GlobeNewswire Inc | Jun 30, 2021 04:00PM EDT

June 30, 2021

HAMILTON, Bermuda, June 30, 2021 (GLOBE NEWSWIRE) -- American Overseas Group Limited (BSX: AORE.BH) (Pink Sheets: AOREF.PK) (AOG or the Company) today reported consolidated net income available to common shareholders of $1.0 million, or $20.81 per diluted share, for the three months ended March 31, 2021. This compares to consolidated net loss available to common shareholders of $0.8 million, or $17.97 per diluted share, for the three months ended March 31, 2020.

The result for the three months was driven by property and casualty growth in both existing and new programs. Book value per weighted share at March 31, 2021 was $1,055.01 a decline from the book value per weighted share of $1,062.22 at December 31, 2020.

For the three months ended March 31, 2021, the Company had operating income of $0.9 million, or $19.99 per diluted share, compared to an operating loss of $1.2 million, or $25.95 per diluted share for the three months ended March 31, 2020. The financial guaranty segment ended in April of 2020 due to a commutation of the remaining portfolio of financial guaranty reinsurance business it had assumed from Assured Guaranty Municipal Corp (AGMC). The aggregate outstanding par value of the reinsurance portfolio commuted was $345.0 million.

Net earned property and casualty premiums increased $1.2 million from $3.8 million in 2020 to $5.0 million in 2020, driven by an increase in existing and new programs. Loss and loss adjustment expenses as a percentage of earned premium declined slightly from 55.4% to 54.6%. Fee income increased slightly from $3.1 million to $3.3 million due to increase in gross written premiums year over year of $5.5 million, moving from $98.4 million to $103.9 million.

Operating expenses decreased $1.4 million or 35.9% from $3.9 million in 2020 to $2.5 million in 2021 mainly due to savings in the financial guaranty segment and improved operational efficiencies.

As part of its ongoing capital management efforts, the Company will continue to redirect excess capital within the group to debt reduction unless other compelling opportunities present themselves.

Forward-Looking Statements

This release contains statements that may be considered "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, the Company's expectations respecting the volatility of its insured portfolio, losses, loss reserves and loss development, the adequacy and availability of its liquidity and capital resources, its current run off strategy, its strategy for writing other reinsurance businesses and its expense reduction measures. These statements are based on current expectations and the current views of the economic and operating environment and are not guarantees of future performance. A number of risks and uncertainties, including economic competitive conditions, could cause actual results to differ materially from those projected in forward-looking statements. The Company's actual results could differ materially from those expressed or implied in the forward-looking statements.

Explanation of Non-GAAP Financial Measures

The Company believes that the following non-GAAP financial measure included in this press release serve to supplement GAAP information and is meaningful to investors.

Operating income (loss): The Company believes operating income (loss) is a useful measure because it measures income from operations, unaffected by non-operating items such as realized investment gains or losses. Operating income (loss) is typically used by research analysts and rating agencies in their analysis of the Company.

Information About the Company

American Overseas Group Limited is an insurance holding company incorporated in Bermuda and a tax resident of the United Kingdom. Its operating subsidiaries provide specialty property/casualty insurance, reinsurance and insurance management services. More information can be found at www.aoreltd.com.

American Overseas Group Limited

info@aoreltd.com



American Overseas Group LimitedConsolidated Balance Sheets(unaudited)As at March 31, 2021 and December 31, 2020(dollars in thousands) March 31, 2021 December 31, 2020Assets Investments: Fixed-maturity securities held as available for sale, at fair $ 68,077 $ 72,642 value Equity investments held as available for sale, at fair 4,336 4,143 value Cash and cash equivalents 23,606 24,254 Restricted cash 796 548 Accrued investment income 353 355 Premiums receivable 87,154 73,073 Deferred insurance premiums 109,231 101,843 Reinsurance balances 184,161 194,914 receivable, net Deferred policy acquisition 5,096 3,590 costs Intangible assets 4,800 4,800 Goodwill 33,050 33,050 Other assets 4,980 3,767 Total Assets $ 525,641 $ 516,979 Liabilities and Equity Liabilities: Loss and loss expense reserve $ 194,812 $ 192,943 Deferred commission income 3,425 2,482 Unearned premiums 114,055 105,678 Ceded premium payable 71,052 71,989 Payable to general agents 5,621 4,331 Funds withheld 59,724 64,980 Accounts payable and accrued 10,117 7,922 liabilities Notes payable 16,521 16,521 Non-owned interest in VIE 300 300 Interest payable 451 451 Total Liabilities 476,078 467,597 Shareholders' Equity: Common shares 4,698 4,698 Additional paid-in capital 189,151 189,151 Accumulated other comprehensive 1,165 1,962 income Retained deficit (151,504 ) (152,482 ) Total Shareholders' Equity 43,510 43,329 Non-controlling interest of preferred shares of 6,053 6,053 subsidiaries Total Equity 49,563 49,382 Total Liabilities and Equity $ 525,641 $ 516,979 See Notes to March 31, 2021 Consolidated Financial Statements available on American Overseas Group Ltd. Website at www.aoreltd.com



