Q2 2013 8K Press Release



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):
August 7, 2013 (August 1, 2013)
 
MAIDEN HOLDINGS, LTD.
 (Exact name of registrant as specified in its charter)
 
Bermuda
(State or other jurisdiction
of incorporation)
 
001-34042
(Commission File
Number)
 
98-0570192
(IRS Employer
Identification No.)
 
131 Front Street, Hamilton HM12, Bermuda
 
(Address of principal executive offices and zip code)
 
(441) 298-4900
(Registrant's telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
 
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))
 
 







Item 1.02
Termination of a Material Definitive Agreement.

On August 1, 2013, Maiden Holdings, Ltd. (the “Company”) and its wholly owned subsidiary, Maiden Insurance Company Ltd. (“Maiden Bermuda”), received notice from Integon National Insurance Company (“Integon”), a wholly owned subsidiary of National General Holdings Corp. (“NGHC”), that Integon was terminating, effective August 1, 2013, Maiden Bermuda's participation in the Personal and Commercial Automobile Quota Share Reinsurance Agreement between Maiden Bermuda, Integon, Technology Insurance Company, Inc., and ACP Re, Ltd. (the “Quota Share”). Maiden Bermuda has a 50% participation in the Quota Share, by which Maiden Bermuda receives 25% of the net premiums of NGHC's personal lines business. The Quota Share provides that the reinsurers, severally, in accordance with their participation percentages, receive 50% of the net premium of the personal lines business and assume 50% of the related net losses. As a result of this agreement, Maiden Bermuda assumed $295.6 million of business during the year ended December 31, 2012, resulting in $7.9 million of underwriting income for that period. The Company and NGHC agreed that the termination is on a run-off basis, meaning Maiden Bermuda will receive 25% of the net premiums and assume 25% of the related net losses with respect to the policies in force as of August 1, 2013 through the expiration of the policies.

Item 2.02
Results of Operations and Financial Condition.


On August 7, 2013, Maiden Holdings, Ltd. (the “Company”) issued a press release announcing its results of operations for the fiscal quarter ended June 30, 2013. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
 
The information contained in this Item 2.02 and in the accompanying exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 8.01
Other Events.
 
On August 7, 2013, the Company also issued a press release announcing the following quarterly dividends:

 
 
Dividend per Share
 
Payable on:
 
Record date:
Common shares
 
$
0.09

 
October 15, 2013
 
October 1, 2013
Preference shares - Series A
 
$
0.515625

 
September 16, 2013
 
September 1, 2013

 A copy of the press release is hereby filed with the Commission and incorporated by reference herein as Exhibit 99.2.

Item 9.01
Financial Statements and Exhibits.
 
(d)           Exhibits
 
Exhibit
 
 
No.
 
Description
 
 
 
99.1
 
Press Release of Maiden Holdings, Ltd., dated August 7, 2013
 
 
 
99.2
 
Press Release of Maiden Holdings, Ltd., dated August 7, 2013.













SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: August 7, 2013
MAIDEN HOLDINGS, LTD.
 
 
    
 
 
 
  By:
/s/ Lawrence F. Metz
 
 
Lawrence F. Metz
 
 
Senior Vice President, General Counsel and
Secretary



EXHIBIT INDEX
 
Exhibit
 
 
No.
 
Description
 
 
 
99.1
 
Press Release of Maiden Holdings, Ltd., dated August 7, 2013.
 
 
 
99.2
 
Press Release of Maiden Holdings, Ltd., dated August 7, 2013.






Exhibit 99.1



Maiden Holdings, Ltd. Reports Second Quarter 2013 Operating Earnings(1) of $20.4 million or $0.28 per Diluted Common Share and Net Income of $20.2 million or $0.27 per Diluted Common Share
 
Highlights for the three months ended June 30, 2013
Annualized operating return on common equity(1) of 9.7%, the same as the second quarter of 2012;
Net operating earnings (1) of $20.4 million, or $0.28 per diluted common share compared with $19.7 million, or $0.27 per diluted common share in the second quarter of 2012;
Net investment income rose to $20.7 million or an increase of 3.3% compared to the second quarter of 2012;
Total investments increased 3.3% in the second quarter of 2013 to $2.7 billion;
Net premiums written increased 20.9% to $497.9 million versus the same period last year;
Combined ratio(6) of 97.6% compared to 97.9% in the second quarter of 2012; and
Book value per common share(4) of $11.12, down 7.0% versus year-end 2012, reflecting the impact of rising interest rates.

