Alterra Capital 8-K Max Capital Group Reports First Quarter 2010 Results

Exhibit 99.2

Max Capital Group Ltd.

Investor Financial Supplement

First Quarter 2010

(Unaudited)

This supplement is for information purposes only. It should be read in conjunction with documents filed by Max Capital Group Ltd with the U.S. Securities Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act 1934.

Max Capital Group Ltd.

Investors:

Susan Spivak Bernstein, +1-212-898-6640

or

Media:

Kekst and Company

Roanne Kulakoff or Peter Hill, +1-212-521-4800

MAX CAPITAL GROUP LTD.

FINANCIAL SUPPLEMENT TABLE OF CONTENTS

	Page
Financial Highlights	4
Consolidated Balance Sheets	5
Consolidated Statements of Income - Quarterly	6
Segment Data and Ratios - Quarterly	7
Gross Premiums Written by Line of Business - Quarterly	14
Investment Portfolio	15
Shareholder Return Analysis	18
Earnings Per Share Information	19
Operating Income Reconciliation	20
Book Value per Share	21
Regulation G	22

MAX CAPITAL GROUP LTD.

Cautionary note regarding forward-looking information

This financial supplement may include forward-looking statements, both with respect to Max and its industry, that reflect its current views with respect to future events and financial performance. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” “may” and similar statements of a future or forward-looking nature identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and you should not place undue reliance on any such statements.

Max believes that these factors include, but are not limited to, the following: (1) the adequacy of loss reserves and the need to adjust such reserves as claims develop over time; (2) the failure of any of the loss limitation methods employed; (3) the effects of emerging claims and coverage issues; (4) changes in general economic conditions, including changes in capital and credit markets; (5) the effect of competition and cyclical trends, including with respect to demand and pricing in the insurance and reinsurance markets; (6) any lowering or loss of financial ratings; (7) the occurrence of natural or man-made catastrophic events with a frequency or severity exceeding expectations; (8) the loss of business provided to Max by its major brokers; (9) the effect on Max’s investment portfolio of changing financial market conditions including inflation, interest rates, liquidity and other factors; (10) tax and regulatory changes and conditions; (11) the integration of Harbor Point Limited or new business ventures Max may enter into; and (12) retention of key personnel, as well as management’s response to any of the aforementioned factors.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the Risk Factors included in Max’s most recent reports on Form 10-K and Form 10-Q and other documents on file with the Securities and Exchange Commission. Any forward-looking statements made in this financial supplement are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Max will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Max or its business or operations. Max undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

MAX CAPITAL GROUP LTD.

FINANCIAL HIGHLIGHTS

(Expressed in thousands of United States Dollars, except per share and share amounts)

	For The Quarters Ended
	Mar. 31, 2010			Mar. 31, 2009			Previous Year Quarter Change
HIGHLIGHTS
Net income	$	36,381		$	44,539		(18.3	)%
Net operating income [a]		40,681			46,933		(13.3	)%
Operating cashflow		46,800			(27,828	)	n/a
Gross premiums written		371,139			434,273		(14.5	)%
Net premiums earned		194,240			190,282		2.1	%
Total assets		7,474,206			7,177,374		4.1	%
Total shareholders’ equity		1,613,116			1,262,862		27.7	%
PER SHARE
Basic earnings per share
Net income	$	0.64		$	0.79
Net operating income [a]		0.72			0.83
Diluted earnings per share
Net income	$	0.63		$	0.78
Net operating income [a]		0.71			0.82
Weighted average shares outstanding - basic		56,516,593			56,637,291
Weighted average shares outstanding - diluted		57,383,748			57,183,826
Book value per common share [b]	$	28.31		$	22.60		25.3	%
Diluted book value per share (treasury stock method) [b]		27.86			21.88		27.3	%
Diluted tangible book value per share (treasury stock method) [b]		27.02			21.18		27.6	%
RATIOS
Annualized return on average shareholders equity [c]		9.2	%		14.0	%
Annualized net operating return on average shareholders equity [c]		10.2	%		14.8	%
Loss ratio [d]		64.6	%		65.7	%
Acquisition cost ratio [d]		12.5	%		10.8	%
General and administrative expense ratio [d]		13.4	%		13.2	%
Combined ratio [d]		90.5	%		89.7	%

[a] Net operating income represents net income excluding, as applicable, after-tax net realized and unrealized gains and losses on fixed maturities, after-tax net foreign exchange gains or losses, and after-tax merger and acquisition expenses.

[b] For detailed calculations see page 21.

[c] For detailed calculations see page 18.

[d] For property and casualty business only.

4

MAX CAPITAL GROUP LTD.

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars, except per share and share amounts)

	Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009			Dec. 31, 2008
	(Unaudited)						(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Cash and cash equivalents	$	690,246		$	702,278		$	1,056,011		$	1,008,178		$	955,577		$	949,404
Fixed maturities, trading at fair value		219,332			228,696			74,337			63,666			56,041			61,820
Fixed maturities, available for sale at fair value		3,158,131			3,007,356			2,872,146			3,615,549			3,424,866			3,592,039
Fixed maturities, held to maturity at amortized cost (fair value $1,013,315)		954,696			1,005,947			1,026,244			—			—			—
Other investments, at fair value		322,160			314,849			389,515			436,603			599,485			753,658
Accrued interest income		51,906			57,215			52,145			47,432			45,816			52,882
Premiums receivable		617,560			567,301			546,195			670,443			673,551			554,845
Losses and benefits recoverable from reinsurers		1,023,224			1,001,373			985,614			930,483			879,823			846,622
Deferred acquisition costs		72,195			65,648			66,451			70,097			64,000			51,337
Prepaid reinsurance premiums		232,947			190,613			206,924			246,068			238,700			192,889
Trades pending settlement		—			76,031			38,217			95,919			131,325			85,727
Other assets		131,809			122,439			114,947			108,121			108,190			110,772
Total assets	$	7,474,206		$	7,339,746		$	7,428,746		$	7,292,559		$	7,177,374		$	7,251,995
LIABILITIES
Property and casualty losses	$	3,220,357		$	3,178,094		$	3,159,156		$	3,058,337		$	3,005,125		$	2,938,171
Life and annuity benefits		1,306,916			1,372,513			1,415,836			1,389,052			1,306,573			1,366,976
Deposit liabilities		149,028			152,629			152,638			153,109			153,265			219,260
Funds withheld from reinsurers		138,984			140,079			142,384			140,826			148,942			164,157
Unearned property and casualty premiums		690,013			628,161			676,342			745,948			690,122			574,134
Reinsurance balances payable		168,329			146,085			151,615			190,479			165,008			160,686
Accounts payable and accrued expenses		61,955			67,088			92,722			54,964			54,108			81,916
Trades pending settlement		35,033			—			—			—			—			—
Bank loans		—			—			—			105,000			300,000			375,000
Senior notes		90,475			90,464			91,379			91,375			91,369			91,364
Total liabilities		5,861,090			5,775,113			5,882,072			5,929,090			5,914,512			5,971,664
SHAREHOLDERS’ EQUITY
Preferred shares (par value $1.00) 20,000,000 shares authorized; no shares issued or outstanding		—			—			—			—			—			—
Common shares (par value $1.00) 200,000,000 shares authorized; 56,979,568 shares issued and outstanding		56,980			55,867			57,013			56,599			55,883			55,806
Additional paid-in capital		744,466			752,309			773,923			772,047			768,585			763,391
Accumulated other comprehensive income (loss)		49,822			25,431			41,602			(49,730	)		(107,588	)		(45,399	)
Retained earnings		761,848			731,026			674,136			584,553			545,982			506,533
Total shareholders’ equity		1,613,116			1,564,633			1,546,674			1,363,469			1,262,862			1,280,331
Total liabilities and shareholders’ equity	$	7,474,206		$	7,339,746		$	7,428,746		$	7,292,559		$	7,177,374		$	7,251,995
Book Value Per Share	$	28.31		$	28.01		$	27.13		$	24.09		$	22.60		$	22.94
Diluted Book Value Per Share (treasury stock method)	$	27.86		$	27.36		$	26.54		$	23.53		$	21.88		$	22.46
Diluted Tangible Book Value Per Share (treasury stock method)	$	27.02		$	26.51		$	25.85		$	22.83		$	21.18		$	21.75
Debt-to-capital ratio [a]		5.3	%		5.5	%		5.6	%		6.3	%		16.0	%		15.9	%

[a] Calculated as debt, being bank loans (excluding swap loan) and senior notes, divided by shareholders' equity plus debt.

5

MAX CAPITAL GROUP LTD.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - QUARTERLY (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)

	FOR THE QUARTERS ENDED
	Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009			Mar. 31, 2008
REVENUES
Gross premiums written	$	371,139		$	278,333		$	265,886		$	396,509		$	434,273		$	306,634
Reinsurance premiums ceded		(153,220	)		(103,143	)		(83,290	)		(129,669	)		(164,379	)		(104,676	)
Net premiums written	$	217,919		$	175,190		$	182,596		$	266,840		$	269,894		$	201,958
Earned premiums	$	304,997		$	325,078		$	329,869		$	354,620		$	309,382		$	209,640
Earned premiums ceded		(110,757	)		(117,805	)		(121,853	)		(125,835	)		(119,100	)		(73,828	)
Net premiums earned		194,240			207,273			208,016			228,785			190,282			135,812
Net investment income		48,390			44,668			42,830			41,755			40,488			49,626
Net realized and unrealized gains (losses) on investments		6,422			17,325			24,528			21,472			18,441			(24,295	)
Total other-than-temporary impairment losses		(698	)		(125	)		—			(5,190	)		—			—
Portion of loss recognized in other comprehensive income (loss) before taxes		278			(800	)		(139	)		3,176			—			—
Net impairment losses recognized in earnings		(420	)		(925	)		(139	)		(2,014	)		—			—
Net realized gain on retirement of senior notes		—			111			—			—			—			—
Other income		344			(196	)		819			974			1,306			1,223
Total revenues		248,976			268,256			276,054			290,972			250,517			162,366
LOSSES AND EXPENSES
Net losses and loss expenses		124,965			114,870			131,778			122,228			124,723			93,602
Claims and policy benefits		17,659			16,976			14,378			55,407			14,332			14,955
Acquisition costs		24,244			23,188			27,997			25,059			20,630			9,612
Interest expense		4,942			6,685			5,971			4,744			3,939			11,957
Net foreign exchange (gains) losses		(2,452	)		702			406			(3,404	)		(3,476	)		12
Merger and acquisition expenses		4,744			(224	)		(41,350	)		4,785			5,223			—
General and administrative expenses		36,528			38,458			40,372			36,105			39,060			24,708
Total losses and expenses		210,630			200,655			179,552			244,924			204,431			154,846
INCOME BEFORE TAXES		38,346			67,601			96,502			46,048			46,086			7,520
Income tax expense		1,965			5,009			1,176			2,290			1,547			(229	)
NET INCOME		36,381			62,592			95,326			43,758			44,539			7,749
Change in net unrealized gains and losses on available for sale securities, net of tax		34,131			(16,085	)		95,794			36,933			(66,098	)		14,949
Foreign currency translation adjustment		(9,740	)		(86	)		(4,462	)		20,925			3,909			(4,926	)
COMPREHENSIVE INCOME (LOSS)	$	60,772		$	46,421		$	186,658		$	101,616		$	(17,650	)	$	17,772
KEY RATIOS/PER SHARE DATA
Loss ratio [a]		64.6	%		55.9	%		63.4	%		65.1	%		65.7	%		69.2	%
Acquisition cost ratio [b]		12.5	%		11.1	%		13.4	%		13.0	%		10.8	%		7.0	%
General and administrative expense ratio [c]		13.4	%		14.2	%		14.1	%		12.7	%		13.2	%		12.6	%
Combined ratio		90.5	%		81.2	%		90.9	%		90.8	%		89.7	%		88.8	%
Basic earnings per share	$	0.64		$	1.10		$	1.67		$	0.77		$	0.79		$	0.14
Diluted earnings per share	$	0.63		$	1.08		$	1.64		$	0.76		$	0.78		$	0.13
Net operating income per share - diluted [d]	$	0.71		$	1.04		$	0.92		$	0.83		$	0.82		$	0.11
Annualized ROAE [e]		9.2	%		16.1	%		26.2	%		13.3	%		14.0	%		2.0	%
Annualized Net Operating ROAE [e]		10.2	%		15.5	%		14.8	%		14.6	%		14.8	%		1.6	%

[a] The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business

[b] The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business

[c] The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business

[d] See page 20 for calculation of net operating income per share - diluted.

