Highlights for the quarter ended
December 31, 2016
Maiden Holdings, Ltd. (NASDAQ:MHLD) (“Maiden” or “the Company”)
today reported a fourth quarter 2016 net loss attributable to
Maiden common shareholders of $74.7 million or $0.87 per diluted
common share compared to net income attributable to Maiden common
shareholders of $24.7 million or $0.32 per diluted common share in
the fourth quarter of 2015. The net operating loss(1) was $69.7
million, or $0.81 per diluted common share compared with net
operating earnings of $26.4 million, or $0.34 per diluted common
share in the fourth quarter of 2015.
As Maiden previously reported on February 14,
2017, the Company’s fourth quarter 2016 results include a reserve
charge of $120.4 million, which is primarily derived from the
commercial auto line of business in both of its reported operating
segments. The charge includes both a provision for adverse
development realized during the fourth quarter, as well as a more
conservative view of the ultimate exposures on commercial auto
liability throughout the portfolio. Excluding the impact of
the $120.4 million reserve charge, Maiden would have reported
fourth quarter 2016 net income attributable to Maiden common
shareholders of $45.7 million, or $0.52 per diluted share, and an
annualized net return on common equity of 15.1%. Excluding the
impact of the $120.4 million reserve charge, Maiden would have
reported fourth quarter 2016 net operating income attributable to
Maiden common shareholders of $39.3 million, or $0.45 per diluted
common share and an annualized operating return on common equity(7)
of 13.0%. Excluding the impact of the $120.4 million reserve
charge, Maiden would have reported 2016 net income attributable to
Maiden common shareholders of $135.7 million, or $1.67 per diluted
share and a net return on common equity of 13.8%. Excluding
the impact of the $120.4 million reserve charge, Maiden would have
reported 2016 net operating income attributable to Maiden
common shareholders of $126.2 million, or $1.56 per diluted common
share and an operating return on common equity(7) of
12.8%.
Commenting on the Company's results, Art
Raschbaum, Chief Executive Officer of Maiden, said: “Despite the
significant challenges presented in the commercial auto business,
we reported a modest profit for the year and have continued to grow
our business and investable assets while strengthening investment
income. We remain focused on improving the profitability of
our business and believe the fourth quarter reserve charge will
help us to stabilize underwriting performance as we enter
2017. Importantly, our 2016 underwriting year expected
loss ratios reflect solid profitability. While the market remains
competitive, we were able to expand our business in 2016 by
leveraging our strong franchise and value-added products and
services. We believe our prospects for continued disciplined growth
are strong. Additionally, we are in an excellent position to
improve our cost of capital, and will explore opportunities to
refinance our existing indebtedness in 2017 at an improved
rate.”
Results for the quarter ended December
31, 2016Maiden reported a fourth quarter
2016 net loss attributable to common shareholders of $74.7 million
or $0.87 per diluted common share compared with net income
attributable to Maiden common shareholders of $24.7 million or
$0.32 per diluted common share in the fourth quarter of 2015.
The net operating loss(1) was $69.7 million, or $0.81 per diluted
common share in the fourth quarter of 2016 compared with net
operating earnings of $26.4 million, or $0.34 per diluted common
share in the fourth quarter of 2015.
In the fourth quarter of 2016, gross premiums
written increased 8.8% to $572.1 million from $525.9 million in the
fourth quarter of 2015. The Diversified Reinsurance segment’s
gross premiums written totaled $157.0 million, an increase of 7.8%
versus the fourth quarter of 2015, with the growth resulting from
existing client accounts and premium from new customers won
throughout the year. In the AmTrust Reinsurance segment,
gross premiums written were $414.7 million, an increase of 9.0%
compared to $380.3 million in the fourth quarter of 2015.
Net premiums written totaled $521.0 million in
the fourth quarter of 2016, an increase of 6.7% compared to the
fourth quarter of 2015.
Net premiums earned were $616.3 million, an
increase of 5.6% compared to the fourth quarter of 2015. In
the Diversified Reinsurance segment, net premiums earned increased
6.8% to $186.0 million compared to the fourth quarter of 2015.
The AmTrust Reinsurance segment net premiums earned were
$429.9 million, up 5.0% compared to the fourth quarter of
2015.
Net loss and loss adjustment expenses of $522.5
million were up 31.6% compared to the fourth quarter of 2015.
The loss ratio(9) of 84.5% was higher than the 67.8% reported in
the fourth quarter of 2015.
Commission and other acquisition expenses,
increased 7.9% to $186.2 million in the fourth quarter of 2016,
compared to the same quarter a year ago. The expense
ratio(12) increased to 32.9% for the fourth quarter of 2016
compared with 32.1% in the same quarter last year, due to changes
in business mix, with the amount of quota share premiums outpacing
excess of loss business. General and administrative expenses
for the fourth quarter of 2016 totaled $17.2 million, an 8.3%
increase compared with $15.9 million in the fourth quarter of 2015.
The general and administrative expense ratio(11) was 2.8% in the
fourth quarter of 2016, compared to 2.7% in the fourth quarter of
2015.
The combined ratio(13) for the fourth quarter of
2016 totaled 117.4% compared with 99.9% in the fourth quarter of
2015. The Diversified Reinsurance segment
combined ratio was 128.3% in the fourth quarter of 2016 compared to
103.6% in the fourth quarter of 2015, as net adverse development
from commercial auto business negatively impacted results.
