- Gross premiums written during the first quarter of 2017 totaled a record $110.0 million, 14.4% higher than the first quarter of 2016.
- Net premiums earned during the first quarter of 2017 totaled $74.0 million, 10.6% higher than the first quarter of 2016.
- Combined ratio during the first quarter of 2017 was 99.7%, reflecting the challenging commercial auto market.
CARMEL, Ind., May 10, 2017 (GLOBE NEWSWIRE) -- Baldwin & Lyons, Inc. (NASDAQ:BWINA) (NASDAQ:BWINB) today announced first quarter net income of $6.8 million, or $0.45 per share, which compares to net income of $14.1 million, or $0.94 per share, for the prior year’s first quarter.
Gross premiums written for the current quarter was a record $110.0 million, 14.4% higher than the $96.2 million written during the first quarter of 2016. The increase was primarily driven by the continued strong performance of the Company’s commercial automobile and workers’ compensation products.
Net premiums earned for the first quarter of 2017 was $74.0 million, 10.6% higher than last year’s first quarter total, primarily driven by increases in premiums earned from the commercial automobile and workers’ compensation products.
Net investment income of $3.7 million, reflected an increase of 7.3% compared to the first quarter of 2016 due to higher bond yields.
Underwriting operations produced a combined ratio of 99.7% during the first quarter of 2017, which compares to a combined ratio of 86.5% for the 2016 first quarter. The combined ratio difference was mainly the result of unusually favorable loss experience during the first quarter of 2016 and unfavorable loss experience during the first quarter of 2017 due in part to a severe charter bus loss.
Book value per share on March 31, 2017 was $27.34, an increase of $0.53 per share during the first quarter, after the payment of cash dividends to shareholders totaling $0.27 per share. The combination of the increase in book value and dividends represents an 11.9% total return on beginning book value for the three months ended March 31, 2017.
The Company's net income, determined in accordance with U.S. generally accepted accounting principles (GAAP), includes items that may not be indicative of ongoing operations. The following table reconciles income before federal income taxes to underwriting income, a non-GAAP financial measure that is a useful tool for investors and analysts in analyzing ongoing operating trends.
| Three Months Ended | |||||||
| March 31 | |||||||
| 2017 | 2016 | ||||||
| Income before federal income taxes | $ | 10,178 | $ | 21,438 | |||
| Less: Net realized gains on investments | 6,294 | 9,012 | |||||
| Operating income, before federal income taxes | $ | 3,884 | $ | 12,426 | |||
| Less: Investment income | 3,692 | 3,440 | |||||
| Underwriting income | $ | 192 | $ | 8,986 | |||
Three months ended March 31, 2017
Operating Income
Operating income, before federal income taxes, was $3.9 million for the first quarter of 2017 which compares to operating income, before federal income taxes, of $12.4 million during the first quarter of 2016.
Conference Call Information:
Baldwin & Lyons, Inc. has scheduled its quarterly conference call for Wednesday, May 10, 2017, at 11:00 AM ET (New York City time) to discuss results for the first quarter ended March 31, 2017.
To participate via teleconference, investors may dial 1-877-705-6003 (U.S./Canada) or 1-201-493-6725 (International or local) at least five minutes prior to the beginning of the call. A replay of the call will be available through May 17, 2017 by calling 1-844-512-2921 or 1-412-317-6671 and referencing passcode 13657859. Investors and interested parties may also listen to the call via a live webcast, accessible on the company’s web site via a link at the top of the main Investor Relations page. To participate in the webcast, please register at least fifteen minutes prior to the start of the call. The webcast will be archived on this site until November 10, 2017. The webcast may be accessed directly at: http://public.viavid.com/player/index.php?id=123410.
Also available on the investor relations section of our web site are complete interim financial statements and copies of our filings with the Securities and Exchange Commission.
Forward-looking statements in this report are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve inherent risks and uncertainties. Readers are encouraged to review the Company's annual report for its full statement regarding forward-looking information.
| Financial Highlights (unaudited) | ||||||||||
| Baldwin & Lyons, Inc. and Subsidiaries | ||||||||||
| (In thousands, except per share data) | Three Months Ended | |||||||||
| March 31 | ||||||||||
| 2017 | 2016 | |||||||||
| Operating revenue | $ | 78,647 | $ | 71,713 | ||||||
| Net realized gains on investments | 6,294 | 9,012 | ||||||||
| Total revenue | $ | 84,941 | $ | 80,725 | ||||||
| Net operating income | $ | 2,665 | $ | 8,254 | ||||||
| Net realized gains on investments, | ||||||||||
| net of federal income taxes | 4,091 | 5,858 | ||||||||
| Net income | $ | 6,756 | $ | 14,112 | ||||||
| Per share data - diluted: | ||||||||||
| Average number of shares | 15,104 | 15,076 | ||||||||
| Net operating income | $ | .18 | $ | .55 | ||||||
| Net investment gains | .27 | .39 | ||||||||
| Net income | $ | .45 | $ | .94 | ||||||
| Dividends paid to shareholders | $ | .27 | $ | .26 | ||||||
| Comprehensive income, net of tax | ||||||||||
| Net income | $ | 6,756 | $ | 14,112 | ||||||
| Unrealized net gains (losses) on securities | 5,335 | (8,050 | ) | |||||||
| Foreign currency translation adjustments | 65 | 419 | ||||||||
| Comprehensive income | $ | 12,156 | $ | 6,481 | ||||||
| Annualized: | ||||||||||
| Total Value Creation 1 | 11.9 | % | 6.4 | % | ||||||
| Return on average shareholders' equity: | ||||||||||
| Net operating income | 2.9 | % | 9.1 | % | ||||||
| Net income | 7.3 | % | 15.6 | % | ||||||
| Consolidated combined ratio of | ||||||||||
| insurance subsidiaries (GAAP basis): | 99.7 | % | 86.5 | % | ||||||
| 1 Total Value Creation equals: (1) change in book value plus dividends paid, divided by (2) beginning book value | ||||||||||