Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Mount Logan Capital's second quarter 2026 results conference call. Before we begin, I would like to remind listeners that today's discussion will include forward-looking statements. These statements discuss our current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance, and business. These statements and other comments are not guarantees of future performance, but rather are subject to risk and uncertainty, some of which are beyond our control. These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. For a description of the risk associated with Mount Logan's capital business, please see our most recent filings with the SEC. In addition, we will be referring to certain non-GAAP financial measures during this call. Additional details and reconciliations of GAAP to non-GAAP financial measures are in today's earnings release. This morning's conference call is hosted by Mount Logan's Chairman and Chief Executive Officer, Ted Goldthorpe. President Henry Wang, Chief Financial Officer, Brandon Suteran, Executive Vice President, and Chief Operating Officer, Jordan Mangum, and Head of Investor Relations, Scott Chan. I will now turn the call over to Mr. Goldthorpe. You may begin.

Thank you, and good morning, everyone. Thank you for joining us today. The second quarter represented another step forward in our effort to build a larger and more durable earnings base around Mount Logan's integrated asset management and insurance platform. Segment income increased to $4.3 million, up from $3.3 million in the first quarter. Fee-related earnings increased sequentially to $1.4 million, while spread-related earnings increased to $2.9 million, up $0.9 million from the first quarter of 2026, and $3 million as compared to the prior year's quarter. These results reflect continued improvement in the profitability of our base of business, a positive indicator as we execute against the strategic initiatives we outlined in the first quarter, which we expect to convert into increased earnings power during the second half of 2026 and into 2027. After quarter end, we achieved three significant milestones against our stated strategic initiatives, including the receipt of Ability's B-plus financial strength rating and a triple b minus long-term issuer credit rating from a invest which was a process spending several quarters as a key catalyst for growth in our insurance segment building directly on that rating this morning ability announced the launch of its initial suite of multi-year guaranteed annuity products honor its flagship reliability brand marketing abilities entry into direct origination of retirement solutions and an important inflection point for our insurance segment. Additionally, Yieldstreet shareholders recently approved the proposed merger with more than $100 million of assets into SoftEx from its Alternative Income Fund. The vote was overwhelmingly positive, and we achieved over 50% of the vote in less than four weeks from the release date of the Yieldstreet proxy. We currently expect the Yieldstreet transaction will close during the third quarter. We're also pleased to announce that we are maintaining our quarterly distribution of three cents per share marking the fourth consecutive quarterly dividend following the completion of our business combination further extending mount logan's long-standing dividend record before reviewing our strategic growth initiatives in more detail i want to review the performance across our core managed portfolios which provides the foundation for our business we built our private credit franchise with the goal of being able to invest across all market cycles and environments and belief performance within the vehicles we manage reflect that with an insurance solution the investment portfolio generated yield of 6.2 percent during the second quarter or 6.6 percent excluding funds withheld and modco assets spread related earnings increased by 0.9 million dollars sequentially to 2.9 million dollars the improvement was driven primarily by a favorable guardian reserve assumption update and lower all-in cost of funds The Opportunistic Credit Interval Fund, or SOFIX, generated a return of 8% over the trailing 12 months ended June 30, 2026, and 2.5% year-to-date. SOFIX remains a differentiated interval fund that invests in a broad range of credit assets, such as privately-regenerated loans, asset-based investments, dislocated credit, and other special situations, which gives the fund flexibility to opportunistically deploy capital across all market cycles. At BCP Investment Corporation, managed by Sierra Crest Investment Management, in which Mount Logan holds a 24.99% interest, portfolio quality remained resilient during the second quarter. Debt investments on non-accruals improved to 5.7% of the portfolio at amortized cost, down from 6.2% in the prior quarter. The debt portfolio remains highly diversified across 71 portfolio companies and 33 industries, with approximately 63% in first-lane senior secured loans and a weighted average yield of 12%, excluding non-accruals and CLO income. The broader private credit market remained resilient during the quarter, though transaction volumes were lower and remained selective across the opportunities we saw in the market. Software credit spreads widened further and now sits several hundred basis points wide of the broader single B-rated loan index, reflecting sector-specific sentiment around AI disruption rather than broad-based credit deterioration. Our software exposure across our managed portfolios remains concentrated in mission-critical, vertically specialized businesses with proprietary data, embedded workflows, high switching costs, and first-link seniority, and the underlying portfolio companies continue to perform. We view the current