The AmTrust Reinsurance segment combined ratio was 108.1% in the
fourth quarter of 2016 compared to 95.8% in the fourth quarter of
2015 due to an elevated level of loss development from AmTrust’s
Specialty Program segment in the quarter, primarily in commercial
auto and to a lesser extent general liability. Excluding the
fourth quarter reserve charge of $120.4 million, Maiden’s combined
ratio for the fourth quarter of 2016 would have been 97.9%,
comprised of 98.1% for the Diversified Reinsurance segment and
96.0% for the AmTrust Reinsurance segment.
Net investment income of $38.6 million in the
fourth quarter of 2016 increased 10.8% compared to the fourth
quarter of 2015. As of December 31, 2016, the average yield
on the fixed income portfolio (excluding cash) is 3.30% with an
average duration of 5.07 years. Cash and cash equivalents
were $149.5 million at December 31, 2016 or $183.0 million lower
than at year-end 2015.
Total assets increased 9.6% to $6.3 billion at
December 31, 2016 compared to $5.7 billion at year-end
2015. Shareholders' equity was $1.4 billion, up 1.0%
compared to December 31, 2015. Book value per
common share was $12.12 at December 31, 2016 or 3.0% higher than at
December 31, 2015. During the fourth quarter of
2016, the Board of Directors declared dividends of $0.15 per common
share, $0.515625 per Series A preference share and $0.445313 per
Series C preference share.
Results for the year ended December
31, 2016Net income attributable to Maiden common
shareholders was $15.2 million or $0.19 per diluted common share in
fiscal year 2016 compared to net income attributable to Maiden
common shareholders of $100.1 million or $1.31 per diluted common
share in 2015. Net operating earnings(1) for 2016 were $17.3
million, or $0.22 per diluted common share compared with $107.2
million, or $1.39 per diluted common share in 2015.
In 2016, gross premiums written totaled $2.8
billion, an increase of 6.3% compared to the 2015. Gross
premiums written in the Diversified Reinsurance segment totaled
$824.3 million, an increase of 6.1% versus 2015. In the
AmTrust Reinsurance segment, gross premiums written increased by
6.4% to $2.0 billion compared to 2015.
In 2016, net premiums written totaled $2.7
billion, an increase of 5.6% compared to 2015.
Net premiums earned of $2.6 billion increased
5.7% compared to 2015. Net premiums earned decreased
2.8% in the Diversified Reinsurance segment to $724.1 million
compared to 2015. The AmTrust Reinsurance segment net premiums
earned were up 9.5% to $1.8 billion compared to 2015.
Net loss and loss adjustment expenses of $1.8
billion were up 11.4% compared to 2015. The loss
ratio(9) of 70.6% was higher than the 66.9% in 2015.
Commission and other acquisition expenses,
increased 6.8% to $773.7 million in 2016 versus 2015, while the
expense ratio(12) rose to 32.6% compared with 32.4% in 2015.
General and administrative expenses for 2016 totaled $67.0 million
compared with $64.9 million in 2015. The general and administrative
expense ratio(11) decreased to 2.6% versus 2.7% in 2015.
The combined ratio(13) for 2016 was 103.2%
compared to the 99.3% combined ratio reported for 2015. The
Diversified Reinsurance segment had a combined ratio of 109.4% in
2016 compared to 103.0% in 2015. The AmTrust Reinsurance
segment combined ratio was 98.4% in 2016 compared to 95.3% in
2015.
Net investment income of $145.9 million in 2016
increased 11.3% compared to $131.1 million in 2015.
(1)(4)(7)(8) Please see the Non-GAAP Financial
Measures table for additional information on these non-GAAP
financial measures and reconciliation of these measures to GAAP
measures.
(9)(11)(12)(13) Loss ratio, general and
administrative expense ratio, expense ratio and combined ratio are
operating metrics. Please see the additional information on these
measures under Segment information tables.
Conference CallMaiden’s Chief Executive Officer, Art Raschbaum
and Chief Financial Officer, Karen Schmitt will review these
results tomorrow via teleconference and live audio webcast
beginning at 8:30 a.m. ET.
To participate in the conference call, please
access one of the following at least five minutes prior to the
start time:
U.S. Callers: 1.877.734.5373
Outside U.S. Callers: 1.973.200.3059
Passcode: 60489931
Webcast:
http://www.maiden.bm/news_events
A replay of the conference call will be
available beginning at 11:30 a.m. ET on February 28, 2017 through
11:30 a.m. ET on March 7, 2017. To listen to the replay, please
dial toll free: 1.855.859.2056 (U.S. Callers) or toll:
1.404.537.3406 (callers outside the U.S.) and enter the Passcode:
60489931; or access http://www.maiden.bm/news_events
About Maiden Holdings, Ltd.Maiden Holdings, Ltd. is a
Bermuda-based holding company formed in 2007. Through its
subsidiaries, which are each A rated (excellent) by A.M. Best, the
Company is focused on providing non-catastrophic, customized
reinsurance products and services to small and mid-size insurance
companies in the United States and Europe. As of December 31,
2016, Maiden had $6.3 billion in assets and shareholders' equity of
$1.4 billion.
