CapMAC Holdings Reports Record First Quarter 1996 Earnings; Regular Quarterly Cash Dividend Declared.NEW YORK--(BUSINESS WIRE)--April 17, 1996--CapMAC Holdings Inc. (NYSE NYSE See: New York Stock Exchange :KAP) today reported record net income for first-quarter 1996 of $9.9 million, up 161 percent from $3.8 million in first-quarter 1995. First-quarter 1996 primary net earnings per share of $0.57 represent a 104 percent increase over first-quarter 1995 primary net earnings per share of $0.28. First-quarter 1996 operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before per share were $0.56, an increase of 100 percent from $0.28 in first-quarter 1995. Operating earnings exclude the impact of realized capital gains and losses, net of taxes. Book value per share at March 31, 1996 was $18.18, up from $17.86 at December December: see month. 31, 1995. Adjusted book value at March 31, 1996 was $23.66, up from $22.91 at December 31, 1995. Adjusted book value is calculated by adding to book value the tax effected estimated present value of future revenues or PFR (consisting of net premiums and ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. commission) and deducting from book value the tax effected deferred acquisition costs. John B. Caouette, Chairman and Chief Executive Officer, said, "Our record first-quarter 1996 performance demonstrates that our unique business plan is the right one for CapMAC Holdings. Our franchise as a leading provider of credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing is firmly established. In addition, the expertise we have developed in asset securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. has allowed us to successfully continue to grow our structuring business, which has already contributed substantially to our total revenues." First-quarter 1996 net premiums earned of $8.8 million represent a 24 percent increase over first-quarter 1995 net premiums earned of $7.1 million. First-quarter advisory fees were up substantially as the result of closing several transactions in the U.S. and international markets. First-quarter 1996 net investment income (excluding capital gains and losses) totaled $4.1 million, an increase of 46 percent from $2.8 million in first-quarter 1995. The first- quarter 1996 investment portfolio as compared to the first- quarter 1995 includes proceeds in 1995 from the initial public offering, investments in the Company by ORIX ORIX Corporation (オリックス株式会社 USA Corporation and Centre Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Limited, and cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses . At March 31, 1996 the fair value of the Company's investments totaled $344.6 million, including investment in affiliates of $35.0 million, compared with its year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1995 total of $329.8 million, including investment in affiliates of $32.0 million. Total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased to $281.7 million at March 31, 1996, from $276.5 million at year-end 1995. The structured asset-backed transactions guaranteed by Capital Markets Assurance Corporation (CapMAC), CapMAC Holdings' triple-A rated insurance subsidiary, include transactions backed by corporate and consumer assets. CapMAC is the leading monoline financial guarantee provider of credit-enhanced asset-backed commercial paper. In addition, CapMAC is the the only financial guarantee insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. to provide access to commercial paper and medium-term note Medium-term note (MTN) A corporate debt instrument that is continuously offered to investors over a period of time by an agent of the issuer. Investors can select from maturity bands of: 9 months to 1 year, more than 1 year to 18 months, more than 18 months to 2 years, etc. funding through third-party owned and managed conduits, for which CapMAC is the exclusive provider of credit enhancement and administrative and referral services. CapMAC has long been an innovator in the credit enhancement of new asset classes. CapMAC was the first company to provide credit enhancement for insurance company guaranteed investment contracts Guaranteed investment contract (GIC) A pure investment product in which a life company agrees, for a single premium, to pay at a maturity date the principal amount of a predetermined annual crediting (interest) rate over the life of the investment. (GICs), obligations backed by delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. tax receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and trade receivables, and tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. backed by hospital receivables in the public market, among others. In addition, CapMAC provides credit enhancement for more familiar