Slide Insurance Holdings, Inc. Fair Value Disclosure
Valuation Hierarchy
The FASB established a valuation hierarchy for disclosure of the inputs used to measure estimated fair value. This hierarchy categorizes the inputs into three broad levels as follows:
The following tables present by level the financial assets carried at estimated fair value measured on a recurring basis as of December 31. The tables do not include assets which are measured at historical cost or any basis other than estimated fair value.
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December 31, 2025 |
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Carrying |
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|
Level 1 |
|
|
Level 2 |
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|
Level 3 |
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|
Estimated |
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|||||
Assets: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
$ |
1,201,210 |
|
|
$ |
1,201,210 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,201,210 |
|
Restricted cash |
|
|
786 |
|
|
|
786 |
|
|
|
— |
|
|
|
— |
|
|
$ |
786 |
|
Restricted cash - variable interest |
|
|
480,972 |
|
|
|
480,972 |
|
|
|
— |
|
|
|
— |
|
|
$ |
480,972 |
|
Fixed-maturity securities |
|
|
580,122 |
|
|
|
317,620 |
|
|
|
272,100 |
|
|
|
— |
|
|
$ |
589,720 |
|
|
|
$ |
2,263,090 |
|
|
$ |
2,000,588 |
|
|
$ |
272,100 |
|
|
$ |
— |
|
|
$ |
2,272,688 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate swap |
|
$ |
62 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
62 |
|
|
$ |
62 |
|
|
|
December 31, 2024 |
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|||||||||||||||||
|
|
Carrying |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Estimated |
|
|||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
$ |
493,409 |
|
|
$ |
493,409 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
493,409 |
|
Restricted cash |
|
|
631 |
|
|
|
631 |
|
|
|
— |
|
|
|
— |
|
|
|
631 |
|
Restricted cash - variable interest |
|
|
295,802 |
|
|
|
295,802 |
|
|
|
— |
|
|
|
— |
|
|
|
295,802 |
|
Fixed-maturity securities |
|
|
464,585 |
|
|
|
323,749 |
|
|
|
141,217 |
|
|
|
— |
|
|
|
464,966 |
|
|
|
$ |
1,254,427 |
|
|
$ |
1,113,591 |
|
|
$ |
141,217 |
|
|
$ |
— |
|
|
$ |
1,254,808 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate swap |
|
$ |
117 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
117 |
|
|
$ |
117 |
|
A financial instrument’s classification within the valuation hierarchy is based upon the lowest level of input that is significant to the estimated fair value measurement; consequently, if there are multiple significant valuation inputs that are categorized in different levels of the hierarchy, the instrument’s hierarchy level is the lowest level within which any significant input falls.
The Level 1 category includes cash and cash equivalents, restricted cash, money market securities, certificates of deposit, U.S. treasury bonds, and corporate bonds.
The Level 2 category generally includes municipal bonds and asset-backed securities. The estimated fair value of fixed-maturity investments included in the Level 2 category was based on the market values obtained from pricing services.
When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market, or which cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management’s judgment or estimation and cannot be supported by reference or market activity. Generally, these investments are classified as Level 3.
Other Financial Instruments
The Company uses various financial instruments in the normal course of its business. In the measurement of the estimated fair value of certain financial instruments, other valuation techniques were utilized if quoted market prices were not available. These derived fair value estimates are significantly affected by the assumptions used. Additionally, excluded from the scope of financial instruments are certain financial instruments, including those related to insurance contracts, pension and other postretirement benefits, and equity method investments.
In estimating the fair value of the financial instruments presented, the Company used the following methods and assumptions:
Cash and Cash equivalents
The carrying amount is a reasonable estimate of fair value, due to the short-term maturity of these investments. These assets are considered to be Level 1 assets.
Restricted cash
Restricted cash represents cash held by state authorities and the carrying value approximates fair value. Restricted cash also includes cash held in trust by the VIE where the Company is the primary beneficiary and the carrying value approximates fair value.
Fixed-Maturity Securities
Fixed-Maturity securities represent investments held at fair value in U.S. government and agencies, municipalities and political subdivisions, corporate bonds, states, and asset-backed securities. U.S. government and agencies bonds and corporate bonds are considered to be Level 1 assets due to readily available pricing. Municipalities and political subdivisions, corporate bonds, states, and asset-backed securities are considered to be Level 2 assets due to valuations based on observable inputs.
Long-Term Debt
The following table summarizes components of the Company’s long-term debt and methods used in estimating their fair values:
|
|
Maturity Date |
|
Valuation Methodology |
Promissory Notes, 0.00% |
|
2027 |
|
Discounted cash flow method, Level 3 inputs |
Commercial Loan, variable rate of interest |
|
2029 |
|
Discounted cash flow method, Level 3 inputs |
The following tables present fair value information for liabilities that are carried on the consolidated balance sheets at amounts other than fair value as of December 31, 2025 and 2024:
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Fair Value Measurements Using |
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As of December 31, 2025 |
|
Carrying |
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|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Estimated |
|
|||||
Financial Liabilities: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Long-Term debt: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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0.00% Promissory notes |
|
$ |
2,500 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,775 |
|
|
$ |
2,775 |
|
Commercial Loan |
|
|
34,000 |
|
|
|
— |
|
|
|
— |
|
|
|
30,088 |
|
|
|
30,088 |
|
Less: unamortized issuance costs |
|
|
(2,813 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,813 |
) |
|
|
(2,813 |
) |
|
|
$ |
33,687 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
30,050 |
|
|
$ |
30,050 |
|
|
|
Fair Value Measurements Using |
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As of December 31, 2024 |
|
Carrying |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Estimated |
|
|||||
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Long-Term debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
0.00% Promissory notes |
|
$ |
4,500 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,992 |
|
|
$ |
3,992 |
|
Commercial Loan |
|
|
38,000 |
|
|
|
— |
|
|
|
— |
|
|
|
37,192 |
|
|
|
37,192 |
|
Less: unamortized issuance costs |
|
|
(3,310 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3,310 |
) |
|
|
(3,310 |
) |
|
|
$ |
39,190 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
37,874 |
|
|
$ |
37,874 |
|
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.