The Maiden Holdings, Ltd. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5006
Forward Looking StatementsThis release contains "forward-looking
statements" which are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The
forward-looking statements are based on the Company's current
expectations and beliefs concerning future developments and their
potential effects on the Company. There can be no assurance that
actual developments will be those anticipated by the Company.
Actual results may differ materially from those projected as a
result of significant risks and uncertainties, including
non-receipt of the expected payments, changes in interest rates,
effect of the performance of financial markets on investment income
and fair values of investments, developments of claims and the
effect on loss reserves, accuracy in projecting loss reserves, the
impact of competition and pricing environments, changes in the
demand for the Company's products, the effect of general economic
conditions and unusual frequency of storm activity, adverse state
and federal legislation, regulations and regulatory investigations
into industry practices, developments relating to existing
agreements, heightened competition, changes in pricing
environments, and changes in asset valuations. Additional
information about these risks and uncertainties, as well as others
that may cause actual results to differ materially from those
projected is contained in Item 1A. Risk Factors in the Company's
Annual Report on Form 10-K for the year ended December 31, 2015 as
updated in periodic filings with the SEC. The Company undertakes no
obligation to publicly update any forward-looking statements,
except as may be required by law.
Maiden Holdings, Ltd. |
Balance
Sheet |
(in thousands (000's), except per share
data) |
|
|
|
|
|
|
|
|
December 31, 2016 (Unaudited) |
|
|
December 31, 2015 (Audited) |
|
Assets |
|
|
|
|
|
|
Fixed
maturities, available-for-sale, at fair value (Amortized cost 2016:
$4,005,642; 2015: $3,562,864) |
$ |
3,971,666 |
|
|
$ |
3,508,088 |
|
|
Fixed
maturities, held-to-maturity, at amortized cost (Fair value 2016:
$766,135; 2015: $598,975) |
|
752,212 |
|
|
|
607,843 |
|
|
Other
investments, at fair value (Cost 2016: $10,057; 2015: $10,816) |
|
13,060 |
|
|
|
11,812 |
|
|
Total
investments |
|
4,736,938 |
|
|
|
4,127,743 |
|
|
Cash and cash
equivalents |
|
45,747 |
|
|
|
89,641 |
|
|
Restricted cash and
cash equivalents |
|
103,788 |
|
|
|
242,859 |
|
|
Accrued investment
income |
|
36,517 |
|
|
|
32,288 |
|
|
Reinsurance balances
receivable, net |
|
410,166 |
|
|
|
377,318 |
|
|
Reinsurance recoverable
on unpaid losses |
|
99,936 |
|
|
|
71,248 |
|
|
Loan to related
party |
|
167,975 |
|
|
|
167,975 |
|
|
Deferred commission and
other acquisition expenses, net |
|
424,605 |
|
|
|
397,548 |
|
|
Goodwill and intangible
assets, net |
|
77,715 |
|
|
|
81,920 |
|
|
Other assets |
|
148,912 |
|
|
|
115,038 |
|
|
Total Assets |
$ |
6,252,299 |
|
|
$ |
5,703,578 |
|
|
Liabilities
and Equity |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Reserve for loss and
loss adjustment expenses |
$ |
2,896,496 |
|
|
$ |
2,510,101 |
|
|
Unearned premiums |
|
1,475,506 |
|
|
|
1,354,572 |
|
|
Accrued expenses and
other liabilities |
|
167,736 |
|
|
|
139,873 |
|
|
Senior notes |
|
|
|
|
|
|
Principal
amount |
|
362,500 |
|
|
|
360,000 |
|
|
Less
unamortized debt issuance costs |
|
11,091 |
|
|
|
10,067 |
|
|
Senior notes, net |
|
351,409 |
|
|
|
349,933 |
|
|
Total Liabilities |
|
4,891,147 |
|
|
|
4,354,479 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Preference Shares |
|
315,000 |
|
|
|
480,000 |
|
|
Common shares |
|
873 |
|
|
|
747 |
|
|
Additional paid-in
capital |
|
749,256 |
|
|
|
579,178 |
|
|
Accumulated other
comprehensive income (loss) |
|
14,997 |
|
|
|
(23,767 |
) |
|
Retained earnings |
|
285,662 |
|
|
|
316,184 |
|
|
Treasury shares, at
cost |
|
(4,991 |
) |
|
|
(4,521 |
) |
|
Total Maiden
Shareholders’ Equity |
|
1,360,797 |
|
|
|
1,347,821 |
|
|
Noncontrolling
interest in subsidiaries |
|
355 |
|
|
|
1,278 |
|
|
Total Equity |
|
1,361,152 |
|
|
|
1,349,099 |
|
|
Total Liabilities and Equity |
$ |
6,252,299 |
|
|
$ |
5,703,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per
