The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and related notes appearing elsewhere in this Form 10-Q, as well as with the Consolidated Financial Statements and related footnotes under Part II. Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed or implied in these forward-looking statements as a result of certain known and unknown risks and uncertainties. See "Forward-Looking Statements." EXECUTIVE SUMMARY Overview American Coastal Insurance Corporation (referred to in this document as we, our, us, the Company or ACIC) is a holding company primarily engaged in commercial property insurance business with investments in the United States. We conduct our business principally through our wholly-owned insurance subsidiary, American Coastal Insurance Company (AmCoastal). Collectively, we refer to the holding company and all our subsidiaries, including non-insurance subsidiaries, as “American Coastal Insurance Corporation,” which is the preferred brand identification for our Company. Our Company’s revenue is generated primarily from writing insurance in Florida. Our target market in such areas consists of states where the perceived threat of natural catastrophe has caused large national insurance carriers to reduce their concentration of policies. We believe an opportunity exists for ACIC to write profitable business in such areas. On May 9, 2024, we entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC (Forza) in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of Interboro Insurance Company (IIC), our former insurance subsidiary. Forza’s application to acquire IIC was approved by the New York Department of Financial Services ("NYDFS") on February 13, 2025, and the sale closed on April 1, 2025. The Company received cash proceeds totaling $25,679,000 from the sale resulting in a loss on disposal of $247,000, net of tax impacts. The Company also recognized a $1,348,000 loss, net of tax impacts, on IIC's fixed maturity portfolio, which was included in accumulated other comprehensive loss on the Company's Consolidated Balance Sheets prior to the sale. As a result, IIC results of operations and assets and liabilities are captured within discontinued operations and can be seen in Note 3 of the Notes to Unaudited Condensed Consolidated Financial Statements above. Our policies in-force increased by 1.2% from 4,402 policies in-force at June 30, 2025 to 4,453 policies in-force at June 30, 2026. The following discussion highlights significant factors influencing the consolidated financial position and results of operations of American Coastal Insurance Corporation. In evaluating our results of operations, we use premiums written and earned, policies in-force and new and renewal policies by geographic concentration. We also consider the impact of catastrophe losses and prior year development on our loss ratios, expense ratios and combined ratios. In monitoring our investments, we use credit quality, investment income, cash flows, realized gains and losses, unrealized gains and losses, asset diversification and portfolio duration. To evaluate our financial condition, we consider our liquidity, financial strength, ratings, book value per share and return on equity. 35 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 2026 Highlights Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Gross premiums written $ 216,304 $ 228,346 $ 365,699 $ 426,198 Gross premiums earned 138,730 165,460 279,864 327,561 Net premiums earned 69,698 78,443 135,309 146,715 Total revenues 82,597 86,467 153,821 158,669 Income from continuing operations, net of tax 21,896 28,037 41,150 47,748 Income (loss) from discontinued operations, net of tax — (1,595 ) — 42 Consolidated net income $ 21,896 $ 26,442 $ 41,150 $ 47,790 Net income available to ACIC stockholders per diluted share Continuing Operations $ 0.44 $ 0.56 $ 0.83 $ 0.96 Discontinued Operations — (0.03 ) — - Total $ 0.44 $ 0.53 $ 0.83 $ 0.96 Reconciliation of net income to core income: Plus: Non-cash amortization of intangible assets $ 610 $ 610 $ 1,220 $ 1,219 Less: Income (loss) from discontinued operations, net of tax — (1,595 ) — 42 Less: Net realized gains on investment portfolio 3,264 — 3,270 1,382 Less: Unrealized gains on equity securities 4,233 2,231 4,761 268 Less: Net tax impact (1) (1,446 ) (340 ) (1,430 ) (91 ) Core income(2) 16,455 26,756 35,769 47,408 Core income per diluted share (2) $ 0.33 $ 0.54 $ 0.72 $ 0.96 Book value per share $ 7.21 $ 6.00 (1) In order to reconcile the net income to the core income measure, we included the tax impact of all adjustments using the 21% corporate federal tax rate. (2) Core income, a measure that is not based on GAAP, is reconciled above to net income, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this Form 10-Q is in "Definitions of Non-GAAP Measures" below. 36 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 Consolidated Net Income Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 REVENUE: Gross premiums written $ 216,304 $ 228,346 $ 365,699 $ 426,198 Change in gross unearned premiums (77,574 ) (62,886 ) (85,835 ) (98,637 ) Gross premiums earned 138,730 165,460 279,864 327,561 Ceded premiums earned (69,032 ) (87,017 ) (144,555 ) (180,846 ) Net premiums earned 69,698 78,443 135,309 146,715 Net investment income 5,402 5,793 10,481 10,304 Net realized investment gains 3,264 — 3,270 1,382 Net unrealized gains on equity securities 4,233 2,231 4,761 268 Total revenue 82,597 86,467 153,821 158,669 EXPENSES: Losses and loss adjustment expenses 18,833 15,540 29,076 26,929 Policy acquisition costs 22,703 24,257 45,096 47,723 General and administrative expenses 10,266 7,778 20,969 17,284 Interest expense 2,344 2,719 4,688 5,436 Total expenses 54,146 50,294 99,829 97,372 Income before other income 