environment as one that rewards discipline and selectivity and believe any further dislocation should create attractive deployment opportunities for our credit strategies. The same discipline also informs how we're thinking about inorganic growth and the Yieldstreet transaction is a clear example of a unique opportunity for our business. As we announced in March, one of our core asset management vehicles, Sofix, entered into a definitive agreement to acquire the assets of Yieldstreet Alternative income fund managed by Willow Wealth. As of July 31st, I'm pleased to report that over 50% of Yield Street shareholders have voted to approve the transaction. As a result, we believe the transaction will close during the third quarter, with benefits beginning to accrue in the fourth quarter and ramping into 2027. The addition of Yield Street is expected to nearly double SoftExNet assets, adding over $100 million to the fund. We continue to believe this transaction will unlock at least $2.8 million of run rate FRE annually to Mt. Logan, which represents approximately 30% growth over our 2025 FRE. The transaction is expected to be immediately accretive to our earnings per share once closed. We believe this is an important step in scaling our asset management platform and increasing our recurring fee-related earnings. As mentioned, the current environment in private credit is creating additional opportunities for disciplined, well-capitalized companies like Mount Logan to acquire strategic assets at attractive valuations. We are pursuing an active pipeline of potential opportunities and we look forward to updating investors on the progress we're making executing against our M&A growth strategy. Another important component of our strategy for Sofix is improving the fund's retail distribution which will be a larger fund with broader appeal following the close of the Yieldstreet transaction. We've recently added a third-party distribution partner and our staffing and servicing agreement with BC partners have made an internal investment to expand the sales team that Mount Logan leverages. We believe the combination of select third-party relationships and targeted internal sales resources provides a balanced structure that broadens our reach while maintaining our cost discipline. Over time, we believe our investment and distribution will drive additional fundraising, increased asset center management, and support growth and recurring fee-related earnings. The last initiative I want to review today is our focus on unlocking organic growth within our insurance segment and its permanent capital base. In July, we announced that AMBEST, a leading global credit agency specializing in the insurance industry, signed an investment-grade rating to our wholly-owned life and annuity subsidiary, Ability Insurance Company. This was a significant milestone for Mount Logan and Ability, providing an independent third-party validation of Ability's financial position. The investment-grade credit rating underscores the strength of Ability's financial profile and reflects the significant capital we've invested since we acquired it in 2021. We believe AMS rating is key to unlocking the full earnings potential of our platform and supports future distribution of Ability's insurance products. Following the receipt of Ability's rating this morning, we announced the next step in our insurance journey by officially launching Ability's initial suite of multi-year guaranteed annuity products available in three, five, seven, and 10-year terms. To support this distribution, Ability has partnered with one of the nation's leading independent marketing organizations and is initially able to write across our existing multi-state license footprint with plans to expand into additional states over the coming quarters. Direction origination gives us greater control over product design, pricing, and the pace of liability generation. And importantly, every incremental dollar of retained liabilities has the potential to generate both spread-related earnings within Ability and management fees at the Mount Logan Management, the flywheel we have been investing towards. We view the controlled liability origination and product innovation as core to building durable spread-related earnings. We cannot understate the significance of this launch, which we believe will drive a meaningful step up in the long-term earnings power and outlook for the insurance segment, as well as drive increases in fees earned by Mount Logan Management for its efforts managing Abilities Investment Portfolio. Before I turn the call over to Brandon, I want to emphasize the progress we are making against several key strategic initiatives across the Mount Logan platform. During the first half of 2026, we solidified our insurance growth strategy, progressed the inorganic expansion of our managed AUM, strengthened SofX distribution capabilities, all while working towards the completion of the yield sheet transaction. Each of these initiatives are designed to increase our scale, expand recurring revenue, and enhance the earnings power of our asset management and insurance solutions businesses, further enhancing our businesses foundation underpinning future durable long-term organic growth we are encouraged by the momentum already reflected in our results particularly the continued growth in segment income and the increasing contribution from insurance solutions at the same time many of our most important initiatives remain in the early stages of contributing to our reported financial results as we continue to execute we expect these efforts to drive further momentum during the balance of 2026, with our financial impacts becoming more meaningful in 2027. With that, I'll turn over the call to Brandon, who will walk through our financial results in more detail.