Highlights for the six months ended June 30, 2013
Annualized operating return on common equity(1) of 10.0% compared to 9.9% in the first six months of last year;
Net operating earnings (1) of $41.5 million, or $0.56 per diluted common share compared with $39.1 million, or $0.53 per diluted common share in the first six months of 2012;
Combined ratio(6) of 97.6% compared to 97.9% in the first six months of 2012;
Net investment income was $42.7 million, an increase of 10.9% compared to the first six months of 2012;
Total investments increased 3.7% in the first six months of 2013 to $2.7 billion; and
Net premiums written increased 18.4% to $1.2 billion versus the same period last year.

HAMILTON, Bermuda - Maiden Holdings, Ltd. (NASDAQ:  MHLD) (“Maiden”) today reported second quarter 2013 net operating earnings(1) of $20.4 million, or $0.28 per diluted common share compared with $19.7 million, or $0.27 per diluted common share in the comparative quarter in 2012. Net income totaled $20.2 million, or $0.27 per diluted common share in the second quarter of 2013, compared with net income of $14.5 million, or $0.20 per diluted common share in the second quarter of 2012. 
 
Commenting on the Company's earnings, Art Raschbaum, Chief Executive Officer of Maiden, said: “Maiden's results for the second quarter and the first six months of 2013 reflect improved underwriting performance, no adverse impact from the catastrophe events of the second quarter, strong growth from the AmTrust segment reflecting a favorable North American pricing environment, and an annualized return on common shareholders' equity of 10% for the first half of the year. Over time, we expect rising interest rates to benefit the Company's long-term earnings run rate as we deploy cash and reinvest assets at higher yields. Along with a favorable insurance pricing environment in North America and rising interest rates, we expect that Maiden's profitability will further benefit from expected repayment of the 14% TRUPS in January 2014.”

Results for the three months ended June 30, 2013
 
Net operating earnings(1) for the second quarter of 2013 were $20.4 million, or $0.28 per diluted common share compared with $19.7 million, or $0.27 per diluted common share in the comparative quarter in 2012. Net income was $20.2 million, or $0.27 per diluted common share in the second quarter of 2013, compared with net income of $14.5 million, or $0.20 per diluted common share in the second quarter of 2012.

In the second quarter of 2013, net premiums written totaled $497.9 million, an increase of 20.9% compared to the second quarter of 2012.  The Diversified Reinsurance segment net premiums written were down 6.3% to $134.9 million versus the second quarter of 2012, primarily due to underwriting actions undertaken in 2012 to strengthen profitability. In the AmTrust Quota Share Reinsurance segment, net premiums written increased by 48.5% to $290.6 million compared to the second quarter of 2012. The growth of the AmTrust Quota Share Reinsurance segment was driven by both organic premium increases, in particular in the workers' compensation line, and, to a lesser extent, acquisition activity. Net premiums written from the National General Holdings Corporation Quota Share (“NGHC Quota Share”, formerly known as the “ACAC Quota Share”) were unchanged at $72.4 million compared to the same period in 2012.
 





Net premiums earned of $513.3 million increased 17.4%, or $76.2 million compared to the second quarter of 2012.  Earned premiums decreased 10.4% in the Diversified Reinsurance segment to $178.3 million compared to the second quarter to 2012. In the same comparative periods, the AmTrust Quota Share Reinsurance segment was up 55.8% and the NGHC Quota Share segment was up 4.8%.
 
Net investment income of $20.7 million in the second quarter of 2013 increased 3.3% compared to the second quarter of 2012. Total investments increased $97.7 million or 3.7% to $2.7 billion versus December 31, 2012.  The average yield on the fixed income portfolio (excluding cash) is 3.54% with an average duration of 4.37 years.
 
Net loss and loss adjustment expenses of $343.3 million were up $42.9 million compared to the second quarter of 2012.  The loss ratio(6) decreased by 1.9 percentage points to 66.5% versus the second quarter of 2012.
 
Commission and other acquisition expenses together with general and administrative expenses of $160.4 million increased $30.5 million in the second quarter of 2013, compared to the year ago quarter, while the total expense ratio(9) rose to 31.1% in the second quarter of 2013 compared with 29.5% in the same quarter last year. General and administrative expenses for the second quarter of 2013 totaled $16.8 million compared with $15.2 million in the second quarter of 2012. The general and administrative expense ratio(8) decreased to 3.3% in the second quarter of 2013 versus 3.4% in the second quarter of 2012.
 