28,451 36,173 53,992 61,297 Other income (loss) (48 ) 1,379 164 2,449 Income before income taxes 28,403 37,552 54,156 63,746 Provision for income taxes 6,507 9,515 13,006 15,998 Net income from continuing operations, net of tax $ 21,896 $ 28,037 $ 41,150 $ 47,748 Income (loss) from discontinued operations, net of tax — (1,595 ) — 42 Net income $ 21,896 $ 26,442 $ 41,150 $ 47,790 Earnings available to ACIC common stockholders per diluted share $ 0.44 $ 0.53 $ 0.83 $ 0.96 Book value per share $ 7.21 $ 6.00 Return on equity based on GAAP net income 25.0 % 37.1 % Loss ratio, net (1) 27.0 % 19.8 % 21.5 % 18.4 % Expense ratio (2) 47.3 % 40.8 % 48.8 % 44.3 % Combined ratio (3) 74.3 % 60.6 % 70.3 % 62.7 % Effect of current year catastrophe losses on combined ratio 4.5 % — % 2.4 % — % Effect of prior year development on combined ratio 1.1 % (1.6 )% (0.7 )% (2.4 )% Underlying combined ratio (4) 68.7 % 62.2 % 68.6 % 65.0 % (1) Loss ratio, net is calculated as losses and loss adjustment expense (LAE) net of losses ceded to reinsurers, relative to net premiums earned. Management uses this operating metric to analyze our loss trends and believes it is useful for investors to evaluate this component separately from our other operating expenses. (2) Expense ratio is calculated as the sum of all operating expenses less interest expense relative to net premiums earned. Management uses this operating metric to analyze our expense trends and believes it is useful for investors to evaluate this component separately from our loss expenses. (3) Combined ratio is the sum of the loss ratio, net and the expense ratio, net. Management uses this operating metric to analyze our total expense trends and believes it is a key indicator for investors when evaluating the overall profitability of our business. (4) Underlying combined ratio, a measure that is not based on GAAP, is reconciled above to the combined ratio, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this Form 10-Q is in "Definitions of Non-GAAP Measures" below. 37 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 Definitions of Non-GAAP Measures We believe that investors' understanding of ACIC's performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited. Combined ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying combined ratio) is a non-GAAP measure, that is computed by subtracting the effect of current year catastrophe losses and prior year development from the combined ratio. We believe that this ratio is useful to investors and it is used by management to highlight the trends in our business that may be obscured by current year catastrophe losses and prior year development. Current year catastrophe losses cause our loss trends to vary significantly between periods as a result of their frequency of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year development is caused by unexpected loss development on historical reserves. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered as a substitute for the combined ratio and does not reflect the overall profitability of our business. Net loss and LAE ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying loss and LAE ratio) is a non-GAAP measure, that is computed by subtracting the effect of current year catastrophe losses and prior year development from the net loss and LAE ratio. We believe that this ratio is useful to investors and it is used by management to highlight the loss trends in our business that may be obscured by current year catastrophe losses and prior year development. Current year catastrophe losses cause our loss trends to vary significantly between periods as a result of their frequency of occurrence and magnitude, and can have a significant impact on the net loss and LAE ratio. Prior year development is caused by unexpected loss development on historical reserves. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. The most directly comparable GAAP measure is the net loss and LAE ratio. The underlying loss and LAE ratio should not be considered as a substitute for the net loss and LAE ratio and does not reflect the overall profitability of our business. Net loss and LAE excluding the effects of current year catastrophe losses and prior year reserve development (underlying loss and LAE) is a non-GAAP measure, that is computed by subtracting the effect of current year catastrophe losses and prior year reserve development from net loss and LAE. We use underlying loss and LAE figures to analyze our loss trends that may be impacted by current year catastrophe losses and prior year development on our reserves. As discussed previously, these two items can have a significant impact on our loss trends in a given period. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. The most directly comparable GAAP measure is net loss and LAE. The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of our business. Net income (loss) excluding the effects of amortization of intangible assets, income (loss) from discontinued operations, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure, which is computed by adding amortization, net of tax, to net income (loss) and subtracting income (loss) from discontinued operations, net of tax, realized gains (losses) on our investment portfolio, net of tax, and unrealized gains (losses) on our equity securities, net of tax, from net income (loss). Amortization expense is related to the amortization of intangible assets acquired, including goodwill, through mergers and therefore the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of our operations. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. The most directly comparable GAAP measure is net income (loss). The core income (loss) measure should not be considered a substitute for net income (loss) and does not reflect the overall profitability of our business. 