Mount Logan Capital Inc. Announces First Quarter 2024 Financial Results
Increased Ability’s total assets managed by
Generated $9.5 million of insurance segment Spread Related Earnings (“SRE”) for the trailing twelve months ended
Strong quarter for the asset management segment with another quarter of record management fees. Fee Related Earnings (“FRE”) for the quarter of
Declared quarterly distribution of
First Quarter 2024 Highlights
- Total revenue for the asset management segment of the Company of
$4.0 million , an increase of$2.1 million , or 109%, as compared to the first quarter of 2023. The increase is primarily due to growth in fees attributable to the inclusion of Ovation management and incentive fees, increase in CLO fees, growth in theOpportunistic Credit Interval Fund , and other sub-advisory activities of Mount Logan. First quarter asset management revenues exclude$1.4 million of management fees associated with Mount Logan’s management of the assets ofAbility Insurance Company (“Ability”), a wholly-owned subsidiary of the Company, during the first quarter of 2024, which increased by$0.6 million , or 74% as compared to first quarter 2023 of$0.8 million . - Total net investment income for the insurance segment was
$21.8 million for the three months endedMarch 31, 2024 , an increase of$1.6 million , or 7.8%, as compared to the first quarter of 2023, driven by an increase in total insurance investment assets and improvements in yield across the investment portfolio attributable to deployment of capital in a higher rate environment. Excluding the funds withheld under reinsurance contracts andModco , Ability’s net investment income was$14.1 million , an increase of$3.0 million , or 27%, as compared to the first quarter of 2023. - 7.9%1 yield on the insurance investment portfolio as of
March 31, 2024 reflective of ongoing portfolio and capital optimization across the insurance solutions portfolio alongside the benefit of higher base rates. Excluding the funds withheld under reinsurance contracts andModco , the yield was 8.5%. - Ability’s total assets managed by Mount Logan increased to
$616.8 million as ofMarch 31, 2024 , up$145.6 million from first quarter 2023 of$471.2 million . As ofMarch 31, 2024 , the insurance segment included$1.0 billion in total investment assets, up$138.2 million or 15% from first quarter 2023 investment assets of$904.8 million . - Book value of the insurance segment as of
March 31, 2024 was$82.6 million , an increase of$56.0 million as compared to$26.6 million for first quarter 2023. - Published SRE disclosure for the insurance segment, generating
$9.5 million for the trailing twelve months endedMarch 31, 2024 . SRE is a non-IFRS financial measure used to assess the insurance segment’s generation of profits excluding the impact of certain market volatility and other one-time, non-core components of insurance segment income (loss). The Company believes this measure is useful to shareholders as it provides additional insight into the underlying economics of the insurance segment. - FRE for the asset management segment was
$1.6 million for the three months endedMarch 31, 2024 , an increase of$0.2 million , or 15% compared to the first quarter ofMarch 31, 2023 . FRE was$6.5 million for the twelve months endedMarch 31, 2024 , an increase of$0.4 million , or 7.1%, compared to the twelve months endedMarch 31, 2023 of$6.1 million primarily driven by the previously mentioned revenue improvements. - Announced the completion of an
$18.8 million capital raise and opportunistic refinancing, representing an important milestone for the business as it simplifies Mount Logan’s capital structure at an attractive fixed-rate over the next 8 years.$13.6 million of the net proceeds of the offering were used to repay all existing indebtedness atLind Bridge L.P. , a wholly owned subsidiary of Mount Logan, which had previously been raised to support direct growth investment into Ability. The balance of the proceeds of the offering are being used for general corporate purposes, primarily supporting the Company’s working capital position, and paying outstanding transaction fees and expenses.
Subsequent Events
- Declared a shareholder distribution in the amount of
C$0.02 per common share for the quarter endedMarch 31, 2024 , payable onMay 31, 2024 to shareholders of record at the close of business onMay 22, 2024 . This cash dividend marks the nineteenth consecutive quarter of the Company issuing aC$0.02 distribution to its shareholders. This dividend is designated by the Company as an eligible dividend for the purpose of the Income Tax Act (Canada ) and any similar provincial or territorial legislation. An enhanced dividend tax credit applies to eligible dividends paid to Canadian residents.