The combined ratio(10) for the second quarter of 2013 totaled 97.6% compared with 97.9% in the second quarter of 2012.
  
Total assets increased 6.5% to $4.4 billion at June 30, 2013 compared to $4.1 billion at year-end 2012.  Total cash on hand at June 30, 2013 was down 13.2% to $185.6 million compared to year-end 2012, and consisted of cash and cash equivalents of $89.4 million and restricted cash and cash equivalents of $96.2 million.  Shareholders' equity was $956.4 million, a decrease of 5.8% compared to December 31, 2012. Book value per common share was $11.12 at the end of the second quarter of 2013 or 7.0% lower than at December 31, 2012.
  
During the second quarter of 2013, the Board of Directors declared dividends of $0.09 per common share and $0.515625 per Series A preference share.

Results for the six months ended June 30, 2013
 
Net income for the six months ended June 30, 2013 was $45.2 million compared to net income of $34.9 million in the first half of 2012. Net operating earnings(1) for the first half of 2013 were $41.5 million, or $0.56 per diluted common share compared to $39.1 million or $0.53 per diluted common share in the first six months of 2012.  Annualized operating return on common equity(1) for the six months ended June 30, 2013 was 10.0% compared to 9.9% for the first half of 2012.
 
Net premiums written rose 18.4%, or $184.2 million to $1.2 billion in the first six months of 2013 compared to the same period in 2012.  For the first two quarters of 2013, net premiums written in the Diversified Reinsurance segment of $402.5 million were 6.9% lower than in the first half of 2012. Net premiums written for the AmTrust Quota Share Reinsurance segment was $635.4 million, up 50.7% compared to the first two quarters of 2012.  Net premiums written for the NGHC Quota Share were $149.1 million in the first six months of 2013 compared to $148.9 million in the first half of 2012.
 
Net premiums earned in the first six months of 2013 were $1.0 billion, an increase of 14.4% or $126.1 million compared to the first half of 2012.  Net premiums earned in the Diversified Reinsurance segment were down 7.2% to $374.6 million for the first six months of 2013 compared to the same period in 2012. The AmTrust Quota Share Reinsurance segment net premiums earned of $481.7 million increased 43.5% in the first six months of 2013 compared to the first half of 2012. The NGHC Quota Share segment net premiums earned totaled $145.4 million in the first half of 2013, up 6.7% compared to the first six months of 2012.
 
Net investment income in the first half of 2013 was $42.7 million, up 10.9% compared to the same period in 2012. This reflects a 13.5% increase in total investments at the end of the second quarter of 2013 compared to the end of the second quarter of 2012, which was somewhat offset by a decrease in book yield (excluding cash) to 3.54% from 3.74% at the end of June 2012.
 
Net loss and loss adjustment expenses for the first six months of 2013 were $678.2 million, up $89.9 million compared to the same period in 2012.  The loss ratio(6) increased 0.5 percentage points to 67.2% versus the first six months of 2012.
 
Commission and other acquisition expenses together with general and administrative expenses of $306.8 million increased $30.9 million compared to the first six months of 2012 and resulted in a total expense ratio(9) of 30.4% compared with 31.2% in the first half of 2012. General and administrative expenses for the first six months of 2013 totaled $30.9 million compared with $29.0





million in the first two quarters of 2012. These results reflected a general and administrative expense ratio(8) of 3.1% in the first six months of 2013 and 3.2% in the comparative period last year.
  
The combined ratio(10) for the first six months of 2013 was 97.6%, which improved compared to the combined ratio(10) for the first six months of last year of 97.9%.

NGHC Quota Share

Maiden and NGHC have agreed to terminate their multi-year quota share reinsurance contract following NGHC's highly successful equity issuance of a 25% stake in NGHC through a private placement transaction. Under the terms of the agreement, NGHC maintains the right to terminate the quota share contract within 60 days of the initiation of a private placement or initial public offering. The termination is effective August 1, 2013, and is subject to regulatory approval by NGHC. The termination is by mutual agreement and takes effect on a run-off basis on that date.

Commenting on the termination, Maiden's Chief Executive Officer, Art Raschbaum, said, “We are very pleased to have had the opportunity to support NGHC as a quota share reinsurance capital provider. Following NGHC's equity issuance, the quota share capital support provided by Maiden is now unnecessary. Importantly with robust growth in our AmTrust business segment and favorable prospects for continued development of our diversified portfolio, the termination should have a negligible impact on Maiden's continued profitable growth.”


