First Quarter 2013 Highlights
- Annualized operating return on common equity(1) of 9.8%
compared to 9.9% in the first quarter of 2012
- Net operating earnings (1) available to Maiden common
shareholders of $21.1 million, or $0.29 per
diluted common share compared with $19.4 million, or $0.27 per
diluted common share in the first quarter of 2012
- Combined ratio(10) of 97.5% compared
to 97.9% in the first quarter of 2012
- Net investment income increased 19.2% to $22.0 million
compared to the first quarter of 2012
- Net premiums written increased 16.6% to $689.1 million
versus the same period last year
- Book value per common share(4) of $12.10, up 1.2%
versus year-end 2012
Maiden Holdings, Ltd. ("Maiden") (Nasdaq:MHLD) today reported first
quarter 2013 net income available to Maiden common shareholders of
$25.0 million, or $0.34 per diluted common share compared with
$20.4 million or $0.28 per diluted common share in the first
quarter of 2012. Net operating earnings(1) available to Maiden
common shareholders for the first quarter of 2013 were $21.1
million, or $0.29 per diluted common share compared with $19.4
million, or $0.27 per diluted common share in the comparative
quarter in 2012.
Commenting on the Company's earnings, Art Raschbaum, President
and Chief Executive Officer of Maiden, said: "Strong first quarter
results reflect the favorable impact of 2012 underwriting actions,
continued strengthening of investment earnings and robust revenue
growth, from the AmTrust segment in particular, driven by the
continued improvement in the primary insurer pricing environment in
the U.S. and select global markets. We remain focused on
maintaining disciplined underwriting, reducing exposure to
volatility, and delivering significant value to our regional and
specialty insurer clients."
Results for the three months ended March 31,
2013
Net income available to Maiden common shareholders was $25.0
million, or $0.34 per diluted common share in the first quarter of
2013, compared with $20.4 million or $0.28 per diluted common share
in the first quarter of 2012. Net operating earnings(1)
available to Maiden common shareholders for the first quarter of
2013 were $21.1 million, or $0.29 per diluted common share compared
with $19.4 million, or $0.27 per diluted common share in the
comparative quarter in 2012.
Net premiums written were up 16.6%, or $98.2 million to $689.1
million in the first quarter of 2013 compared to the same quarter
in 2012. The majority of the growth was attributable to the
AmTrust Quota Share Reinsurance segment, which increased $118.8
million, or 52.6% to $344.8 million in the first quarter of
2013. The increase in the AmTrust Quota Share Reinsurance
segment resulted from the continued combination of strategic
acquisitions, organic growth and rate strengthening at AmTrust.
Net premiums written from the ACAC Quota Share in the first
quarter of 2013 were approximately the same as the same period in
2012 at $76.6 million. Maiden's Diversified Reinsurance
segment experienced a 7.2% reduction in net premiums written in the
first quarter of 2013 compared to the first quarter of
2012. The lower net premiums written in the Diversified
Reinsurance segment resulted from increased retention of business
by clients and the impact of underwriting decisions in
2012.
Net premiums earned of $488.4 million increased 11.4%, or $49.9
million compared to the first quarter of 2012, reflecting growth of
net premiums written during 2012. Comparing the first
quarter of 2013 to the same quarter in 2012, earned premiums
increased 31.2% for the AmTrust Quota Share Reinsurance segment and
were up 8.7% in the ACAC Quota Share segment. The Diversified
Reinsurance segment had net premiums earned of $196.2 million in
the first quarter of 2013, a decrease of 4.0% compared to the same
quarter in 2012.
Net investment income of $22.0 million in the first quarter of
2013 increased 19.2% compared to the first quarter of
2012. Total investments increased 19.6% to $2.6 billion
versus March 31, 2012. The average yield on the
fixed income portfolio (excluding cash) is 3.32% with an average
duration of 3.57 years.
Net loss and loss adjustment expenses of $334.9 million were up
$47.0 million compared to the first quarter of 2012. The net
loss and loss adjustment expense ratio(6) increased 2.8 percentage
points to 67.8% versus the first quarter of 2012.
Commission and other acquisition expenses together with general
and administrative expenses of $146.4 million was nearly the same
as the year ago quarter, while the total expense ratio(9) improved
to 29.7% in the first quarter of 2013 compared with 32.9% in the
same quarter last year. General and administrative expenses for the
first quarter of 2013 totaled $14.1 million compared with $13.8
million in the first quarter of 2012. The general and
administrative expense ratio(8) improved to 2.9% compared to 3.1%
in the first quarter of 2012.