Management Commentary
Ted Goldthorpe , Chief Executive Officer and Chairman of Mount Logan stated, “We are excited to announce our first quarter 2024 results, which demonstrate the earnings power of both our asset management and insurance segments. Fee Related Earnings, or FRE, of the asset management segment was up significantly year-over-year and highlights the growing profitability of our asset management business. Additionally, today we published a new non-IFRS metric, Spread Related Earnings, or SRE, which highlights the profitability of our insurance segment and provides additional information to enable shareholders to better understand the financial performance of our insurance segment.”
_______________________________
1The yield is calculated based on the net investment income excluding reinsured portfolio income less management fees paid to Mount Logan divided by the average of investments in financial assets for the current and prior period, and then is annualized.
Selected Financial Highlights
- Total Capital of the Company was
$147.1 million atMarch 31, 2024 , an increase of$17.6 million as compared toDecember 31, 2023 . Total capital consists of debt obligations and total shareholders’ equity. - Consolidated net income(loss) before taxes was
$13.1 million for the three months endedMarch 31, 2024 , an increase of$42.3 million from$(29.2 million) for the first quarter 2023. The increase is due to increases in risk-adjusted market interest rates, which resulted in lower net insurance finance expense. - Basic Earnings per share (“EPS”) was
$0.51 for the three months endedMarch 31, 2024 , an increase of
$1.84 from$(1.33) for the first quarter 2023. The increase in EPS resulted primarily from an increase in the net insurance finance income in the first quarter 2024 compared to the first quarter 2023. The increase in net insurance finance income in the first quarter 2024 was attributable to changes in risk-adjusted market interest rates. - Adjusted basic EPS was
$0.54 for the first quarter 2024, an increase of$1.84 from$(1.30) for the first quarter 2023.
Results of Operations by Segment
($ in Thousands)
| Three Months Ended | |||||||||||
| Reported Results(1) | |||||||||||
| Asset management | |||||||||||
| Revenue | $ | 4,030 | $ | 3,723 | $ | 1,926 | |||||
| Expenses | 7,315 | 7,839 | 5,840 | ||||||||
| Net income (loss) - asset management | (3,285 | ) | (4,116 | ) | (3,914 | ) | |||||
| Insurance | |||||||||||
| Revenue(2) | 17,555 | 30,847 | 10,186 | ||||||||
| Expenses | 822 | 28,677 | 35,459 | ||||||||
| Net income (loss) - insurance | 16,733 | 2,170 | (25,273 | ) | |||||||
| Income before income taxes | 13,148 | (1,946 | ) | (29,187 | ) | ||||||
| Provision for income taxes | (56 | ) | (315 | ) | (265 | ) | |||||
| Net income (loss) | $ | 13,092 | $ | (2,261 | ) | $ | (29,452 | ) | |||
| Basic EPS | $ | 0.51 | $ | (0.09 | ) | $ | (1.33 | ) | |||
| Diluted EPS | $ | 0.50 | $ | (0.09 | ) | $ | (1.33 | ) | |||
| Adjusting Items | |||||||||||
| Asset management | |||||||||||
| Transaction costs(3) | (251 | ) | (1,413 | ) | (158 | ) | |||||
| Acquisition integration costs(4) | (250 | ) | — | (375 | ) | ||||||
| Non-cash items(5) | (346 | ) | (553 | ) | (140 | ) | |||||
| Impact of adjusting items on expenses | (847 | ) | (1,966 | ) | (673 | ) | |||||
| Adjusted Results | |||||||||||
| Asset management | |||||||||||
| Revenue | $ | 4,030 | $ | 3,723 | $ | 1,926 | |||||
| Expenses | 6,768 | 5,873 | 5,167 | ||||||||
| Net income (loss) - asset management | (2,738 | ) | (2,150 | ) | (3,241 | ) | |||||
| Income before income taxes | 13,995 | 20 | (28,514 | ) | |||||||
| Provision for income taxes | (56 | ) | (315 | ) | (265 | ) | |||||
| Net income (loss) | $ | 13,939 | $ | (295 | ) | $ | (28,779 | ) | |||
| Basic EPS | $ | 0.54 | $ | (0.01 | ) | $ | (1.30 | ) | |||
| Diluted EPS | $ | 0.54 | $ | (0.01 | ) | $ | (1.30 | ) | |||
(1) Certain comparative figures have been reclassified to conform with the current year's presentation, including the reclassification of "Net realized and unrealized gain (loss)" to "Revenue"
(2) Insurance Revenue line item is presented net of insurance service expenses and net expenses from reinsurance contracts held.