Thanks, Ted. Good morning, everyone. For the second quarter of 2026, total revenue was $8.7 million, and the company reported a net loss of approximately $4.2 million, which represents an improvement of $1.8 million from the $6 million net loss reported in the prior quarter. The sequential improvement in the company's net loss was primarily driven by lower expenses. Against that backdrop, segment income increased to $4.3 million in the second quarter of 2026 from $3.2 million in the prior quarter driven by sequential improvement in both FRE and SRE. Looking at our segment results, asset management revenue for the second quarter of 2026 was $2.3 million compared to $2.5 million in the first quarter of 2026. Near term, we expect core management fee streams to increase, but to be partially offset by the wind down of certain non-core legacy fee vehicles, including the Ovation Alternative Income Fund and our Mt. Logan managed CLOs. Importantly, we are beginning to replace legacy revenues from non-core vehicles with newer, more scalable, and recurring fee streams, as well as by growing our existing core revenue streams. This includes our profit sharing arrangement with the majority owner of Sierra Crest Investment Management, the expected addition of over $100 million dollars of assets in Sofix from its acquisition of the Yieldstreet Alternative Income Fund, which is expected to close in the third quarter, and the benefit of $120 million of managed assets from an existing relationship, as well as higher transaction and advisory fees. We are beginning to see contributions from these initiatives, and we expect their impact to become more visible as they scale. Turning to insurance solutions, net investment income, including net investment income from our consolidated variable interest entities, was $18.5 million for the second quarter of 2026, a decrease of $1.7 million, or 8% from the first quarter of 2026. Excluding funds withheld and including intercompany elimination of management fees, net investment income for the second quarter of 2026 was 13 million dollars a decrease of 1.6 million dollars or 11 percent compared to the first quarter of 2026 the investment portfolio generated a 6.2 percent yield or 6.6 percent excluding funds withheld and our insurance AUM increased to almost 1 billion dollars an increase of 126 million dollars from the same period in the prior year This growth reflects the agreement announced during the first quarter of 2026 to manage an additional $120 million of assets benefiting fee-related earnings. During the quarter, we continued to focus on optimizing and high-grading the insurance portfolio through discipline, portfolio rotation, and deployment, while maintaining a high level of invested assets to support spread earnings. Over time, direct origination has the potential to meaningfully increase the earnings power of our insurance solutions business while also supporting growth in asset management fees as the investment portfolio expands. Looking at core earnings, fee-related earnings or FRE were $1.4 million for the second quarter of 2026 compared to $1.2 million in the first quarter of 2026. Importantly, we continue to make progress towards improving the mix and durability of our fee related earnings management fees incentive fees and equity investment equity investment earnings and other fee income totaled approximately 4.3 million dollars before intercompany elimination and were broadly unchanged sequentially the benefit of the vista mandate was offset by lower fees from bcic ability and non-core vehicles Additionally, we did not earn advisory or transaction fees during the quarter compared with approximately $0.1 million earned in the first quarter. Looking ahead, we expect FRE to continue to improve as the strategic initiatives Ted discussed begin to contribute more meaningfully. Spread-related earnings, or SRE, increased to $2.9 million for the second quarter of 2026 from two million dollars in the first quarter the quarter benefited from the favorable guardian block assumption update lower general and administrative expenses and lower interest expense beyond the assumption update we continue to benefit from the actions we have taken to lower financing costs and improve the underlying economics of the insurance platform Finally, moving to our balance sheet, Mount Logan's capital position remains strong with approximately $92.3 million of cash, restricted cash, and cash equivalents, including BIEs, with limited near-term debt maturities. Finally, as Ted mentioned earlier, the Board approved a dividend of $0.03 per share for the quarter, continuing our 28 consecutive quarter dividend track record. Looking ahead, expense discipline and operational efficiency remain priorities across the platform. More specifically, our priorities remain prudent and disciplined expense management, driving operational excellence, continued growth in recurring fee-related earnings, and increasing the contribution from insurance solutions to MLC's P&L. Several of the initiatives Ted discussed are just beginning to or haven't yet started flowing through our financials. As we continue to execute against our growth strategy and in turn grow our fee-earning AUM and continue to scale our new and core revenue streams, we expect their impact to be more visible through the second half of 2026 and into 2027. With that, I will turn the call back over to Ted.