[e] See page 18 for calculation of annualized return on average shareholders' equity (ROAE) and net operating ROAE

6

MAX CAPITAL GROUP LTD.

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED MARCH 31, 2010 (Unaudited)

(Expressed in thousands of United States Dollars)

	Property & Casualty															Life & Annuity
	Insurance			Reinsurance			U.S. Specialty			Max at Lloyd’s			Total			Reinsurance			Corporate			Consolidated
Gross premiums written	$	66,421		$	154,851		$	76,887		$	72,117		$	370,276		$	863		$	—		$	371,139
Reinsurance premiums ceded		(38,576	)		(45,351	)		(49,227	)		(19,959	)		(153,113	)		(107	)		—			(153,220	)
Net premiums written	$	27,845		$	109,500		$	27,660		$	52,158		$	217,163		$	756		$	—		$	217,919
Earned premiums	$	97,041		$	95,743		$	73,890		$	37,460		$	304,134		$	863		$	—		$	304,997
Earned premiums ceded		(47,246	)		(15,958	)		(39,977	)		(7,469	)		(110,650	)		(107	)		—			(110,757	)
Net premiums earned		49,795			79,785			33,913			29,991			193,484			756			—			194,240
Net investment income		6,169			10,904			1,341			2,017			20,431			13,099			14,860			48,390
Net realized and unrealized gains (losses) on investments		306			318			—			(182	)		442			5,916			64			6,422
Net impairment losses recognized in earnings		—			—			—			—			—			—			(420	)		(420	)
Other income		(11	)		—			5			178			172			(28	)		200			344
Total revenues		56,259			91,007			35,259			32,004			214,529			19,743			14,704			248,976
Net losses and loss expenses		37,279			50,065			21,363			16,258			124,965			—			—			124,965
Claims and policy benefits		—			—			—			—			—			17,659			—			17,659
Acquisition costs		(309	)		14,966			3,674			5,767			24,098			146			—			24,244
Interest expense		234			1,701			—			—			1,935			1,363			1,644			4,942
Net foreign exchange (gains) losses		—			—			—			(2,709	)		(2,709	)		—			257			(2,452	)
Merger and acquisition expenses		—			—			—			—			—			—			4,744			4,744
General and administrative expenses		5,897			8,959			8,472			2,713			26,041			657			9,830			36,528
Total losses and expenses		43,101			75,691			33,509			22,029			174,330			19,825			16,475			210,630
Income (loss) before taxes	$	13,158		$	15,316		$	1,750		$	9,975		$	40,199		$	(82	)	$	(1,771	)	$	38,346
Loss ratio [a]		74.9	%		62.7	%		63.0	%		54.2	%		64.6	%
Acquisition cost ratio [b]		(0.6	)%		18.8	%		10.8	%		19.2	%		12.5	%
General and administrative expense ratio [c]		11.8	%		11.2	%		25.0	%		9.1	%		13.4	%
Combined ratio		86.1	%		92.7	%		98.8	%		82.5	%		90.5	%

[a] The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business

[b] The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business

[c] The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business

7

MAX CAPITAL GROUP LTD.

CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED MARCH 31, 2010 (Unaudited)

	Property & Casualty
	Insurance		Reinsurance		U.S. Specialty		Max at Lloyd’s		Total
UNDERWRITING RATIOS
Loss ratio	74.9	%	62.7	%	63.0	%	54.2	%	64.6	%
Acquisition cost ratio	(0.6	)%	18.8	%	10.8	%	19.2	%	12.5	%
General and administrative expense ratio	11.8	%	11.2	%	25.0	%	9.1	%	13.4	%
Combined ratio	86.1	%	92.7	%	98.8	%	82.5	%	90.5	%
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
FAVORABLE / (UNFAVORABLE)
Loss ratio [a]	11.0	%	11.6	%	2.2	%	5.5	%	8.8	%
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
UNDERWRITING RATIOS
Loss ratio	85.9	%	74.3	%	65.2	%	59.7	%	73.4	%
Acquisition cost ratio	(0.6	)%	18.8	%	10.8	%	19.2	%	12.5	%
General and administrative expense ratio	11.8	%	11.2	%	25.0	%	9.1	%	13.4	%
Combined ratio	97.1	%	104.3	%	101.0	%	88.0	%	99.3	%

[a] Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts.

8

MAX CAPITAL GROUP LTD.

INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)

	FOR THE QUARTERS ENDED
	Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009			Mar. 31, 2008
Gross premiums written	$	66,421		$	125,040		$	81,134		$	133,911		$	87,682		$	73,204
Reinsurance premiums ceded		(38,576	)		(66,007	)		(41,884	)		(49,251	)		(54,941	)		(45,391	)
Net premiums written	$	27,845		$	59,033		$	39,250		$	84,660		$	32,741		$	27,813
Earned premiums	$	97,041		$	109,381		$	103,961		$	101,551		$	102,197		$	91,791
Earned premiums ceded		(47,246	)		(53,417	)		(54,814	)		(50,743	)		(52,153	)		(49,213	)
Net premiums earned		49,795			55,964			49,147			50,808			50,044			42,578
Net investment income		6,169			6,014			5,898			5,722			5,241			4,055
Net realized and unrealized gains (losses) on investments		306			893			1,298			1,003			1,236			(2,000	)
Other income		(11	)		—			91			—			1,147			1,066
Total revenues		56,259			62,871			56,434			57,533			57,668			45,699
Net losses and loss expenses		37,279			26,326			31,756			37,809			36,464			31,111
Acquisition costs		(309	)		270			369			(470	)		(1,402	)		(846	)
Interest expense		234			781			—			—			—			—
General and administrative expenses		5,897			6,798			7,281			5,415			5,129			5,280
Total losses and expenses		43,101			34,175			39,406			42,754			40,191			35,545
Income before taxes	$	13,158		$	28,696		$	17,028		$	14,779		$	17,477		$	10,154
Loss ratio		74.9	%		47.0	%		64.6	%		74.4	%		72.9	%		73.1	%
Acquisition cost ratio		(0.6	)%		0.5	%		0.8	%		(0.9	)%		(2.8	)%		(2.0	)%
General and administrative expense ratio		11.8	%		12.2	%		14.8	%		10.6	%		10.2	%		12.4	%
Combined ratio		86.1	%		59.7	%		80.2	%		84.1	%		80.3	%		83.5	%

9

MAX CAPITAL GROUP LTD.

REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)

	FOR THE QUARTERS ENDED
	Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2008			June 30, 2009			Mar. 31, 2009			Mar. 31, 2008
Gross premiums written	$	154,851		$	66,732		$	94,118		$	95,196		$	232,982		$	203,425
Reinsurance premiums ceded		(45,351	)		569			(11,106	)		(18,085	)		(51,383	)		(39,252	)
Net premiums written	$	109,500		$	67,301		$	83,012		$	77,111		$	181,599		$	164,173
Earned premiums	$	95,743		$	111,440		$	128,458		$	112,550		$	123,986		$	100,614
Earned premiums ceded		(15,958	)		(13,867	)		(25,367	)		(22,825	)		(26,519	)		(13,597	)
Net premiums earned		79,785			97,573			103,091			89,725			97,467			87,017
Net investment income		10,904			10,613			10,404			9,975			9,228			9,885
Net realized and unrealized gains (losses) on investments		318			2,073			3,040			2,385			3,042			(6,485	)
Other income		—			—			—			12			—			—
Total revenues		91,007			110,259			116,535			102,097			109,737			90,417
Net losses and loss expenses		50,065			61,718			68,728			57,813			66,215			58,637
Acquisition costs		14,966			17,578			20,299			15,734			17,463			9,964
Interest expense		1,701			4,191			1,706			1,191			(497	)		3,043
General and administrative expenses		8,959			8,174			8,857			7,223			7,524			6,606
Total losses and expenses		75,691			91,661			99,590			81,961			90,705			78,250
Income before taxes	$	15,316		$	18,598		$	16,945		$	20,136		$	19,032		$	12,167
Loss ratio		62.7	%		63.3	%		66.7	%		64.4	%		67.9	%		67.4	%
Acquisition cost ratio		18.8	%		18.0	%		19.7	%		17.5	%		18.0	%		11.5	%
General and administrative expense ratio		11.2	%		8.3	%		8.5	%		8.1	%		7.7	%		7.5	%
Combined ratio		92.7	%		89.6	%		94.9	%		90.0	%		93.6	%		86.4	%

10

MAX CAPITAL GROUP LTD.

U.S. SPECIALTY SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)

	FOR THE QUARTERS ENDED
	Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009			Mar. 31, 2008
Gross premiums written	$	76,887		$	66,210		$	69,419		$	81,016		$	68,833		$	29,352
Reinsurance premiums ceded		(49,227	)		(36,517	)		(26,259	)		(51,659	)		(40,661	)		(19,902	)
Net premiums written	$	27,660		$	29,693		$	43,160		$	29,357		$	28,172		$	9,450
Earned premiums	$	73,890		$	71,061		$	68,175		$	63,078		$	54,356		$	16,582
Earned premiums ceded		(39,977	)		(42,886	)		(37,074	)		(41,657	)		(32,951	)		(10,887	)
Net premiums earned		33,913			28,175			31,101			21,421			21,405			5,695
Net investment income		1,341			1,438			1,461			1,495			1,593			1,935
Net realized and unrealized gains on investments		—			84			—			—			148			—
Other income		5			42			52			372			(152	)		—
Total revenues		35,259			29,739			32,614			23,288			22,994			7,630
Net losses and loss expenses		21,363			16,312			21,266			13,149			12,085			3,854
Acquisition costs		3,674			1,628			1,926			2,723			1,224			342
General and administrative expenses		8,472			10,034			7,804			5,635			7,756			5,193
Total losses and expenses		33,509			27,974			30,996			21,507			21,065			9,389
Income (loss) before taxes	$	1,750		$	1,765		$	1,618		$	1,781		$	1,929		$	(1,759	)
Loss ratio		63.0	%		57.9	%		68.4	%		61.4	%		56.5	%		67.7	%
Acquisition cost ratio		10.8	%		5.8	%		6.2	%		12.7	%		5.7	%		6.0	%
General and administrative expense ratio		25.0	%		35.6	%		25.1	%		26.3	%		36.2	%		91.2	%
Combined ratio		98.8	%		99.3	%		99.7	%		100.4	%		98.4	%		164.9	%

11

MAX CAPITAL GROUP LTD.

