 339,010.00 |
| Changes in operating assets and liabilities, net | 13,153,245.00 | 13,011,774.00 |
| Net cash from operating activities | ||
| Investing activities | ||
| Investing activities, net | -8,203,453.00 | -11,844,067.00 |
| Net cash from investing activities | - | - |
| Financing activities | ||
| Financing activities, net | -1,334,372.00 | 2,807,501.00 |
| Net cash from financing activities | - | |
| Net change in cash | - | |
| Cash at beginning of period | 28,669,441.00 | |
| Cash at end of period | 37,490,182.00 | |
| Amount | |
|---|---|
| Balance at beginning of period | 122,731,249.00 |
| Net income | -5,808,250.00 |
| Other equity movements | -2,418,489.00 |
| Balance at end of period | 114,504,510.00 |
Kingstone Companies, Inc. is a public reporting company classified under Fire, Marine & Casualty Insurance. The accompanying condensed financial statements as of and for the period ended March 31, 2026 are unaudited and have been prepared from the Company's books and records; in the opinion of management, they reflect all adjustments necessary for a fair presentation of the interim periods presented, and the results for the interim period are not necessarily indicative of the results to be expected for the full year. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted as permitted for interim reporting.
Total revenue for the period was $59,775,736. Net premiums earned of $55,868,814 increased 28.4% from $43,523,063 in the prior period, and net investment income of $3,337,581 increased 62.9% from $2,048,596. These increases were partially offset by commission revenue of $1,276,750, which declined 60.7% from $3,252,404, other revenue of $307,938, which declined 83.0% from $1,812,691, and net losses on investments of $1,015,347 compared with losses of $137,979 in the prior period. Unearned premiums were $153,642,731 at period end, an increase of 16.2% from $132,231,352, and premiums receivable were $19,027,968, up 11.8% from $17,012,840.
The Company reported a net loss of $5,808,250 for the period. The loss was recorded net of an income tax benefit of $1,592,992, compared with income tax expense of $835,681 in the prior period. Basic loss per share was $(0.40), computed using weighted-average basic shares outstanding of 14,453,747. Potentially dilutive securities were excluded from the computation to the extent their effect would have been antidilutive given the net loss for the period.
Debt outstanding at period end was $4,122,971, a decrease of 23.1% from $5,364,265, and interest expense of $69,855 declined 69.3% from $227,454. The Company's operating leases gave rise to right-of-use assets of $128,036 and current operating lease liabilities of $128,036, each down 33.8% from $193,545 in the prior period. Total liabilities were $350,834,533 at period end. Stockholders' equity was $114,504,510 at period end, an increase of 39.3% from $82,209,963. [COMPLETE: description of the components of and changes in stockholders' equity, including any capital transactions during the period].
| Current | Prior | |
|---|---|---|
| Debt | 4,122,971.00 | 4,440,127.00 |
| Deposits | 0.00 | 765,172.00 |
| Operating lease liabilities, current | 128,036.00 | 136,209.00 |
| Total debt | 4,251,007.00 | 5,341,508.00 |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | 8,017,975.00 | 7,897,675.00 |
| Total property and equipment | 8,017,975.00 | 7,897,675.00 |
| Current | Prior | |
|---|---|---|
| Stockholders equity | 114,504,510.00 | 122,731,249.00 |
| Total stockholders' equity | 114,504,510.00 | 122,731,249.00 |
Kingstone Companies, Inc. is a public reporting company classified under Fire, Marine & Casualty Insurance, and the following discussion should be read in conjunction with our unaudited condensed consolidated financial statements for the quarter ended March 31, 2026. KINGSTONE COMPANIES, INC. is a public reporting company classified under Fire, Marine & Casualty Insurance. For the current period, total revenues were $59,775,736 and we reported a net loss of $5,808,250, and basic loss per share was $0.40 based on weighted-average basic shares outstanding of 14,453,747. Net premiums earned increased 28.4% to $55,868,814 from $43,523,063 in the comparable prior-year period, and net investment income rose 62.9% to $3,337,581 from $2,048,596. These increases were partially offset by a decline in commission revenue of 60.7% to $1,276,750 from $3,252,404, a decrease in other revenue of 83.0% to $307,938 from $1,812,691, and net losses on investments of $1,015,347 compared with net losses of $137,979 in the prior-year period.
