First Quarter 2012 Highlights
- Book Value per Share(4) of $11.22, up 5.5% versus
year-end 2011
- Annualized operating return on equity(1) of 9.9%
compared to 10.6% in the first quarter last year
- Net operating earnings (1) of $19.4 million, or $0.27
per diluted share compared with $19.8 million, or $0.27 per diluted
share in the first quarter of 2011
- Total investments increased 8.9% in the first quarter
of 2012 to $2.2 billion
- Net premiums written increased 31.4% to $590.8 million
versus the same period last year
- Combined ratio of 97.9% versus 97.0% in the first
quarter of 2011
- 30-Year, 8% Senior Notes Offering of $100 million
closed on March 27, 2012
Maiden Holdings, Ltd. (Nasdaq:MHLD) today reported first quarter
2012 net income of $20.4 million, or $0.28 per diluted share
compared with $19.3 million or $0.27 per diluted share in the first
quarter of 2011. Net operating earnings(1) for the first quarter of
2012 were $19.4 million, or $0.27 per diluted share compared with
$19.8 million, or $0.27 per diluted share in the comparative
quarter in 2011.
Commenting on the Company's earnings, Art Raschbaum, Chief
Executive Officer of Maiden Holdings, said: "The first quarter was
a solid start to the year for Maiden as we increased invested
assets, generated continued profitable underwriting results, grew
net premiums written and strengthened our capital base with a $100
million debt offering. We were also pleased with the
effectiveness of our risk management, as losses from significant
thunderstorms in the U.S. were well within our provision for
expected weather related losses in the quarter. Maiden is well
positioned to benefit from an improving pricing environment in the
U.S. through disciplined underwriting and a focus on serving the
non-catastrophe needs of our regional and specialty insurer
clients."
Results for the three months ended March 31,
2012
Net premiums written were up 31.4% or $141.3 million to $590.8
million in the first quarter of 2012 compared to the same quarter
in 2011. All three of Maiden's business segments
increased net premiums written, with the Diversified Reinsurance
segment, up 11.4%. The 78.4% growth of the AmTrust
Quota Share Reinsurance segment compared to the first quarter of
2011 was significantly the result of the addition of the European
Hospital Liability business in the second quarter of 2011 and
acquisition activity throughout last year. Net premiums
written from the ACAC Quota Share increased by 19.6% to $76.5
million compared to the same period in 2011.
Net premiums earned of $438.5 million increased 26.5%, or $92.0
million compared to the first quarter of 2011, reflecting the
impact of strong 2011 premium growth. Earned premiums
increased across all business lines with Diversified Reinsurance up
17.3%, AmTrust Quota Share Reinsurance up 46.7% and ACAC Quota
Share up 14.4%.
Net investment income of $18.4 million decreased 3.7% compared
to the first quarter of 2011. Total investments
increased $179.0 million to $2.2 billion or 8.9% versus
December 31, 2011. The average yield on the
fixed income portfolio (excluding cash) is 3.86% with an average
duration of 3.22 years.
Net loss and loss adjustment expenses of $287.9 million were up
$66.7 million compared to the first quarter of 2011. The
loss ratio(6) increased 2.0 percentage points to 65.0% versus the
first quarter of 2011.
Commission and other acquisition expenses together with general
and administrative expenses of $146.1 million increased $26.7
million from the year ago quarter, while the total expense ratio
improved to 32.9% in the first quarter of 2012 compared with 34.0%
in the prior year. General and administrative expenses for
the quarter totaled $13.8 million compared with $12.3 million in
the first quarter of 2011. The general and administrative expense
ratio(8) improved to 3.1% compared to 3.5% in the first quarter of
2011.
The combined ratio(9) for the first quarter totaled 97.9%
compared with 97.0% in the first quarter of 2011.
The impact of the updated accounting guidance issued by the
Financial Accounting Standards Board which limits the
capitalization of costs incurred to acquire or renew insurance
contracts to those that are incremental direct costs of successful
contract acquisitions was to decrease earnings by approximately
$1.2 million or $0.02 per diluted share. The impact on the
Company's combined ratio was an increase of approximately
0.3%.