38 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 CRITICAL ACCOUNTING POLICIES AND ESTIMATES When we prepare our consolidated financial statements and accompanying notes in conformity with GAAP, we must make estimates and assumptions about future events that affect the amounts we report. Certain of these estimates result from judgments that can be subjective and complex. As a result of that subjectivity and complexity, and because we continuously evaluate these estimates and assumptions based on a variety of factors, actual results could materially differ from our estimates and assumptions if changes in one or more factors require us to make accounting adjustments. During the six months ended June 30, 2026, we reassessed our critical accounting policies and estimates as disclosed in Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements and our Annual Report on Form 10-K for the year ended December 31, 2025. We have made no changes or additions with regard to those policies and estimates. RECENT ACCOUNTING STANDARDS Please refer to Note 2 in the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of recent accounting standards that may affect us. 39 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 ANALYSIS OF FINANCIAL CONDITION - JUNE 30, 2026 COMPARED TO DECEMBER 31, 2025 The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our accompanying unaudited condensed consolidated interim financial statements and related notes, and in conjunction with the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025. Investments The primary goals of our investment strategy are to preserve capital, maximize after-tax investment income, maintain liquidity and minimize risk. To accomplish our goals, we purchase debt securities in sectors that represent the most attractive relative value, and we maintain a moderate equity exposure. Limiting equity exposure manages risks and helps to preserve capital for two reasons: first, bond market returns are less volatile than stock market returns, and second, should the bond issuer enter bankruptcy liquidation, bondholders generally have a higher priority than equity holders in a bankruptcy proceeding. We must comply with applicable state insurance regulations that prescribe the type, quality and concentrations of investments our insurance subsidiary can make; therefore, our current investment policy limits investment in non-investment-grade fixed maturities and limits total investment amounts in preferred stock, common stock and mortgage notes receivable. We do not invest in derivative securities, however, we do hold warrants as a result of our surplus note investment. Please see Note 4 for more information. As of June 30, 2026, we engaged one outside asset management company and retain one internal asset manager, which have authority and discretion to buy and sell securities for us, manage our investments subject to (i) the guidelines established by our Board of Directors and (ii) the direction of management. Prior to August 2025, we engaged two outside asset management companies and prior to April 2026 we engaged no internal asset manager. The Investment Committee of our Board of Directors reviews and approves our investment policy on a regular basis. Our cash, cash equivalents, restricted cash and investment portfolio totaled $650,022,000 at June 30, 2026, compared to $647,744,000 at December 31, 2025. 40 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 The following table summarizes our investments, by type: June 30, 2026 December 31, 2025 Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total U.S. government and agency securities $ 76,095 11.7 % $ 92,118 14.2 % Corporate securities 79,110 12.1 80,745 12.5 Mortgage-backed securities 29,770 4.6 30,711 4.7 States, municipalities and political subdivisions 32,460 5.0 27,078 4.2 Asset-backed securities 11,379 1.8 12,657 2.0 Public utilities 9,005 1.4 9,246 1.4 Foreign government 584 0.1 597 0.1 Total fixed maturities 238,403 36.7 % 253,152 39.1 % Mutual funds 52,014 8.0 56,637 8.7 Other common stocks 5,035 0.8 5,048 0.8 Total equity securities 57,049 8.8 % 61,685 9.5 % Other investments 37,347 5.7 40,053 6.2 Total investments 332,799 51.2 % 354,890 54.8 % Cash and cash equivalents 218,943 33.7 198,762 30.7 Restricted cash 98,280 15.1 94,092 14.5 Total cash, cash equivalents, restricted cash and investments $ 650,022 100.0 % $ 647,744 100.0 % We classify all of our fixed-maturity investments as available-for-sale. Our investments at June 30, 2026 and December 31, 2025 consisted mainly of U.S. government and agency securities, securities of investment-grade corporate issuers, mortgage-backed securities, and states, municipalities and political subdivisions. Our equity holdings as of June 30, 2026 and December 31, 2025 consisted of mutual funds and common stock. At June 30, 2026, approximately 81.7% of our fixed maturities were U.S. Treasuries or corporate bonds rated "A" or better, and 18.3% were corporate bonds rated "BBB" or "BB". Reinsurance We follow the industry practice of reinsuring a portion of our risks. Reinsurance involves transferring, or "ceding", all or a portion of the risk exposure on policies we write to another insurer, known as a reinsurer. To the extent that our reinsurers are unable to meet the obligations they assume under our reinsurance agreements, we remain primarily liable for the entire insured loss under the policies we write. The Company's catastrophe reinsurance coverage consists of three separate placements: 1.AmCoastal’s core catastrophe reinsurance program, including catastrophe bonds (effective April 2024, December 2024 and June 2026), in effect June 1 through May 31, annually, which includes excess of loss and quota share treaties providing coverage for catastrophe losses from all perils; 2.AmCoastal’s all other perils catastrophe excess of loss agreement in effect January 1 through December 31, annually, which provides protection from catastrophe loss events other than named or numbered windstorms and earthquakes; and 3.AmCoastal's catastrophe aggregate excess of loss coverage, in effect January 1 through December 31, annually, which provides protection from all catastrophe loss events, including named and numbered windstorms, severe convective storms and winter storm events. 