common share(4) |
$ |
12.12 |
|
|
$ |
11.77 |
|
|
|
|
|
|
|
|
|
Common shares
outstanding |
|
86,271,109 |
|
|
|
73,721,140 |
|
|
|
|
|
|
|
|
Maiden Holdings, Ltd. |
|
Income Statement |
|
(in thousands (000's), except per share
data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December
31, 2016 |
|
For the Three Months Ended December
31, 2015 |
|
For the Twelve Months Ended
December 31, 2016 |
|
For the Twelve Months Ended
December 31, 2015 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums
written |
$ |
572,058 |
|
|
$ |
525,890 |
|
|
$ |
2,831,348 |
|
|
$ |
2,662,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums
written |
$ |
521,041 |
|
|
$ |
488,362 |
|
|
$ |
2,654,952 |
|
|
$ |
2,514,116 |
|
|
Change in unearned
premiums |
|
95,258 |
|
|
|
95,448 |
|
|
|
(86,802 |
) |
|
|
(85,047 |
) |
|
Net premiums earned |
|
616,299 |
|
|
|
583,810 |
|
|
|
2,568,150 |
|
|
|
2,429,069 |
|
|
Other insurance
revenue |
|
2,121 |
|
|
|
2,104 |
|
|
|
10,817 |
|
|
|
11,512 |
|
|
Net investment
income |
|
38,601 |
|
|
|
34,832 |
|
|
|
145,892 |
|
|
|
131,092 |
|
|
Net realized gains on
investment |
|
2,263 |
|
|
|
171 |
|
|
|
6,774 |
|
|
|
2,498 |
|
|
Total
other-than-temporary impairment losses |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,060 |
) |
|
Portion of loss
recognized in other comprehensive income (loss) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net impairment losses
recognized in earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,060 |
) |
|
Total revenues |
|
659,284 |
|
|
|
620,917 |
|
|
|
2,731,633 |
|
|
|
2,573,111 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss
adjustment expenses ("LAE") |
|
522,545 |
|
|
|
397,065 |
|
|
|
1,819,906 |
|
|
|
1,633,570 |
|
|
Commission and other
acquisition expenses |
|
186,163 |
|
|
|
172,519 |
|
|
|
773,664 |
|
|
|
724,197 |
|
|
General and
administrative expenses |
|
17,246 |
|
|
|
15,921 |
|
|
|
66,984 |
|
|
|
64,872 |
|
|
Total expenses |
|
725,954 |
|
|
|
585,505 |
|
|
|
2,660,554 |
|
|
|
2,422,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income
from operations(2) |
|
(66,670 |
) |
|
|
35,412 |
|
|
|
71,079 |
|
|
|
150,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
amortization expenses |
|
(6,859 |
) |
|
|
(7,267 |
) |
|
|
(28,173 |
) |
|
|
(29,063 |
) |
|
Accelerated
amortization of senior note issuance cost |
|
- |
|
|
|
- |
|
|
|
(2,345 |
) |
|
|
- |
|
|
Amortization of
intangible assets |
|
(615 |
) |
|
|
(710 |
) |
|
|
(2,461 |
) |
|
|
(2,840 |
) |
|
Foreign exchange and
other gains, net |
|
5,138 |
|
|
|
3,691 |
|
|
|
11,612 |
|
|
|
7,753 |
|
|
Total other expenses |
|
(2,336 |
) |
|
|
(4,286 |
) |
|
|
(21,367 |
) |
|
|
(24,150 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income taxes |
|
(69,006 |
) |
|
|
31,126 |
|
|
|
49,712 |
|
|
|
126,322 |
|
|
Less: income tax
expense |
|
368 |
|
|
|
402 |
|
|
|
1,574 |
|
|
|
2,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income |
|
(69,374 |
) |
|
|
30,724 |
|
|
|
48,138 |
|
|
|
124,284 |
|
|
Add: loss attributable
to noncontrolling interest |
|
676 |
|
|
|
76 |
|
|
|
842 |
|
|
|
192 |
|
|
Net (loss)
income attributable to Maiden |
|
(68,698 |
) |
|
|
30,800 |
|
|
|
48,980 |
|
|
|
124,476 |
|
|
Dividends on preference
shares(6) |
|
(6,033 |
) |
|
|
(6,084 |
) |
|
|
(33,756 |
) |
|
|
(24,337 |
) |
|
Net (loss)
income attributable to Maiden common shareholders |
$ |
(74,731 |
) |
|
$ |
24,716 |
|
|
$ |
15,224 |
|
|
$ |
100,139 |
|
|
Net operating
(loss) earnings attributable to Maiden common
shareholders(1) |
$ |
(69,680 |
) |
|
$ |
26,399 |
|
|
$ |
17,294 |
|
|
$ |
107,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings per common share attributable to Maiden
shareholders |
$ |
(0.87 |
) |
|
$ |
0.34 |
|
|
$ |
0.20 |
|
|
$ |
1.36 |
|
|
Diluted (loss)
earnings per common share
attributable to Maiden
shareholders(8) |
$ |
(0.87 |
) |
|
$ |
0.32 |
|
|
$ |
0.19 |
|
|
$ |
1.31 |
|
|
Basic operating
(loss) earnings per common share attributable to Maiden
shareholders |
$ |
(0.81 |
) |
|
$ |
0.36 |
|
|
$ |
0.22 |
|
|
$ |
1.46 |
|
|
Diluted
operating (loss) earnings per common share attributable to Maiden
shareholders(8) |
$ |
(0.81 |
) |
|
$ |
0.34 |
|
|
$ |
0.22 |
|
|
$ |
1.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per common share |