asset classes, such as automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of loans, credit card receivables and home equity loans. Board of Directors Declares Regular Quarterly Cash Dividend CapMAC Holdings' Board of Directors today declared the regular quarterly cash dividend of $0.02 per share on the common stock. The dividend will be payable on May 29, 1996 to shareholders of record as of May 15, 1996. CapMAC Holdings Inc., through its subsidiaries, provides financial guarantee insurance, principally of asset-backed obligations; advisory and structuring services in connection with asset-backed financings; and access to funding for its clients through third-party owned and managed securitization funding vehicles. -0-
CapMAC Holdings Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)
ASSETS March 31, 1996 Dec. 31, 1995
(Unaudited)
Investments:
Bonds at fair value (amortized
cost $258,874 at March 31, 1996
and $210,651 at Dec. 31, 1995) $259,226 $215,706
Short-term investments (at amortized
cost which approximates fair value) 50,380 82,019
Investment in affiliates 35,023 32,033
Total investments 344,629 329,758
Cash 909 1,033
Accrued investment income 3,356 3,136
Deferred acquisition costs 37,559 35,162
Premiums receivable 3,463 3,540
Prepaid reinsurance 13,379 13,171
Other assets 2,823 5,473
Total assets $406,118 391,273
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Unearned premiums $ 50,266 45,767
Reserve for losses and loss adjustment
expenses 7,261 6,548
Ceded reinsurance 2,773 2,469
Accounts payable and other accrued
expenses 12,904 11,367
Senior notes 15,000 15,000
Current income taxes 5,494 3,264
Deferred income taxes 9,324 10,776
Total liabilities 103,022 95,191
Minority interest 21,398 19,563
Stockholders' Equity: Common stock - $0.01 par value per share; 50,000,000 shares are authorized; 15,966,032 shares issued March 31, 1996 and Dec. 31, 1995; 15,965,995 shares outstanding at March 31, 1996 and 160 160 Dec. 31, 1995 Preferred Stock - $0.01 par value per share; 20,000,000 shares are authorized Additional paid-in capital 223,400 223,400 Unrealized (depreciation) appreciation on investments, net of tax (2,244) 2,443 Retained earnings 66,610 57,029 Unallocated ESOP shares (6,227) (6,497) Cumulative translation adjustment, net of tax (1) (16) Total stockholders' equity 281,698 276,519 Total liabilities, minority interest, and stockholders' equity $406,118 391,273 CapMAC Holdings Inc. and Subsidiaries Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Income (Unaudited) (Dollars in thousands) Three Months Ended Three Months Ended March 31, 1996 March 31, 1995 Revenues: Direct premiums written $ 14,155 16,838 Assumed premiums written 874 154 Ceded premiums written (1,910) (3,093) Net premiums written 13,119 13,899 Increase in unearned premiums (4,291) (6,798) Net premiums earned 8,828 7,101 Advisory fees 9,549 2,024 Net investment income 4,111 2,811 Net realized capital gains 149 9 Other income 610 262 Total revenues 23,247 12,207 Expenses: Losses and loss adjustment expenses 1,075 696 Underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. 5,069 4,080 Policy acquisition costs 2,064 1,725 Interest expense 301 301 Total expenses 8,509 6,802 Income before income taxes and minority interest 14,738 5,405 Income Taxes: Current income tax 3,899 1,024 Deferred income tax 987 541 Total income taxes 4,886 1,565 Income before minority interest 9,852 3,840 Minority interest 48 - NET INCOME $ 9,900 3,840 Primary earnings per share $ 0.57 0.28 Fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of $ 0.57 0.28
CapMAC Holdings Inc. and Subsidiaries
Components of Adjusted Book Value per Share
March 31, December 31,
1996 1995
GAAP Book Value $18.18 $17.86
After-tax value of:
Adding present value of
future revenues (PFR)
(including net premiums earned
and ceding commissions)
and deducting deferred
acquisition costs 5.48 5.05
Adjusted Book Value $23.66 $22.91
CapMAC Holdings Inc. and Subsidiaries
Selected Statutory Data
(Dollars in thousands, except ratios)
March 31, December 31,
1996 1995
Qualified statutory capital $245,413 $239,927 Unearned premiums 38,949 34,260 Net reserve for losses and loss adjustment expenses 0 0 Policyholders' capital and reserves $284,362 $274,187 Net Statutory P&I Outstanding $16,807,583 $15,137,582 Policyholders' leverage ratio (1) 68:1 63:1 (1) Policyholders' leverage ratio is Net Statutory P&I Outstanding divided by qualified statutory capital CONTACT: CapMAC Holdings Inc., New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Mitchell Mitchell, city (1990 pop. 13,798), seat of Davison co., SE S.Dak.; inc. 1881. Mitchell is a trade, distribution, and shipping center for a dairy and livestock area. Karig, 212/891-6787 |
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