41 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 This reinsurance protection is an essential part of our catastrophe risk management strategy. It is intended to provide our stockholders with an acceptable return on the risks assumed by our insurance entity, and to reduce the variability of earnings, while providing surplus protection. Although reinsurance agreements contractually obligate our reinsurers to reimburse us for the agreed-upon portion of our gross paid losses, they do not discharge our primary liability. In the event one or more of our reinsurers fail to fulfill their obligation, the surplus of our statutory entity may decline, and we may not be able to fulfill our obligation to policyholders, or we may not be able to maintain compliance with various regulatory financial requirements. Additionally, we face the risk that actual losses incurred from one or more catastrophic events may be above the modeled expected loss resulting in losses exceeding our reinsurance coverage, which may result in a decline in surplus, and as a result we may not be able to fulfill our obligations to policyholders, or we may not be able to maintain compliance with various regulatory financial requirements. The details of our programs and the likelihood of a catastrophic event exceeding these three coverages are outlined below. AmCoastal’s core catastrophe reinsurance program provides occurrence-based coverage up to an exhaustion point of approximately $1,680,000,000 for a first occurrence and $1,918,000,000 in the aggregate. Under this program, the Company's GAAP retention on a first event is $49,000,000 ($26,500,000 retained by AmCoastal under statutory accounting principles (STAT retained), $22,500,000 retained separately by the Company's captive)). The Company has purchased second and third event retrocession coverage, decreasing its second event GAAP retention to $25,000,000 ($13,300,000 STAT retained by AmCoastal, $11,700,000 retained separately by the Company's captive) and third event GAAP retention to $2,000,000, based on three $100,000,000 loss events. AmCoastal’s program provides sufficient coverage for approximately a 1-in-286-year return period, indicating that the probability of a single occurrence exceeding protection purchased is roughly 0.4% when using the catastrophe model AIR 13 (using the long-term catalog with demand surge and 10% loss adjustment expense included) and based on estimated total insured value at September 30, 2026 of $78 billion. AmCoastal’s program also provides sufficient coverage for a 1-in-100-year event followed by a 1-in-50-year event in the same treaty year, the probability of which is less than 0.1%. While we believe these catastrophe models are useful tools and their outputs provide reasonable proxies for the probability of exhausting our reinsurance protections, they are imperfect, and actual results may differ materially from those expected. AmCoastal’s all other perils catastrophe excess of loss agreement provides protection from catastrophe loss events other than named windstorms and earthquakes up to $95,600,000 for a first event, totaling $170,400,000 in the aggregate. This agreement provides sufficient coverage for approximately a 1-in-227-year return period, indicating that the probability of a single occurrence exceeding protection purchased is no more than 0.5%. In addition to the programs described above, AmCoastal renewed its catastrophe aggregate excess of loss coverage (the “CAT Agg” agreement) to mitigate our catastrophe frequency risk. This agreement provides coverage for in-force, new and renewal business. Effective January 1, 2026, the CAT Agg agreement provides $40,000,000 of aggregate limit (with a $20,000,000 per occurrence cap) in excess of zero after the $40,000,000 annual aggregate deductible has been met. The CAT Agg agreement limits our losses from all catastrophe loss events, including named windstorms, severe convective storms and winter storm events for the full year ending December 31, 2026. Where we think prudent, particularly where premium rates are high relative to the risk, we retain risk whereby AmCoastal purchases reinsurance from Shoreline Re, our captive reinsurance entity. Shoreline Re has historically participated on AmCoastal's all other perils catastrophe excess of loss agreement and AmCoastal's excess per risk agreement. In addition, Shoreline Re participates in a 45% quota share agreement with AmCoastal, which provides coverage for all catastrophe perils as well as attritional losses incurred. 