MAX AT LLOYD’S SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)

	FOR THE QUARTERS ENDED
	Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009
Gross premiums written	$	72,117		$	18,344		$	21,087		$	45,363		$	44,179
Reinsurance premiums ceded		(19,959	)		(921	)		(4,015	)		(10,647	)		(17,301	)
Net premiums written	$	52,158		$	17,423		$	17,072		$	34,716		$	26,878
Earned premiums	$	37,460		$	31,189		$	29,147		$	36,418		$	28,246
Earned premiums ceded		(7,469	)		(7,368	)		(4,572	)		(10,583	)		(7,384	)
Net premiums earned		29,991			23,821			24,575			25,835			20,862
Net investment income		2,017			1,172			1,749			645			822
Net realized and unrealized (losses) gains on investments		(182	)		3			1,400			720			467
Other income		178			183			(33	)		436			72
Total revenues		32,004			25,179			27,691			27,636			22,223
Net losses and loss expenses		16,258			10,514			10,028			13,457			9,959
Acquisition costs		5,767			3,339			5,250			6,395			3,152
Net foreign exchange (gains) losses		(2,709	)		69			42			(1,656	)		(3,510	)
General and administrative expenses		2,713			4,116			5,423			5,712			4,721
Total losses and expenses		22,029			18,038			20,743			23,908			14,322
Income before taxes	$	9,975		$	7,141		$	6,948		$	3,728		$	7,901
Loss ratio		54.2	%		44.1	%		40.8	%		52.1	%		47.7	%
Acquisition cost ratio		19.2	%		14.0	%		21.4	%		24.8	%		15.1	%
General and administrative expense ratio		9.1	%		17.3	%		22.0	%		22.1	%		22.7	%
Combined ratio		82.5	%		75.4	%		84.2	%		99.0	%		85.5	%

12

MAX CAPITAL GROUP LTD.

LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)

	FOR THE QUARTERS ENDED
	Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009			Mar. 31, 2008
Gross premiums written	$	863		$	2,007		$	128		$	41,023		$	597		$	653
Reinsurance premiums ceded		(107	)		(267	)		(26	)		(27	)		(93	)		(131	)
Net premiums written	$	756		$	1,740		$	102		$	40,996		$	504		$	522
Earned premiums	$	863		$	2,007		$	128		$	41,023		$	597		$	653
Earned premiums ceded		(107	)		(267	)		(26	)		(27	)		(93	)		(131	)
Net premiums earned		756			1,740			102			40,996			504			522
Net investment income		13,099			13,367			13,143			12,917			11,566			9,805
Net realized and unrealized gains (losses) on investments		5,916			8,192			11,932			9,346			7,868			(10,369	)
Other income		(28	)		(120	)		—			—			—			—
Total revenues		19,743			23,179			25,177			63,259			19,938			(42	)
Claims and policy benefits		17,659			16,976			14,378			55,407			14,332			14,955
Acquisition costs		146			373			153			677			193			152
Interest expense		1,363			525			2,349			837			(383	)		2,491
General and administrative expenses		657			606			829			657			694			611
Total losses and expenses		19,825			18,480			17,709			57,578			14,836			18,209
(Loss) income before taxes	$	(82	)	$	4,699		$	7,468		$	5,681		$	5,102		$	(18,251	)

13

MAX CAPITAL GROUP LTD.

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS (Unaudited)

(Expressed in thousands of United States Dollars)

		FOR THE QUARTERS ENDED
Gross Premiums Written by Type of Risk:		Mar. 31, 2010		Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009		Mar. 31, 2008
Property & Casualty:
Insurance:
Aviation	S	$	2,349	$	39,520		$	13,495		$	10,634		$	6,185	$	3,199
Excess Liability	L		23,648		26,683			19,084			33,352			34,648		33,915
Professional Liability	L		27,573		45,059			39,146			63,258			32,441		25,501
Property	S		12,851		13,778			9,409			26,667			14,408		10,589
			66,421		125,040			81,134			133,911			87,682		73,204
Reinsurance:
Agriculture	S		35,806		2,212			(95	)		(233	)		87,666		84,992
Aviation	S		4,822		9,380			10,477			10,699			4,159		5,821
General Casualty	L		13,051		5,781			7,279			(2,016	)		18,141		5,212
Marine & Energy	S		4,100		3,599			5,987			(343	)		9,078		6,455
Medical Malpractice	L		27,155		11,086			2,567			17,437			36,393		32,175
Other	S		989		29			—			402			1,866		3,088
Professional Liability	L		11,919		25,609			20,992			15,219			9,711		12,263
Property	S		45,933		(2,375	)		13,541			33,692			42,181		41,456
Whole Account	L		2,573		2,947			2,546			1,588			4,375		5,213
Workers’ Compensation	L		8,503		8,464			30,824			18,751			19,412		6,750
			154,851		66,732			94,118			95,196			232,982		203,425
U.S. Specialty:
General Liability	L		23,014		18,756			27,267			22,816			18,943		8,472
Marine	S		16,063		15,443			16,168			14,968			14,781		4,370
Professional Liability	L		2,246		576			—			—			—		—
Property	S		35,564		31,435			25,984			43,232			35,109		16,510
			76,887		66,210			69,419			81,016			68,833		29,352
Max at Lloyd’s [a]:
Accident & Health	S		13,410		1,245			3,692			5,255			12,410		—
Aviation	S		4,403		2,611			—			—			—		—
Financial Institutions	L		6,088		5,446			6,873			7,679			3,824		—
International Casualty	L		13,684		—			—			—			—		—
Professional Liability	L		6,896		5,290			5,284			6,530			2,785		—
Property	S		27,636		3,752			5,238			25,899			25,160		—
			72,117		18,344			21,087			45,363			44,179		—
Aggregate Property & Casualty		$	370,276	$	276,326		$	265,758		$	355,486		$	433,676	$	305,981
Life & Annuity:
Annuity		$	—	$	—		$	—		$	—		$	—	$	—
Life			863		2,007			128			41,023			597		653
Aggregate Life & Annuity			863		2,007			128			41,023			597		653
Aggregate P&C and Life & Annuity		$	371,139	$	278,333		$	265,886		$	396,509		$	434,273	$	306,634
[a]    The results of operations for the Max at Lloyd’s segment are consolidated only from November 6, 2008, the date Max at Lloyd’s was acquired.
S = Short tail lines		$	203,926	$	120,629		$	103,896		$	170,872		$	253,003	$	176,480
L = Long tail lines			166,350		155,697			161,862			184,614			180,673		129,501
Aggregate Property & Casualty		$	370,276	$	276,326		$	265,758		$	355,486		$	433,676	$	305,981

14

MAX CAPITAL GROUP LTD.

