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Exhibit 99.1
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BALDWIN & LYONS, INC.
PROTECTIVE INSURANCE COMPANY
SAGAMORE INSURANCE COMPANY
B & L INSURANCE, LTD. (BERMUDA)
1099 North Meridian Street
Indianapolis, IN 46204
(317) 636-9800
Subj: Baldwin & Lyons, Inc. November 1, 2007
Unaudited Third Quarter Report Press Contact: G. Patrick Corydon
(317) 636-9800
corydon@baldwinandlyons.com
BALDWIN & LYONS ANNOUNCES RECORD NET INCOME FOR THE THIRD QUARTER
AND RECORD OPERATING AND NET INCOME FOR NINE MONTHS
INDIANAPOLIS, INDIANA, NOVEMBER 1, 2007--Baldwin & Lyons, Inc. (NASDAQ:
BWINA, BWINB) today announced record third quarter net income of $11.7 million,
or $.77 per share, compared to $9.9 million, or $.65 per share, for the third
quarter of 2006. Operating income, defined as net income before investment gains
or losses was $7.5 million, or $.50 per share, for the current quarter compared
to $8.0 million, or $.53 per share, reported in 2006. Net investment gains
totaled $4.2 million, or $.27 per share, during the quarter and compare to $1.9
million, or $.12 per share in the prior year quarter.
For the nine months ended September 30, 2007, operating income was a record at
$24.5 million, or $1.62 per share, compared to $21.1 million, or $1.41 per
share, reported a year earlier. Net investment gains totaled $10.2 million, or
$.67 per share, during the 2007 period compared to gains of $5.7 million a year
earlier. Including investment gains, net income for the current year-to-date
totaled a record $34.7 million, or $2.29 per share, compared to $26.9 million,
or $1.79 per share, for the first nine months of 2006.
Net premium earned by the Company's insurance subsidiaries increased by 5.4%
from $42.3 million during 2006's third quarter to $44.6 million for the third
quarter of 2007. For the nine months, earned premium increased by 4.6% to $133.6
million. Direct and assumed premiums written for the current quarter increased
5.0% compared to the third quarter of 2006 while premiums written were 1.0%
lower for nine months. The earned premium increases for the quarter and
year-to-date were aided by volume increases in the Company's independent
contractor and reinsurance assumed products. The reinsurance assumed increases
resulted primarily from new business generated by the Company's affiliation with
Paladin Catastrophe Management. Competitive pressures continue for the Company's
trucking and private passenger automobile products, both of which posted
declines in written and earned premiums for the quarter and year-to-date.
The company's quarterly consolidated combined ratio was 89.3%, producing
underwriting profits of $4.8 million, compared to last year's third quarter
ratio of 89.1% and underwriting profits of $4.6 million. The current quarter
combined ratio reflects improved underwriting results from the Company's fleet
trucking business compared to the prior year third quarter while reinsurance
assumed results were not on par with the excellent prior year results as the
result of some losses from the Paladin business. Those same factors impacted the
combined ratio of 87.9% for the first nine months of 2007 compared to 90.8% for
2006.
Pre-tax investment income decreased 2% for the current year third quarter
reflecting a significantly higher proportion of the Company's bond portfolio
allocated to municipal bonds in 2007. Net investment income, after tax,
increased 5% from the prior year third quarter. For the nine months, pre-tax and
after tax investment income were up 2% and 9%, respectively. The record net
investment gains for the quarter of $.27 per share were largely due to gains
from the Company's investments in limited partnerships.
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Shareholders' equity increased $19.9 million (5.6%) from December 31, 2006,
after cash dividends paid year-to-date of $19.7 million ($1.30 per share). Book
value per common share outstanding was $24.79 at September 30, 2007, an increase
of $1.19 from year end 2006. The combination of book value increase and cash
dividends equals a 10.5% return on beginning book value for the nine month
period.
CONFERENCE CALL INFORMATION:
Baldwin & Lyons, Inc. has scheduled a conference call for November 1, 2007 at
11:00 AM ET (New York time) to discuss results for the third quarter ended
September 30, 2007.
To participate via teleconference, interested partues may dial 800-811-8845
(U.S./Canada) or 913-981-4905 (International or local) at least five minutes
prior to the beginning of the call. A replay of the call will be available
through November 8, 2007 by calling 888-203-1112 or 719-457-0820 and referencing
passcode 4067391.
The conference call will also be webcast. Interested parties may access the
webcast through a link on the top of the Corporate Profile page on the investor
relations section of our web site at www.baldwinandlyons.com.
The webcast can also be accessed directly from the following web address :
http://investor.shareholder.com/media/eventdetail.cfm?mediaid=26259&c=BWINB&medi
akey=E3F9DEA23CDFABDB5574359EB6367BC4&e=0
The webcast will be archived on the site until November 1, 2008.
Also available on the investor relations section of our web site are complete
interim financial statements, information regarding our business segments, and
copies of our filings with the Securities and Exchange Commission.
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FINANCIAL HIGHLIGHTS (UNAUDITED)
Baldwin & Lyons, Inc. and Subsidiaries
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------------------ ----------------------------------------
2007 2006 2007 2006
--------------- ---------------- ----------------- ------------------
Operating revenue $50,855 $48,891 $ 152,132 $ 147,279
Net investment gains 6,421 2,958 15,667 8,837
--------------- ---------------- ----------------- ------------------
TOTAL REVENUE $57,276 $51,849 $ 167,799 $ 156,116
=============== ================ ================= ==================
Operating income $ 7,541 $ 7,956 $ 24,534 $ 21,118
Net investment gains,
net of federal income taxes 4,173 1,923 10,183 5,744
--------------- ---------------- ----------------- ------------------
NET INCOME $11,714 $ 9,879 $ 34,717 $ 26,862
=============== ================ ================= ==================
Per share data - diluted:
Average number of shares 15,201 15,130 15,175 15,013
Operating income $ .50 $ .53 $ 1.62 $ 1.41
Net investment gains .27 .12 .67 .38
--------------- ---------------- ----------------- ------------------
NET INCOME $ .77 $ .65 $ 2.29 $ 1.79
=============== ================ ================= ==================
Dividends paid to shareholders $ .60 $ .25 $ 1.30 $2.10
Annualized return on average
shareholders' equity:
Operating income 9.3% 10.5% 10.2% 9.2%
Net income 14.4% 13.1% 14.5% 11.7%
Consolidated combined ratio of
insurance subsidiaries (GAAP basis):
Without fee income 89.3% 89.1% 87.9% 90.8%
Including fee income 87.7% 87.2% 86.3% 88.3%
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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.