42 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 The table below outlines the participation of Shoreline Re for each program, including premium collected and capital at risk. Treaty Effective Dates Premium Collected(1) / Cession Rate Capital at Risk(1)(2) Quota Share Agreement 06/01/2026 - 05/31/2027 45% $ 33,041,000 (3) Quota Share Agreement 06/01/2025 - 05/31/2026 45%(4) $ 33,346,000 (3) Quota Share Agreement(5) 06/01/2024 - 05/31/2026 30%(4) $ 4,200,000 (3) Excess Per Risk Agreement 02/01/2024 - 01/31/2025 1,867,000 633,000 All Other Perils Catastrophe 01/01/2025 - Excess of Loss Agreement 12/31/2025 1,296,000 2,304,000 (1) Presented in ones. (2) Capital at risk is calculated by taking the aggregate losses Shoreline Re is subject to under the contract, less net premiums earned under the contract. (3) Net premiums earned based on estimated subject premiums at treaty inception. (4) This treaty provides or provided coverage for all catastrophe perils and attritional losses incurred. For all catastrophe perils, the quota share agreement provides or provided ground-up protection, effectively reducing our retention for catastrophe losses. (5) This treaty was commuted on June 1, 2025 with no impact on our consolidated results. The table below outlines our external quota share agreements in effect for the six months ended June 30, 2026 and 2025. Reinsurer Companies in Scope Effective Dates Cession Rate States in Scope External third-party AmCoastal 06/01/2026 - 05/31/2028 15%(1) Florida External third-party AmCoastal 06/01/2024 - 05/31/2026 20%(1)(2) Florida (1) This treaty provides or provided coverage for all catastrophe perils and attritional losses incurred. For all catastrophe perils, the quota share agreement provides or provided ground-up protection, effectively reducing our retention for catastrophe losses. (2) The cession rate of this treaty was reduced from 20% to 15% effective June 1, 2025. Reinsurance costs as a percentage of gross earned premium during the three and six months ended June 30, 2026 and 2025 were as follows: 2026 2025 Three Months Ended June 30, Non-at-Risk (0.4 )% (0.3 )% Quota Share (11.9 )% (15.1 )% All Other (37.5 )% (37.2 )% Total Ceding Ratio (49.8 )% (52.6 )% Six Months Ended June 30, Non-at-Risk (0.4 )% (0.3 )% Quota Share (12.2 )% (15.6 )% All Other (39.0 )% (39.3 )% Total Ceding Ratio (51.6 )% (55.2 )% 43 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 We amortize our ceded unearned premiums over the annual agreement period, and we record that amortization in ceded premiums earned on our Unaudited Condensed Consolidated Statements of Comprehensive Income. The table below summarizes the amounts of our ceded premiums written under the various types of agreements, as well as the amortization of ceded unearned premiums: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Quota Share $ (26,899 ) $ (22,624 ) $ (44,899 ) $ (53,785 ) All Other (175,207 ) (199,174 ) (213,071 ) (221,456 ) Non-at-Risk (964 ) (854 ) (1,648 ) (1,485 ) Ceded premiums written (203,070 ) (222,652 ) (259,618 ) (276,726 ) Change in ceded unearned premiums 134,038 135,635 115,063 95,880 Ceded premiums earned $ (69,032 ) $ (87,017 ) $ (144,555 ) $ (180,846 ) Current year catastrophe losses disaggregated between named and numbered storms and all other catastrophe loss events are shown in the following table. 2026 2025 Number of Events Incurred Loss and LAE (1) Combined Ratio Impact Number of Events Incurred Loss and LAE (1) Combined Ratio Impact Three Months Ended June 30, Current period catastrophe losses incurred Named and numbered storms — $ — — % — $ — — % All other catastrophe loss events 2 3,118 4.5 % — — — % Total 2 $ 3,118 4.5 % — $ — — % Six Months Ended June 30, Current period catastrophe losses incurred Named and numbered storms — $ — — % — $ — — % All other catastrophe loss events 3 3,232 2.4 % — — — % Total 3 $ 3,232 2.4 % — $ — — % (1) Incurred loss and LAE is equal to losses and LAE paid plus the change in case and incurred but not reported reserves. Shown net of losses ceded to reinsurers. Incurred loss and LAE and number of events includes the development on storms during the year in which it occurred. See Note 6 in our Notes to Unaudited Condensed Consolidated Financial Statements for additional information regarding our reinsurance program. Unpaid Losses and Loss Adjustments We generally use the term “loss(es)” to collectively refer to both loss and LAE. We establish reserves for both reported and unreported unpaid losses that have occurred at or before the balance sheet date for amounts we estimate we will be required to pay in the future, including provisions for claims that have been reported but are unpaid at the balance sheet date and for obligations on claims that have been incurred but not reported at the balance sheet date. Our policy is to establish these loss reserves after considering all information known to us at each reporting period. At any given point in time, our loss reserve represents our best estimate of the ultimate settlement and administration costs of our insured claims incurred and unpaid. 44 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 Unpaid losses and LAE totaled $118,920,000 and $165,701,000 as of June 30, 2026 and December 31, 2025, respectively. Since the process of estimating loss reserves requires significant judgment due to a number of variables, such as fluctuations in inflation, judicial decisions, legislative changes and changes in claims handling procedures, our ultimate liability will likely differ from these estimates. We revise our reserve for unpaid losses as additional information becomes available, and reflect adjustments, if any, in our earnings in the periods in which we determine the adjustments as necessary. See Note 7 in our Notes to Unaudited Condensed Consolidated Financial Statements for additional information regarding our losses and loss adjustments. 