(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) 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 Call
 
Maiden's CEO Art Raschbaum and CFO John Marshaleck will review these 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 no later than 8:25 a.m. ET:
U.S. Callers: 1.877.734.5373
Outside U.S. Callers: 1.973.200.3059
Passcode: 22942949
Webcast: http://www.maiden.bm/presentations_conferences
 
A replay of the conference call will be available beginning 11:30 a.m. ET on August 8, 2013 through midnight on August 15, 2013. 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: 22942949; 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 June 30, 2013, Maiden had $4.4 billion in assets and shareholders' equity of $956.4 million.
 
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.


CONTACT:
 
Noah Fields, Vice President, Investor Relations
Maiden Holdings, Ltd.
Phone: 441.298.4927
E-mail: nfields@maiden.bm







Maiden Holdings, Ltd.
Balance Sheet
(in thousands of U.S. dollars (000's), except per share data)
 
 
 
 
 
 
 
June 30, 2013 (Unaudited)
 
December 31, 2012
(Audited)
ASSETS
 
 
 
 
Investments:
 
 
 
 
Fixed maturities, available for sale, at fair value (Amortized cost 2013: $2,665,870; 2012: $2,475,202)
 
$
2,714,867

 
$
2,618,697

Other investments, at fair value (Cost 2013: $4,087; 2012: $2,599)
 
4,438

 
2,901

Total investments
 
2,719,305

 
2,621,598

Cash and cash equivalents
 
89,375

 
81,543

Restricted cash and cash equivalents
 
96,215

 
132,327

Accrued investment income
 
21,515

 
21,007

Reinsurance balances receivable, net
 
685,095

 
522,614

Funds withheld
 
43,706

 
42,712

Prepaid reinsurance premiums
 
48,944

 
38,725

Reinsurance recoverable on unpaid losses
 
101,143

 
110,858

Loan to related party
 
167,975

 
167,975

Deferred commission and other acquisition costs
 
314,839

 
270,669

Goodwill and intangible assets, net
 
92,503

 
94,393

Other assets
 
25,235

 
33,742

Total assets
 
$
4,405,850

 
$
4,138,163

LIABILITIES
 
 
 
 
Reserve for loss and loss adjustment expenses
 
$
1,844,086

 
$
1,740,281

Unearned premiums
 
1,129,796

 
936,497

Accrued expenses and other liabilities
 
141,359

 
111,957

Senior notes
 
207,500

 
207,500

Junior subordinated debt
 
126,348

 
126,317

Total liabilities
 
3,449,089

 
3,122,552

Commitments and Contingencies
 
 
 
 
EQUITY
 
 
 
 
Preference shares - Series A
 
150,000

 
150,000

Common shares
 
735

 
733

Additional paid-in capital
 
577,960

 
575,869

Accumulated other comprehensive income
 
48,035

 
141,130

Retained earnings
 
183,436

 
151,308

Treasury shares, at cost
 
(3,801
)
 
(3,801
)
Total Maiden shareholders’ equity
 
956,365

 
1,015,239

Noncontrolling interest in subsidiaries
 
396

 
372

Total equity
 
956,761

 
1,015,611

Total liabilities and equity
 
$
4,405,850

 
$
4,138,163

 
 
 
 
 
Book value per common share (4)
 
$
11.12

 
$
11.96

 
 
 
 
 
Common shares outstanding
 
72,514,437

 
72,343,947








Maiden Holdings, Ltd.
Income Statement
(in thousands of U.S. dollars (000's), except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
For the Three Months
Ended June 30,

For the Six Months
Ended June 30,
 
 
2013
 
2012

2013
 
2012
Revenues:
 
 
 
 
 
 
 
 
Gross premiums written
 
$
535,457

 
$
445,228

 
$
1,250,177

 
$
1,058,440

 
 
 
 
 
 
 
 
 
Net premiums written
 
$
497,949

 
$
411,960

 
$
1,187,008

 
$
1,002,793

Change in unearned premiums
 
15,324

 
25,156

 
(185,293
)
 
(127,181
)
Net premiums earned
 
513,273

 
437,116

 
1,001,715

 
875,612

Other insurance revenue
 
2,780

 
2,274

 
7,995

 
7,028

Net investment income
 
20,745

 
20,085

 
42,724

 
38,522

Net realized (losses) gains on investment
 
(53
)
 
