Bermuda (State or other jurisdiction of incorporation) | 001-34042 (Commission File Number) | 98-0570192 (IRS Employer Identification No.) |
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | Trading symbol(s) | Name of Each Exchange on Which Registered | ||
Common Shares, par value $0.01 per share | MHLD | NASDAQ Global Select Market | ||
Series A Preference Shares, par value $0.01 per share | MH.PA | New York Stock Exchange, Inc. | ||
Series C Preference Shares, par value $0.01 per share | MH.PC | New York Stock Exchange, Inc. | ||
Series D Preference Shares, par value $0.01 per share | MH.PD | New York Stock Exchange, Inc. |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit | ||
No. | Description | |
99.1 | ||
Date: | May 10, 2019 | MAIDEN HOLDINGS, LTD. | |
By: | /s/ Denis M. Butkovic | ||
Denis M. Butkovic | |||
Senior Vice President, General Counsel and Secretary |
Exhibit | ||
No. | Description | |
99.1 |
March 31, 2019 | December 31, 2018 | |||||||
ASSETS | (Unaudited) | (Audited) | ||||||
Investments: | ||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost 2019 - $3,130,981; 2018 - $3,109,980) | $ | 3,131,934 | $ | 3,051,568 | ||||
Fixed maturities, held-to-maturity, at amortized cost (fair value 2018 - $998,012) | — | 1,015,681 | ||||||
Other investments, at fair value | 24,693 | 23,716 | ||||||
Total investments | 3,156,627 | 4,090,965 | ||||||
Cash and cash equivalents | 89,521 | 200,841 | ||||||
Restricted cash and cash equivalents | 42,334 | 130,148 | ||||||
Accrued investment income | 27,788 | 27,824 | ||||||
Reinsurance balances receivable, net | 72,867 | 67,308 | ||||||
Loan to related party | 167,975 | 167,975 | ||||||
Deferred commission and other acquisition expenses, net | 161,976 | 388,442 | ||||||
Funds withheld receivable | 652,087 | 27,039 | ||||||
Other assets | 14,729 | 12,443 | ||||||
Assets held for sale | 177,452 | 174,475 | ||||||
Total assets | $ | 4,563,356 | $ | 5,287,460 | ||||
LIABILITIES | ||||||||
Reserve for loss and loss adjustment expenses | $ | 2,980,113 | $ | 3,055,976 | ||||
Unearned premiums | 455,175 | 1,200,419 | ||||||
Reinsurance balances payable, net | 117,943 | 52,594 | ||||||
Accrued expenses and other liabilities | 12,087 | 12,900 | ||||||
Senior notes - principal amount | 262,500 | 262,500 | ||||||
Less: unamortized debt issuance costs | 7,753 | 7,806 | ||||||
Senior notes, net | 254,747 | 254,694 | ||||||
Liabilities held for sale | 159,002 | 155,961 | ||||||
Total liabilities | 3,979,067 | 4,732,544 | ||||||
Commitments and Contingencies | ||||||||
EQUITY | ||||||||
Preference shares | 465,000 | 465,000 | ||||||
Common shares | 881 | 879 | ||||||
Additional paid-in capital | 750,670 | 749,418 | ||||||
Accumulated other comprehensive loss | (220 | ) | (65,616 | ) | ||||
Accumulated deficit | (600,527 | ) | (563,891 | ) | ||||
Treasury shares, at cost | (31,515 | ) | (31,515 | ) | ||||
Total Maiden Shareholders’ Equity | 584,289 | 554,275 | ||||||
Noncontrolling interest in subsidiaries | — | 641 | ||||||
Total Equity | 584,289 | 554,916 | ||||||
Total Liabilities and Equity | $ | 4,563,356 | $ | 5,287,460 | ||||
Book value per common share(1) | $ | 1.44 | $ | 1.08 | ||||
Common shares outstanding | 83,064,173 | 82,948,577 |
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Revenues: | ||||||||
Gross premiums written | $ | (561,139 | ) | $ | 623,328 | |||
Net premiums written | $ | (561,530 | ) | $ | 622,651 | |||
Change in unearned premiums | 744,632 | (105,838 | ) | |||||
Net premiums earned | 183,102 | 516,813 | ||||||
Other insurance revenue | 750 | 3,726 | ||||||