(3) Transaction costs are related to business acquisitions and strategic initiatives transacted by the Company.
(4) Acquisition integration costs are consulting and administration services fees related to integrating a business into the Company. Acquisition integration costs are recorded in general, administrative and other expenses.
(5) Non-cash items include amortization of acquisition-related intangible assets and impairment of goodwill, if any.
Asset Management
Total Revenue – Asset Management
($ in Thousands)
| Three Months Ended | |||||
| Management fee | $ | 3,494 | $ | 1,237 | |
| Equity investment earning | 224 | 468 | |||
| Interest income | 271 | 268 | |||
| Dividend income | 112 | 56 | |||
| Net gains (losses) from investment activities | (71 | ) | (103) | ||
| Total revenue — asset management | $ | 4,030 | $ | 1,926 | |
Quarter Ended Fee Related Earnings (“FRE”)
Fee Related Earnings (“FRE”) is a non-IFRS financial measure used to assess the asset management segment’s generation of profits from revenues that are measured and received on a recurring basis and are not dependent on future realization events. The Company calculates FRE, and reconciles FRE to net income from it’s asset management activities, as follows:
| ($ in Thousands) | Three Months Ended | ||||||
| Net income (loss) and comprehensive income (loss) | 13,092 | (29,452 | ) | ||||
| Adjustment to net income (loss) and comprehensive income (loss): | |||||||
| Total revenue - insurance(1) | (17,555 | ) | (10,186 | ) | |||
| Total expenses - insurance | 822 | 35,459 | |||||
| Net income - asset management(2) | (3,641 | ) | (4,179 | ) | |||
| Adjustments to non-fee generating asset management business and other recurring revenue stream: | |||||||
| Management fee from Ability | 1,429 | 823 | |||||
| Interest income | — | — | |||||
| Dividend income | (112 | ) | (56 | ) | |||
| Net gains (losses) from investment activities | 71 | 103 | |||||
| Administration and servicing fees | 366 | 174 | |||||
| Transaction costs | 251 | 158 | |||||
| Amortization of intangible assets | 346 | 140 | |||||
| Interest and other credit facility expenses | 1,702 | 1,254 | |||||
| General, administrative and other | 1,233 | 3,013 | |||||
| Fee Related Earnings | $ | 1,645 | $ | 1,430 | |||
(1) Includes add-back of management fees paid to ML Management (as defined below).
(2) Represents net income for asset management, as presented in the Interim Consolidated Statement of Comprehensive Income (Loss).
The following table presents FRE, the performance measure of our Asset segment for the trailing twelve month period ended
Trailing Twelve Month FRE
| ($ in Thousands) | Trailing Twelve Months Ended | ||||||
| Net income (loss) and comprehensive income (loss) | 26,088 | (4,056 | ) | ||||
| Adjustment to net income (loss) and comprehensive income (loss): | |||||||
| Total revenue - insurance(1) | (76,512 | ) | 2,831 | ||||
| Total expenses - insurance | 35,450 | (6,798 | ) | ||||
| Net income - asset management(2) | (14,974 | ) | (8,023 | ) | |||
| Adjustments to non-fee generating asset management business and other recurring revenue stream: | |||||||
| Management fee from Ability | 4,853 | 2,170 | |||||
| Interest income | — | (95 | ) | ||||
| Dividend income | (640 | ) | (211 | ) | |||
| Net gains (losses) from investment activities | 157 | 687 | |||||
| Administration and servicing fees | 1,228 | 748 | |||||
| Transaction costs | 3,814 | 343 | |||||
| Amortization of intangible assets | 1,178 | 500 | |||||
| Interest and other credit facility expenses | 6,425 | 4,057 | |||||
| General, administrative and other | 4,481 | 5,912 | |||||
| Fee Related Earnings | $ | 6,522 | $ | 6,088 | |||
(1) Includes add-back of management fees paid to ML Management.
