OXBRIDGE RE HOLDINGS LIMITED
|
||
(Exact
name of registrant as specified in its charter)
|
Cayman
Islands
|
|
98-1150254
|
(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S.
Employer Identification
No.)
|
Strathvale
House, 2nd
Floor90 North Church Street, Georgetown P.O. Box 469
Grand
Cayman, Cayman Islands
|
|
KY1-9006
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Large accelerated
filer
|
☐
|
Accelerated
filer
|
☐
|
Non-accelerated
filer
|
☐
|
Smaller reporting
company
|
☑
|
PART I – FINANCIAL INFORMATION
|
Page
|
|
|
|
|
Item
1.
|
Financial
Statements
|
|
|
|
|
|
Consolidated
Balance Sheets September 30, 2016
(unaudited) and December 31, 2015
|
3
|
|
|
|
|
Consolidated
Statements of Income Three and Nine
months Ended September 30, 2016 and 2015 (unaudited)
|
4
|
|
|
|
|
Consolidated
Statements of Comprehensive Income Three and Nine
months Ended September 30, 2016 and 2015 (unaudited)
|
5
|
|
|
|
|
Consolidated
Statements of Cash Flows Nine months Ended
September 30, 2016 and 2015 (unaudited)
|
6
|
|
|
|
|
Consolidated
Statements of Changes in Shareholders’ Equity
Nine
months Ended September 30, 2016 and 2015 (unaudited)
|
8
|
|
|
|
|
Notes
to Consolidated Financial Statements (unaudited)
|
9
|
|
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
31
|
|
|
|
Item
3.
|
Quantitative and
Qualitative Disclosures About Market Risk
|
42
|
|
|
|
Item
4.
|
Controls and
Procedures
|
42
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
|
Item
1.
|
Legal
Proceedings
|
43
|
|
|
|
Item
1A.
|
Risk
Factors
|
43
|
|
|
|
Item
2.
|
Unregistered Sales
of Equity Securities and Use of Proceeds
|
43
|
|
|
|
Item
3.
|
Defaults Upon
Senior Securities
|
44
|
|
|
|
Item
4.
|
Mine
Safety Disclosures
|
44
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|
|
|
Item
5.
|
Other
Information
|
44
|
|
|
|
Item
6.
|
Exhibits
|
44
|
|
|
|
|
Signatures
|
45
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|
|
|
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
|
||
Consolidated Balance Sheets
|
||
(expressed in thousands of U.S. Dollars, except per share and share
amounts)
|
||
|
|
|
|
|
|
|
At
September 30, 2016
|
At
December 31, 2015
|
|
(Unaudited)
|
|
Assets
|
|
|
Investments:
|
|
|
Fixed-maturity
securities, available for sale, at fair value (amortized cost:
$6,081 and $3,080, respectively)
|
$6,074
|
3,096
|
Equity
securities, available for sale, at fair value (cost: $6,801 and
$7,742, respectively)
|
6,359
|
6,252
|
Total
investments
|
12,433
|
9,348
|
Cash
and cash equivalents
|
9,478
|
8,584
|
Restricted
cash and cash equivalents
|
26,296
|
30,368
|
Accrued
interest and dividend receivable
|
26
|
25
|
Premiums
receivable
|
9,448
|
4,117
|
Deferred
policy acquisition costs
|
162
|
90
|
Prepayment
and other receivables
|
95
|
91
|
Property
and equipment, net
|
59
|
64
|
Total
assets
|
$57,997
|
52,687
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
Liabilities:
|
|
|
Reserve
for losses and loss adjustment expenses
|
$972
|
-
|
Loss
experience refund payable
|
6,818
|
9,913
|
Unearned
premiums reserve
|
9,526
|
5,571
|
Accounts
payable and other liabilities
|
212
|
176
|
Total
liabilities
|
17,528
|
15,660
|
|
|
|
Shareholders’
equity:
|
|
|
Ordinary
share capital, (par value $0.001, 50,000,000 shares authorized;
5,981,613 and 6,060,000 shares issued and outstanding at September
30, 2016 and December 31, 2015, respectively)
|
6
|
6
|
Additional
paid-in capital
|
33,348
|
33,657
|
Retained
earnings
|
7,564
|
4,838
|
Accumulated
other comprehensive loss
|
(449)
|
(1,474)
|
Total
shareholders’ equity
|
40,469
