MLCI

• Strategic Milestones Achieved

• Wholly-owned insurance subsidiary Ability Insurance Company received a B-plus financial strength rating and BBB- long-term issuer credit rating from AM Best, a multi-quarter process that unlocks growth for the insurance segment
• Ability launched its initial suite of multi-year guaranteed annuity (MYGA) products, marking its entry into direct origination of retirement solutions, a key inflection point for the insurance segment
• Yieldstreet shareholders overwhelmingly approved the proposed merger of over $100 million of assets into SOFX from its alternative income fund, with the transaction expected to close in Q3 2026
• The company maintained its quarterly dividend of $0.03 per share, marking the 28th consecutive quarter of dividend payments

• Portfolio Performance

• The combined insurance investment portfolio generated a 6.2% quarterly yield (6.6% excluding funds withheld and mod co-assets)
• The Opportunistic Credit Interval Fund (SOFX) generated an 8% trailing 12-month return and 2.5% year-to-date return as of June 30, 2026
• BCP Investment Corporation (24.99% held by Mount Logan) saw non-accrual debt investments fall to 5.7% of amortized cost from 6.2% last quarter, with a 12% weighted average yield (excluding non-accruals and CLO income)
• Software credit exposures remain concentrated in mission-critical, vertically specialized businesses that continue to perform well despite widening sector spreads driven by AI sentiment rather than credit deterioration

• Growth Strategy

• The Yieldstreet transaction is expected to nearly double SOFX's assets, deliver $2.8 million of annual run-rate FRE (30% growth over 2025 FRE), and be immediately accretive to EPS
• Management is actively pursuing additional M&A opportunities in private credit, as market dislocation has created opportunities for disciplined, well-capitalized acquirers
• SOFX has added a third-party distribution partner and expanded its sales team to improve retail fundraising and grow recurring fee income
• Direct insurance origination provides greater control over product design, pricing, and liability growth, creating a flywheel effect that generates both spread earnings for Ability and management fees for Mount Logan

• Management expects earnings inflection to begin in Q4 2026, with more meaningful financial contributions from completed strategic initiatives coming in 2027, after 6-9 months of investment phase activity • The Yieldstreet transaction is on track to close in Q3 2026, with benefits beginning to accrue in Q4 2026 and ramping into 2027 • Fee-related earnings are expected to improve steadily as strategic initiatives scale, driven by growing fee-earning AUM, portfolio optimization, and continued expense discipline • Management expects to remain very active in M&A over the next 6-12 months, given a large pipeline of attractive opportunities • Ability's MYGA product launch will initially operate across the company's existing multi-state license footprint, with expansion to additional states planned over coming quarters

Total segment income increased to $4.3 million in Q2 2026, up from $3.2 million in Q1 2026.

1. Asset Management: Q2 2026 revenue was $2.3 million, down from $2.5 million in Q1 2026. Legacy non-core fee vehicles are winding down, but this is being partially offset by growth in newer scalable recurring revenue streams. Fee-related earnings (FRE) totaled $1.4 million for the quarter, up from $1.2 million in Q1 2026, representing 32.6% of total segment income.
2. Insurance Solutions: Reported net investment income (including consolidated VIEs) was $18.5 million in Q2 2026, an 8% decrease from Q1 2026; excluding funds withheld and intercompany eliminations, net investment income was $13 million, an 11% decrease quarter-over-quarter. Insurance AUM grew to nearly $1 billion, up $126 million year-over-year. Spread-related earnings (SRE) increased to $2.9 million in Q2 2026, up from $2 million in Q1 2026, representing 67.4% of total segment income. The SRE increase was driven by a favorable Guardian reserve assumption update, lower cost of funds, and lower expenses.

• Forward-looking statements are inherently subject to risks and uncertainties, many of which are outside of the company's control, and outcomes may differ from current projections

• Legacy long-term care insurance blocks generate volatility in spread-related earnings, and the company's goal of reducing the impact of this segment on overall profitability is still in progress
• The private credit market currently has lower transaction volumes, and future credit defaults could rise if economic conditions weaken
• The annuity market is highly competitive, which could pressure liability costs and impact returns on new direct insurance products
• The company's stock has lagged peer asset manager valuations amid the 2026 market rebound, creating ongoing valuation uncertainty

Q: What is the earnings outlook for H2 2026 and 2027, and what is the priority for M&A going forward?

A: Management expects FRE to begin inflecting in Q4 2026, with earnings contributions from the closing Yieldstreet transaction and the newly launched Ability annuity product becoming more meaningful in 2027 after the prior 6-9 month investment phase. M&A activity will remain very active over the next 6-12 months, as large firms are exiting smaller non-core public vehicles, and smaller independent managers cannot reach scale on their own, creating a robust pipeline of attractive opportunities for Mount Logan as a leading mid-market consolidator.

Q: What opportunities does the new AM Best rating and direct writing capability create for the insurance segment, and why is direct writing more economical than reinsurance?

A: Direct writing gives Mount Logan full control over liability flow volumes, pricing, and product strategy, allowing the business to ramp originations up or down aligned with available investment opportunities, and opens the door to expanding the future product set beyond MYGAs. Direct originations are more economical because reinsurance requires paying third-party seeding commissions to originating providers, while direct origination through a third-party marketing organization has lower total origination costs; small savings in liability costs generate large ROE improvements given the embedded leverage in the insurance model, and the company will continue to pursue reinsurance alongside direct writing to diversify funding sources.

Q: What drivers are needed to produce an inflection in fee-related earnings, and how much of the Q2 SRE improvement is sustainable?

A: All three factors (growing fee-earning AUM, optimizing fee rate mix through portfolio high-grading, and ongoing expense discipline) will contribute to the FRE inflection, with scale growth being the most important. Around $600,000 of the Q2 SRE improvement came from the one-time favorable Guardian reserve assumption adjustment, with offsetting non-recurring items impacting the quarter. Management's long-term goal is to reduce the share of SRE coming from volatile legacy long-term care blocks by growing the new direct insurance segment.

Q: Why has Mount Logan's stock lagged other asset managers in the 2026 rebound, and how does the current interest rate environment impact the business?

A: Management notes that larger, more liquid asset managers typically lead market recoveries after sell-offs, with smaller names rallying later, and believes the current stock price does not reflect fair value; the CEO purchased stock last quarter and will purchase additional stock this quarter to align with this view. Higher short-term interest rates are positive for Mount Logan, as most assets are floating-rate, so higher rates directly increase investment income; the company is levered to a strong US economy, where credit conditions remain benign with low defaults, making the current rate environment broadly favorable.