(2) Represents net income for asset management, as presented in the Interim Consolidated Statement of Comprehensive Income (Loss).
Insurance
IFRS 17 Insurance Contracts (“IFRS 17”) is effective for years beginning as of
Total Revenue – Insurance
($ in Thousands)
| Three Months Ended | |||||||
| Insurance service result | $ | (3,092 | ) | $ | (4,961 | ) | |
| Net investment income | 21,804 | 20,222 | |||||
| Net gains (losses) from investment activities | 2,666 | 2,609 | |||||
| Realized and unrealized gains (losses) on embedded derivative — funds withheld | (3,829 | ) | (7,684 | ) | |||
| Other income | 6 | - | |||||
| Total revenue — net of insurance services expenses and net expenses from reinsurance | $ | 17,555 | $ | 10,186 | |||
Spread Related Earnings (“SRE”)
Effective
The Company uses SRE to assess the performance of the insurance segment, excluding the impact of certain market volatility and other one-time, non-core components of insurance segment income (loss). Excluded items under SRE are investment gains (losses), effects of discount rates and other financial variables on the value of insurance obligations (which is a component of “net insurance finance income/(expense)”), other income and certain general, administrative & other expenses. The Company believes this measure is useful to shareholders as it provides additional insight into the underlying economics of the insurance segment, as further discussed below.
For the insurance segment, SRE equals the sum of (i) the net investment income on the insurance segment’s net invested assets (excluding investment income earned on funds held under reinsurance contracts) less (ii) cost of funds (as described below) and (iii) certain operating expenses.
Cost of funds includes the impact of interest accretion on insurance and investment contract liabilities and amortization of losses recognized for new insurance contracts that are deemed onerous at initial recognition. It also includes experience adjustments which represents the difference between actual and expected cashflows and includes the impact of certain changes to non-financial assumptions.
The Company reconciles SRE to net income (loss) before tax from its insurance segment activities, as follows:
| ($ in Thousands) | Three Months Ended | |||||||||||||||||||||||
| Q1-2024 | Q4-2023 | Q3-2023 | Q2-2023 | Q1-2023 | Q4-2022 | Q3-2022 | Q2-2022 | |||||||||||||||||
| Net income (loss) and comprehensive income (loss) before tax | $ | 13,148 | $ | (1,946 | ) | $ | 16,243 | $ | (903 | ) | $ | (29,187 | ) | $ | 4,901 | $ | 14,490 | $ | 6,351 | |||||
| Adjustment to net income (loss) and comprehensive income (loss): | ||||||||||||||||||||||||
| Total revenue - asset management(1) | (4,030 | ) | (3,723 | ) | (3,186 | ) | (2,996 | ) | (1,926 | ) | (2,651 | ) | (2,139 | ) | (2,022 | ) | ||||||||
| Total expenses - asset management | 7,615 | 7,839 | 6,868 | 6,133 | 5,840 | 4,132 | 3,401 | 2,778 | ||||||||||||||||
| Net income - insurance(2) | 16,733 | 2,170 | 19,925 | 2,234 | (25,273 | ) | 6,382 | 15,752 | 7,107 | |||||||||||||||
| Adjustments to Insurance segment business: | ||||||||||||||||||||||||
| Management fees to ML Management | (1,429 | ) | (1,345 | ) | (1,110 | ) | (969 | ) | (823 | ) | (740 | ) | (607 | ) | (527 | ) | ||||||||
| Net (gains) losses from investment activities(3) | (2,995 | ) | (10,116 | ) | (2,113 | ) | (1,454 | ) | 1,493 | (3,418 | ) | 12,439 | 22,450 | |||||||||||
| Other Income(4) | — | (7,353 | ) | — | — | — | — | — | — | |||||||||||||||
| Net insurance finance (income)/expense(5) | (11,769 | ) | 14,399 | (17,684 | ) | (5,275 | ) | 20,650 | (924 | ) | (31,286 | ) | (35,028 | ) | ||||||||||
| Loss on onerous contracts(6) | 6,884 | 286 | 2,451 | 4,214 | 490 | — | — | — | ||||||||||||||||
| General, administrative and other(7) | 447 | 502 | 1,289 | 1,546 | 144 | — | — | — | ||||||||||||||||
| Spread Related Earnings | $ | 7,871 | $ | (1,457 | ) | $ | 2,758 | $ | 296 | $ | (3,319 | ) | $ | 1,300 | $ | (3,702 | ) | $ | (5,998 | ) | ||||
(1) Includes add-back of management fees paid by Ability to ML Management.
