KESTREL GROUP LTD

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share and per share data)

December 31,
2025

December 31,
2024

(Audited)

(Audited)

ASSETS

Investments:

Fixed maturities, available-for-sale, at fair value (Amortized cost 2025 - $162,472)

$          163,167

$                    —

Equity securities, at fair value ( Cost: 2025 - $11,145)

11,748

—

   Equity method investments

33,532

—

  Other investments

173,358

—

Total investments

381,805

—

Cash and cash equivalents

7,801

4,286

Restricted cash and cash equivalents

9,146

—

Accrued investment income

4,970

—

Reinsurance balances receivable, net

724

—

Reinsurance recoverable on unpaid losses

461,197

—

Net loan receivable from related party

86,883

—

Intangible assets

9,347

—

Funds withheld receivable

10,956

—

Other assets

17,631

1,224

Assets held for sale

19,495

—

Total assets

$       1,009,955

$               5,510

LIABILITIES

Reserve for loss and loss adjustment expenses

$          637,169

$                    —

Unearned premiums

17,406

—

Accrued expenses and other liabilities

51,572

904

Senior notes - principal amount

262,361

—

Less: unamortized fair value adjustment

87,959

—

Senior notes, net

174,402

—

Liabilities held for sale

1,122

—

Total liabilities

881,671

904

Commitments and Contingencies

EQUITY

Common shares

100

27

Additional paid-in capital

177,534

10,107

Accumulated other comprehensive income

916

—

Retained earnings (accumulated deficit)

1,197

(5,528)

Treasury shares, at cost

(51,463)

—

Total Equity

128,284

4,606

Total Liabilities and Equity

$       1,009,955

$               5,510

Book value per common share (3)

$              16.57

$                 1.67

Common shares outstanding

7,741,943

2,749,996

KESTREL GROUP LTD

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(In thousands of U.S. dollars, except share and per share data)

For the Three Months Ended
December 31,

For the Year Ended December 31,

2025

2024

2025

2024

Revenues:

Gross premiums written

$         1,235

$              —

$         6,091

$              —

Net premiums written

$         1,219

$              —

$         6,209

$              —

Change in unearned premiums

2,196

—

6,464

—

Net premiums earned

3,415

—

12,673

—

Fee revenue

3,104

1,177

6,076

3,634

Net investment income

3,284

43

8,343

213

Net realized and unrealized investment gains

405

—

6,957

—

Total revenues

10,208

1,220

34,049

3,847

Expenses:

Net loss and loss adjustment expenses

4,547

—

8,992

—

Commission and other acquisition expenses

1,019

—

3,131

—

General and administrative expenses

12,056

1,128

29,062

5,108

Total expenses

17,622

1,128

41,185

5,108

Other expenses

Interest and amortization expenses

4,218

—

9,865

—

Gain on bargain purchase

5,284

—

(68,306)

—

Foreign exchange and other (gains) losses

(432)

—

1,723

—

Total other expenses

9,070

—

(56,718)

—

Net (loss) income before income taxes

(16,484)

92

49,582

(1,261)

Less: income tax (benefit) expense

(34)

30

68

30

Interest in income of equity method investments

48

—

24

—

Net (loss) income from continuing operations

(16,402)

62

49,538

(1,291)

Loss from discontinued operations, net of income tax

(1,353)

—

(2,813)

—

Net (loss) income

$      (17,755)

$              62

$       46,725

$       (1,291)

Basic and diluted (loss) earnings per share from
continuing operations

$          (2.12)

$           0.02

$           8.57

$          (0.47)

Basic and diluted loss per share from discontinued
operations

(0.17)

—

(0.49)

—

Basic and diluted (loss) earnings per share attributable
to Kestrel common shareholders

$          (2.29)

$           0.02

$           8.08

$          (0.47)

Annualized return on average common equity

(51.8) %

5.4 %

70.3 %

(24.7) %

Weighted average number of common shares - basic and
diluted

7,741,943

2,749,996

5,731,380

2,749,996

KESTREL GROUP LTD

SUPPLEMENTAL FINANCIAL DATA - SEGMENT INFORMATION (Unaudited)

(in thousands of U.S. dollars)

For the Three Months Ended December 31, 2025

Legacy
Reinsurance

Program Services

Total

Gross premiums written

$              1,235

$                   —

$              1,235

Net premiums written

$              1,219

$                   —

$              1,219

Net premiums earned

$              3,415

$                   —

$              3,415

Fee revenue

—

3,104

3,104

Net loss and loss adjustment expenses ("loss and LAE")

(4,547)