The most significant driver of the change in expenses was other operating expenses, which increased 66.5% to $46,289,891 from $27,798,941 in the prior-year period. Commission expense increased 9.5% to $10,195,412 from $9,312,880, other underwriting expenses increased 12.9% to $8,361,273 from $7,405,422, and other operating costs increased 118.3% to $2,260,547 from $1,035,737. Interest expense declined 69.3% to $69,855 from $227,454, reflecting a 23.1% reduction in debt outstanding to $4,122,971 from $5,364,265. We recorded an income tax benefit of $1,592,992 in the current period, compared with income tax expense of $835,681 in the prior-year period. Reflecting growth in the business, unearned premiums increased 16.2% to $153,642,731 from $132,231,352, unpaid claims and claims adjustment expenses increased 26.9% to $171,748,662 from $135,334,723, deferred policy acquisition costs increased 13.9% to $27,799,748 from $24,400,992, and premiums receivable increased 11.8% to $19,027,968 from $17,012,840.
Our liquidity and capital resources consist principally of cash, cash equivalents, and our investment portfolio. Cash and cash equivalents at March 31, 2026 were [COMPLETE: cash and cash equivalents balance and prior-period comparison]. Restricted cash and equivalents decreased 69.7% to $11,355,391 from $37,490,182. Our investment portfolio at March 31, 2026 included debt securities available for sale of $293,800,426, up 43.8% from $204,282,369, debt securities held to maturity of $6,041,016, other invested assets of $9,839,800, and other investments of $3,756,749. Stockholders' equity increased 39.3% to $114,504,510 from $82,209,963, and accounts payable and accrued liabilities decreased 58.3% to $4,984,969 from $11,967,825. Based on our current level of operations, cash position, and investment portfolio, management believes that our capital resources are sufficient to fund our operations and meet our obligations for at least the next twelve months.
Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. We are involved in legal proceedings arising in the ordinary course of business from time to time, and management does not currently believe any pending matter is material to the financial statements. Management evaluated our disclosure controls and procedures as of the end of the period and concluded they were effective at the reasonable assurance level, and no changes materially affected our internal control over financial reporting during the quarter.
We are exposed to various market risks in the ordinary course of our business, and our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. We do not have material foreign currency or commodity price exposure. Kingstone Companies, Inc. is a public reporting company classified under Fire, Marine & Casualty Insurance, and as such our investment portfolio, which supports our insurance operations, represents the principal source of our sensitivity to changes in interest rates.
Our exposure to interest rate risk arises principally from our fixed-income investment portfolio. As of March 31, 2026, debt securities available for sale totaled $293,800,426, an increase of 43.8% from $204,282,369 at the prior period end, and debt securities held to maturity totaled $6,041,016, a decrease of 14.3% from $7,046,023. In addition, we held other invested assets of $9,839,800 and other investments of $3,756,749, and restricted cash and equivalents of $11,355,391, down 69.7% from $37,490,182. Changes in prevailing interest rates directly affect the fair value of these holdings as well as the yields available on new investments and reinvested proceeds. Net investment income increased 62.9% to $3,337,581 from $2,048,596, while net losses on investments were $1,015,347 for the current period compared with net losses of $137,979 in the prior period, reflecting the sensitivity of our investment results to market conditions.
Our exposure to interest rate risk on our borrowings is limited. Outstanding debt was $4,122,971 at March 31, 2026, a decrease of 23.1% from $5,364,265, and interest expense declined 69.3% to $69,855 from $227,454. A hypothetical change in interest rates would affect the fair value of our fixed-income portfolio and our future investment income; the estimated impact of such a hypothetical change is [COMPLETE: quantitative interest rate sensitivity analysis, including hypothetical basis point shifts and estimated effects on portfolio fair value]. Because we do not have material foreign currency or commodity price exposure, we have not provided quantitative disclosures with respect to those risks.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2026. Based on that evaluation, management concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in our internal control over financial reporting that occurred during the quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management recognizes that any system of controls, however well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
[NOTE: Management's conclusion language above must be reviewed and adopted by management before filing.]
