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
HAMILTON, Bermuda, May 8, 2013 (GLOBE NEWSWIRE) -- 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.