Baldwin & Lyons Announces Results for the Quarter and Twelve Months of 2016
- Gross premiums written during the fourth quarter of 2016 totaled a record $104.9 million, 7.2% higher than the fourth quarter of 2015.
- Gross premiums written for the year ended December 31, 2016 totaled a record $403.0 million, 5.1% higher than the previous record from 2015.
- December 31, 2016 net income totaled $28.9 million, or $1.92 per share, an increase of $5.7 million compared to 2015.
CARMEL, Ind, Feb. 16, 2017 (GLOBE NEWSWIRE) -- Baldwin & Lyons, Inc. (NASDAQ:BWINA) (NASDAQ:BWINB) today announced fourth quarter net income of $4.9 million, or $.32 per share, which compares to net income of $3.5 million, or $.24 per share, for the prior year’s fourth quarter. Net income for the full year of 2016 totaled $28.9 million, or $1.92 per share, compared to $23.3 million, or $1.55 per share, for the prior year period.
Gross premiums written for the current quarter was a record $104.9 million, 7.2% higher than the $97.8 million written during the fourth quarter of 2015. The increase was driven by the continued strong performance of the Company’s core Fleet Transportation products. Gross premiums written for the twelve months ended December 31, 2016 totaled a record $403.0 million, 5.1% higher than the previous record $383.6 million written during 2015.
Net premiums earned for the fourth quarter of 2016 was $69.1 million, 4.8% higher than last year’s fourth quarter total, driven by a 10.1% increase in premiums earned from Fleet Transportation products, partially offset by planned declines in reinsurance products. For the twelve months ended December 31, 2016, earned premiums increased 4.8% to a record twelve month total of $276.0 million.
Net investment income of $4.0 million, reflected an increase of 5.6% compared to the fourth quarter of 2015 due to higher bond yields. For the twelve months ended December 31, 2016, net investment income was $14.5 million, reflecting an increase of 15.9% compared to the prior year period.
Book value per share on December 31, 2016 of $26.81 decreased $.17 per share during the fourth quarter, after the payment of cash dividends to shareholders totaling $.26 per share. For the twelve months ended December 31, 2016, book value per share increased $.56 after the payment of cash dividends to shareholders totaling $1.04 per share. The combination of the increase in book value and dividends represents a 6.1% total return on beginning book value for the twelve months ended December 31, 2016.
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 | Twelve Months Ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Income before federal income taxes | $ | 7,067 | $ | 4,621 | $ | 43,054 | $ | 33,952 | ||||||||
| Less: Net realized gains (losses) on investments | 6,204 | (1,753 | ) | 23,228 | (1,261 | ) | ||||||||||
| Operating income, before federal income taxes | $ | 863 | $ | 6,374 | $ | 19,826 | $ | 35,213 | ||||||||
| Less: Investment income | 3,982 | 3,771 | 14,483 | 12,498 | ||||||||||||
| Less: Corporate and other income (expense) | 257 | (395 | ) | 1,118 | (60 | ) | ||||||||||
| Underwriting income (loss) | $ | (3,376 | ) | $ | 2,998 | $ | 4,225 | $ | 22,775 | |||||||
| Less: Reinsurance underwriting income (loss) in run-off | (519 | ) | (2,603 | ) | (8,199 | ) | (1,504 | ) | ||||||||
| P&C Insurance underwriting income | $ | (2,857 | ) | $ | 5,601 | $ | 12,424 | $ | 24,279 | |||||||
| Note: The Company currently operates within two reportable business segments: Property and Casualty (P&C) Insurance and Reinsurance (which is in run-off). | ||||||||||||||||
Three months ended December 31, 2016
Operating Income
Operating income, before federal income taxes, was $0.9 million for the fourth quarter of 2016 which compares to operating income, before federal income taxes, of $6.4 million during the fourth quarter of 2015.
Reinsurance Operations (in run-off)
Reinsurance Operations produced an underwriting loss of $0.5 million for the fourth quarter of 2016 which compares to an underwriting loss of $2.6 million during the 2015 fourth quarter.
Property & Casualty Insurance Operations
Property & Casualty Insurance produced an underwriting loss of $2.9 million, resulting in a combined ratio for the fourth quarter of 104.3%. The fourth quarter of 2016 was negatively impacted by adverse development related to a limited number of infrequent, but severe, Public Transportation charter bus claims. This compares to underwriting income of $5.6 million and a combined ratio of 91.1% during the fourth quarter of 2015.