(2,939
)
 
3,230

 
(1,574
)
Total revenues
 
536,745

 
456,536

 
1,055,664

 
919,588

Expenses:
 
 
 
 
 
 
 
 
Net loss and loss adjustment expenses
 
343,347

 
300,435

 
678,242

 
588,352

Commission and other acquisition expenses
 
143,572

 
114,663

 
275,902

 
246,921

General and administrative expenses
 
16,817

 
15,208

 
30,912

 
29,039

Total expenses
 
503,736

 
430,306

 
985,056

 
864,312

 
 
 
 
 
 
 
 
 
Income from operations (2)
 
33,009

 
26,230

 
70,608

 
55,276

 
 
 
 
 
 
 
 
 
Other expenses
 
 
 
 
 
 
 
 
Interest and amortization expenses
 
(9,570
)
 
(9,568
)
 
(19,140
)
 
(17,246
)
Amortization of intangible assets
 
(945
)
 
(1,091
)
 
(1,890
)
 
(2,181
)
Foreign exchange and other gains (losses)
 
1,049

 
(874
)
 
2,596

 
105

Total other expenses
 
(9,466
)
 
(11,533
)
 
(18,434
)
 
(19,322
)
 
 
 
 
 
 
 
 
 
Income before income taxes
 
23,543

 
14,697

 
52,174

 
35,954

Income taxes:
 
 
 
 
 
 
 
 
Current tax (benefit) expense
 
(53
)
 
(155
)
 
520

 
483

Deferred tax expense
 
265

 
246

 
216

 
487

Income tax expense
 
212

 
91

 
736

 
970

Net income
 
23,331

 
14,606

 
51,438

 
34,984

Less: income attributable to noncontrolling interest
 
(32
)
 
(65
)
 
(59
)
 
(66
)
Net income attributable to Maiden
 
23,299

 
14,541

 
51,379

 
34,918

Dividends on preference shares
 
(3,094
)
 

 
(6,188
)
 

Net income attributable to Maiden common shareholders
 
$
20,205


$
14,541


$
45,191


$
34,918

Net operating earnings attributable to Maiden common shareholders (1)
 
$
20,419

 
$
19,691

 
$
41,471

 
$
39,055

 
 
 
 
 
 
 
 
 
Basic earnings per common share attributable to Maiden shareholders
 
$
0.28

 
$
0.20

 
$
0.62

 
$
0.48

Diluted earnings per common share attributable to Maiden shareholders
 
$
0.27

 
$
0.20

 
$
0.61

 
$
0.48

Basic operating earnings per common share attributable to Maiden shareholders
 
$
0.28

 
$
0.27

 
$
0.57

 
$
0.54

Diluted operating earnings per common share attributable to Maiden shareholders
 
$
0.28

 
$
0.27

 
$
0.56

 
$
0.53

 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
$
0.09

 
$
0.08

 
$
0.18

 
$
0.16

 
 
 
 
 
 
 
 
 
Weighted average number of basic shares common outstanding
 
72,454,400

 
72,258,550

 
72,435,982

 
72,242,440






Weighted average number of diluted shares common outstanding
 
73,684,301

 
73,040,926

 
73,596,794

 
73,063,659

 
 
 
 
 
 
 
 
 
Net loss and loss adjustment expense ratio (6)
 
66.5
%
 
68.4
%
 
67.2
%
 
66.7
%
Commission and other acquisition expense ratio (7)
 
27.8
%
 
26.1
%
 
27.3
%
 
28.0
%
General and administrative expense ratio (8)
 
3.3
%
 
3.4
%
 
3.1
%
 
3.2
%
Expense ratio (9)
 
31.1
%
 
29.5
%
 
30.4
%
 
31.2
%
Combined ratio (10)
 
97.6
%
 
97.9
%
 
97.6
%
 
97.9
%
Annualized return on common equity
 
9.6
%
 
7.2
%
 
10.9
%
 
8.8
%
Annualized operating return on common equity
 
9.7
%
 
9.7
%
 
10.0
%
 
9.9
%












Maiden Holdings, Ltd.
Non - GAAP Financial Measure
(in thousands of U.S. dollars (000's), except per share data)
(Unaudited)
 
 
For the Three Months
Ended June 30,
 
For the Six Months
Ended June 30,
 
 
2013
 
2012
 
2013
 
2012
Reconciliation of net income attributable to Maiden common shareholders to net operating earnings:
 
 
 