(2) Represents net income for insurance segment, as presented in the Interim Consolidated Statement of Comprehensive Income (Loss).
(3) Excludes net (gains) losses from investment activities on assets retained by the Company under funds withheld arrangement with Front Street Re and Vista.
(4) Represents non-operating income.
(5) Includes the impact of changes in interest rates and other financials assumptions and excludes interest accretion on insurance contract liabilities and reinsurance contract assets.
(6) Represents the unamortized portion of future interest accretion and ceded commissions paid at the time of issue of new MYGA insurance contracts. Future interest accretion and ceded commissions are amortized over the average duration of MYGA contracts reinsured which aligns with the recognition of insurance service revenue. Loss on onerous contracts are part of Insurance service expense.
(7) Represents certain costs incurred by the insurance segment for purposes of IFRS reporting but not the day to day operations of the insurance company.
The following table presents SRE, the performance measure of the insurance segment:
($ in Thousands)
| Trailing Twelve Months Ended | ||||||
2024 |
2023 |
|||||
| Fixed Income and other investment income, net(1) | $ | 50,502 | $ | 29,773 | ||
| Cost of funds | (32,318 | ) | (27,358 | ) | ||
| Net Investment spread | 18,184 | 2,415 | ||||
| Other operating expenses | (8,716 | ) | (14,134 | ) | ||
| Spread Related Earnings | 9,468 | (11,719 | ) | |||
| SRE % of Average Net Investments | 1.7 | % | (2.7 | %) | ||
(1) Excludes net investment income from investment activities on assets retained by the Company under funds withheld arrangement with Front Street Re and
Spread related earnings ("SRE") was
SRE as a percentage of average net invested assets was 1.7% for the trailing twelve months ended
Liquidity and Capital Resources
As of
($ in Thousands)
| As at | |||||
| Cash and cash equivalents | $ | 67,850 | $ | 90,220 | |
| Restricted cash posted as collateral | 12,253 | — | |||
| Investments | 627,216 | 643,578 | |||
| Management fee receivable | 2,819 | 2,599 | |||
| Receivable for investments sold | 51 | 6,511 | |||
| Accrued interest and dividend receivable | 20,229 | 19,340 | |||
| Total liquid assets | $ | 730,418 | $ | 762,248 | |
The Company defines working capital as the sum of cash, restricted cash, investments that mature within one year of the reporting date, management fees receivable, receivables for investments sold, accrued interest and dividend receivables, and premium receivables, less the sum of debt obligations, payables for investments purchased, amounts due to affiliates, reinsurance liabilities, and other liabilities that are payable within one year of the reporting date.
As at
Interest Rate Risk
The Company has obligations to policyholders and other debt obligations that expose it to interest rate risk. The Company also owns debt assets and interest rate swaps that are exposed to interest rate risk. The fair value of these obligations and assets may change if base rate changes in interest rates occur.
The following table summarizes the potential impact on net assets of hypothetical base rate changes in interest rates assuming a parallel shift in the yield curve, with all other variables remaining constant.
| As at | ||||||
| 50 basis point increase(1) | $ | 13,923 | $ | 20,186 | ||
| 50 basis point decrease(1) | (16,913 | ) | (21,860 | ) | ||
(1) Losses are presented in brackets and gains are presented as positive numbers.
Actual results may differ significantly from this sensitivity analysis. As such, the sensitivities should only be viewed as directional estimates of the underlying sensitivities for the respective factors based on the assumptions outlined above.