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.57 |
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares - basic |
|
86,198,686 |
|
|
|
73,699,754 |
|
|
|
77,534,860 |
|
|
|
73,478,544 |
|
|
Adjusted
weighted average number of common shares and assumed conversions -
diluted |
|
87,410,257 |
|
|
|
85,815,793 |
|
|
|
78,686,943 |
|
|
|
85,638,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
LAE(9) |
|
84.5 |
% |
|
|
67.8 |
% |
|
|
70.6 |
% |
|
|
66.9 |
% |
|
Commission and
other acquisition expense ratio(10) |
|
30.1 |
% |
|
|
29.4 |
% |
|
|
30.0 |
% |
|
|
29.7 |
% |
|
General and
administrative expense ratio(11) |
|
2.8 |
% |
|
|
2.7 |
% |
|
|
2.6 |
% |
|
|
2.7 |
% |
|
Expense
ratio(12) |
|
32.9 |
% |
|
|
32.1 |
% |
|
|
32.6 |
% |
|
|
32.4 |
% |
|
Combined
ratio(13) |
|
117.4 |
% |
|
|
99.9 |
% |
|
|
103.2 |
% |
|
|
99.3 |
% |
|
Annualized
return on average common equity |
|
(26.0 |
%) |
|
|
11.1 |
% |
|
|
1.6 |
% |
|
|
11.2 |
% |
|
Annualized
operating return on average common
equity(7) |
|
(24.3 |
%) |
|
|
11.8 |
% |
|
|
1.9 |
% |
|
|
12.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maiden Holdings, Ltd. |
Non - GAAP Financial Measure |
(in thousands (000's), except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months EndedDecember
31, 2016 |
|
For the Three Months EndedDecember
31, 2015 |
|
For the Twelve Months Ended
December 31, 2016 |
|
For the Twelve Months Ended
December 31, 2015 |
|
Reconciliation of net (loss) income attributable to
Maiden common shareholders to net operating (loss)
earnings: |
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income attributable to Maiden common shareholders |
$ |
(74,731 |
) |
|
$ |
24,716 |
|
|
$ |
15,224 |
|
|
$ |
100,139 |
|
Add
(subtract) |
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains on
investment |
|
(2,263 |
) |
|
|
(171 |
) |
|
|
(6,774 |
) |
|
|
(2,498 |
) |
|
Net impairment losses
recognized in earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,060 |
|
|
Foreign exchange and
other gains, net |
|
(5,138 |
) |
|
|
(3,691 |
) |
|
|
(11,612 |
) |
|
|
(7,753 |
) |
|
Amortization of
intangible assets |
|
615 |
|
|
|
710 |
|
|
|
2,461 |
|
|
|
2,840 |
|
|
Divested excess and
surplus "E&S" business and NGHC run-off |
|
11,547 |
|
|
|
4,545 |
|
|
|
14,489 |
|
|
|
12,241 |
|
|
Accelerated
amortization of senior note issuance cost |
|
- |
|
|
|
- |
|
|
|
2,345 |
|
|
|
- |
|
|
Non-cash deferred tax
expense |
|
290 |
|
|
|
290 |
|
|
|
1,161 |
|
|
|
1,161 |
|
Net
operating (loss) earnings attributable to Maiden common
shareholders(1) |
$ |
(69,680 |
) |
|
$ |
26,399 |
|
|
$ |
17,294 |
|
|
$ |
107,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) earnings per common share attributable to
Maiden shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(loss) earnings per common share attributable to Maiden
shareholders |
$ |
(0.81 |
) |
|
$ |
0.36 |
|
|
$ |
0.22 |
|
|
$ |
1.46 |
|
Diluted
(loss) earnings per common share attributable to Maiden
shareholders (8) |
$ |
(0.81 |
) |
|
$ |
0.34 |
|
|
$ |
0.22 |
|
|
$ |
1.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net (loss) income attributable to
Maiden to (loss) income from operations: |
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income attributable to Maiden |
$ |
(68,698 |
) |
|
$ |
30,800 |
|
|
$ |
48,980 |
|
|
$ |
124,476 |
|
Add
(subtract) |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange and
other gains, net |
|
(5,138 |
) |
|
|
(3,691 |
) |
|
|
(11,612 |
) |
|
|
(7,753 |
) |
|
Amortization of
intangible assets |
|
615 |
|
|
|
710 |
|
|
|
2,461 |
|
|
|
2,840 |
|
|
Interest and
amortization expenses |
|
6,859 |
|
|
|
7,267 |
|
|
|
28,173 |
|
|
|
29,063 |
|
|
Accelerated
amortization of senior note issuance cost |
|
- |
|
|
|
- |
|
|
|
2,345 |
|
|
|
- |
|
|
Income tax expense |
|
368 |
|
|
|
402 |
|
|
|
1,574 |
|
|
|
2,038 |
|
|
Loss attributable to
noncontrolling interest |
|
(676 |
) |
|
|
(76 |
) |
|
|
(842 |
) |
|
|
(192 |
) |
(Loss)
income from operations(2) |
$ |
(66,670 |
) |
|
$ |
35,412 |
|
|
$ |
71,079 |
|
|
$ |
150,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
|
Investable assets: |
|
|
|
|
|
|
|
|
|
Total
investments |
$ |
4,736,938 |
|
|
$ |
4,127,743 |