Kingstone Companies, Inc. is, from time to time, involved in legal proceedings arising in the ordinary course of its business. These matters may include claims-related litigation and other disputes incidental to the operation of the Company's business. Management does not currently believe that any pending legal matter is material to the Company's financial statements.
While the outcome of litigation is inherently uncertain, the Company does not expect that the ultimate resolution of any currently pending proceedings, individually or in the aggregate, will have a material adverse effect on its financial condition, results of operations, or cash flows. This assessment reflects management's current belief that no pending matter is material to the financial statements.
As a public reporting company classified under Fire, Marine & Casualty Insurance, KINGSTONE COMPANIES, INC. is subject to risks inherent in the property and casualty insurance business, including the possibility that losses and loss adjustment expenses will exceed our reserves and that adverse claims experience will impair our results of operations. For the period ended March 31, 2026, we reported revenue of $59,775,736 and a net loss of $5,808,250, and there can be no assurance that we will return to profitability in future periods. Our reserve for unpaid claims and claims adjustment expenses increased to $171,748,662 from $135,334,723, an increase of 26.9%, and if actual claims develop unfavorably relative to these estimates, we may be required to strengthen reserves, which would adversely affect our financial condition and results of operations. In addition, other operating expenses increased 66.5% to $46,289,891 from $27,798,941, and other operating costs increased 118.3% to $2,260,547 from $1,035,737, and our inability to manage expense growth relative to premium growth could further pressure underwriting results.
Our results depend significantly on premium production and the availability and cost of reinsurance. Net premiums earned increased 28.4% to $55,868,814 from $43,523,063, while commission revenue declined 60.7% to $1,276,750 from $3,252,404 and other revenue declined 83.0% to $307,938 from $1,812,691, and a failure to sustain premium growth or to replace declining ancillary revenue could adversely affect our results. We rely on reinsurance to manage our exposure to catastrophic and other losses, and our reinsurance recoverables of $57,996,924 expose us to the credit risk of our reinsurers; the failure of a reinsurer to honor its obligations, or an inability to obtain reinsurance on acceptable terms, could materially and adversely affect us. Prepaid reinsurance premiums of $4,934,974 as of the current period, compared to none in the prior period, reflect changes in our reinsurance arrangements, and future changes in the pricing or structure of such arrangements could increase our net retained exposure.
We are also exposed to market and investment risks. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. We recognized net losses on investments of $1,015,347 in the current period, compared to net losses of $137,979 in the prior period, and further deterioration in the fair value of our investments could adversely affect our earnings and stockholders' equity. Our investment portfolio includes debt securities available for sale of $293,800,426, which increased 43.8% from $204,282,369, and rising interest rates or credit deterioration affecting these holdings could result in unrealized or realized losses. Restricted cash and equivalents declined 69.7% to $11,355,391 from $37,490,182, and changes in our liquidity position could constrain our ability to meet obligations as they come due.
Finally, we face legal, regulatory, and operational risks common to insurance enterprises. We are involved in legal proceedings arising in the ordinary course of business from time to time, and although management does not currently believe any pending matter is material to the financial statements, adverse outcomes in litigation or regulatory proceedings could harm our business, reputation, or financial condition. Our total liabilities of $350,834,533 relative to total stockholders' equity of $114,504,510 expose us to leverage-related risks, and any need to raise additional capital may not be met on favorable terms, or at all. The risks described above are not the only risks we face, and additional risks not presently known to us or that we currently deem immaterial may also materially and adversely affect our business, financial condition, and results of operations.
Pursuant to Item 408(a) of Regulation S-K, Kingstone Companies, Inc. provides the following disclosure regarding Rule 10b5-1 trading arrangements of its directors and officers for the quarter ended March 31, 2026. [COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]