45 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 RESULTS OF OPERATIONS - COMPARISON OF THE THREE MONTH PERIODS ENDED JUNE 30, 2026 AND 2025 ACIC net income for the three months ended June 30, 2026 decreased $4,546,000, or 17.2%, to net income of $21,896,000 for the second quarter of 2026 from $26,442,000 for the same period in 2025. All of this net income is attributable to continuing operations for the three months ended June 30, 2026. Quarter-over-quarter revenues decreased, driven by a decrease in net premiums earned. In addition, expenses increased quarter-over-quarter, driven by an increase in loss and loss adjustment expenses and general and administrative expenses, partially offset by decreased policy acquisition costs. In addition, other income attributable to the Company's intellectual property transaction came to its conclusion, resulting in a decrease in other income during the quarter. Revenue Our gross written premiums decreased $12,042,000, or 5.3%, to $216,304,000 for the second quarter ended June 30, 2026 from $228,346,000 for the same period in 2025. Gross premium earned decreased $26,730,000, or 16.2%, to $138,730,000 for the second quarter ended June 30, 2026 from $165,460,000 for the same period in 2025. These changes are attributed to a 24% decrease in our net pricing year-over-year as the market continued to soften. Ceded premiums earned decreased $17,985,000, or 20.7%, to $69,032,000 for the second quarter ended June 30, 2026 from $87,017,000 for the same period in 2025. The breakdown of the quarter-over-quarter change in these premiums and new and renewal policies are shown in the tables below. More detail regarding our ceded premiums can be seen in our analysis of financial condition above. ($ in thousands) Three Months Ended June 30, 2026 2025 Change Gross premiums written $ 216,304 $ 228,346 $ (12,042 ) Change in gross unearned premiums (77,574 ) (62,886 ) (14,688 ) Gross premiums earned 138,730 165,460 (26,730 ) Ceded premiums written (203,070 ) (222,652 ) 19,582 Change in ceded unearned premiums 134,038 135,635 (1,597 ) Ceded premiums earned (69,032 ) (87,017 ) 17,985 Net premiums earned $ 69,698 $ 78,443 $ (8,745 ) Three Months Ended June 30, 2026 2025 Change New and Renewal Policies 1,705 1,532 173 46 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 Expenses Expenses for the three months ended June 30, 2026 increased $3,852,000, or 7.7%, to $54,146,000 from $50,294,000 for the same period in 2025. The increase in expenses was primarily due to an increase in losses and loss adjustment expenses and general and administrative expenses. This was offset in part by a decrease in policy acquisition costs. The details of these changes can be seen below. The calculations of our loss ratios and underlying loss ratios are shown below. Three Months Ended June 30, 2026 2025 Change Net loss and LAE $ 18,833 $ 15,540 $ 3,293 % of Gross earned premiums 13.6 % 9.4 % 4.2 pts % of Net earned premiums 27.0 % 19.8 % 7.2 pts Less: Current year catastrophe losses $ 3,118 $ — $ 3,118 Prior year reserve unfavorable (favorable) development 767 (1,275 ) 2,042 Underlying loss and LAE (1) $ 14,948 $ 16,815 $ (1,867 ) % of Gross earned premiums 10.8 % 10.2 % 0.6 pts % of Net earned premiums 21.5 % 21.4 % 0.1 pts (1) Underlying loss and LAE is a non-GAAP measure and is reconciled above to net loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this document is in the "Definitions of Non-GAAP Measures" section of this Form 10-Q. The calculations of our expense ratios are shown below. Three Months Ended June 30, 2026 2025 Change Policy acquisition costs $ 22,703 $ 24,257 $ (1,554 ) General and administrative 10,266 7,778 2,488 Total operating expenses $ 32,969 $ 32,035 $ 934 % of Gross earned premiums 23.8 % 19.4 % 4.4 pts % of Net earned premiums 47.3 % 40.8 % 6.5 pts Loss and LAE increased by $3,293,000, or 21.2%, to $18,833,000 for the second quarter of 2026 from $15,540,000 for the second quarter of 2025. Loss and LAE expense as a percentage of net earned premiums increased 7.2 points to 27.0% for the second quarter of 2026, compared to 19.8% for the second quarter of 2025. Excluding catastrophe losses and prior year reserve development, our gross underlying loss and LAE ratio for the second quarter of 2026 was 10.8%, an increase of 0.6 points, from 10.2% for the second quarter of 2025. Policy acquisition costs decreased by $1,554,000, or 6.4%, to $22,703,000 for the second quarter of 2026 from $24,257,000 for the second quarter of 2025, due to a decrease in external management fees of $5,105,000, primarily as the product of the decrease in gross premiums shown above. This was partially offset by a decrease in reinsurance ceding commission income of $2,277,000, driven by a decrease in our quota share cession rate from 20% to 15%, effective June 1, 2025. This was further offset by legacy unearned agent commission collections during the second quarter of 2025, which drove an increase in agent commission expense of $1,536,000 in the second quarter of 2026. General and administrative expenses increased by $2,488,000, or 32.0%, to $10,266,000 for the second quarter of 2026 from $7,778,000 for the second quarter of 2025, driven by increased salary related expenses of $3,168,000, primarily due to a non-recurring employee retention tax credit refund of $2,939,000 that was received during the second quarter of 2025. This change was partially offset by a decrease in amortization of $944,000. This decrease in amortization corresponds with the decrease seen in other income. The full details of our general and administrative expenses can be seen in Note 12, above. 