|
|
|
|
|
Cash and
cash equivalents |
|
45,747 |
|
|
|
89,641 |
|
|
|
|
|
Restricted
cash and cash equivalents |
|
103,788 |
|
|
|
242,859 |
|
|
|
|
|
Loan to
related party |
|
167,975 |
|
|
|
167,975 |
|
|
|
|
|
Total
investable assets(3) |
$ |
5,054,448 |
|
|
$ |
4,628,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
|
|
|
Capital: |
|
|
|
|
|
|
|
|
|
|
|
Preference
shares |
$ |
315,000 |
|
|
$ |
480,000 |
|
|
|
|
|
|
|
Common
shareholders' equity |
|
1,045,797 |
|
|
|
867,821 |
|
|
|
|
|
|
|
Total Maiden shareholders' equity |
|
1,360,797 |
|
|
|
1,347,821 |
|
|
|
|
|
|
|
2016 Senior
Notes |
|
110,000 |
|
|
|
- |
|
|
|
|
|
|
|
2013 Senior
Notes |
|
152,500 |
|
|
|
152,500 |
|
|
|
|
|
|
|
2012 Senior
Notes |
|
100,000 |
|
|
|
100,000 |
|
|
|
|
|
|
|
2011 Senior
Notes |
|
- |
|
|
|
107,500 |
|
|
|
|
|
|
|
Total capital resources(5) |
$ |
1,723,297 |
|
|
$ |
1,707,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net operating (loss) earnings is a non-GAAP
financial measure defined by the Company as net (loss) income
attributable to Maiden common shareholders excluding realized and
unrealized investment gains and losses, net impairment losses
recognized in earnings, foreign exchange and other gains and
losses, amortization of intangible assets, divested excess and
surplus business and NGHC run-off, accelerated amortization of
senior note issuance cost and non-cash deferred tax expense and
should not be considered as an alternative to net income. The
Company's management believes that net operating (loss) earnings is
a useful indicator of trends in the Company's underlying
operations. The Company's measure of net operating (loss) earnings
may not be comparable to similarly titled measures used by other
companies. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) (Loss) income from operations is a non-GAAP
financial measure defined by the Company as net (loss) income
attributable to Maiden excluding foreign exchange and other gains
and losses, amortization of intangible assets, interest and
amortization expenses, accelerated amortization of senior note
issuance cost, income tax expense and income or loss attributable
to noncontrolling interest and should not be considered as an
alternative to net income. The Company’s management believes
that (loss) income from operations is a useful measure of the
Company’s underlying earnings fundamentals based on its
underwriting and investment income before financing costs. This
(loss) income from operations enables readers of this information
to more clearly understand the essential operating results of the
Company. The Company’s measure of (loss) income from operations may
not be comparable to similarly titled measures used by other
companies. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Investable assets is the total of the Company's
investments, cash and cash equivalents and loan to a related
party. |
|
|
|
|
|
(4) Book value per common share is calculated using
Maiden common shareholders’ equity (shareholders' equity excluding
the aggregate liquidation value of our preference shares) divided
by the number of common shares outstanding. |
|
|
|
|
|
(5) Total capital resources is the sum of the
Company's principal amount of debt and Maiden shareholders'
equity. |
|
|
|
|
|
(6) Dividends on preference shares consist of $3,093
and $12,375 paid to Preference shares - Series A and $0 and $8,971
paid to Preference shares - Series B for the three and twelve
months ended December 31, 2016 and 2015, respectively, and $2,940
and $12,410 paid to Preference shares - Series C for the three and
twelve months ended December 31, 2016, respectively. On
September 15, 2016, each of then outstanding Preference share
- Series B were automatically converted into 12,069,090 of the
Company's common shares at a conversion rate of 3.6573 per
preference share. |
|
|
|
|
|
(7) Operating return on average common equity is a
non-GAAP financial measures. Management uses operating return on
average common shareholders' equity as a measure of profitability
that focuses on the return to Maiden common shareholders. It is
calculated using operating (loss) earnings available to common
shareholders divided by average Maiden common shareholders' equity.