Conference Call
The Company will hold a conference call on
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About
Ability is a
Non-IFRS Financial Measures
This press release makes reference to certain non-IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS financial measures by providing further understanding of the Company’s results of operations from management’s perspective. The Company’s definitions of non-IFRS measures used in this press release may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can be identified by the expressions “seeks”, “expects”, “believes”, “estimates”, “will”, “target” and similar expressions. The forward-looking statements are not historical facts but reflect the current expectations of the Company regarding future results or events and are based on information currently available to it. Certain material factors and assumptions were applied in providing these forward-looking statements. The forward-looking statements discussed in this release include, but are not limited to, statements relating to the Company’s continued transition to an asset management and insurance platform business and the entering into of further strategic transactions to diversify the Company’s business and further grow recurring management fee and other income and increasing Ability’s assets; the Company’s plans to focus Ability’s business on the reinsurance of annuity products; the potential benefits of combining Mount Logan’s and Ovation’s platform including an increase in fee-related earnings as a result of the acquisition; the decrease in expenses in the asset management segment; the historical growth in the asset management segment and insurance segment being an indicator for future growth; the growth and scalability of the Company’s business the Company’s business strategy, model, approach and future activities; portfolio composition and size, asset management activities and related income, capital raising activities, future credit opportunities of the Company, portfolio realizations, the protection of stakeholder value; the expansion of the Company’s loan portfolio; the risk that changes to IFRS, including the adoption of IFRS 17, could have a material impact on the Company’s financial results and access to capital; and the expansion of Mount Logan’s capabilities. All forward-looking statements in this press release are qualified by these cautionary statements. The Company believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, the Company can give no assurance that the actual results or developments will be realized by certain specified dates or at all. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including that the Company has a limited operating history with respect to an asset management oriented business model; Ability may not generate recurring asset management fees, increase its assets or strategically benefit the Company as expected; the expected synergies by combining the business of Mount Logan with the business of Ability may not be realized as expected; the risk that Ability may require a significant investment of capital and other resources in order to expand and grow the business; the Company does not have a record of operating an insurance solutions business and is subject to all the risks and uncertainties associated with a broadening of the Company’s business; the risk that the expected synergies of the acquisition of Ovation may not be realized as expected and the matters discussed under “Risks Factors” in the most recently filed annual information form and management discussion and analysis for the Company. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by securities laws. These forward-looking statements are made as of the date of this press release.
This press release is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication of this release is not, and under no circumstances is it to be construed as, an offer to sell or an offer to purchase any securities in the Company or in any fund or other investment vehicle. This press release is not intended for
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| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||||
| (in thousands of |
||||||
| As at | Notes | |||||
| ASSETS | ||||||
| Asset Management: | ||||||
| Cash | $ | 2,602 | $ | 990 | ||
| Investments | 6 | 26,245 | 26,709 | |||
| Intangible assets | 9 | 28,433 | 28,779 | |||
| Other assets | 6,769 | 6,593 | ||||