INVESTMENT PORTFOLIO (Unaudited)

(Expressed in thousands of United States Dollars)

	Carrying Value								Fair Value
Type of Investment	As at Mar. 31, 2010		Investment Distribution		As at Dec. 31, 2009		Investment Distribution		As at Mar. 31, 2010		Investment Distribution		As at Dec. 31, 2009		Investment Distribution
Cash and cash equivalents	$	690,246	12.9	%	$	702,278	13.4	%	$	690,246	12.7	%	$	702,278	13.3	%
U.S. government and agencies		635,025	11.9	%		525,427	10.0	%		635,025	11.7	%		525,427	9.9	%
Non-U.S. government		71,899	1.4	%		82,027	1.5	%		71,899	1.3	%		82,027	1.6	%
Corporate securities		1,406,131	26.3	%		1,375,999	26.2	%		1,406,131	26.0	%		1,375,999	26.0	%
Municipal securities		105,722	2.0	%		83,658	1.6	%		105,722	2.0	%		83,658	1.6	%
Asset-backed securities		80,816	1.5	%		102,006	1.9	%		80,816	1.5	%		102,006	1.9	%
Residential mortgage-backed securities		787,997	14.7	%		763,974	14.5	%		787,997	14.6	%		763,974	14.5	%
Commercial mortgage-backed securities		289,873	5.4	%		302,961	5.8	%		289,873	5.4	%		302,961	5.7	%
Fixed maturities carried at fair value	$	3,377,463	63.2	%	$	3,236,052	61.5	%	$	3,377,463	62.5	%	$	3,236,052	61.2	%
Other investments carried at fair value	$	322,160	6.0	%	$	314,849	6.0	%	$	322,160	6.0	%	$	314,849	6.0	%
Total investments carried at fair value	$	4,389,869	82.1	%	$	4,253,179	80.9	%	$	4,389,869	81.2	%	$	4,253,179	80.5	%
U.S. government and agencies	$	20,550	0.4	%	$	14,050	0.3	%	$	20,064	0.3	%	$	13,535	0.3	%
Non-U.S. government		544,527	10.2	%		573,250	10.9	%		578,398	10.7	%		584,284	11.0	%
Corporate securities		389,619	7.3	%		418,647	7.9	%		414,853	7.8	%		435,732	8.2	%
Fixed maturities carried at amortized cost	$	954,696	17.9	%	$	1,005,947	19.1	%	$	1,013,315	18.8	%	$	1,033,551	19.5	%
Total invested assets	$	5,344,565	100.0	%	$	5,259,126	100.0	%	$	5,403,184	100.0	%	$	5,286,730	100.0	%

Credit Ratings	As at Mar. 31, 2010		Ratings Distribution		As at Dec. 31, 2009		Ratings Distribution		As at Mar. 31, 2010		Ratings Distribution		As at Dec. 31, 2009		Ratings Distribution
U.S. government and agencies [a]	$	1,355,551	31.3	%	$	1,214,895	28.6	%	$	1,355,551	30.9	%	$	1,214,895	28.5	%
AAA		701,036	16.2	%		720,364	17.0	%		701,036	16.0	%		720,364	16.9	%
AA		326,142	7.5	%		325,997	7.7	%		326,142	7.4	%		325,997	7.6	%
A		732,917	16.9	%		731,723	17.3	%		732,917	16.7	%		731,723	17.1	%
BBB		86,925	2.0	%		100,841	2.4	%		86,925	2.0	%		100,841	2.4	%
BB		23,884	0.6	%		34,781	0.8	%		23,884	0.5	%		34,781	0.8	%
B or lower		151,008	3.5	%		107,451	2.5	%		151,008	3.4	%		107,451	2.5	%
Fixed maturities carried at fair value	$	3,377,463	78.0	%	$	3,236,052	76.3	%	$	3,377,463	76.9	%	$	3,236,052	75.8	%
U.S. Government and Agencies		20,550	0.5	%		14,050	0.3	%		20,064	0.5	%		13,535	0.3	%
AAA		675,447	15.6	%		717,954	16.9	%		718,060	16.4	%		734,595	17.2	%
AA		94,101	2.2	%		101,675	2.4	%		99,709	2.3	%		105,296	2.5	%
A		150,602	3.5	%		158,141	3.7	%		160,097	3.6	%		165,172	3.9	%
BBB		12,609	0.2	%		12,672	0.3	%		13,911	0.3	%		13,478	0.3	%
BB		—	—			—	—			—	—			—	—
B or lower		1,387	0.0	%		1,455	0.1	%		1,474	0.0	%		1,475	0.0	%
Fixed maturities carried at amortized cost	$	954,696	22.0	%	$	1,005,947	23.7	%	$	1,013,315	23.1	%	$	1,033,551	24.2	%
Total fixed maturities	$	4,332,159	100.0	%	$	4,241,999	100.0	%	$	4,390,778	100.0	%	$	4,269,603	100.0	%

[a] Included within US government and agencies are agency-issued residential mortgage-backed securities with a fair value of $720,526 (December 31, 2009; $689,468)

	Quarter Ended 31-Mar-10			Quarter Ended 31-Dec-09			Quarter Ended 30-Sep-09			Quarter Ended 30-Jun-09			Quarter Ended 31-Mar-09			Quarter Ended 31-Mar-08
Net investment income	$	48,390		$	44,668		$	42,830		$	41,755		$	40,488		$	49,626
Net realized and unrealized gains (losses) on investments:
Change in fair value of other investments		7,288			13,820			23,275			21,406			18,013			(25,727	)
Realized and unrealized (losses) gains on trading fixed maturities		(182	)		3			1,400			720			467			—
Net realized gains (losses) on available for sale fixed maturities		838			3,234			(655	)		(654	)		(39	)		1,432
Change in fair value of derivatives		(1,522	)		268			508			—			—			—
	$	6,422		$	17,325		$	24,528		$	21,472		$	18,441		$	(24,295	)
Net impairment losses recognized in earnings	$	(420	)	$	(925	)	$	(139	)	$	(2,014	)	$	—		$	—

15

MAX CAPITAL GROUP LTD.