Net investment income | 32,022 | 32,869 | ||||||
Net realized (losses) gains on investment | (11,101 | ) | 357 | |||||
Total revenues | 204,773 | 553,765 | ||||||
Expenses: | ||||||||
Net loss and loss adjustment expenses | 152,689 | 353,206 | ||||||
Commission and other acquisition expenses | 69,617 | 166,628 | ||||||
General and administrative expenses | 15,939 | 15,671 | ||||||
Total expenses | 238,245 | 535,505 | ||||||
Non-GAAP (loss) income from operations(2) | (33,472 | ) | 18,260 | |||||
Other expenses | ||||||||
Interest and amortization expenses | (4,829 | ) | (4,829 | ) | ||||
Foreign exchange and other gains (losses) | 4,979 | (2,407 | ) | |||||
Total other expenses | 150 | (7,236 | ) | |||||
(Loss) income before income taxes | (33,322 | ) | 11,024 | |||||
Less: income tax benefit | (38 | ) | (1,324 | ) | ||||
Net (loss) income from continuing operations | (33,284 | ) | 12,348 | |||||
(Loss) income from discontinued operations, net of income tax | (3,352 | ) | 9,995 | |||||
Net (loss) income | (36,636 | ) | 22,343 | |||||
Net income attributable to noncontrolling interest | — | (71 | ) | |||||
Net (loss) income attributable to Maiden | (36,636 | ) | 22,272 | |||||
Dividends on preference shares(3) | — | (8,545 | ) | |||||
Net (loss) income attributable to Maiden common shareholders | $ | (36,636 | ) | $ | 13,727 | |||
Basic (loss) earnings from continuing operations per common share attributable to Maiden shareholders | $ | (0.40 | ) | $ | 0.05 | |||
Basic (loss) earnings from discontinued operations per common share attributable to Maiden shareholders | (0.04 | ) | 0.12 | |||||
Basic (loss) earnings per common share attributable to Maiden shareholders | $ | (0.44 | ) | $ | 0.17 | |||
Diluted (loss) earnings from continuing operations per common share attributable to Maiden shareholders(15) | $ | (0.40 | ) | $ | 0.04 | |||
Diluted (loss) earnings from discontinued operations per common share attributable to Maiden shareholders(15) | $ | (0.04 | ) | $ | 0.12 | |||
Diluted (loss) earnings per common share attributable to Maiden shareholders(15) | $ | (0.44 | ) | $ | 0.16 | |||
Dividends declared per common share | $ | — | $ | 0.15 | ||||
Annualized return on average common equity | (142.5 | )% | 7.6 | % | ||||
Weighted average number of common shares - basic | 82,965,156 | 83,040,413 | ||||||
Adjusted weighted average number of common shares and assumed conversions - diluted(15) | 82,965,156 | 83,318,542 |
For the Three Months Ended March 31, 2019 | Diversified Reinsurance | AmTrust Reinsurance | Other | Total | ||||||||||||
Gross premiums written | $ | 15,338 | $ | (576,477 | ) | $ | — | $ | (561,139 | ) | ||||||
Net premiums written | $ | 14,947 | $ | (576,477 | ) | $ | — | $ | (561,530 | ) | ||||||
Net premiums earned | $ | 25,292 | $ | 157,810 | $ | — | $ | 183,102 | ||||||||
Other insurance revenue | 750 | — | — | 750 | ||||||||||||
Net loss and loss adjustment expenses ("loss and LAE") | (14,391 | ) | (138,070 | ) | (228 | ) | (152,689 | ) | ||||||||
Commission and other acquisition expenses | (9,261 | ) | (60,356 | ) | — | (69,617 | ) | |||||||||
General and administrative expenses(4) | (3,031 | ) | (1,266 | ) | — | (4,297 | ) | |||||||||
Underwriting loss(5) | $ | (641 | ) | $ | (41,882 | ) | $ | (228 | ) | (42,751 | ) | |||||
Reconciliation to net loss from continuing operations | ||||||||||||||||
Net investment income and realized losses on investment | 20,921 | |||||||||||||||
Interest and amortization expenses | (4,829 | ) | ||||||||||||||
Foreign exchange and other gains | 4,979 | |||||||||||||||