Twelve months ended December 31, 2016
Operating Income
For the twelve months ended December 31, 2016, operating income, before federal income taxes, was $19.8 million. This compares to operating income, before federal income taxes, of $35.2 million during 2015.
Reinsurance Operations (in run-off)
Reinsurance Operations produced an underwriting loss of $8.2 million for 2016 which compares to an underwriting loss of $1.5 million during 2015.
Property & Casualty Insurance Operations
For the twelve months ended December 31, 2016, Property & Casualty Insurance produced underwriting income of $12.4 million resulting in a combined ratio for 2016 of 95.3%. This compares to Property & Casualty Insurance underwriting income of $24.3 million and a combined ratio of 89.9% during 2015.
Conference Call Information:
Baldwin & Lyons, Inc. has scheduled its quarterly conference call for Thursday February 16, 2017, at 11:00 AM ET (New York City time) to discuss results for the fourth quarter ended December 31, 2016.
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 February 23, 2017 by calling 1-844-512-2921 or 1-412-317-6671 and referencing passcode 13653203. 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 July 28, 2017. The webcast may be accessed directly at: http://public.viavid.com/player/index.php?id=122564.
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 | Twelve Months Ended | |||||||||||||||
| December 31 | December 31 | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Operating revenue | $ | 74,364 | $ | 71,500 | $ | 295,769 | $ | 281,536 | |||||||||
| Net investment gains (losses) | 6,204 | (1,753 | ) | 23,228 | (1,261 | ) | |||||||||||
| Total revenue | $ | 80,568 | $ | 69,747 | $ | 318,997 | $ | 280,275 | |||||||||
| Net operating income | $ | 831 | $ | 4,680 | $ | 13,847 | $ | 24,103 | |||||||||
| Net investment gains (losses), | |||||||||||||||||
| net of federal income taxes | 4,033 | (1,139 | ) | 15,098 | (820 | ) | |||||||||||
| Net income | $ | 4,864 | $ | 3,541 | $ | 28,945 | $ | 23,283 | |||||||||
| Per share data - diluted: | |||||||||||||||||
| Average number of shares | 15,084 | 15,024 | 15,084 | 15,022 | |||||||||||||
| Net operating income | $ | .06 | $ | .31 | $ | .92 | $ | 1.60 | |||||||||
| Net investment gains (losses) | .26 | (.07 | ) | 1.00 | (.05 | ) | |||||||||||
| Net income | $ | .32 | $ | .24 | $ | 1.92 | $ | 1.55 | |||||||||
| Dividends paid to shareholders | $ | .26 | $ | .25 | $ | 1.04 | $ | 1.00 | |||||||||
| Comprehensive income, net of tax | |||||||||||||||||
| Net income | $ | 4,864 | $ | 3,541 | $ | 28,945 | $ | 23,283 | |||||||||
| Unrealized net gains (losses) on securities | (3,359 | ) | 2,041 | (4,873 | ) | (12,916 | ) | ||||||||||
| Foreign currency translation adjustments | (163 | ) | (354 | ) | 235 | (1,456 | ) | ||||||||||
| Comprehensive income | $ | 1,342 | $ | 5,228 | $ | 24,307 | $ | 8,911 | |||||||||
| Annualized: | |||||||||||||||||
| Total Value Creation 1 | 1.3 | % | 5.2 | % | 6.1 | % | 2.2 | % | |||||||||
| Return on average shareholders' equity: | |||||||||||||||||
| Net operating income | 0.9 | % | 5.3 | % | 3.8 | % | 6.9 | % | |||||||||
| Net income | 5.3 | % | 4.0 | % | 8.0 | % | 6.6 | % | |||||||||
| Consolidated combined ratio of | |||||||||||||||||
| insurance subsidiaries (GAAP basis): | 104.9 | % | 95.5 | % | 98.5 | % | 91.4 | % | |||||||||
| 1 Total Value Creation equals: (1) change in book value plus dividends paid, divided by (2) beginning book value | |||||||||||||||||
Investor Contact: William Vens investors@baldwinandlyons.com (317) 429-2554