|
37,027
|
Total
liabilities and shareholders’ equity
|
$57,997
|
52,687
|
|
|
|
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
|
||||
Consolidated Statements of Income (unaudited)
|
||||
(expressed in thousands of U.S. Dollars, except per share and share
amounts)
|
||||
|
||||
|
||||
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2016
|
2015
|
2016
|
2015
|
|
(Unaudited)
|
(Unaudited)
|
||
|
|
|
|
|
Revenue
|
|
|
|
|
Assumed
premiums
|
$-
|
-
|
$15,065
|
14,888
|
Change
in loss experience refund payable
|
(2,089)
|
(2,089)
|
(4,465)
|
(6,204)
|
Change
in unearned premiums reserve
|
4,007
|
3,881
|
(3,955)
|
(3,708)
|
|
|
|
|
|
Net
premiums earned
|
1,918
|
1,792
|
6,645
|
4,976
|
Net
realized investment gain / (loss)
|
122
|
(303)
|
256
|
673
|
Net
investment income
|
126
|
90
|
327
|
262
|
Other-than-temporary
impairment losses
|
-
|
(399)
|
-
|
(399)
|
|
|
|
|
|
Total
revenue
|
2,166
|
1,180
|
7,228
|
5,512
|
|
|
|
|
|
Expenses
|
|
|
|
|
Losses
and loss adjustment expenses (credit)
|
(1,248)
|
-
|
1,030
|
-
|
Policy
acquisition costs and underwriting expenses
|
83
|
85
|
211
|
259
|
General
and administrative expenses
|
346
|
353
|
1,087
|
1,024
|
|
|
|
|
|
Total
expenses (credit)
|
(819)
|
438
|
2,328
|
1,283
|
|
|
|
|
|
Net
income
|
$2,985
|
742
|
$4,900
|
4,229
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
Basic
and Diluted
|
$0.50
|
0.12
|
$0.81
|
0.70
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per share
|
$0.12
|
0.12
|
$0.36
|
0.36
|
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
|
||||
Consolidated Statements of Comprehensive Income (unaudited)
|
||||
(expressed in thousands of U.S. Dollars)
|
||||
|
||||
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2016
|
2015
|
2016
|
2015
|
|
(Unaudited)
|
(Unaudited)
|
||
|
|
|
|
|
|
|
|
|
|
Net
income
|
$2,985
|
742
|
$4,900
|
4,229
|
Other
comprehensive income:
|
|
|
|
|
Change
in unrealized gain on investments:
|
|
|
|
|
Unrealized
gain / (loss) arising during the period
|
304
|
(1,209)
|
1,281
|
(1,967)
|
Other-than-temporary
impairment losses
|
-
|
399
|
-
|
399
|
Reclassification
adjustment for net realized (gain) / loss included in net
income
|
(122)
|
303
|
(256)
|
(673)
|
|
|
|
|
|
Net
change in unrealized gain / (loss)
|
182
|
(507)
|
1,025
|
(2,241)
|
|
|
|
|
|
Total
other comprehensive income / (loss)
|
182
|
(507)
|
1,025
|
(2,241)
|
|
|
|
|
|
Comprehensive
income
|
3,167
|
235
|
5,925
|
1,988
|
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
|
||
Consolidated Statements of Cash Flows (unaudited)
|
||
(expressed in thousands of U.S. Dollars)
|
||
|
|
|
|
Nine
Months Ended
|
|
|
September
30,
|
|
|
2016
|
2015
|
Operating activities
|
|
|
Net
income
|
$4,900
|
4,229
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
Stock-based
compensation
|
90
|
88
|
Depreciation
and amortization
|
16
|
12
|
Net
realized investment gains
|
(256)
|
(673)
|
Other-than-temporary
impairment losses
|
-
|
399
|
Change
in operating assets and liabilities:
|
|
|
Accrued
interest and dividend receivable
|
(1)
|
(6)
|
Premiums
receivable
|
(5,331)
|
(2,648)
|
Deferred
policy acquisition costs
|
(72)
|
(43)
|
Prepayment
and other receivables
|
(4)
|
(41)
|
Reserve
for loss and loss adjustment expenses
|
972
|
-
|
Loss
experience refund payable
|
(3,095)
|
691
|
Unearned
premiums reserve
|
3,955
|
3,708
|
Accounts
payable and other liabilities
|
36
|
(6)
|
|
|
|
Net
cash provided by operating activities
|
$1,210
|
5,710
|
|
|
|
Investing activities
|
|
|
Change
in restricted cash and cash equivalents
|
4,072
|
(1,974)
|