 
 
 
 
 
Net income attributable to Maiden common shareholders
 
$
20,205

 
$
14,541

 
$
45,191

 
$
34,918

Add (subtract)
 
 
 
 
 
 
 
 
Net realized losses (gains) on investment
 
53

 
2,939

 
(3,230
)
 
1,574

Foreign exchange and other (gains) losses
 
(1,049
)
 
874

 
(2,596
)
 
(105
)
Amortization of intangible assets
 
945

 
1,091

 
1,890

 
2,181

Non-cash deferred tax expense
 
265

 
246

 
216

 
487

Net operating earnings attributable to Maiden common shareholders (1)
 
$
20,419

 
$
19,691

 
$
41,471


$
39,055

 
 
 
 
 
 
 
 
 
Operating earnings per common share attributable to Maiden shareholders:
 
 
 
 
 
 
 
 
Basic earnings per common share attributable to Maiden shareholders
 
$
0.28

 
$
0.27

 
$
0.57

 
$
0.54

Diluted earnings per common share attributable to Maiden shareholders
 
$
0.28

 
$
0.27

 
$
0.56

 
$
0.53

 
 
 
 
 
 
 
 
 
Reconciliation of net income attributable to Maiden to income from operations:
 
 
 
 
 
 
 
 
Net income attributable to Maiden
 
$
23,299

 
$
14,541

 
$
51,379

 
$
34,918

Add (subtract)
 
 
 
 
 
 
 
 
Foreign exchange and other (gains) losses
 
(1,049
)
 
874

 
(2,596
)

(105
)
Amortization of intangible assets
 
945

 
1,091

 
1,890


2,181

Interest and amortization expenses
 
9,570

 
9,568

 
19,140

 
17,246

Income tax expense
 
212

 
91

 
736

 
970

Income attributable to noncontrolling interest
 
32

 
65

 
59

 
66

Income from operations (2)
 
$
33,009

 
$
26,230

 
$
70,608

 
$
55,276

 
 
 
 
 
 
 
 
 
 
 
June 30, 2013
 
December 31, 2012
 
 
 
 
Investable assets:
 
 
 
 
 
 
 
 
Total investments
 
$
2,719,305

 
$
2,621,598

 
 
 
 
Cash and cash equivalents
 
89,375

 
81,543

 
 
 
 
Restricted cash and cash equivalents
 
96,215

 
132,327

 
 
 
 
Funds withheld (3)
 
24,153

 
26,494

 
 
 
 
Loan to related party
 
167,975

 
167,975

 
 
 
 
Total investable assets (3)
 
$
3,097,023

 
$
3,029,937

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2013
 
December 31, 2012
 
 
 
 
Capital:
 
 
 
 
 
 
 
 
Senior notes
 
$
207,500

 
$
207,500

 
 
 
 
Junior subordinated debt
 
126,348

 
126,317

 
 
 
 
Total Maiden shareholders' equity
 
956,365

 
1,015,239

 
 
 
 
Total capital (5)
 
$
1,290,213

 
$
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 and other 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 and other 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 shareholders' equity.








Maiden Holdings, Ltd.
Supplemental Financial Data - Segment Information
(in thousands of U.S. dollars (000's))
(Unaudited)

For the Three Months Ended June 30, 2013
 
Diversified Reinsurance
 
AmTrust Quota Share Reinsurance
 
NGHC
Quota Share
 
Total
Net premiums written
 
$
134,934

 
$
290,578

 
$
72,437

 
$
497,949

Net premiums earned
 
$
178,336

 
$
261,404

 
$
73,533

 
$
513,273

Other insurance revenue
 
2,780

 

 

 
2,780

Net loss and loss adjustment expenses
 
(120,837
)
 
(172,925
)
 
(49,585
)
 
(343,347
)
Commission and other acquisition expenses
 
(44,438
)
 
(76,198
)
 
(22,936
)
 
(143,572
)
General and administrative expenses
 
(11,153
)
 
(505
)
 
(179
)
 
(11,837
)
Underwriting income
 
$
4,688

 
$
11,776

 
$
833

 
17,297

Reconciliation to net income attributable to Maiden common shareholders
 
 
 
 
 
 
 
 
Net investment income and realized losses on investment
 
 
 
 
 
 
 
20,692

Amortization of intangible assets
 
 
 
 
 
 
 