Other general and administrative expenses(4) | (11,642 | ) | ||||||||||||||
Income tax benefit | 38 | |||||||||||||||
Net loss from continuing operations | $ | (33,284 | ) | |||||||||||||
Net loss and LAE ratio(6) | 55.3 | % | 87.5 | % | 83.0 | % | ||||||||||
Commission and other acquisition expense ratio(7) | 35.6 | % | 38.2 | % | 37.9 | % | ||||||||||
General and administrative expense ratio(8) | 11.6 | % | 0.8 | % | 8.7 | % | ||||||||||
Expense Ratio(9) | 47.2 | % | 39.0 | % | 46.6 | % | ||||||||||
Combined ratio(10) | 102.5 | % | 126.5 | % | 129.6 | % |
For the Three Months Ended March 31, 2018 | Diversified Reinsurance | AmTrust Reinsurance | Other | Total | ||||||||||||
Gross premiums written | $ | 49,400 | $ | 573,928 | $ | — | $ | 623,328 | ||||||||
Net premiums written | $ | 48,271 | $ | 574,380 | $ | — | $ | 622,651 | ||||||||
Net premiums earned | $ | 25,515 | $ | 491,298 | $ | — | $ | 516,813 | ||||||||
Other insurance revenue | 3,726 | — | — | 3,726 | ||||||||||||
Net loss and LAE | (15,899 | ) | (337,307 | ) | — | (353,206 | ) | |||||||||
Commission and other acquisition expenses | (9,312 | ) | (157,316 | ) | — | (166,628 | ) | |||||||||
General and administrative expenses(4) | (4,481 | ) | (920 | ) | — | (5,401 | ) | |||||||||
Underwriting loss(5) | $ | (451 | ) | $ | (4,245 | ) | $ | — | (4,696 | ) | ||||||
Reconciliation to net income from continuing operations | ||||||||||||||||
Net investment income and realized gains on investment | 33,226 | |||||||||||||||
Interest and amortization expenses | (4,829 | ) | ||||||||||||||
Foreign exchange losses | (2,407 | ) | ||||||||||||||
Other general and administrative expenses(4) | (10,270 | ) | ||||||||||||||
Income tax benefit | 1,324 | |||||||||||||||
Net income from continuing operations | $ | 12,348 | ||||||||||||||
Net loss and LAE ratio(6) | 54.4 | % | 68.7 | % | 67.9 | % | ||||||||||
Commission and other acquisition expense ratio(7) | 31.8 | % | 32.0 | % | 32.0 | % | ||||||||||
General and administrative expense ratio(8) | 15.3 | % | 0.2 | % | 3.0 | % | ||||||||||
Expense Ratio(9) | 47.1 | % | 32.2 | % | 35.0 | % | ||||||||||
Combined ratio(10) | 101.5 | % | 100.9 | % | 102.9 | % |
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Non-GAAP operating (loss) income attributable to Maiden common shareholders(11) | $ | (26,934 | ) | $ | 5,782 | |||
Non-GAAP basic and diluted operating (loss) earnings per common share attributable to Maiden shareholders(15) | $ | (0.32 | ) | $ | 0.07 | |||
Annualized non-GAAP operating return on average common equity(12) | (104.7 | )% | 3.2 | % | ||||
Reconciliation of Net (loss) income attributable to Maiden common shareholders to Non-GAAP operating (loss) income attributable to Maiden common shareholders | ||||||||
Net (loss) income attributable to Maiden common shareholders | $ | (36,636 | ) | $ | 13,727 | |||
Add (subtract): | ||||||||
Net realized losses (gains) on investment | 11,101 | (357 | ) | |||||
Foreign exchange and other (gains) losses | (4,979 | ) | 2,407 | |||||
Loss (income) from discontinued operations, net of income tax | 3,352 | (9,995 | ) | |||||
Divested NGHC Quota Share run-off | 228 | — | ||||||
Non-GAAP operating (loss) income attributable to Maiden common shareholders(11) | $ | (26,934 | ) | $ | 5,782 | |||
Weighted average number of common shares - basic | 82,965,156 | 83,040,413 | ||||||
Adjusted weighted average number of common shares and assumed conversions - diluted(15) | 82,965,156 | 83,318,542 | ||||||