During the first quarter of 2012, the Company issued $100
million of 30-year 8.0% senior notes. Total net proceeds from
the offering were $96.6 million and are being used for working
capital and general corporate purposes, which may include
repurchasing the Company's outstanding 14% 30-year trust preferred
securities ("TRUPS") issued in January 2009. The Company does not
intend to repurchase any portion of the TRUPS with these proceeds
prior to January 20, 2014, and expects to invest such net proceeds
in marketable fixed income securities and short term
investments. The proceeds also give Maiden the flexibility to
write additional business as opportunities become
available.
Total assets increased 9.4% to $3.7 billion compared to $3.4
billion at year-end 2011. Total cash on hand at March
31, 2012, including the proceeds of the first quarter senior note
issuance, was $273.8 million, comprised of cash and cash
equivalents of $183.8 million, down 2.3% from the end of 2011, and
restricted cash and cash equivalents of $90.0 million, a decrease
of 21.7% versus year-end of 2011. Shareholders' equity
was $810.4 million, an increase of 5.4% compared to
December 31, 2011. Book value per share was $11.22
at the end of the first quarter of 2012 or 5.5% higher than at
December 31, 2011.
During the first quarter of 2012, the Board of Directors
declared a dividend of $0.08 per share.
Conference Call
Maiden's CEO Art Raschbaum and CFO John Marshaleck will review
first quarter 2012 results tomorrow morning via teleconference and
live audio webcast beginning at 8:00 a.m. ET.
To participate in the conference call, please access one of the
following no later than 7:55 a.m. ET:
U.S.Callers: 1.877.734.5373
Outside U.S. Callers: 1.973.200.3059
Passcode: 70810422
Webcast: http://www.maiden.bm/presentations_conferences
A replay of the conference call will be available beginning
12:00 p.m. ET on May 3, 2012 through midnight on May 10,
2012. To listen to the replay, please dial toll free:
1.800.585.8367 (U.S. Callers) or toll: 1.404.537.3406 (callers
outside the U.S.) and enter the Passcode: 70810422; or access
http://www.maiden.bm/presentations_conferences
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 March 31, 2012, Maiden had $3.7 billion in
assets and shareholders' equity of $810.4 million.
The Maiden Holdings, Ltd. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5006
(1)(4) 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.
(6)(8)(9) Loss ratio and combined ratio are operating metrics.
Please see the additional information on these measures under
Segment information tables.
Forward Looking Statements
This 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, 2011 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) |
|
|
|
|
|
|
|
March 31, 2012 |
December 31, 2011 |
|
(Unaudited) |
(Audited) |
Assets |
|
|
Fixed maturities, available-for-sale, at fair
value (Amortized cost 2012: $2,106,626; 2011: $1,957,106) |
$ 2,199,470 |
$ 2,020,661 |
Other investments, at fair value (Cost 2012:
$2,181; 2011: $1,955) |
2,430 |
2,192 |
Total investments |
2,201,900 |
2,022,853 |
Cash and cash equivalents |
183,846 |
188,082 |
Restricted cash and cash equivalents |
89,979 |
114,895 |
Accrued investment income |
14,901 |
13,215 |
Reinsurance balances receivable,
net |
508,633 |
382,670 |
Funds withheld |
44,817 |
42,605 |
Prepaid reinsurance premiums |
35,886 |
35,381 |
Reinsurance recoverable on unpaid losses |
25,901 |
20,289 |