Thank you, Brennan. Before we open the call for questions, I want to reemphasize the durability of the model we are building. Mount Logan operates as an integrated platform across a scalable asset management business with disciplined private credit franchise and a permanent insurance platform and capital base. The business is designed to compound recurring earnings across market cycles. We believe progress today is underway to drive further momentum through the balance of 2026 and a more meaningful acceleration in earnings and value creation in 2027 and beyond. This concludes our prepared remarks. Operator, if you could please open the call for questions.

Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. One moment while we compile the Q&A roster, And our first question will come from the line of Sam Finkelman with Canaccord Genuity. Your line is open.

Hi, Sam. Great. Thanks for taking my call. I have a couple kind of quick questions. I guess the first one would be kind of how should we think about the outlook for the second half of this year and going into next year? And I guess kind of a follow-up on that is once the Yieldstreet transaction closes, is M&A still a big priority for you guys? Thanks.

Thanks, Sam. Yeah, I'd say two things. One is we do expect our FRE to begin to inflect. The Yieldstreet transaction is expected to close this quarter, as we mentioned, which will add some earnings. And again, as we direct right for Ability, which we just launched today, you'll begin to see some seeding commissions as well as growth in AUM. So we really spent the last six to nine months in the investment phase, and you should see the results of that come through in the fourth quarter and next year. In terms of M&A, listen, our M&A pipeline has never been larger. With the volatility around private credit, there's two things going on. Some very large managers are exiting smaller vehicles, particularly public vehicles, just because it's a distraction for their core franchise. And the second thing is smaller managers are just having a hard time raising money and growing their platform and getting it to scale. So I would expect us to be very active on the M&A front over the next six to 12 months.

Okay, that's great. Thanks.

Thank you.

Thank you. One moment for our next question. And that will come from the line of Justin Marco with Lucid Capital Markets. Your line is open.

Hey, guys. Good morning. Just a follow-up on the Yieldstreet transaction. Are there any other regulatory or other approvals required for the deal to close?

No. No. We've gone through the SEC process, and we've now got the shareholder vote, so it's just a matter of getting it closed.

Okay. All right. Great. And then another follow-up on the M&A conversation. What's your process like for sourcing new opportunities? Is it, you know, these smaller managers that are struggling that are coming to you guys or do you have a dedicated team that is focused on outreach?

It's multifold. I think, you know, we're in constant dialogue with a lot of our peers around doing things together. So a lot of it's social slash, you know, proactive sourcing. And then, you know, listen, we've been the big consolidator in the middle market, the lower to middle market. So we typically get introduced to a lot of people who are looking for strategic alternatives. So I think it's, you know, a combination of people know that we're the acquirer, you know, again, like the big guys have obviously, you know, made a series of acquisitions. But in our space, we really are the only ones.