Purchase
of fixed-maturity securities
|
(3,111)
|
(1,101)
|
Purchase
of equity securities
|
(8,030)
|
(10,814)
|
Proceeds
from sale of fixed-maturity and equity securities
|
9,337
|
11,477
|
Purchase
of property and equipment
|
(11)
|
(25)
|
|
|
|
Net
cash provided by / (used in) investing activities
|
$2,257
|
(2,437)
|
|
|
|
Financing activities
|
|
|
Repurchases
of common stock under share repurchase plan
|
(399)
|
-
|
Cash
dividends paid
|
(2,174)
|
(2,182)
|
|
|
|
Net
cash used in financing activities
|
$(2,573)
|
(2,182)
|
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
|
||
Consolidated Statements of Cash Flows
|
||
(expressed in thousands of U.S. Dollars)
|
||
|
|
|
|
Nine
Months Ended
|
|
|
September
30,
|
|
|
2016
|
2015
|
|
|
|
Net
change in cash and cash equivalents
|
894
|
1,091
|
Cash
and cash equivalents at beginning of period
|
8,584
|
5,317
|
|
|
|
Cash
and cash equivalents at end of period
|
$9,478
|
6,408
|
|
|
|
Supplemental disclosure of cash flow information
|
|
|
Interest
paid
|
-
|
-
|
Income
taxes paid
|
-
|
-
|
|
|
|
Non-cash investing activities
|
|
|
Net
change in unrealized gain (loss) on securities available for
sale
|
1,025
|
(2,241)
|
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
|
||||||
Consolidated Statements of Changes in Shareholders' Equity
|
||||||
Nine Months Ended September 30, 2016 and 2015 (unaudited)
|
||||||
(expressed in thousands of U.S. Dollars, except number of shares
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Share Capital
|
Additional Paid-in
|
Retained
|
Accumulated Other
|
Total Shareholders'
|
|
|
Shares
|
Amount
|
Capital
|
Earnings
|
Comprehensive
Loss
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2014
|
6,000,000
|
6
|
33,540
|
3,145
|
17
|
36,708
|
Cash
dividends
|
-
|
-
|
-
|
(2,182)
|
-
|
(2,182)
|
Net
income for the period
|
-
|
-
|
-
|
4,229
|
-
|
4,229
|
Issuance
of restricted stock
|
60,000
|
-
|
-
|
-
|
-
|
-
|
Stock-based
compensation
|
|
-
|
88
|
-
|
-
|
88
|
Total
other comprehensive loss
|
-
|
-
|
-
|
-
|
(2,241)
|
(2,241)
|
Balance
at September 30, 2015
|
6,060,000
|
6
|
33,628
|
5,192
|
(2,224)
|
36,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2015
|
6,060,000
|
6
|
33,657
|
4,838
|
(1,474)
|
37,027
|
Cash
dividends
|
-
|
-
|
-
|
(2,174)
|
-
|
(2,174)
|
Repurchase
and retirement of common stock under share repurchase
plan
|
(78,387)
|
-
|
(399)
|
-
|
-
|
(399)
|
Net
income for the period
|
-
|
-
|
-
|
4,900
|
-
|
4,900
|
Stock-based
compensation
|
-
|
-
|
90
|
-
|
-
|
90
|
Total
other comprehensive income
|
-
|
-
|
-
|
-
|
1,025
|
1,025
|
Balance
at September 30, 2016
|
5,981,613
|
6
|
33,348
|
7,564
|
(449)
|
40,469
|
Level
1
|
Inputs
that reflect unadjusted quoted prices in active markets for
identical assets or liabilities that the Company has the ability to
access at the measurement date;
|
|
|
Level
2
|
Inputs
other than quoted prices that are observable for the asset or
liability either directly or indirectly, including inputs in
markets that are not considered to be active; and
|
|
|
Level
3
|
Inputs
that are unobservable.
|
|
At
September 30,
|
At
December 31,
|
|
2016
|
2015
|
|
(in thousands)
|
|
|
|
|
Cash
on deposit
|
$5,649
|
$3,567
|
Cash
held with custodians
|
3,829
|
5,017
|
Restricted
cash held in trust
|
26,296
|
30,368
|
|
|
|
Total
|
35,774
|
38,952
|
|
|
|
|
Cost
or
|
Gross
|
Gross
|
Estimated
|
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|
Cost
|
Gain
|
Loss
|
Value ($000)
|
|
($ in thousands)
|
|||
As of September 30, 2016
|
|
|
|
|
Fixed-maturity securities
|
|
|
|
|
U.S.