The combined ratio(10) for the first quarter of 2013 totaled
97.5% compared with 97.9% in the first quarter of 2012.
Total assets increased 6.7% to $4.4 billion at March 31, 2013
compared to $4.1 billion at year-end 2012.
Shareholders' equity was $1.03 billion, an increase of 1.1%
compared to December 31, 2012. Book value per common
share was $12.10 at the end of the first quarter of 2013 or 1.2%
higher than at December 31, 2012.
During the first quarter of 2013, the Board of Directors
declared a dividend of $0.09 per share.
(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)(10) Net loss and loss adjustment expense 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 Call
Maiden's CEO Art Raschbaum and CFO John Marshaleck will review
the first quarter 2013 results tomorrow morning 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: 48256308 |
Webcast:
http://www.maiden.bm/presentations_conferences |
A replay of the conference call will be available beginning at
11:00 a.m. ET on May 9, 2013 through midnight on May 16, 2013. 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: 48256308; 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, 2013, Maiden had $4.4 billion in assets and
shareholders' equity of $1.0 billion.
The Maiden Holdings, Ltd. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5006
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, 2012 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, 2013 |
December 31, 2012 |
|
(Unaudited) |
(Audited) |
Assets |
|
|
Fixed maturities, available-for-sale, at fair
value (Amortized cost 2013: $2,497,242; 2012: $2,475,202) |
$ 2,629,873 |
$ 2,618,697 |
Other investments, at fair value (Cost 2013:
$2,987; 2012: $2,599) |
3,220 |
2,901 |
Total investments |
2,633,093 |
2,621,598 |
Cash and cash equivalents |
103,789 |
81,543 |
Restricted cash and cash equivalents |
127,316 |
132,327 |
Accrued investment income |
21,180 |
21,007 |
Reinsurance balances receivable,
net |
726,392 |
522,614 |
Funds withheld |
44,281 |
42,712 |
Prepaid reinsurance premiums |
38,786 |
38,725 |
Reinsurance recoverable on unpaid losses |
118,091 |
110,858 |
Loan to related party |
167,975 |
167,975 |
Deferred commission and other acquisition
expenses |
312,254 |
270,669 |
Goodwill and intangible assets, net |
93,448 |
94,393 |
Other assets |
30,646 |
33,742 |
Total
Assets |
$ 4,417,251 |
$ 4,138,163 |
Liabilities
and Equity |
|
|
Liabilities |
|
|
Reserve for loss and loss adjustment
expenses |
$ 1,779,050 |
$ 1,740,281 |
Unearned premiums |
1,134,697 |
936,497 |
Accrued expenses and other liabilities |
142,977 |
111,957 |
Senior notes |
207,500 |
207,500 |
Junior subordinated debt |
126,332 |
126,317 |
Total
Liabilities |
3,390,556 |
3,122,552 |
|
|
|
Equity |
|
|
Preference Shares - Series A |
150,000 |
150,000 |
Common shares |
734 |
733 |
Additional paid-in capital |
576,517 |
575,869 |
Accumulated other comprehensive
income |
133,098 |
141,130 |
Retained earnings |
169,774 |
151,308 |
Treasury stock, at cost |
(3,801) |
(3,801) |
Total Maiden Shareholders'
Equity |
1,026,322 |
1,015,239 |
Noncontrolling interest in
subsidiaries |
373 |
372 |
Total
Equity |
1,026,695 |
1,015,611 |
Total Liabilities and
Equity |
$ 4,417,251 |
$ 4,138,163 |
|
|
|
|
|
|
Book value per common share
(4) |
$ 12.10 |
$ 11.96 |
|
|
|
Common shares
outstanding |
72,440,857 |
72,343,947 |
|
Maiden Holdings,
Ltd. |
Income
Statement |
(in thousands (000's),
except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
For the Three Months Ended March
31, 2013 |
For the Three Months Ended March
31, 2012 |
Revenues: |
|
|
Gross premiums written |
$ 714,720 |
$ 613,212 |
|
|
|
Net premiums written |
$ 689,059 |
$ 590,833 |
Change in unearned premiums |
(200,617) |
(152,337) |
Net premiums
earned |
488,442 |
438,496 |
Other insurance revenue |
5,215 |
4,754 |
Net investment income |
21,979 |
18,437 |
Net realized and unrealized gains on
investment |
3,283 |
1,365 |
Total
revenues |
518,919 |
463,052 |
Expenses: |
|
|
Net loss and loss adjustment
expenses |
334,895 |
287,917 |
Commission and other acquisition
expenses |
132,330 |
132,258 |
General and administrative expenses |
14,095 |
13,831 |
Total
expenses |
481,320 |
434,006 |
|
|
|
Income from operations
(2) |
37,599 |
29,046 |
|
|
|
Other expenses |
|
|
Amortization of intangible assets |