Loan to related party |
167,975 |
167,975 |
Deferred commission and other acquisition
costs |
277,547 |
248,436 |
Goodwill and intangible assets, net |
97,665 |
98,755 |
Other assets |
19,368 |
19,270 |
Total Assets |
$ 3,668,418 |
$ 3,354,426 |
Liabilities
and Equity |
|
|
Liabilities |
|
|
Reserve for loss and loss adjustment
expenses |
$ 1,460,618 |
$ 1,398,438 |
Unearned premiums |
994,728 |
832,047 |
Accrued expenses and other liabilities |
68,511 |
121,198 |
Senior notes |
207,500 |
107,500 |
Junior subordinated debt |
126,276 |
126,263 |
Total Liabilities |
2,857,633 |
2,585,446 |
|
|
|
Equity: |
|
|
Common shares |
732 |
732 |
Additional paid-in capital |
579,413 |
579,004 |
Accumulated other comprehensive
income |
90,849 |
64,059 |
Retained earnings |
143,245 |
128,648 |
Treasury stock, at cost |
(3,801) |
(3,801) |
Total Maiden Shareholders'
Equity |
810,438 |
768,642 |
Noncontrolling interest in
subsidiaries |
347 |
338 |
Total Equity |
810,785 |
768,980 |
Total Liabilities and
Equity |
$ 3,668,418 |
$ 3,354,426 |
|
|
|
|
|
|
Book value per share
(4) |
$ 11.22 |
$ 10.64 |
|
|
|
Common shares
outstanding |
72,256,812 |
72,221,428 |
|
|
|
|
|
|
|
|
|
Maiden Holdings,
Ltd. |
Income
Statement |
(in thousands (000's),
except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
For the |
For the |
|
Three Months
Ended |
Three Months Ended |
|
March 31, 2012 |
March 31, 2011 |
|
|
|
Revenues: |
|
|
Gross premiums written |
$ 613,212 |
$ 470,777 |
|
|
|
Net premiums written |
$ 590,833 |
$ 449,500 |
Change in unearned premiums |
(152,337) |
(102,965) |
Net premiums earned |
438,496 |
346,535 |
Other insurance revenue |
4,754 |
4,655 |
Net investment income |
18,437 |
19,141 |
Net realized and unrealized investment
gains |
1,365 |
47 |
Total revenues |
463,052 |
370,378 |
Expenses: |
|
|
Net loss and loss adjustment
expenses |
287,917 |
221,182 |
Commission and other acquisition
expenses |
132,258 |
107,072 |
General and administrative expenses |
13,831 |
12,293 |
Total expenses |
434,006 |
340,547 |
|
|
|
Income from operations
(2) |
29,046 |
29,831 |
|
|
|
Other expense |
|
|
Amortization of intangible assets |
(1,090) |
(1,258) |
Foreign exchange gains |
979 |
1,062 |
Interest and amortization expenses |
(7,678) |
(9,118) |
Total other expenses |
(7,789) |
(9,314) |
|
|
|
Income before income
taxes |
21,257 |
20,517 |
Income taxes: |
|
|
Current tax expense |
638 |
885 |
Deferred tax expense |
241 |
287 |
Income tax expense |
879 |
1,172 |
|
|
|
Net income |
20,378 |
19,345 |
Less: Income attributable to noncontrolling
interest |
(1) |
(3) |
Net income attributable to Maiden
shareholders |
$ 20,377 |
$ 19,342 |
Net operating earnings attributable
to Maiden shareholders (1) |
$ 19,364 |
$ 19,778 |
|
|
|
Basic earnings per common share
attributable to Maiden shareholders |
$ 0.28 |
$ 0.27 |
Diluted earnings per common share
attributable to Maiden shareholders |
$ 0.28 |
$ 0.27 |
Basic operating earnings per common
share attributable to Maiden shareholders |
$ 0.27 |
$ 0.27 |
Diluted operating earnings per common
share attributable to Maiden shareholders |
$ 0.27 |
$ 0.27 |
|
|
|
Dividends declared per common
share |
$ 0.08 |
$ 0.07 |
|
|
|
Weighted average number of basic
shares outstanding |
72,226,329 |
72,107,194 |
Weighted average number of diluted
shares outstanding |
73,056,423 |
72,773,914 |
|
|
|
Net Loss and loss adjustment expense
ratio (6) |
65.0% |
63.0% |
Commission and other acquisition
expense ratio (7) |