Treasury and agency securities
|
$6,081
|
$29
|
$(36)
|
$6,074
|
|
|
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
6,081
|
29
|
(36)
|
6,074
|
|
|
|
|
|
Mutual
funds
|
400
|
-
|
(10)
|
390
|
Preferred
stocks
|
963
|
25
|
(11)
|
977
|
Common
stocks
|
5,438
|
233
|
(679)
|
4,992
|
|
|
|
|
|
Total
equity securities
|
6,801
|
258
|
(700)
|
6,359
|
|
|
|
|
|
|
|
|
|
|
Total
available for sale securities
|
$12,882
|
$287
|
$(736)
|
$12,433
|
|
|
|
|
|
As of December 31, 2015
|
|
|
|
|
Fixed-maturity securities
|
|
|
|
|
U.S.
Treasury and agency securities
|
$2,969
|
$12
|
$-
|
$2,981
|
Exchange-traded
debt securities
|
111
|
4
|
-
|
115
|
|
|
|
|
|
Total
fixed-maturity securities
|
3,080
|
16
|
-
|
3,096
|
|
|
|
|
|
Preferred
stocks
|
1,674
|
15
|
(174)
|
1,515
|
Common
stocks
|
6,068
|
158
|
(1,489)
|
4,737
|
|
|
|
|
|
Total
equity securities
|
7,742
|
173
|
(1,663)
|
6,252
|
|
|
|
|
|
Total
available for sale securities
|
$10,822
|
$189
|
$(1,663)
|
$9,348
|
|
Amortized
|
Estimated
|
|
Cost
|
Fair
Value
|
|
($ in
thousands)
|
|
As of September 30, 2016
|
|
|
Available for sale
|
|
|
Due
after one year through five years
|
$6,081
|
$6,074
|
|
|
|
|
|
|
|
$6,081
|
$6,074
|
|
|
|
|
|
|
As of December 31, 2015
|
|
|
Available for sale
|
|
|
Due
after one year through five years
|
$2,969
|
$2,981
|
Due
after ten years
|
111
|
115
|
|
|
|
|
$3,080
|
$3,096
|
|
Gross proceeds |
Gross
|
Gross
|
|
from
|
Realized
|
Realized
|
|
sales
|
Gains
|
Losses
|
|
($ in thousands)
|
||
Three Months Ended September 30, 2016
|
|
|
|
Fixed-maturity
securities
|
$-
|
$-
|
$-
|
|
|
|
|
Equity
securities
|
$4,099
|
$368
|
$(246)
|
|
|
|
|
Nine Months Ended September 30, 2016
|
|
|
|
Fixed-maturity
securities
|
$119
|
$8
|
$-
|
|
|
|
|
Equity
securities
|
$9,218
|
$867
|
$(619)
|
|
|
|
|
Three Months Ended September 30, 2015
|
|
|
|
Fixed-maturity
securities
|
$-
|
$-
|
$-
|
|
|
|
|
Equity
securities
|
$773
|
$5
|
$(308)
|
|
|
|
|
Nine Months Ended September 30, 2015
|
|
|
|
Fixed-maturity
securities
|
$775
|
$75
|
$-
|
|
|
|
|
Equity
securities
|
$10,702
|
$914
|
$(316)
|
|
Less Than Twelve
|
Twelve Months or
|
|
|||
|
Months
|
Greater
|
Total
|
|||
As of September 30, 2016
|
Gross
|
Estimated
|
Gross
|
Estimated
|
Gross
|
Estimated
|
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
Value
|
|
($ in thousands)
|
($ in thousands)
|
($ in thousands)
|
|||
|
|
|
|
|
|
|
U.S.