47 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 RESULTS OF OPERATIONS - COMPARISON OF THE SIX MONTH PERIODS ENDED JUNE 30, 2026 AND 2025 ACIC net income for the six months ended June 30, 2026 decreased $6,640,000, or 13.9%, to $41,150,000 from $47,790,000 for the same period in 2025. All of this income is attributable to continuing operations for the six months ended June 30, 2026. Year-over-year revenues decreased, driven by a decrease in net premiums earned. In addition, expenses increased year-over-year, driven by an increase in loss and loss adjustment expenses and general and administrative expenses, partially offset by decreased policy acquisition costs. Revenue Our gross written premiums decreased $60,499,000, or 14.2%, to $365,699,000 for the six months ended June 30, 2026 from $426,198,000 for the same period in 2025. Gross premium earned decreased $47,697,000, or 14.6%, to $279,864,000 for the six months ended June 30, 2026 from $327,561,000 for the same period in 2025. These changes are attributed to a 24% decrease in our net pricing year-over-year as the market continued to soften. Ceded premiums earned decreased $36,291,000, or 20.1%, to $144,555,000 for the six months ended June 30, 2026 from $180,846,000 for the same period in 2025. The breakdown of the year-over-year change in these premiums and new and renewal policies are shown in the tables below. More detail regarding our ceded premiums can be seen in our analysis of financial condition above. ($ in thousands) Six Months Ended June 30, 2026 2025 Change Gross premiums written $ 365,699 $ 426,198 $ (60,499 ) Change in gross unearned premiums (85,835 ) (98,637 ) 12,802 Gross premiums earned 279,864 327,561 (47,697 ) Ceded premiums written (259,618 ) (276,726 ) 17,108 Change in ceded unearned premiums 115,063 95,880 19,183 Ceded premiums earned (144,555 ) (180,846 ) 36,291 Net premiums earned $ 135,309 $ 146,715 $ (11,406 ) Six Months Ended June 30, 2026 2025 Change New and Renewal Policies 2,842 2,728 114 48 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 Expenses Expenses for the six months ended June 30, 2026 increased $2,457,000, or 2.5%, to $99,829,000 from $97,372,000 for the same period in 2025. The increase in expenses was primarily due to an increase in loss and loss adjustment expenses and general and administrative expenses. This was partially offset by decreased policy acquisition costs year-over-year. The details of these changes can be seen below. Six Months Ended June 30, 2026 2025 Change Net loss and LAE $ 29,076 $ 26,929 $ 2,147 % of Gross earned premiums 10.4 % 8.2 % 2.2 pts % of Net earned premiums 21.5 % 18.4 % 3.1 pts Less: Current year catastrophe losses $ 3,232 $ — $ 3,232 Prior year reserve favorable development (899 ) (3,469 ) 2,570 Underlying loss and LAE (1) $ 26,743 $ 30,398 $ (3,655 ) % of Gross earned premiums 9.6 % 9.3 % 0.3 pts % of Net earned premiums 19.8 % 20.7 % (0.9 ) pts (1) Underlying loss and LAE is a non-GAAP measure and is reconciled above to net loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this document is in the "Definitions of Non-GAAP Measures" section of this Form 10-Q. The calculations of our expense ratios are shown below. Six Months Ended June 30, 2026 2025 Change Policy acquisition costs $ 45,096 $ 47,723 $ (2,627 ) General and administrative 20,969 17,284 3,685 Total operating expenses $ 66,065 $ 65,007 $ 1,058 % of Gross earned premiums 23.6 % 19.8 % 3.8 pts % of Net earned premiums 48.8 % 44.3 % 4.5 pts Loss and LAE increased $2,147,000, or 8.0%, to $29,076,000 for the six months ended June 30, 2026 from $26,929,000 for the same period in 2025. Loss and LAE expense as a percentage of net earned premiums increased 3.1 points to 21.5% for the six months ended June 30, 2026, compared to 18.4% for the same period in 2025. Excluding catastrophe losses and prior year reserve development, our underlying loss and LAE as a percentage of gross earned premiums for the six months ended June 30, 2026 would have been 9.6%, an increase of 0.3 points, from 9.3% during the six months ended June 30, 2025. Policy acquisition costs decreased $2,627,000, or 5.5%, to $45,096,000 for the six months ended June 30, 2026 from $47,723,000 for the same period in 2025. The primary driver of the decrease was a decrease in external management fees of $8,258,000 as a result of the decrease in gross premiums shown above. This was partially offset by a decrease in ceding commission income of $4,637,000 as the result of the Company's decrease in quota share reinsurance coverage from 20% to 15%, effective June 1, 2025. This was further offset by legacy unearned agent commission collections during the first six months of 2025, which drove an increase in agent commission expense of $1,749,000 in the first six months of 2026. General and administrative expenses increased $3,685,000, or 21.3%, to $20,969,000 for the six months ended June 30, 2026 from $17,284,000 for the same period in 2025, driven by increased salary-related expenses, primarily due to a non-recurring employee retention tax credit refunds of $4,469,000 that were received during 2025. Overall, employee compensation increased $5,557,000, 49 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 inclusive of this refund. This was partially offset by a decrease in amortization of $1,796,000, as assets related to our intellectual property transaction were fully amortized when the transaction came to its conclusion in January 2026. This decrease in amortization corresponds with the decrease seen in other income year-over-year. The full details of our general and administrative expenses can be seen in Note 12, above. LIQUIDITY AND CAPITAL RESOURCES We generate cash through premium collections, reinsurance recoveries, investment income, the sale or maturity of invested assets, the incurrence of debt and the issuance of additional shares of our stock. We use cash to pay reinsurance premiums, claims and related costs, policy acquisition costs, salaries and employee benefits, other expenses and stockholder dividends, acquire subsidiaries and pay associated costs, as well as to repay debts, repurchase stock and purchase investments. As a holding company, we do not conduct any business operations of our own and, as a result, we rely on cash dividends or intercompany loans from our