(945
)
Foreign exchange and other gains
 
 
 
 
 
 
 
1,049

Interest and amortization expenses
 
 
 
 
 
 
 
(9,570
)
Other general and administrative expenses
 
 
 
 
 
 
 
(4,980
)
Income tax expense
 
 
 
 
 
 
 
(212
)
Income attributable to noncontrolling interest
 
 
 
 
 
 
 
(32
)
Dividends on preference shares
 
 
 
 
 
 
 
(3,094
)
Net income attributable to Maiden common shareholders
 
 
 
 
 
 
 
$
20,205

 
 
 
 
 
 
 
 
 
Net loss and loss adjustment expense ratio (6)
 
66.7
%
 
66.2
%
 
67.4
%
 
66.5
%
Commission and other acquisition expense ratio (7)
 
24.5
%
 
29.1
%
 
31.2
%
 
27.8
%
General and administrative expense ratio (8)
 
6.2
%
 
0.2
%
 
0.3
%
 
3.3
%
Combined ratio (10)
 
97.4
%
 
95.5
%
 
98.9
%
 
97.6
%







For the Three Months Ended June 30, 2012
 
Diversified Reinsurance
 
AmTrust Quota Share Reinsurance
 
NGHC
Quota Share
 
Total
Net premiums written
 
$
143,981

 
$
195,629

 
$
72,350

 
$
411,960

Net premiums earned
 
$
199,130

 
$
167,816

 
$
70,170

 
$
437,116

Other insurance revenue
 
2,274

 

 

 
2,274

Net loss and loss adjustment expenses
 
(138,420
)
 
(116,755
)
 
(45,260
)
 
(300,435
)
Commission and other acquisition expenses
 
(47,945
)
 
(44,590
)
 
(22,128
)
 
(114,663
)
General and administrative expenses
 
(12,145
)
 
(530
)
 
(194
)
 
(12,869
)
Underwriting income
 
$
2,894

 
$
5,941

 
$
2,588

 
11,423

Reconciliation to net income attributable to Maiden common shareholders
 
 
 
 
 
 
 
 
Net investment income and realized losses on investment
 
 
 
 
 
 
 
17,146

Amortization of intangible assets
 
 
 
 
 
 
 
(1,091
)
Foreign exchange losses
 
 
 
 
 
 
 
(874
)
Interest and amortization expenses
 
 
 
 
 
 
 
(9,568
)
Other general and administrative expenses
 
 
 
 
 
 
 
(2,339
)
Income tax expense
 
 
 
 
 
 
 
(91
)
Income attributable to noncontrolling interest
 
 
 
 
 
 
 
(65
)
Net income attributable to Maiden common shareholders
 
 
 
 
 
 
 
$
14,541

 
 
 
 
 
 
 
 
 
Net loss and loss adjustment expense ratio (6)
 
68.7
%
 
69.6
%
 
64.5
%
 
68.4
%
Commission and other acquisition expense ratio (7)
 
23.8
%
 
26.6
%
 
31.5
%
 
26.1
%
General and administrative expense ratio (8)
 
6.1
%
 
0.3
%
 
0.3
%
 
3.4
%
Combined ratio (10)
 
98.6
%
 
96.5
%
 
96.3
%
 
97.9
%






Maiden Holdings, Ltd.
Supplemental Financial Data - Segment Information
(in thousands of U.S. dollars (000's))
(Unaudited)

For the Six Months Ended June 30, 2013
 
Diversified Reinsurance
 
AmTrust Quota Share Reinsurance
 
NGHC
Quota Share
 
Total
Net premiums written
 
$
402,544

 
$
635,396

 
$
149,068

 
$
1,187,008

Net premiums earned
 
$
374,585

 
$
481,692

 
$
145,438

 
$
1,001,715

Other insurance revenue
 
7,995

 

 

 
7,995

Net loss and loss adjustment expenses
 
(261,600
)
 
(318,570
)
 
(98,072
)
 
(678,242
)
Commission and other acquisition expenses
 
(89,220
)
 
(141,330
)
 
(45,352
)
 
(275,902
)
General and administrative expenses
 
(21,951
)
 
(994
)
 
(353
)
 
(23,298
)
Underwriting income
 
$
9,809

 
$
20,798

 
$
1,661

 
32,268

Reconciliation to net income attributable to Maiden common shareholders
 
 
 
 
 
 
 
 
Net investment income and realized gains on investment
 
 
 