Treasury and agency securities
|
36
|
3,075
|
-
|
-
|
36
|
3,075
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
36
|
3,075
|
-
|
-
|
36
|
3,075
|
|
|
|
|
|
|
|
Equity securities
|
|
|
|
|
|
|
Mutual
funds
|
10
|
390
|
-
|
-
|
10
|
390
|
Preferred
stocks
|
11
|
465
|
-
|
-
|
11
|
465
|
All
other common stocks
|
225
|
2,008
|
454
|
1,080
|
679
|
3,088
|
|
|
|
|
|
|
|
Total
equity securities
|
246
|
2,863
|
454
|
1,080
|
700
|
3,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
available for sale securities $
|
282
|
$5,938
|
$454
|
$1,080
|
$736
|
$7,018
|
|
|
|
|
|
|
|
|
Less Than Twelve
|
Twelve Months or
|
|
|||
|
Months
|
Greater
|
Total
|
|||
As of December 31, 2015
|
Gross
|
Estimated
|
Gross
|
Estimated
|
Gross
|
Estimated
|
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
Value
|
|
($ in thousands)
|
($ in thousands)
|
($ in thousands)
|
|||
Equity securities
|
|
|
|
|
|
|
Preferred
stocks
|
174
|
1,054
|
-
|
-
|
174
|
1,054
|
All
other common stocks
|
1,405
|
3,274
|
84
|
316
|
1,489
|
3,590
|
|
|
|
|
|
|
|
Total
equity securities
|
1,579
|
4,328
|
84
|
316
|
1,663
|
4,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
available for sale securities $
|
1,579
|
$4,328
|
$84
|
$316
|
$1,663
|
$4,644
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
|
||
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
As of September 30, 2016
|
($ in thousands)
|
|||
Financial
Assets:
|
|
|
|
|
Cash and cash equivalents
|
$9,478
|
$-
|
$-
|
$9,478
|
|
|
|
|
|
Restricted cash and cash equivalents
|
$26,296
|
$-
|
$-
|
$26,296
|
|
|
|
|
|
Fixed-maturity securities:
|
|
|
|
|
U.S.
Treasury and agency securities
|
6,074
|
-
|
-
|
6,074
|
|
|
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
6,074
|
-
|
-
|
6,074
|
|
|
|
|
|
Mutual
funds
|
390
|
-
|
-
|
390
|
Preferred
stocks
|
977
|
-
|
-
|
977
|
All
other common stocks
|
4,992
|
-
|
-
|
4,992
|
|
|
|
|
|
Total
equity securities
|
6,359
|
-
|
-
|
6,359
|
|
|
|
|
|
Total
available for sale securities
|
12,433
|
-
|
-
|
12,433
|
|
|
|
|
|
Total
|
$48,207
|
$-
|
$-
|
$48,207
|
|
|
|
|
|
|
Fair Value Measurements Using
|
|
||
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
As of December 31, 2015
|
($ in thousands)
|
|||
Financial
Assets:
|
|
|
|
|
Cash and cash equivalents
|
$8,584
|
$-
|
$-
|
$8,584
|
|
|
|
|
|
Restricted cash and cash equivalents
|
$30,368
|
$-
|
$-
|
$30,368
|
|
|
|
|
|
Fixed-maturity securities:
|
|
|
|
|
U.S.
Treasury and agency securities
|
2,981
|
-
|
-
|
2,981
|
Exchange-traded
debt securities
|
115
|
-
|
-
|
115
|
|
|
|
|
|
Total
fixed-maturity securities
|
3,096
|
-
|
-
|
3,096
|
|
|
|
|
|
|
|
|
|
|
Preferred
stocks
|
1,515
|
-
|
-
|
1,515
|
All
other common stocks
|
4,737
|
-
|
-
|
4,737
|
|
|
|
|
|
Total
equity securities
|
6,252
|
-
|
-
|
6,252
|
|
|
|
|
|
Total
available for sale securities
|
9,348
|
-
|
-
|
9,348
|
|
|
|
|
|
Total
|
$48,300
|
$-
|
$-
|
$48,300
|
|
|
|
|
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2016
|
2015
|
2016
|
2015
|
|
($ in thousands)
|
($ in thousands)
|
||
|
|
|
|
|
|
|
|
|
|
Balance,
beginning of period
|
$2,250
|
-
|
$-
|
-
|
Incurred
related to:
|
|