management subsidiary to pay our general and administrative expenses. Insurance regulatory authorities heavily regulate our insurance subsidiary, including restricting any dividends paid by our insurance subsidiary and requiring approval of any management fees our insurance subsidiary pays to our management subsidiary for services rendered; however, nothing restricts our non-insurance company subsidiaries from paying us dividends other than state corporate laws regarding solvency. Our management subsidiary pays us dividends primarily using cash from the collection of management fees from our insurance subsidiary, pursuant to the management agreements in effect between those entities. In accordance with state laws, our insurance subsidiary may pay dividends or make distributions out of that part of its statutory surplus derived from its net operating profit and its net realized capital gains. The Risk-Based Capital (RBC) guidelines published by the National Association of Insurance Commissioners may further restrict our insurance subsidiary's ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause their respective surplus as regards policyholders to fall below minimum RBC guidelines. See Note 8 in our Notes to Unaudited Condensed Consolidated Financial Statements for additional information. The Company made no capital contributions to its subsidiaries during the six months ended June 30, 2026. The Company made a capital contribution of $8,269,000 to its reinsurance subsidiary, Shoreline Re, during the six months ended June 30, 2025. During the six months ended June 30, 2026, the Company received a dividend of $87,000,000 from AmCoastal. During the six months ended June 30, 2025, the Company received a dividend of $23,000,000 from AmCoastal. In September 2023, we entered into an equity distribution agreement (the “Agreement”) with Raymond James & Associates, Inc., as agent (the “Agent”), of up to 8,000,000 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”). Sales of the Shares under the Agreement will be made in sales deemed to be “at-the-market” offerings. The Agent is not required to sell any specific amount of Shares but has agreed to act as our sales agent for a commission equal to 3.0% of the gross proceeds from the sales of the Shares. As of June 30, 2026, 4,373,000 shares had been sold under the Agreement resulting in commissions paid of approximately $1,181,000 and net proceeds of approximately $38,190,000. The Agreement will terminate upon the issuance and sale of all Shares subject to the Agreement, or the Agreement may be suspended or discontinued at any time. 50 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026 Cash Flows for the Six Months Ended June 30, 2026 and 2025 (in thousands) Six Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 52,760 $ 154,392 Net cash provided by investing activities 27,650 29,756 Net cash provided by (used in) financing activities $ (56,041 ) $ 774 Operating Activities The principal cash inflows from our operating activities come from premium collections, reinsurance recoveries and investment income. The principal cash outflows from our operating activities are the result of claims and related costs, reinsurance premiums, policy acquisition costs and salaries and employee benefits. A primary liquidity concern with respect to these cash flows is the risk of large magnitude catastrophe events. During the six months ended June 30, 2026, we experienced cash inflows of $52,760,000 compared to $154,392,000 during the six months ended June 30, 2025. This change was driven by a reduction in premiums collected that was more than the reduction in net paid losses during the six months ended June 30, 2026 as compared to June 30, 2025. The change in reinsurance recoverable decreased $83,061,000 and the change in ceded unearned premiums decreased $21,255,000, partially offset by a decrease in the change in unpaid loss and loss adjustment expenses of $56,172,000 and decrease in the change in unearned premiums of $16,137,000. The change in unpaid loss and loss adjustment expenses and the corresponding reinsurance recoverable balance is attributed to the continued settlement of catastrophe claims in 2026. Investing Activities The principal cash inflows from our investing activities come from repayments of principal, proceeds from maturities and sales of investments. We closely monitor and manage these risks through our comprehensive investment risk management process. The principal cash outflows relate to sales of investments. The primary liquidity concerns with respect to these cash flows are the risk of default by debtors and market disruption. During the six months ended June 30, 2026, net sales of investments totaled $28,021,000 compared to $25,357,000 during the six months ended June 30, 2025. Financing Activities The principal cash outflows from our financing activities come from payments of dividends, repayments of debt, and repurchases of common stock. The primary liquidity concern with respect to these cash flows is market disruption in the cost and availability of credit. We believe our current capital resources, together with cash provided from our operations, are sufficient to meet currently anticipated working capital requirements. During the six months ended June 30, 2026, cash used in financing activities totaled $56,041,000, compared to $774,000 provided by financing activities for the six months ended June 30, 2025, driven by the payment of dividends and treasury stock repurchases. OFF-BALANCE SHEET ARRANGEMENTS At June 30, 2026, we did not have any off-balance sheet arrangements or material changes to our contractual obligations during the quarter. 51 AMERICAN COASTAL INSURANCE CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2026