29.8% |
30.5% |
General and administrative
expense ratio (8) |
3.1% |
3.5% |
Combined ratio (9) |
97.9% |
97.0% |
Annualized return on
equity |
10.4% |
10.3% |
Annualized return on equity on
operating earnings |
9.9% |
10.6% |
|
|
|
|
Maiden Holdings,
Ltd. |
Non - GAAP Financial
Measure |
(in thousands (000's),
except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
For the Three Months Ended March
31, 2012 |
For the Three Months Ended March
31, 2011 |
|
|
|
Reconciliation of net income to net
operating earnings: |
|
|
Net income attributable to Maiden
shareholders |
$ 20,377 |
$ 19,342 |
Add (subtract) |
|
|
Net realized and unrealized investment
gains |
(1,365) |
(47) |
Foreign exchange gains |
(979) |
(1,062) |
Amortization of intangible assets |
1,090 |
1,258 |
Non-cash deferred tax charge |
241 |
287 |
Net operating earnings attributable to Maiden
shareholders (1) |
$ 19,364 |
$ 19,778 |
|
|
|
Operating earnings per common share
attributable to Maiden shareholders: |
|
|
|
|
|
Basic earnings per common share attributable
to Maiden shareholders |
$ 0.27 |
$ 0.27 |
Diluted earnings per common share
attributable to Maiden shareholders |
$ 0.27 |
$ 0.27 |
|
|
|
Reconciliation of net income to
income from operations: |
|
|
Net income attributable to Maiden
shareholders |
$ 20,377 |
$ 19,342 |
Add (subtract) |
|
|
Foreign exchange gains |
(979) |
(1,062) |
Amortization of intangible assets |
1,090 |
1,258 |
Interest and amortization expenses |
7,678 |
9,118 |
Income tax expense |
879 |
1,172 |
Income attributable to noncontrolling
interest |
1 |
3 |
Income from operations (2) |
$ 29,046 |
$ 29,831 |
|
|
|
|
March 31, 2012 |
December 31, 2011 |
Investable assets: |
|
|
Total investments |
$ 2,201,900 |
$ 2,022,853 |
Cash and cash equivalents |
183,846 |
188,082 |
Restricted cash and cash equivalents |
89,979 |
114,895 |
Funds withheld (3) |
34,361 |
29,783 |
Loan to related party |
167,975 |
167,975 |
Total investable assets (3) |
$ 2,678,061 |
$ 2,523,588 |
|
|
|
|
March 31, 2012 |
December 31, 2011 |
Capital: |
|
|
Senior notes |
$ 207,500 |
$ 107,500 |
Junior subordinated debt |
126,276 |
126,263 |
Total Maiden shareholders' equity |
810,438 |
768,642 |
Total capital (5) |
$ 1,144,214 |
$ 1,002,405 |
|
|
|
|
|
|
(1) Net operating earnings is a
non-GAAP financial measure defined by the Company as net income
attributable to Maiden shareholders excluding realized investment
gains and losses, foreign exchange gains and losses, amortization
of intangible assets and non-cash deferred tax charge and should
not be considered as an alternative to net income. The Company's
management believes that net operating earnings is a useful
indicator of trends in the Company's underlying operations. The
Company's measure of net operating earnings may not be comparable
to similarly titled measures used by other companies. |
|
|
|
|
|
|
|
|
(2) Income from Operations is a
non-GAAP financial measure defined by the Company as net income
attributable to Maiden shareholders excluding foreign
exchange gains and losses, amortization of intangible assets,
interest and amortization expenses, income tax expense and income
attributable to noncontrolling interest and should not be
considered as an alternative to net income. The Company's
management believes that 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
income from operations enables readers of this information to more
clearly understand the essential operating results of the Company.
