(Source: PrimeNewswire)NEW YORK, May 5, 2009 (GLOBE NEWSWIRE) -- AmTrust Financial Services, Inc. (Nasdaq:AFSI) today reported operating earnings of $30.2 million for the first quarter of 2009. Operating earnings is a non-GAAP financial measure defined by the Company as net income, excluding realized investment gains and losses, net of tax. Gross written premium for the first quarter of 2009 was $267.5 million and net income was $24.2 million.

During the first quarter of 2009, the Company incurred a realized loss on an after-tax basis of $6.0 million on its investment portfolio. The realized loss related to certain fixed income and equity investments.

First Quarter Overview:

Gross written premium in the first quarter 2009 increased by $32.7 million to $267.5 million or 13.9% from $234.8 million in the first quarter of 2008.The Company reported operating earnings of $30.2 million or basic operating earnings per share of $0.50 for the first quarter of 2009, an increase of 16% from the first quarter of 2008. Net income for the first quarter 2009 was $24.2 million, or $0.40 basic earnings per share.

First Quarter 2009 Highlights:

     * Quarterly basic operating earnings per share was $.50 ($0.43 in     2008)   * Quarterly basic earnings per share was $0.40 ($0.37 in 2008)   * Annualized return on equity on operating earnings for the first     quarter was 30.4%   * Book value per share was $6.77 as of March 31, 2009 ($6.54 as of     December 31, 2008)   * The combined ratio for the first quarter was 79.7% (77.2% in 2008)   * Completed share repurchases of approximately 700,000 shares 

First Quarter 2009 Results:

Revenue:

Gross written premium for the first quarter was $267.5 million, an increase of 13.9% or $32.7 million from $234.8 million in the first quarter 2008. The increases were attributable to both organic growth and the continued successful integration of our recent acquisitions.

Net written premium (gross written premium less cessions for reinsurance, including cessions to Maiden Insurance Company (Maiden)) in the first quarter of 2009 increased by $18.8 million or 16.0%, to $136.2 million from $117.4 million in the first quarter of 2008 and net earned premium for the first quarter of 2009 increased by $35.0 million or 35.9%, to $132.4 million from $97.4 million in the first quarter 2008.

As previously disclosed, the Company entered into a reinsurance agreement with Maiden effective July 1, 2007. Under the terms of this reinsurance agreement, the Company ceded approximately $87.5 million and $82.9 million of written premium to Maiden in the first quarter of 2009 and 2008, respectively.

The Company's agreement with Maiden generated $27.6 million and $20.2 million of earned ceding commission for the first quarter of 2009 and 2008, respectively. The agreement continues to enable the Company to leverage its balance sheet, increase its writings, decrease its expense ratio and, most importantly, increase its return on equity.

Commission and fee income (exclusive of ceding commission from Maiden) for the first quarter 2009 increased by $1.2 million or 19.0% to $7.5 million from $6.3 million for the first quarter 2008. The increase was attributable primarily to additional fees from Maiden and administrator fees related to new warranty programs in 2009.

Net investment income, excluding realized gains and losses in the first quarter 2009, was $13.6 million compared to $13.5 million in the first quarter 2008. Average invested assets for the three months ended March 31, 2009 and 2008 was approximately $1.4 billion. During the quarters ended March 31, 2009 and 2008, the Company realized investment losses of $6.0 million and $3.4 million, respectively, on an after-tax basis.

Expenses:

The Company's loss ratio for the quarter ended March 31, 2009 was 56.6% and was consistent with the quarter ended March 31, 2008.

Acquisition Costs and Other Underwriting Expenses less Ceding Commission Revenue for the three months ended March 31, 2009 increased by $17.3 million to $58.2 million from $40.9 million for the three months ended March 31, 2008. The increase resulted, primarily, from increased premium writings in 2009. The expense ratio for the three months ended March 31, 2009 increased to 23.1% from 20.5% for the three months ended March 31, 2008.

Other Matters:

During the first quarter the Company completed share repurchases of approximately 700 thousand shares for $5.4 million. This leaves approximately 2.3 million remaining under its share repurchase authorization.