—

(4,547)

Commission and other acquisition expenses

(1,019)

—

(1,019)

General and administrative expenses (4)

(5,429)

(1,243)

(6,672)

Underwriting loss and fee income (5)

$            (7,580)

$              1,861

(5,719)

Reconciliation to net loss from continuing operations

Net investment income and net realized and unrealized investment gains

3,689

Interest and amortization expenses

(4,218)

Gain on bargain purchase

(5,284)

Foreign exchange and other gains, net

432

Other general and administrative expenses (4)

(5,384)

Income tax benefit

34

Interest in income of equity method investments

48

Net loss from continuing operations

$           (16,402)

For the Three Months Ended December 31, 2024

Legacy
Reinsurance

Program Services

Total

Fee revenue

$                   —

$              1,177

$              1,177

General and administrative expenses (4)

—

(564)

(564)

Fee income (5)

$                   —

$                 613

613

Reconciliation to net income

Net investment income

43

Other general and administrative expenses (4)

(564)

Income tax expense

(30)

Net income

$                   62

KESTREL GROUP LTD

SUPPLEMENTAL FINANCIAL DATA - SEGMENT INFORMATION (Unaudited)

(in thousands of U.S. dollars)

For the Year Ended December 31, 2025

Legacy
Reinsurance

Program Services

Total

Gross premiums written

$              6,091

$                   —

$          6,091

Net premiums written

$              6,209

$                   —

$          6,209

Net premiums earned

$            12,673

$                   —

$        12,673

Fee revenue

—

6,076

6,076

Net loss and LAE

(8,992)

—

(8,992)

Commission and other acquisition expenses

(3,131)

—

(3,131)

General and administrative expenses (4)

(10,861)

(3,246)

(14,107)

Underwriting loss and fee income (5)

$           (10,311)

$              2,830

(7,481)

Reconciliation to net income from continuing operations

Net investment income and net realized and unrealized investment gains

15,300

Interest and amortization expenses

(9,865)

Gain on bargain purchase

68,306

Foreign exchange and other losses, net

(1,723)

Other general and administrative expenses (4)

(14,955)

Income tax expense

(68)

Interest in income from equity method investments

24

Net income from continuing operations

$        49,538

For the Year Ended December 31, 2024

Legacy
Reinsurance

Program Services

Total

Fee revenue

$                   —

$              3,634

$          3,634

General and administrative expenses (4)

—

(2,554)

(2,554)

Fee income (5)

$                   —

$              1,080

1,080

Reconciliation to net loss

Net investment income

213

Other general and administrative expenses (4)

(2,554)

Income tax expense

(30)

Net loss

$        (1,291)

KESTREL GROUP LTD

NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands of U.S. dollars, except share and per share data)

For the Three Months Ended
December 31,

For the Year Ended December 31,

2025

2024

2025

2024

Non-GAAP operating (loss) earnings (6)

$         (8,190)

$                62

$      (13,819)

$        (1,291)

Non-GAAP basic and diluted operating (loss) earnings per
common share attributable to Kestrel common shareholders (6)

$           (1.06)

$             0.02

$          (2.41)

$          (0.47)

Annualized non-GAAP operating return on average
adjusted common equity (7)

(23.9) %

5.4 %

(20.8) %

(24.7) %

Reconciliation of net (loss) income to non-GAAP
operating (loss) earnings:

Net (loss) income

$       (17,755)

$                62

$        46,725

$        (1,291)

Add (subtract):

  Net realized and unrealized investment gains

(405)

—

(6,957)

—

  Amortization of intangible assets

1,023

—

2,517

—

  Foreign exchange and other (gains) losses

(432)

—

1,723

—

  Interest in income of equity method investments

(48)

—

(24)

—

 Litigation costs from GLS related arbitration

2,006

—

2,575

—

   Change in bargain purchase gain

5,284

—

(68,306)

—

   Net loss from discontinued operations

1,353

—

2,813

—

Restructuring and severance costs

784

—

3,107

—

 Costs incurred due to the Combination

—

—

2,008

—

Non-GAAP operating (loss) earnings (6)

$         (8,190)

$                62

$      (13,819)

$        (1,291)

Weighted average number of common shares - basic and
diluted

7,741,943

2,749,996

5,731,380

2,749,996

Reconciliation of diluted (loss) earnings per share attributable to Kestrel common
shareholders to non-GAAP diluted operating (loss) earnings per share attributable to
Kestrel common shareholders:

Diluted (loss) earnings per share attributable to common
     shareholders

$           (2.29)

$             0.02

$            8.08

$          (0.47)