 
 
 
 
45,954

Amortization of intangible assets
 
 
 
 
 
 
 
(1,890
)
Foreign exchange and other gains
 
 
 
 
 
 
 
2,596

Interest and amortization expenses
 
 
 
 
 
 
 
(19,140
)
Other general and administrative expenses
 
 
 
 
 
 
 
(7,614
)
Income tax expense
 
 
 
 
 
 
 
(736
)
Income attributable to noncontrolling interest
 
 
 
 
 
 
 
(59
)
Dividends on preference shares
 
 
 
 
 
 
 
(6,188
)
Net income attributable to Maiden common shareholders
 
 
 
 
 
 
 
$
45,191

 
 
 
 
 
 
 
 
 
Net loss and loss adjustment expense ratio (6)
 
68.4
%
 
66.1
%
 
67.4
%
 
67.2
%
Commission and other acquisition expense ratio (7)
 
23.3
%
 
29.3
%
 
31.2
%
 
27.3
%
General and administrative expense ratio (8)
 
5.7
%
 
0.3
%
 
0.3
%
 
3.1
%
Combined ratio (10)
 
97.4
%
 
95.7
%
 
98.9
%
 
97.6
%







For the Six Months ended June 30, 2012
 
Diversified Reinsurance
 
AmTrust Quota Share Reinsurance
 
NGHC
Quota Share
 
Total
Net premiums written
 
$
432,277

 
$
421,644

 
$
148,872

 
$
1,002,793

Net premiums earned
 
$
403,593

 
$
335,695

 
$
136,324

 
$
875,612

Other insurance revenue
 
7,028

 

 

 
7,028

Net loss and loss adjustment expenses
 
(270,812
)
 
(229,611
)
 
(87,929
)
 
(588,352
)
Commission and other acquisition expenses
 
(112,094
)
 
(91,759
)
 
(43,068
)
 
(246,921
)
General and administrative expenses
 
(22,593
)
 
(909
)
 
(367
)
 
(23,869
)
Underwriting income
 
$
5,122

 
$
13,416

 
$
4,960

 
23,498

Reconciliation to net income attributable to Maiden common shareholders
 
 
 
 
 
 
 
 
Net investment income and realized losses on investment
 
 
 
 
 
 
 
36,948

Amortization of intangible assets
 
 
 
 
 
 
 
(2,181
)
Foreign exchange gains
 
 
 
 
 
 
 
105

Interest and amortization expenses
 
 
 
 
 
 
 
(17,246
)
Other general and administrative expenses
 
 
 
 
 
 
 
(5,170
)
Income tax expense
 
 
 
 
 
 
 
(970
)
Income attributable to noncontrolling interest
 
 
 
 
 
 
 
(66
)
Net income attributable to Maiden common shareholders
 
 
 
 
 
 
 
$
34,918

 
 
 
 
 
 
 
 
 
Net loss and loss adjustment expense ratio (6)
 
66.0
%
 
68.4
%
 
64.5
%
 
66.7
%
Commission and other acquisition expense ratio (7)
 
27.3
%
 
27.3
%
 
31.6
%
 
28.0
%
General and administrative expense ratio (8)
 
5.5
%
 
0.3
%
 
0.3
%
 
3.2
%
Combined ratio (10)
 
98.8
%
 
96.0
%
 
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 net premiums earned and other insurance revenue.
(8) Calculated by dividing commission and other acquisition 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 the general and administrative expense ratio.
(10) Calculated by adding together the net loss and loss adjustment expense ratio, the commission and other acquisition expense ratio and the general and administrative expense ratio.





















Exhibit 99.2




PRESS RELEASE

Maiden Holdings Announces Dividends on Common Shares and Preference Shares

HAMILTON, Bermuda, August 7, 2013 -- Maiden Holdings, Ltd. (NASDAQ: MHLD) today announced that its Board of Directors approved a quarterly cash dividend of $0.09 per share of common stock. The dividend will be payable on October 15, 2013 to shareholders of record as of October 1, 2013.
Maiden’s Board of Directors also approved a cash dividend on its 8.25% Non-Cumulative Perpetual Preference Shares of $0.515625 per Preference Share. The dividend will be payable on September 16, 2013 to shareholders of record as of September 1, 2013.

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
 
CONTACT:
Noah Fields, Vice President, Investor Relations
Maiden Holdings, Ltd.
Phone: 441.298.4927
E-mail: nfields@maiden.bm