INVESTMENT PORTFOLIO (Unaudited)

(Expressed in thousands of United States Dollars)

								Periodic Rate of Return
			As at Mar. 31, 2010					Last 3 Months		Last 12 months		Last 60 months*
Cash and fixed maturities			$	5,022,405				1.69	%	7.97	%	4.86	%
Convertible arbitrage			$	—				0.00	%	0.00	%	0.15	%
Distressed securities				61,115				4.29	%	26.02	%	7.98	%
Diversified arbitrage				32,577				3.71	%	15.55	%	(2.05	)%
Emerging markets				21,414				(0.14	)%	35.19	%	5.92	%
Event-driven arbitrage				41,425				1.28	%	25.89	%	6.79	%
Fixed income arbitrage				13,126				(1.57	)%	6.51	%	12.86	%
Global macro				34,812				2.72	%	13.32	%	5.76	%
Long / short credit				9,717				3.09	%	21.16	%	6.50	%
Long / short equity				102,553				2.10	%	8.76	%	5.10	%
Opportunistic				2,732				(1.19	)%	(30.64	)%	(7.33	)%
Hedge funds **				319,471				1.99	%	12.25	%	3.69	%
Reinsurance private equity				2,689				(2.99	)%	4.99	%	14.38	%
Other investments			$	322,160				1.95	%	12.23	%	3.52	%
Total invested assets			$	5,344,565				1.70	%	8.34	%	4.67	%
Hedge Fund Investment Return Data:
HFRI Fund of Funds Composite Index [a]								1.54	%	12.77	%	2.93	%
Hedge Fund Performance History – 60 months ended March 31, 2010
Annual standard deviation	6.84	%
Monthly performance	2010		2009			2008		2007		2006		2005
January	0.79	%		2.13	%	(1.37	)%	1.28	%	2.75	%
February	0.17	%		0.65	%	1.83	%	1.50	%	0.39	%
March	1.02	%		(0.76	)%	(2.58	)%	1.90	%	1.22	%
April				(0.84	)%	(0.13	)%	2.30	%	1.89	%	(0.65	)%
May				2.45	%	2.51	%	2.59	%	(1.74	)%	(0.68	)%
June				1.53	%	0.93	%	0.85	%	(0.66	)%	1.20	%
July				1.40	%	(4.12	)%	0.99	%	(0.71	)%	1.33	%
August				0.78	%	(2.14	)%	(1.62	)%	0.02	%	0.98	%
September				1.71	%	(7.31	)%	1.85	%	(2.04	)%	1.84	%
October				1.53	%	(4.85	)%	4.15	%	1.37	%	(1.45	)%
November				0.35	%	(1.75	)%	0.10	%	1.81	%	0.61	%
December				0.77	%	(1.92	)%	(0.13	)%	1.96	%	1.37	%
Quarterly performance
Q1	1.99	%		2.00	%	(2.15	)%	4.75	%	4.41	%
Q2				3.14	%	3.33	%	5.83	%	(0.54	)%	(0.14	)%
Q3				3.94	%	(13.03	)%	1.18	%	(2.72	)%	4.21	%
Q4				2.66	%	(8.31	)%	4.11	%	5.22	%	0.51	%
Period return	1.99	%		12.27	%	(19.38	)%	16.78	%	6.30	%	4.60	%

Past performance should not be considered to be a reliable indicator of future performance.

[a] As reported by HFRI as at May 3, 2010

* Annualized

** Net of all fees

16

MAX CAPITAL GROUP LTD.

LARGEST 25 CORPORATE HOLDINGS - AS AT MARCH 31, 2010 (Unaudited)

(Expressed in thousands of United States Dollars)

	MARCH 31, 2010
	Amortized Cost		Fair Value
Issuer
European Investment Bank	$	61,413	$	60,309
KFW-Kredit Wiederaufrbau		52,280		52,905
Citigroup Inc		33,822		32,627
General Electric Cap Corp		26,864		26,932
Goldman Sachs Group Inc		26,548		26,681
Hypo PFandBriefBK Intl		26,333		27,938
Morgan Stanley		26,322		27,054
Wal-Mart Stores		25,516		25,298
JP Morgan Chase & Co		25,481		25,423
UBS AG		25,100		24,716
Network Rail		23,667		22,347
BP Capital Markets plc		23,520		23,699
Coca-Cola Co		22,794		22,890
Deutsche Bank		22,479		23,425
Roche Holdings		22,454		23,538
Novartis Capital Corp		22,130		22,377
Caisse D’amort Dette SOC		21,740		23,965
Credit Suisse USA Inc		21,445		21,565
GMAC Inc		21,136		21,149
Conocco Inc		19,836		20,801
Wells Fargo Company		19,515		19,203
BK Nederlandse Gemeenten		17,643		15,639
Intl BK Recon & Develop		16,794		15,573
Bank of America		15,991		15,630
Merrill Lynch		15,797		16,047
Praxair Inc		15,699		16,010
	$	652,319	$	653,741

17

MAX CAPITAL GROUP LTD.

SHAREHOLDER RETURN ANALYSIS (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)

	FOR THE QUARTERS ENDED
	Mar. 31, 2010			Mar. 31, 2009
Income and Return on Equity:
Net income	$	36,381		$	44,539
Net operating income	$	40,681		$	46,933
Shareholders’ equity	$	1,613,116		$	1,262,862
Annualized return on average shareholders’ equity [a]		9.2	%		14.0	%
Annualized net operating return on average shareholders’ equity [a]		10.2	%		14.8	%
Book value and dividends per share:
Diluted book value per share	$	27.86		$	21.88
Dividends paid per share	$	0.10		$	0.09
Change in diluted book value per share		1.8	%		(2.6	)%
Dividend payout ratio [b]		0.4	%		0.4	%
Total return to shareholders [c]		2.2	%		(2.2	)%

[a] Annualized return on average shareholders’ equity is defined as annualized net income divided by the average of the beginning and ending shareholders’ equity. Annualized net operating return on average shareholders’ equity is defined as annualized net operating income divided by the average of the beginning and ending shareholders’ equity.