So I think it's a combination of like, we get the first phone call just given where the we've been the biggest acquirer, coupled with the fact that um um couple of the fact that we were in constant proactive dialogue with a lot of people got it okay thanks um and then switching to the insurance side uh you know congrats on the rollout of reliability um you know as you ramp directly writing policies is the intent to eventually replace the policies you've reinsured with the ones that you're directly writing and then you know longer-term do you have plans to expand the product set beyond the

migas yeah good question so on the first part you know like direct writing you control your own destiny a little bit better in terms of like you know predictability around flows and theoretically we should be able to source liabilities for cheaper and again that that's super creative for our way that's why it's so important to us we're not going to stop reinsuring other people's policies because again it diversifies our funding sources and it's still economic for us to do so so i think i think um you know i think that i think we'll continue to kind of do both um and then sorry what's your second question uh just you know sort of longer term plans um other products do you have any yeah other products outside of the migas yeah my bad sorry um i mean the answer is yes i mean the answer is the market continues to evolve um you know the annuity space is a very competitive space and become more so. So we've had to be a lot more thoughtful on the asset side because liability costs have been a little bit more elevated than they have been versus history. So I think what we'll do is I think we're going to, I wouldn't be surprised to see us do other products. But all that being said, I mean, really, our goal is to take risk on the asset side, not the liability side. So it's always been our business model. And I think we'll kind of can stick to that. So like minimal insurance risk. And we'd prefer to kind of make or break ourselves on the investment side.

And I would just add that our ability to direct right opens all of those doors, though. We will certainly look at and consider other products, FIA, RILA, et cetera, to the extent they work for our current cost of capital. But again, direct writing is the panacea. You know, now that we can directly distribute insurance through our third-party marketing organization, we can sell, you know, again, all the full suite of insurance products that the market is looking for.

And last one for me, maybe it's for Brandon on fee-related earnings. Was there any specific driver to the quarter-over-quarter increase in other fee-related income?

So that's our profit share interest. So that is, and it's largely driven by incentive fees, which can ebb and flow. So I would say nothing in particular. This quarter, it just had, there was a true up from the prior quarter that did flow through. the current period profit share, but again, it wasn't, it was a couple hundred thousand dollars, it was over $200,000.

All right, great. That's all for me today. Thanks, guys. Thank you.

Thank you. As a reminder, if you would like to ask a question, please press star one one. Our next question will come from the line of Charles Burns with CIBC. Your line is open.

Good morning, Ted. Good to hear the update this morning. I just had a couple questions. The first one is with the AM best rating and the recent regulatory approval to write direct business.

Can you elaborate on the opportunities this creates? uh yep yeah i mean it definitely allows us it does a couple things for us one is it allows us to control our own destiny and control you know the flows a little bit better so we can kind of take in flows as we see you know the investment opportunity um evolve you know so there's good opportunities we can ramp it up and down um and obviously like flexibility around pricing you know it also allows us to you know look at new products like pre-need and some other things we've been looking at um to basically expand our product set versus just taking what market's given us and so i think it gives us a lot more flexibility and and you know hopefully and you know we think practically cheaper liabilities so you know it doesn't in insurance given the leverage embedded in the model you know small small savings in liabilities lead to big changes in roe so we're hoping this drives you know AUM and roe for us oh yeah the answer the answer for that is you know typically when we reinsure from another provider we pay them a seating commission So generally speaking, we pay people some kind of commission for them to originate for us versus when we originate ourselves, obviously the origination costs are lower. So as we mentioned earlier, we're generally speaking using a third party to distribute our product. So obviously we have an economic arrangement with them, but it tends to be more economic from a seeding perspective than just pure reinsurance.

Oh, I guess you have to shit you bottom line.

Yeah, that's a good way to say it.

And I guess the final thing, asset managers rebound in a number of them. Why do you think Mount Logan stock has lagged relative to these other asset managers recently?

Yeah, I think the answer to that question is, you know, generally speaking, anytime there's a big sell-up in the markets, and I've just followed this for my whole career, generally the things that come back first are the larger, most liquid, you know, in this case, asset managers. but it could be the same said the same thing for other asset classes as well so generally speaking when there's a rebound in asset management you know you'll have the big guys rally first and then we kind of get dragged up after so i you know again i continue our stock doesn't reflect fair market value you know i bought stock last quarter and you know i'll buy stock this quarter as well um and you know we'll just keep buying stock until until the price reflects you know fair market value.