| Total assets — asset management | 64,049 | 63,071 | ||||
| Insurance: | ||||||
| Cash and cash equivalents | 65,248 | 89,230 | ||||
| Restricted cash posted as collateral | 18 | 12,253 | - | |||
| Investments | 6 | 1,043,028 | 1,008,637 | |||
| Reinsurance contract assets | 13 | 425,930 | 442,673 | |||
| Intangible assets | 9 | 2,444 | 2,444 | |||
| 9 | 55,015 | 55,015 | ||||
| Other assets | 22,087 | 27,508 | ||||
| Total assets — insurance | 1,626,005 | 1,625,507 | ||||
| Total assets | $ | 1,690,054 | $ | 1,688,578 | ||
| LIABILITIES | ||||||
| Asset Management | ||||||
| Due to affiliates | 10 | $ | 10,728 | $ | 12,113 | |
| Debt obligations | 12 | 66,721 | 62,030 | |||
| Derivatives - debt warrants | 296 | — | ||||
| Accrued expenses and other liabilities | 3,990 | 3,494 | ||||
| Total liabilities — asset management | 81,735 | 77,637 | ||||
| Insurance | ||||||
| Debt obligations | 12 | 14,250 | 14,250 | |||
| Insurance contract liabilities | 13 | 1,086,172 | 1,107,056 | |||
| Investment contract liabilities | 14 | 203,592 | 169,314 | |||
| Derivatives | 18 | 672 | - | |||
| Funds held under reinsurance contracts | 235,273 | 238,253 | ||||
| Accrued expenses and other liabilities | 3,409 | 30,116 | ||||
| Total liabilities — insurance | 1,543,368 | 1,558,989 | ||||
| Total liabilities | 1,624,103 | 1,636,626 | ||||
| EQUITY | ||||||
| Common shares | 11 | 115,897 | 115,607 | |||
| Warrants | 11 | 1,129 | 1,129 | |||
| Contributed surplus | 7,240 | 7,240 | ||||
| Surplus (Deficit) | (37,457) | (50,166) | ||||
| Cumulative translation adjustment | (21,858) | (21,858) | ||||
| Total equity | 64,951 | 51,952 | ||||
| Total liabilities and equity | $ | 1,690,054 | $ | 1,688,578 | ||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||
| (in thousands of |
||||||||
| Three months ended | ||||||||
| Notes | ||||||||
| REVENUE | ||||||||
| Asset management | ||||||||
| Management fee | 7 | $ | 3,494 | $ | 1,237 | |||
| Equity investment earning | 224 | 468 | ||||||
| Interest income | 271 | 268 | ||||||
| Dividend income | 112 | 56 | ||||||
| Net gains (losses) from investment activities | 4 | (71 | ) | (103 | ) | |||
| Total revenue — asset management | 4,030 | 1,926 | ||||||
| Insurance | ||||||||
| Insurance revenue | 8 | 22,741 | 21,805 | |||||
| Insurance service expenses | 8 | (25,184 | ) | (21,686 | ) | |||
| Net expenses from reinsurance contracts held | 8 | (649 | ) | (5,080 | ) | |||
| Insurance service result | (3,092 | ) | (4,961 | ) | ||||
| Net investment income | 5 | 21,804 | 20,222 | |||||
| Net gains (losses) from investment activities | 4 | 2,666 | 2,609 | |||||
| Realized and unrealized gains (losses) on embedded derivative — funds withheld | (3,829 | ) | (7,684 | ) | ||||
| Other income | 6 | — | ||||||
| Total revenue, net of insurance service expenses and net expenses from reinsurance contracts held — insurance | 17,555 | 10,186 | ||||||
| Total revenue | 21,585 | 12,112 | ||||||
| EXPENSES | ||||||||
| Asset management | ||||||||
| Administration and servicing fees | 10 | 1,423 | 491 | |||||
| Transaction costs | 251 | 158 | ||||||
| Amortization of intangible assets | 9 | 346 | 140 | |||||
| Interest and other credit facility expenses | 12 | 1,702 | 1,254 | |||||
| General, administrative and other | 3,893 | 3,797 | ||||||
| Total expenses — asset management | 7,615 | 5,840 | ||||||
| Insurance | ||||||||
| Net insurance finance (income) expenses | 5 | (7,252 | ) | 24,484 | ||||
| Increase (decrease) in investment contract liabilities | 14 | 2,279 | 1,412 | |||||
| (Increase) decrease in reinsurance contract assets | 3,556 | 5,525 | ||||||
| General, administrative and other | 2,239 | 4,038 | ||||||
| Total expenses — insurance | 822 | 35,459 | ||||||
| Total expenses | 8,437 | 41,299 | ||||||
| Income (loss) before taxes | 13,148 | (29,187 | ) | |||||
| Income tax (expense) benefit — asset management | 15 | (56 | ) | (265 | ) | |||
| Income tax (expense) benefit — insurance | ||||||||
| Net income (loss) and comprehensive income (loss) | $ | 13,092 | $ | (29,452 | ) | |||
| Earnings per share | ||||||||
| Basic | $ | 0.51 | $ | (1.33 | ) | |||
| Diluted | $ | 0.50 | $ | (1.33 | ) | |||
| Dividends per common share — USD | $ | 0.02 | $ | 0.02 | ||||
| Dividends per common share — CAD | $ | 0.02 | $ | 0.02 | ||||
Source:
Sun Life: Q1 Earnings Snapshot
In Re: TS# 116791-WA-Trustee Sale
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