The Company's measure of 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, loan to a
related party and the portion of the funds withheld balance that
comprises fixed maturity securities and cash and cash
equivalents. |
|
|
|
|
|
|
|
|
(4) Calculated by dividing total Maiden
shareholders' equity by total common shares outstanding. |
|
|
|
|
|
|
|
|
(5) Capital is the total of the
Company's senior notes, junior subordinated debt and shareholders'
equity. |
|
|
|
Maiden Holdings,
Ltd. |
Supplemental Financial
Data - Segment Information |
(in thousands
(000's)) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
2012 |
Diversified
Reinsurance |
AmTrust Quota Share
Reinsurance |
ACAC Quota
Share |
Total |
Net premiums written |
$ 288,296 |
$ 226,015 |
$ 76,522 |
$ 590,833 |
Net premiums earned |
204,463 |
167,879 |
66,154 |
438,496 |
Other insurance revenue |
4,754 |
-- |
-- |
4,754 |
Net loss and loss adjustment expenses |
(132,392) |
(112,856) |
(42,669) |
(287,917) |
Commissions and other acquisition
expenses |
(64,149) |
(47,169) |
(20,940) |
(132,258) |
General and administrative expenses |
(10,448) |
(379) |
(173) |
(11,000) |
Underwriting income |
$ 2,228 |
$ 7,475 |
$ 2,372 |
$ 12,075 |
|
|
|
|
|
Reconciliation to net income before
income taxes |
|
|
|
|
Net investment income and realized and
unrealized investment gains |
|
|
|
19,802 |
Amortization of intangible assets |
|
|
|
(1,090) |
Foreign exchange gains |
|
|
|
979 |
Interest and amortization expenses |
|
|
|
(7,678) |
Other general and administrative
expenses |
|
|
|
(2,831) |
|
|
|
|
|
Net income before income
taxes |
|
|
|
$ 21,257 |
|
|
|
|
|
Net loss and loss expense ratio (6) |
63.3% |
67.2% |
64.5% |
65.0% |
Acquisition cost ratio (7) |
30.7% |
28.1% |
31.7% |
29.8% |
General and administrative expense ratio
(8) |
4.9% |
0.2% |
0.2% |
3.1% |
Combined ratio (9) |
98.9% |
95.5% |
96.4% |
97.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
2011 |
Diversified
Reinsurance |
AmTrust Quota Share
Reinsurance |
ACAC Quota
Share |
Total |
Net premiums written |
$ 258,818 |
$ 126,714 |
$ 63,968 |
$ 449,500 |
Net premiums earned |
174,234 |
114,474 |
57,827 |
346,535 |
Other insurance revenue |
4,655 |
-- |
-- |
4,655 |
Net loss and loss adjustment expenses |
(110,345) |
(73,539) |
(37,298) |
(221,182) |
Commissions and other acquisition
expenses |
(51,420) |
(37,237) |
(18,415) |
(107,072) |
General and administrative expenses |
(8,028) |
(668) |
(543) |
(9,239) |
Underwriting income |
$ 9,096 |
$ 3,030 |
$ 1,571 |
$ 13,697 |
|
|
|
|
|
Reconciliation to net income before
income taxes |
|
|
|
|
Net investment income and realized investment
gains |
|
|
|
19,188 |
Amortization of intangible assets |
|
|
|
(1,258) |
Foreign exchange gains |
|
|
|
1,062 |
Interest and amortization expenses |
|
|
|
(9,118) |
Other general and administrative
expenses |
|
|
|
(3,054) |
|
|
|
|
|
Net income before income
taxes |
|
|
|
$ 20,517 |
|
|
|
|
|
Net loss and loss expense ratio (6) |
61.7% |
64.2% |
64.5% |
63.0% |
Acquisition cost ratio (7) |
28.7% |
32.5% |
31.8% |
30.5% |
General and administrative expense ratio
(8) |
4.5% |
0.7% |
1.0% |
3.5% |
Combined ratio (9) |
94.9% |
97.4% |
97.3% |
97.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) Calculated by dividing net
loss and loss adjustment expenses by net premiums earned and other
insurance revenue. |
|
(7) Calculated by dividing
commission and other acquisition expenses by net premiums earned
and other insurance revenue. |
(8) Calculated by dividing
general and administrative expenses by net premiums earned and
other insurance revenue. |
|
(9) Calculated by adding together
net loss and loss expense ratio, acquisition cost ratio and general
and administrative expense ratio. |
CONTACT: Noah Fields, Vice President, Investor Relations
Maiden Holdings, Ltd.
Phone: 441.298.4927
E-mail: nfields@maiden.bm
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