Okay. And I guess the final current interest rate environment, positive or negative?

I mean, it's definitely positive. I mean, like higher rates, the question's always like, why are rates higher? And we're levered to short-term rates. So most of our assets are floating rate risk. So short data rates are actually, higher rates are just good for us. We just can make more money. And generally speaking, we're paying out a mixture of fixed and floating on our liabilities. So higher is better for us. And it all depends on what that does to credit. But again, you can see economic strength. I mean, the economy is doing really well in the U.S., which is really what we're levered to. And credit is still pretty benign. There hasn't been a lot of defaults. So higher rates in a good economy are good for us. Higher rates that cost credit issues are not as good for us. But yeah, higher for longer is good.

Okay. Okay. Thanks very much.

Thank you. One moment for our next question. And that will come from the line of Jonathan Rothschild. Your line is open.

Hi. I'd like to know something about executive compensation, how many employees you have, and what is the structure of your compensation relative to stock and cash?

Yeah, okay. So, you know, I take all of my compensation in stock, as does, you know, most of the management team, sort of as it's all the management team. And the way that, you know, it works is, is BC, which provides a lot of the support for the vehicle gets, you know, a basis point fee, but it's a very, very low below market fee, it's really just to cover costs. um and so we you know we do not take cash comp we do not you know and we're aligned with shareholders just the way we get you know we we get rsu's and stock and what um do you have incentive options or is it based on the spread and profitability is it a commission-based compensation what is the structure i mean you could it's all in our proxy but basically it's all um we do not get paid in options we do not get paid commissions it's generally speaking in stock grants service-based vesting conditions so time okay and we all get pocket vests over invests over time you know as long as we're you know still here and so and again we do not take cash comp okay and then the last call yeah you said you weren't able to tap the ten million dollar buyback is that calendar changing it in any way no it's always something that we're considering and we weigh it versus buying stock personally and buying stock you know in

our funds and everything else but you know we're very committed to you know invest in the stock price at these kind of levels okay thank you thanks thank you one moment for our next question that will come from the line of Ritri Munjal with Canaccord Genuity. Your line is open.

Thanks, operator. Sorry, we had some difficulty queuing our questions. I'm filling in for Matt and a couple of questions. First, on FRE, it's improved sequentially. Could you walk us through what specifically needs to change to drive the inflection? Is it going to be a function of fundraising, fee rate mix, or just expense discipline, please.

Yeah, so Q2FRE increased to 1.4 million from 1.2 in the prior quarter. That said, we agree there is considerably more work to do there, you know, as we continue to execute on our strategic initiatives. So, I would say all of the above in response specifically to your question we absolutely need to grow our fee earning AUM high grade our portfolios to optimize earnings and then expense discipline is also like in my personal opinion a huge catalyst scale paramount that's helpful um and the second one on sre um how much of the improvement would you categorize as sustainable versus driven by um the favorable guardian reserve adjustment just trying to get a sense of like the clean base going forward yeah so I think long term it's critical that we grow the insurance business and frankly decrease or shrink the attribution to SRE from our long-term care book which is where the volatility comes from in our insurance business on our SRE metric so there are a couple gives and takes in the quarter I would say there's about a net six hundred thousand dollar benefit the SRE this quarter to keep 700 from the Guardian up assumption update offset by other non-recurring items in SRE that will attract this point that said we are you You know, the assumption update comes with the insurance risk we hold today from our legacy long-term care blocks. And again, the goal is to continue to minimize their significance of our overall P&L.

That's it for me. That's very helpful. Thank you so much.

Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to management for any closing remarks.

Thank you all for your time today. As always, please feel free to reach out to us with any questions. We're always happy to discuss. We look forward to speaking to you again in November when we announce our third quarter 2026 results. Thank you so much and have a great rest of your week.

This concludes today's program. Thank you all for participating. You may now disconnect.