Midwest Holding Inc Reports First Quarter 2023 Results.

LINCOLN, Neb: Midwest Holding Inc. ("Midwest") (NASDAQ: MDWT), today announced financial results for the quarter ended March 31, 2023.

First Quarter 2023 Highlights:

GAAP net income for the quarter was $3.8 million compared with $0.2 million recorded in the first quarter of 2022. GAAP earnings were $1.01 per share (diluted) versus $0.05 per share (diluted) in Q1 2022.

GAAP total revenue in Q1 2023 was $38.5 million compared with revenue of $2.6 million in the first quarter of 2022, driven by an increase in investment income from growth in invested assets retained, higher policy administration fees, and growing amortization of deferred ceding commissions. The mark-to-market change in derivatives also generated a gain in the quarter compared to a loss in the same quarter in the prior year.

Annuity direct written premium under statutory accounting principles ("SAP"), a non-GAAP measure, was up 98.4% to $194.6 million in the first three months of the year from $98.1 million in Q1 2022, due to a focus on distribution and pricing. The mix of new business in the quarter was 69% Multi-Year Guaranteed Annuities (MYGA) and 31% Fixed Indexed Annuities (FIA).

Ceded premiums (SAP), a non-GAAP measure, were $102.1 million in Q1 2023 compared to $40.1 million in the first quarter of the prior year. The cession rate for the current period, or that portion of our written premium that we reinsured, was 52% compared to 41% in the same period last year.

Total expenses for the quarter increased to $29.8 million from $(3.3) million in the first quarter of last year resulting from interest credited being treated as an expense (impacted by the change in value of the options embedded in our liabilities), compared to negative interest credited in the first quarter of the prior year, and from an expense related to the mark-to-market value of the options allowance included in other operating expenses, compared to a gain in the same period of the prior year. Total expenses have increased from variable costs associated with increased premiums written related to technology, distribution, product fees, and premium taxes along with expenses related to state expansion and capital initiatives. Salaries and benefits increased with the addition, repositioning, and retention of personnel to support growth and manage a tighter labor market.

Invested assets grew to $1,832.9 million at March 31, 2023 compared with $1,615.0 million at December 31, 2022. The retained portfolio was $945.1 million as of March 31, 2023, compared to $812.2 million at the end of last year. Third-party assets under management were...