For the twelve months ended December 31, 2016, the average common
shareholders' equity is adjusted for the period the Mandatory
Convertible Preference shares - Series B are outstanding (prior to
mandatory conversion date of September 15, 2016). |
|
|
|
|
|
(8) During a period of loss, the basic weighted
average common shares outstanding is used in the denominator of the
diluted loss per common share computation as the effect of
including potential dilutive shares would be anti-dilutive. |
|
Maiden Holdings, Ltd. |
Supplemental Financial Data - Segment
Information |
(in thousands (000's)) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2016 |
|
Diversified Reinsurance |
|
AmTrust Reinsurance |
|
Other |
|
Total |
Gross
premiums written |
|
$ |
156,953 |
|
|
$ |
414,744 |
|
|
$ |
361 |
|
|
$ |
572,058 |
|
Net premiums
written |
|
$ |
139,597 |
|
|
$ |
381,039 |
|
|
$ |
405 |
|
|
$ |
521,041 |
|
Net premiums
earned |
|
$ |
185,972 |
|
|
$ |
429,922 |
|
|
$ |
405 |
|
|
$ |
616,299 |
|
Other insurance
revenue |
|
|
2,121 |
|
|
|
- |
|
|
|
- |
|
|
|
2,121 |
|
Net loss and LAE |
|
|
(183,802 |
) |
|
|
(327,127 |
) |
|
|
(11,616 |
) |
|
|
(522,545 |
) |
Commissions and other
acquisition expenses |
|
|
(48,611 |
) |
|
|
(137,216 |
) |
|
|
(336 |
) |
|
|
(186,163 |
) |
General and
administrative expenses |
|
|
(8,964 |
) |
|
|
(588 |
) |
|
|
- |
|
|
|
(9,552 |
) |
Underwriting
loss |
|
$ |
(53,284 |
) |
|
$ |
(35,009 |
) |
|
$ |
(11,547 |
) |
|
$ |
(99,840 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to net loss |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
and realized gains on investment |
|
|
|
|
|
|
|
|
|
|
|
40,864 |
|
Interest and
amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
(6,859 |
) |
Amortization of
intangible assets |
|
|
|
|
|
|
|
|
|
|
|
(615 |
) |
Foreign exchange and
other gains, net |
|
|
|
|
|
|
|
|
|
|
|
5,138 |
|
Other general and
administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
(7,694 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
(368 |
) |
Net
loss |
|
|
|
|
|
|
|
|
|
|
$ |
(69,374 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
LAE(9) |
|
|
97.7 |
% |
|
|
76.1 |
% |
|
|
|
|
|
84.5 |
% |
Commission and other
acquisition expense ratio(10) |
|
|
25.8 |
% |
|
|
31.9 |
% |
|
|
|
|
|
30.1 |
% |
General and
administrative expense ratio(11) |
|
|
4.8 |
% |
|
|
0.1 |
% |
|
|
|
|
|
2.8 |
% |
Combined
ratio(13) |
|
|
128.3 |
% |
|
|
108.1 |
% |
|
|
|
|
|
117.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2015 |
|
Diversified Reinsurance |
|
AmTrust Reinsurance |
|
Other |
|
Total |
Gross
premiums written |
|
$ |
145,558 |
|
|
$ |
380,332 |
|
|
$ |
- |
|
|
$ |
525,890 |
|
Net premiums
written |
|
$ |
132,088 |
|
|
$ |
356,274 |
|
|
$ |
- |
|
|
$ |
488,362 |
|
Net premiums
earned |
|
$ |
174,181 |
|
|
$ |
409,628 |
|
|
$ |
1 |
|
|
$ |
583,810 |
|
Other insurance
revenue |
|
|
2,104 |
|
|
|
- |
|
|
|
- |
|
|
|
2,104 |
|
Net loss and LAE |
|
|
(129,450 |
) |
|
|
(263,056 |
) |
|
|
(4,559 |
) |
|
|
(397,065 |
) |
Commissions and other
acquisition expenses |
|
|
(43,960 |
) |
|
|
(128,572 |
) |
|
|
13 |
|
|
|
(172,519 |
) |
General and
administrative expenses |
|
|
(9,336 |
) |
|
|
(816 |
) |
|
|
- |
|
|
|
(10,152 |
) |
Underwriting
(loss) income |
|
$ |
(6,461 |
) |
|
$ |
17,184 |
|
|
$ |
(4,545 |
) |
|
$ |
6,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to net income |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
and realized gains on investment |
|
|
|
|
|
|
|
|
|
|
|
35,003 |
|
Interest and
amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
(7,267 |
) |
Amortization of
intangible assets |
|
|
|
|
|
|
|
|
|
|
|
(710 |
) |
Foreign exchange and
other gains, net |
|
|
|
|
|
|
|
|
|
|
|
3,691 |
|
Other general and
administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
(5,769 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
(402 |
) |
Net
income |
|
|
|
|
|
|
|
|
|
|
$ |
30,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
LAE(9) |
|
|
73.4 |
% |
|
|
64.2 |
% |
|
|
|
|
|
67.8 |
% |
Commission and other
acquisition expense ratio(10) |
|
|
24.9 |
% |
|
|
31.4 |
% |
|
|
|
|
|
29.4 |
% |
General and
administrative expense ratio(11) |
|
|
5.3 |
% |
|
|
0.2 |
% |
|
|
|
|
|
2.7 |
% |
Combined
ratio(13) |
|
|
103.6 |
% |
|
|
95.8 |
% |
|
|
|
|
|
99.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Maiden Holdings, Ltd. |
Supplemental Financial Data - Segment
Information |
(in thousands (000's)) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months Ended December 31, 2016 |
|
Diversified Reinsurance |
|
AmTrust Reinsurance |
|
Other |
|
Total |
Gross
premiums written |
|
$ |
824,341 |
|
|