American Overseas Group LimitedConsolidated Statements of Operations(unaudited)For three months ended March 31, 2021 and 2020(dollars in thousands, except share and per share amounts) Three Months ended March 31, 2021 2020 Revenues Net premiums earned $ 4,985 $ 3,828 Fee income 3,286 3,166 Net change in fair value of - 2 credit derivatives Net investment income 97 500 Net realized gains on 39 207 investments Fair value adjustment - (558 ) Other income 33 - Total revenues 8,440 7,145 Expenses Losses and loss adjustment 2,724 1,704 expenses Acquisition expenses 1,776 1,283 Operating expenses 2,485 3,857 Other expense - 523 Interest expense 451 451 Total expenses 7,436 7,818 Net income (loss) available to common $ 1,004 $ (673 )shareholders Income tax (expense) (26 ) (164 ) Net income (loss) before dividends 978 (837 ) Dividends on preference shares - - of subsidiary Net income (loss) available to common $ 978 $ (837 )shareholders Net income (loss) per common share: Basic $ 20.81 $ (18.10 ) Diluted 20.81 (17.97 ) Weighted-average number of common shares outstanding: Basic 46,979 46,214 Diluted 46,979 46,554 See Notes to March 31, 2021 Consolidated Financial Statements available on American Overseas Group Ltd. Website at www.aoreltd.com



AMERICANOVERSEAS GROUP LTD. NET INCOME AND OPERATING INCOME BY SEGMENT (dollars in March 31, 2021thousands) Net Income Net Realized Net Change Available to (Gain)/Loss in Fair Fair Value Operating Common on Sales of Value of Adjustments Income Shareholders Investments Credit DerivativesProperty and casualty: Net premiums $ 4,986 $ 4,986 earnedLosses andloss (2,724 ) (2,724 )adjustmentexpensesAcquisition (1,776 ) (1,776 )expensesProperty/Casualty 486 486 UnderwritingIncome Fee income 3,286 3,286 Operating (2,277 ) (2,277 )expensesIncome tax (26 ) (26 )Property and 1,469 - - - 1,469 casualty Financial guaranty: Net premiums - - earnedNet change infair value of - - creditderivativesLosses andloss - - adjustmentexpensesAcquisition - - expensesOperating - - expensesFinancial - - - - - guaranty Corporate and Investing Net investment 97 97 incomeNet realized 39 (39 ) - gain/(loss)Operating (209 ) (209 )expensesInterest (451 ) (451 )expenseOther income,net of other 33 33 expenseCorporate and (491 ) (39 ) - - (530 )investing Group total $ 978 $ (39 ) $ - $ - $ 939 AMERICANOVERSEAS GROUP LTD. NET INCOME AND OPERATING INCOME BY SEGMENT (dollars in March 31, 2020thousands) Net Income Net Realized Net Change Available to (Gain)/Loss in Fair Fair Value Operating Common on Sales of Value of Adjustments Income Shareholders Investments Credit DerivativesProperty and casualty: Net premiums $ 3,831 $ 3,831 earnedLosses andloss (2,123 ) (2,123 )adjustmentexpensesAcquisition (1,285 ) (1,285 )expensesProperty/Casualty 423 423 UnderwritingIncome Fee income 3,166 3,166 Operating (3,142 ) (3,142 )expensesAmortization - - expenseIncome tax (164 ) (164 )Property and 283 - - - 283 casualty Financial guaranty: Net premiums (3 ) 193 190 earnedNet change infair value of 2 (2 ) - creditderivativesLosses andloss 418 (889 ) (471 )adjustmentexpensesAcquisition 2 (24 ) (22 )expensesOperating (103 ) (103 )expensesFinancial 316 - (2 ) (720 ) (406 )guaranty Corporate and Investing Net investment 500 500 incomeNet realized 207 (207 ) - gain/(loss)Fair value (558 ) 558 - adjustmentOperating (613 ) (613 )expensesInterest (451 ) (451 )expenseOther income,net of other (521 ) (521 )expenseCorporate and (1,436 ) (207 ) - 558 (1,085 )investing Group total $ (837 ) $ (207 ) $ (2 ) $ (162 ) $ (1,208 )