[b] Dividend payout ratio is calculated as dividends paid divided by beginning shareholders’ equity.

[c] Total return to shareholders is calculated as the change in diluted book value per share plus the dividend payout ratio.

18

MAX CAPITAL GROUP LTD.

EARNINGS PER SHARE INFORMATION (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)

	FOR THE QUARTERS ENDED
	Mar. 31, 2010		Mar. 31, 2009
Net income available to common shareholders	$	36,381	$	44,539
Denominator:
Weighted average shares - basic
Outstanding [a]		56,112,672		55,844,529
Unvested restricted share units		403,921		792,762
		56,516,593		56,637,291
Share equivalents:
Warrants		632,465		451,169
Options		234,690		95,366
Employee Stock Purchase Plan		—		—
Weighted average shares - diluted [b]		57,383,748		57,183,826
Basic earnings per share	$	0.64	$	0.79
Diluted earnings per share	$	0.63	$	0.78

[a] Includes weighted average unvested restricted shares

[b] Computed using the treasury method. The treasury method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Company’s common shares at the average market price during the period of calculation.

19

MAX CAPITAL GROUP LTD.

OPERATING INCOME RECONCILIATION (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)

	FOR THE QUARTERS ENDED
	Mar 31, 2010			Mar 31, 2009
Net income	$	36,381		$	44,539
Net realized and unrealized losses (gains) on fixed maturities [a]		1,236			(285	)
Net foreign exchange gains		(1,680	)		(2,544	)
Merger and acquisition expenses		4,744			5,223
Net operating income		40,681			46,933
Weighted average shares outstanding:
Basic		56,516,593			56,637,291
Diluted		57,383,748			57,183,826
Basic per share data
Earnings per share	$	0.64		$	0.79
Net realized and unrealized losses (gains) on fixed maturities [a]		0.02		$	(0.01	)
Net foreign exchange gains		(0.03	)		(0.04	)
Merger and acquisition expenses		0.09			0.09
Net operating income per share	$	0.72		$	0.83
Diluted per share data
Diluted earnings per share	$	0.63		$	0.78
Net realized and unrealized losses (gains) on fixed maturities [a]		0.02			(0.01	)
Net foreign exchange gains		(0.03	)		(0.04	)
Merger and acquisition expenses		0.09			0.09
Net operating income per diluted share	$	0.71		$	0.82

[a] Net realized and unrealized losses (gains) on fixed maturities includes realized and unrealized (gains) losses on trading securities, realized (gains) losses on available for sale securities, net impairment losses recognized in earnings and changes in fair value of investment derivatives.

20

MAX CAPITAL GROUP LTD.

BOOK VALUE PER SHARE (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)

	As at Mar. 31, 2010		As at Dec. 31, 2009
Price per share at period end	$	22.99	$	22.30
Shareholders’ equity	$	1,613,116	$	1,564,633
Goodwill and intangible assets		48,686		48,686
Tangible book value	$	1,564,430	$	1,515,947
Basic common shares outstanding [a]		56,979,568		55,867,125
Add: unvested restricted stock units		456,918		406,514
Add: dilutive impact of warrants outstanding		222,372		683,163
Add: dilutive impact of options outstanding		231,823		221,656
Diluted shares outstanding [b]		57,890,681		57,178,458
Basic book value per share	$	28.31	$	28.01
Diluted book value per share	$	27.86	$	27.36
Basic tangible book value per share	$	27.46	$	27.13
Diluted tangible book value per share	$	27.02	$	26.51

[a] Includes unvested restricted shares

[b] Computed using the treasury method. The treasury method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Company’s common shares at the period-end market price.

21

MAX CAPITAL GROUP LTD.

REGULATION G

In presenting the Company’s results, management has included and discussed net operating income, net operating income per share, net operating income per diluted share, net operating return on average shareholders’ equity, tangible book value per share and diluted tangible book value per share. Such measures are “non-GAAP financial measures” as defined in Regulation G. Management believes that these non-GAAP financial measures, which may be defined differently by other companies, allow for a more complete understanding of the Company’s business. These measures, however, should not be viewed as a substitute for those determined in accordance with GAAP. The reconciliation of such measures to their respective most directly comparable GAAP financial measures is presented in the attached financial information in accordance with Regulation G.

Net operating income is defined as net income excluding after-tax net realized and unrealized gains or losses on fixed maturities (this includes net realized and unrealized gains or losses on trading securities, net realized gains or losses on available for sale securities, net impairment losses recognized in earnings and changes in fair value of investment derivatives), after-tax net foreign exchange gains or losses and after-tax merger and acquisition expenses. Net operating income per share and per diluted share is defined as the net operating income divided by the weighted average common shares or weighted average diluted common shares, respectively. We believe that this non-GAAP measure provides a better indication of management performance as realized and unrealized gains and losses on fixed maturities may fluctuate from period to period and foreign exchange gains and losses are typically outside the control of management. Merger and acquisition expenses are not indicative of expenses fundamental to the business and may fluctuate from period to period.

Annualized net operating return on average shareholders’ equity is defined as annualized net operating income divided by the average of the beginning and ending shareholders’ equity. Tangible book value is defined as shareholders’ equity excluding goodwill and intangible assets. Tangible book value per share and diluted tangible book value per share is defined as the tangible book value divided by the common shares outstanding or diluted common shares outstanding, respectively. These non-GAAP measures allow management to assess how the Company has performed in terms of wealth generated for our shareholders.

22