(945) |
(1,090) |
Foreign exchange gains |
1,547 |
979 |
Interest and amortization expenses |
(9,570) |
(7,678) |
Total other
expenses |
(8,968) |
(7,789) |
|
|
|
Income before income
taxes |
28,631 |
21,257 |
Income taxes: |
|
|
Current tax expense |
573 |
638 |
Deferred tax (benefit) expense |
(49) |
241 |
Income tax expense |
524 |
879 |
|
|
|
Net income |
28,107 |
20,378 |
Less: income attributable to noncontrolling
interest |
(27) |
(1) |
Net income attributable to
Maiden |
28,080 |
20,377 |
Dividends on preference shares |
(3,094) |
-- |
Net income attributable to Maiden
common shareholders |
$ 24,986 |
$ 20,377 |
Net operating earnings attributable
to Maiden common shareholders (1) |
$ 21,052 |
$ 19,364 |
|
|
|
Basic earnings per common share
attributable to Maiden shareholders |
$ 0.35 |
$ 0.28 |
Diluted earnings per common share
attributable to Maiden shareholders |
$ 0.34 |
$ 0.28 |
Basic operating earnings per common
share attributable to Maiden shareholders |
$ 0.29 |
$ 0.27 |
Diluted operating earnings per common
share attributable to Maiden shareholders |
$ 0.29 |
$ 0.27 |
|
|
|
Dividends declared per common
share |
$ 0.09 |
$ 0.08 |
|
|
|
Weighted average number of basic
shares outstanding |
72,417,358 |
72,226,329 |
Weighted average number of diluted
shares outstanding |
73,440,372 |
73,056,423 |
|
|
|
Net loss and loss adjustment expense
ratio (6) |
67.8% |
65.0% |
Commission and other acquisition
expense ratio (7) |
26.8% |
29.8% |
General and administrative
expense ratio (8) |
2.9% |
3.1% |
Expense ratio (9) |
29.7% |
32.9% |
Combined ratio (10) |
97.5% |
97.9% |
Annualized return on common
equity |
11.6% |
10.4% |
Annualized operating return on common
equity |
9.8% |
9.9% |
|
Maiden Holdings,
Ltd. |
Non - GAAP Financial
Measure |
(in thousands (000's),
except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
For the Three Months Ended March
31, 2013 |
For the Three Months Ended March
31, 2012 |
Reconciliation of net income
attributable to Maiden common shareholders to net operating
earnings: |
|
|
Net income attributable to Maiden common
shareholders |
$ 24,986 |
$ 20,377 |
Add (subtract) |
|
|
Net realized and unrealized
gains on investment |
(3,283) |
(1,365) |
Foreign exchange gains |
(1,547) |
(979) |
Amortization of intangible
assets |
945 |
1,090 |
Non-cash deferred tax (benefit)
expense |
(49) |
241 |
Net operating earnings attributable to Maiden
common shareholders (1) |
$ 21,052 |
$ 19,364 |
|
|
|
Operating earnings per common share
attributable to Maiden shareholders: |
|
|
|
|
|
Basic earnings per common share attributable
to Maiden shareholders |
$ 0.29 |
$ 0.27 |
Diluted earnings per common share
attributable to Maiden shareholders |
$ 0.29 |
$ 0.27 |
|
|
|
Reconciliation of net income
attributable to Maiden to income from operations: |
|
|
Net income attributable to Maiden |
$ 28,080 |
$ 20,377 |
Add (subtract) |
|
|
Foreign exchange gains |
(1,547) |
(979) |
Amortization of intangible
assets |
945 |
1,090 |
Interest and amortization
expenses |
9,570 |
7,678 |
Income tax expense |
524 |
879 |
Income attributable to
noncontrolling interest |
27 |
1 |
Income from operations (2) |
$ 37,599 |
$ 29,046 |
|
|
|
|
March 31, 2013 |
December 31, 2012 |
Investable assets: |
|
|
Total investments |
$ 2,633,093 |
$ 2,621,598 |
Cash and cash equivalents |
103,789 |
81,543 |
Restricted cash and cash equivalents |
127,316 |
132,327 |
Funds withheld (3) |
25,108 |
26,494 |
Loan to related party |
167,975 |
167,975 |
Total investable assets (3) |
$ 3,057,281 |
$ 3,029,937 |
|
|
|
|
March 31, 2013 |
December 31, 2012 |
Capital: |
|
|
Senior notes |
$ 207,500 |
$ 207,500 |
Junior subordinated debt |
126,332 |
126,317 |
Total Maiden shareholders' equity |
1,026,322 |
1,015,239 |
Total capital (5) |
$ 1,360,154 |
$ 1,349,056 |
(1) Net operating earnings is a non-GAAP financial measure
defined by the Company as net income attributable to Maiden common
shareholders excluding realized and unrealized 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
excluding foreign exchange gains and losses, amortization of
intangible assets, interest and amortization expenses, 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 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
less the preference shares - series A by total common shares
outstanding.