Add (subtract):

Net realized and unrealized investment gains

(0.05)

—

(1.19)

—

Amortization of intangible assets

0.13

—

0.44

—

Foreign exchange and other (gains) losses

(0.06)

—

0.32

—

Interest in income of equity method investments

(0.01)

—

—

—

Litigation costs from GLS related arbitration

0.26

—

0.45

—

 Change in bargain purchase gain

0.68

—

(11.90)

—

 Net loss from discontinued operations

0.18

—

0.50

—

Restructuring and severance costs

0.10

—

0.54

—

Costs incurred due to the Combination

—

—

0.35

—

Non-GAAP diluted operating (loss) earnings per
     share attributable to common shareholders (6)

$           (1.06)

$             0.02

$          (2.41)

$          (0.47)

KESTREL GROUP LTD

NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands of U.S. dollars, except share and per share data)

December 31,
2025

December 31,
2024

Investable assets:

Total investments

$          381,805

$                   —

Cash and cash equivalents

7,801

4,286

Restricted cash and cash equivalents

9,146

—

Net loan receivable from related party

86,883

—

Funds withheld receivable

10,956

—

Total investable assets (8)

$          496,591

$              4,286

Capital:

Total shareholders' equity

$          128,284

$              4,606

2016 Senior Notes

110,000

—

2013 Senior Notes

152,361

—

Total capital resources (9)

$          390,645

$              4,606

(1) Premium produced is an operating metric determined by management as a byproduct of the program services fees it earns and is paid by clients. Premium produced is equal to the premium written by an MGA or capacity provider, and management believes this measure is important in understanding the underlying production trends of its Program Services business and the fees it earns. Where available, the Company utilizes underlying premium produced as reported by its clients. Where the premium produced was not directly observable, the Company derived the premium produced by grossing up the known fee component using the applicable contractual fee percentage, including its arrangements with its insurance carrier partners.

(2) Full year 2025 results are not comparable to prior periods due to the merger with Maiden Holdings, which was accounted for as a reverse merger.

(3) Book value per common share is calculated using shareholders' equity divided by the number of common shares outstanding. Management uses growth in this metric as a prime measure of the value we are generating for our common shareholders, because management believes that growth in this metric ultimately results in growth in the Company's common share price. This metric is impacted by the Company's net income and external factors, such as interest rates, which can drive changes in unrealized gains or losses on our investment portfolio as well as share repurchases.

(4) Underwriting and fee income related general and administrative expenses is a non-GAAP measure and includes expenses which are segregated for analytical purposes as a component of underwriting and fee income (loss).

(5) Underwriting and fee income or loss is a non-GAAP measure and is calculated as net premiums earned plus fee revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting and fee revenue activities. For purposes of these non-GAAP operating measures, the fee-generating business, which is included in our Program Services segment, is considered part of the underwriting and fee income operations of the Company. Management believes that this measure is important in evaluating the underwriting and fee income performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is also a widely used performance indicator in the insurance industry.

(6) Non-GAAP operating earnings (loss) and non-GAAP basic and diluted operating earnings (loss) per common share are non-GAAP financial measure defined by the Company as net income (loss) excluding realized investment gains and losses, foreign exchange and other gains and losses, interest in income (loss) of equity method investment, and amortization of intangible assets and should not be considered as an alternative to net income (loss). It also excludes on a non-recurring basis: (1) loss from discontinued operations, net of income tax; (2) the bargain purchase gain resulting from the Combination; (3) litigation costs from GLS related arbitration; (5) restructuring and severance costs; (6) and costs incurred due to the Combination. The Company's management believes that the use of non-GAAP operating earnings (loss) and non-GAAP diluted operating earnings (loss) per common share enables investors and other users of the Company's financial information to analyze its performance in a manner similar to how management analyzes performance. Management also believes that these measures generally follow industry practice therefore allowing the users of financial information to compare the Company's performance with its industry peer group, and that the equity analysts and certain rating agencies which follow the Company, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons. Non-GAAP operating earnings should not be viewed as a substitute for U.S. GAAP net income.

(7) Non-GAAP operating return on average shareholders' equity is a non-GAAP financial measure. Management uses non-GAAP operating return on average adjusted shareholders' equity as a measure of profitability that focuses on the return to common shareholders. It is calculated using non-GAAP operating earnings divided by average shareholders' equity.

(8) Investable assets are the total of the Company's investments, cash and cash equivalents, net loan receivable from related party and funds withheld receivable.

(9) Total capital resources are the sum of the Company's principal amount of debt and shareholders' equity.