Investors drove AmTrust Financial Services’ stock price down more than 10 percent on Aug. 9 after the New York-based insurer disclosed mixed second-quarter financial results.

The Nasdaq stock price closed at $14.23, down $1.67 or 10.5 percent from the previous day’s close.

Investors appeared to respond to Q2 results released Aug. 8 after the market closed. Among the results: AmTrust’s net income for the 2017 second quarter hit just $5.8 million, or $0.03 per diluted share, compared to $127.2 million, or $0.73 per diluted share over the same period in 2016. While premium volume grew, AmTrust’s combined ratio hiked up to 101.2 for the second quarter, well above the 91.3 combined ratio booked in Q2 2016.

AmTrust Chairman and CEO Barry Zyskind said that the insurer “took transformative steps” during the quarter and also completed “a number of strategic initiatives to increase certainty and confidence in AmTrust’s long-term financial strength.”

Those initiatives included the injection of $300 million into the company for new shares in a private placement, something designed to stabilize AmTrust after a drop in market capitalization. The money came from the family of Zyskind and director George Karfunkel, the late former chairman Michael Karfunkel’s brother.

Zyskind, in prepared remarks, also noted AmTrust’s sale of 86 percent of its equity position in National General for $211.7 million to simplify its balance sheet, and its $400 million reinsurance agreement with Premia Re.

“We undertook these actions with a long-term view for [AmTrust] and our shareholders, to demonstrate strength and stability to all of our partners, brokers, agents, and insureds, and to enhance our earnings consistency.”

As well, AmTrust hired Adam Karakowski, its former executive focused on M&A activity, as its new chief financial officer, after months of accounting problems. In March, AmTrust delayed its 2016 annual report by a few weeks so it could audit and restate financial statements for the year, plus related disclosures in 2014 and 2015. AmTrust blamed its former auditor BDO USA, and said it has since boosted internal financial controls and created a chief accounting officer position.

Here are additional highlights from AmTrust’s 2017 Q2 results:

• Gross written premium was $2.2 billion, versus $2.1 billion in the 2016 second quarter.
• Net written premium came in at $1.4 billion, compared to $1.3 billion over the same period a year ago.
• Net earned premium, at $1.4 billion, was 16.8 percent higher than the $1.2 billion in net earned premium from the 2016 second quarter.
• Net investment income was $49.2 million, down 3 percent from $50.7 million in the 2016 second quarter. AmTrust blamed a change in valuation of investments in real estate joint ventures based on updated details from the managing partner.
• Acquisition costs and other underwriting expenses of $373.2 million were $78.7 million higher than the $294.5 million over the same period in 2016.

Source: AmTrust Financial Services