(5) Capital is the total of the Company's senior notes, junior
subordinated debt and Maiden shareholders' equity.
Maiden Holdings,
Ltd. |
Supplemental Financial
Data - Segment Information |
(in thousands
(000's)) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
2013 |
Diversified
Reinsurance |
AmTrust Quota Share
Reinsurance |
ACAC Quota
Share |
Total |
Net premiums written |
$ 267,610 |
$ 344,818 |
$ 76,631 |
$ 689,059 |
Net premiums earned |
$ 196,249 |
$ 220,288 |
$ 71,905 |
$ 488,442 |
Other insurance revenue |
5,215 |
-- |
-- |
5,215 |
Net loss and loss adjustment expenses |
(140,763) |
(145,645) |
(48,487) |
(334,895) |
Commissions and other acquisition
expenses |
(44,782) |
(65,132) |
(22,416) |
(132,330) |
General and administrative expenses |
(10,798) |
(489) |
(174) |
(11,461) |
Underwriting income |
$ 5,121 |
$ 9,022 |
$ 828 |
$ 14,971 |
|
|
|
|
|
Reconciliation to net income
attributable to Maiden common shareholders |
|
|
|
|
Net investment income and realized gains on
investment |
|
|
|
25,262 |
Amortization of intangible assets |
|
|
|
(945) |
Foreign exchange gains |
|
|
|
1,547 |
Interest and amortization expenses |
|
|
|
(9,570) |
Other general and administrative
expenses |
|
|
|
(2,634) |
Income tax expense |
|
|
|
(524) |
Income attributable to noncontrolling
interest |
|
|
|
(27) |
Dividends on preference shares |
|
|
|
(3,094) |
Net income attributable to Maiden
common shareholders |
|
|
|
$ 24,986 |
|
|
|
|
|
Net loss and loss adjustment expense ratio
(6) |
69.9% |
66.1% |
67.4% |
67.8% |
Commission and other acquisition expense
ratio (7) |
22.2% |
29.6% |
31.2% |
26.8% |
General and administrative expense ratio
(8) |
5.4% |
0.2% |
0.2% |
2.9% |
Combined ratio (10) |
97.5% |
95.9% |
98.8% |
97.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
attributable to Maiden common shareholders |
|
|
|
|
Net investment income and realized and
unrealized gains on investment |
|
|
|
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) |
Income tax expense |
|
|
|
(879) |
Income attributable to noncontrolling
interest |
|
|
|
(1) |
Net income attributable to Maiden
common shareholders |
|
|
|
$ 20,377 |
|
|
|
|
|
Net loss and loss adjustment expense ratio
(6) |
63.3% |
67.2% |
64.5% |
65.0% |
Commission and other acquisition expense
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 (10) |
98.9% |
95.5% |
96.4% |
97.9% |
(6) Calculated by dividing net loss and loss adjustment expenses
by the sum of net premiums earned and other insurance revenue.
(7) Calculated by dividing commission and other acquisition
expenses by the sum of net premiums earned and other insurance
revenue.
(8) Calculated by dividing general and administrative expenses
by the sum of net premiums earned and other insurance revenue.
(9) Calculated by adding together the commission and other
acquisition expense ratio and general and administrative expense
ratio.
(10) Calculated by adding together the net loss and loss
adjustment expense ratio and 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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