Maiden Leadership Update & Q1 Financial Results

May 14, 2023

Maiden Holdings, Ltd. reported an update on its leadership team along with its first quarter 2023 results.

Leadership Update

The company said, “The Company reported that its Board of Directors had named Patrick J. Haveron its sole Chief Executive Officer and Lawrence F. Metz was named Executive Vice Chairman while remaining as Group President. Mr. Haveron will continue as the Company’s Chief Financial Officer. Barry D. Zyskind, Maiden’s Chairman of the Board, commented on the leadership changes: “As our Board evaluated Maiden’s requirements as we continue to advance and further develop our strategies, the Board concluded a reversion to a more traditional leadership structure was in order. As we look to develop an increased operating profile building for the long term, the Board recognized Pat’s significant leadership, experience and aptitude in these areas in becoming the sole CEO. While continuing his executive duties, Larry’s appointment as Executive Vice Chairman of our Board recognizes his many contributions during his time with Maiden, particularly during the Company’s most challenging period. We look forward to both of their continuing contributions as we move ahead.”

First Quarter 2023 Results

“Maiden reported a net loss attributable to Maiden common shareholders of $11.3 million or $0.11 per diluted common share for the first quarter of 2023 compared to net income available to Maiden common shareholders of $1.6 million or $0.02 per diluted common share in the first quarter of 2022.

“Non-GAAP operating loss(5) was $7.9 million or $0.08 per diluted common share for the first quarter of 2023 compared to non-GAAP operating loss of $6.9 million or $0.08 per diluted common share for the same period in 2022.

“Maiden’s book value per common share(1) was $2.66 at March 31, 2023 compared to $2.80 at December 31, 2022. Adjusted for the unamortized deferred gain on ceded retroactive reinsurance of $47.0 million at March 31, 2023, the Company’s adjusted book value per common share(2) was $3.12 at March 31, 2023.”

Patrick J. Haveron, Maiden’s Chief Executive Officer commented on the first quarter of 2023 financial results: “First quarter results were impacted by an underwriting loss in both our AmTrust Reinsurance and Diversified segments. The AmTrust Reinsurance segment reported an underwriting loss of $6.3 million which was largely the result of adverse prior year loss development of $2.9 million during the quarter as adverse development in Auto Liability and Specialty programs were the principal drivers of the results. In addition, while smaller than last year, continuing negative premium adjustments from the run-off of our terminated AmTrust reinsurance contracts contributed $3.9 million to the underwriting loss. Our GLS unit reported a small loss, largely reflecting adjustments to a previously recognized gain on acquisition of certain assets.”

“Book value was reduced by $0.05 per common share in the first quarter from the adoption of a new accounting standard for credit losses which we generally expect to not recur. In addition, while first quarter expenses are traditionally higher compared to the balance of the year, operating expenses were 7.1% lower on a year-over-year basis for the first quarter and we expect them to return to a significantly lower trajectory over the remainder of 2023.”

Mr. Haveron added, “As interest rates continue to rise, with 32.3% of our fixed income investments now in floating rate securities, we are seeing the benefit from the rise in interest rates on our financial statements, as net investment income increased by $3.0 million or 45.3% compared to last year’s first quarter. As noted in our last report, the market environment has led to a more measured pace of deployment of new alternative investment opportunities, and we are adjusting our investment focus accordingly. Our alternative asset portfolio decreased by 3% during the first quarter, and the slower pace of deployment reflects the challenging market conditions, particularly the continued repricing of fixed income assets, which affords us the opportunity to focus on income producing, lower risk assets at more attractive yields. While our alternative portfolio returns were marginally positive in the first quarter, we are confident our asset management strategy remains on track to achieve its targeted long-term returns.”

“Finally, our consolidated balance sheet at March 31, 2023 does not reflect $1.18 in net U.S. deferred tax assets which still maintains a full valuation allowance. While the ongoing adverse reserve development experienced may impact the timing related to ultimately recognizing this asset, we believe the factors that will enable us to ultimately recognize these tax assets in the future continues to accumulate, particularly with our asset portfolio producing more current income.”

Mr. Haveron concluded, “The authorization by our Board for the repurchase of senior notes adds another avenue by which we can create additional shareholder value. We expect to deploy this authorization in a disciplined and prudent manner. We also continue to closely evaluate our strategies as we look to build a more consistent base of revenue and profits.”

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