Reconciliation of Diluted (loss) earnings per common share attributable to Maiden shareholders to Non-GAAP diluted operating (loss) earnings per common share attributable to Maiden shareholders: | ||||||||
Diluted (loss) earnings per common share attributable to Maiden shareholders | $ | (0.44 | ) | $ | 0.16 | |||
Add (subtract): | ||||||||
Net realized losses (gains) on investment | 0.13 | — | ||||||
Foreign exchange and other (gains) losses | (0.06 | ) | 0.03 | |||||
Loss (income) from discontinued operations, net of income tax | 0.04 | (0.12 | ) | |||||
Divested NGHC Quota Share run-off | 0.01 | — | ||||||
Non-GAAP diluted operating (loss) earnings per common share attributable to Maiden shareholders | $ | (0.32 | ) | $ | 0.07 | |||
Reconciliation of net (loss) income attributable to Maiden to non-GAAP (loss) income from operations: | ||||||||
Net (loss) income attributable to Maiden | $ | (36,636 | ) | $ | 22,272 | |||
Add (subtract): | ||||||||
Foreign exchange and other (gains) losses | (4,979 | ) | 2,407 | |||||
Interest and amortization expenses | 4,829 | 4,829 | ||||||
Income tax benefit | (38 | ) | (1,324 | ) | ||||
Loss (income) from discontinued operations, net of income tax | 3,352 | (9,995 | ) | |||||
Net income attributable to noncontrolling interest | — | 71 | ||||||
Non-GAAP (loss) income from operations(2) | $ | (33,472 | ) | $ | 18,260 |
March 31, 2019 | December 31, 2018 | ||||||
Investable assets: | |||||||
Total investments | $ | 3,156,627 | $ | 4,090,965 | |||
Cash and cash equivalents | 89,521 | 200,841 | |||||
Restricted cash and cash equivalents | 42,334 | 130,148 | |||||
Loan to related party | 167,975 | 167,975 | |||||
Funds withheld receivable | 652,087 | 27,039 | |||||
Total investable assets(13) | $ | 4,108,544 | $ | 4,616,968 | |||
March 31, 2019 | December 31, 2018 | ||||||
Capital: | |||||||
Preference shares | $ | 465,000 | $ | 465,000 | |||
Common shareholders' equity | 119,289 | 89,275 | |||||
Total Maiden shareholders' equity | 584,289 | 554,275 | |||||
2016 Senior Notes | 110,000 | 110,000 | |||||
2013 Senior Notes | 152,500 | 152,500 | |||||
Total capital resources(14) | $ | 846,789 | $ | 816,775 |
(1) | 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. |
(2) | Non-GAAP 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, interest and amortization expenses, income tax (benefit) expense, loss (income) from discontinued operations, net of income tax and net income attributable to noncontrolling interest and should not be considered as an alternative to net loss (income). The Company’s management believes that non-GAAP 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 non-GAAP loss (income) from operations may not be comparable to similarly titled measures used by other companies. |
(3) | Dividends on preference shares consist of $0 and $3,094 paid to Preference Shares - Series A for the three months ended March 31, 2019 and 2018, respectively, $0 and $2,939 paid to Preference Shares - Series C for the three months ended March 31, 2019 and 2018, respectively, and $0 and $2,512 paid to Preference Shares - Series D for the three months ended March 31, 2019 and 2018, respectively. |
(4) | Underwriting related general and administrative expenses is a non-GAAP measure and includes expenses which are segregated for analytical purposes as a component of underwriting loss. |
(5) | Underwriting loss is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. Management believes that this measure is important in evaluating the underwriting performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is also a widely used performance indicator in the insurance industry. |