$ |
2,006,646 |
|
|
$ |
361 |
|
|
$ |
2,831,348 |
|
Net premiums
written |
|
$ |
766,119 |
|
|
$ |
1,888,428 |
|
|
$ |
405 |
|
|
$ |
2,654,952 |
|
Net premiums
earned |
|
$ |
724,124 |
|
|
$ |
1,843,621 |
|
|
$ |
405 |
|
|
$ |
2,568,150 |
|
Other insurance
revenue |
|
|
10,817 |
|
|
|
- |
|
|
|
- |
|
|
|
10,817 |
|
Net loss and LAE |
|
|
(579,520 |
) |
|
|
(1,225,830 |
) |
|
|
(14,556 |
) |
|
|
(1,819,906 |
) |
Commissions and other
acquisition expenses |
|
|
(188,506 |
) |
|
|
(584,820 |
) |
|
|
(338 |
) |
|
|
(773,664 |
) |
General and
administrative expenses |
|
|
(35,681 |
) |
|
|
(2,896 |
) |
|
|
- |
|
|
|
(38,577 |
) |
Underwriting
(loss) income |
|
$ |
(68,766 |
) |
|
$ |
30,075 |
|
|
$ |
(14,489 |
) |
|
$ |
(53,180 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to net income |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
and realized gains on investment |
|
|
|
|
|
|
|
|
|
|
|
152,666 |
|
Interest and
amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
(28,173 |
) |
Accelerated
amortization of senior note issuance cost |
|
|
|
|
|
|
|
|
|
|
|
(2,345 |
) |
Amortization of
intangible assets |
|
|
|
|
|
|
|
|
|
|
|
(2,461 |
) |
Foreign exchange and
other gains, net |
|
|
|
|
|
|
|
|
|
|
|
11,612 |
|
Other general and
administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
(28,407 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
(1,574 |
) |
Net
income |
|
|
|
|
|
|
|
|
|
|
$ |
48,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
LAE(9) |
|
|
78.9 |
% |
|
|
66.5 |
% |
|
|
|
|
|
70.6 |
% |
Commission and other
acquisition expense ratio(10) |
|
|
25.6 |
% |
|
|
31.7 |
% |
|
|
|
|
|
30.0 |
% |
General and
administrative expense ratio(11) |
|
|
4.9 |
% |
|
|
0.2 |
% |
|
|
|
|
|
2.6 |
% |
Combined
ratio(13) |
|
|
109.4 |
% |
|
|
98.4 |
% |
|
|
|
|
|
103.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months Ended December 31, 2015 |
|
Diversified Reinsurance |
|
AmTrust Reinsurance |
|
Other |
|
Total |
Gross
premiums written |
|
$ |
776,852 |
|
|
$ |
1,885,974 |
|
|
$ |
(1 |
) |
|
$ |
2,662,825 |
|
Net premiums
written |
|
$ |
734,781 |
|
|
$ |
1,779,334 |
|
|
$ |
1 |
|
|
$ |
2,514,116 |
|
Net premiums
earned |
|
$ |
744,875 |
|
|
$ |
1,684,191 |
|
|
$ |
3 |
|
|
$ |
2,429,069 |
|
Other insurance
revenue |
|
|
11,512 |
|
|
|
- |
|
|
|
- |
|
|
|
11,512 |
|
Net loss and LAE |
|
|
(547,296 |
) |
|
|
(1,074,072 |
) |
|
|
(12,202 |
) |
|
|
(1,633,570 |
) |
Commissions and other
acquisition expenses |
|
|
(196,292 |
) |
|
|
(527,863 |
) |
|
|
(42 |
) |
|
|
(724,197 |
) |
General and
administrative expenses |
|
|
(35,312 |
) |
|
|
(3,016 |
) |
|
|
- |
|
|
|
(38,328 |
) |
Underwriting
(loss) income |
|
$ |
(22,513 |
) |
|
$ |
79,240 |
|
|
$ |
(12,241 |
) |
|
$ |
44,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to net income |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
and realized gains on investment |
|
|
|
|
|
|
|
|
|
|
|
133,590 |
|
Net impairment losses
recognized in earnings |
|
|
|
|
|
|
|
|
|
|
|
(1,060 |
) |
Interest and
amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
(29,063 |
) |
Amortization of
intangible assets |
|
|
|
|
|
|
|
|
|
|
|
(2,840 |
) |
Foreign exchange and
other gains, net |
|
|
|
|
|
|
|
|
|
|
|
7,753 |
|
Other general and
administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
(26,544 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
(2,038 |
) |
Net
income |
|
|
|
|
|
|
|
|
|
|
$ |
124,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
LAE(9) |
|
|
72.3 |
% |
|
|
63.8 |
% |
|
|
|
|
|
66.9 |
% |
Commission and other
acquisition expense ratio(10) |
|
|
26.0 |
% |
|
|
31.3 |
% |
|
|
|
|
|
29.7 |
% |
General and
administrative expense ratio(11) |
|
|
4.7 |
% |
|
|
0.2 |
% |
|
|
|
|
|
2.7 |
% |
Combined
ratio(13) |
|
|
103.0 |
% |
|
|
95.3 |
% |
|
|
|
|
|
99.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9) Calculated by dividing net loss and LAE by the sum
of net premiums earned and other insurance revenue. |
|
(10) Calculated by dividing commission and other
acquisition expenses by the sum of net premiums earned and other
insurance revenue. |
|
(11) Calculated by dividing general and administrative
expenses by the sum of net premiums earned and other insurance
revenue. |
|
(12) Calculated by adding together the commission and
other acquisition expense ratio and general and administrative
expense ratio. |
|
(13) Calculated by adding together the net loss and
LAE ratio and expense ratio. |
|
|
|
|
|
|
|
|
|
|
CONTACT:
Noah Fields, Senior Vice President, Investor Relations
Maiden Holdings, Ltd.
Phone: 441.298.4927
E-mail: nfields@maiden.bm
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