American Overseas Group Limited Announces Full Year 2011 Results (Excerpt)

Hamilton, Bermuda – 02 May, 2012 – American Overseas Group Limited – formerly known as RAM Holding Limited - (Tickers: BSX – AORE.BH; Pink Sheets - AORE.PK) (“AOG” or the “Company”) reported a net loss available to common shareholders of $30.5 million, or $11.55 per diluted share, for the fourth quarter ended December 31, 2011. This compares to a net loss available to common shareholders of $13.5 million, or $5.10 per diluted share, for the fourth quarter ended December 31, 2010. Net income available to common shareholders for the year ended December 31, 2011 was $0.9 million, or $0.34 per diluted share, compared to net income available to common shareholders of $11.8 million, or $4.47 per diluted share, for the year ended December 31, 2010 (*).

During the fourth quarter of 2011, the operating loss, a non GAAP financial measure, was $11.0 million, or $4.15 per diluted share, compared to operating income of $5.2 million, or $1.97 per diluted share, during the fourth quarter of 2010. The operating loss during the full year 2011 was $16.6 million, or $6.29 per diluted share, compared to operating income of $5.9 million, or $2.23 per diluted share, for the full year 2010 (*).

The Company’s net income (loss) is calculated in conformity with U.S. generally accepted accounting principles (“GAAP”). The Company also provides information regarding its operating income (loss), a non-GAAP financial measure, because the Company’s management and Board of Directors, as well as many research analysts and investors, also evaluate financial performance on the basis of operating income (loss), which excludes nonoperating items such as realized investment gains or losses, unrealized gains or losses on credit derivatives and foreign currency gains or losses. Please refer to “Explanation of Non-GAAP Financial Measures” below.

Commenting on the financial results, the Company's Chief Executive Officer, David Steel, noted that, “Our 2011 fourth quarter net loss was largely the result of a $18.9 million unrealized loss within the change in fair value of credit derivatives during the period. As noted in the past, we view the operating loss, which excludes unrealized gains and losses on derivatives, as a better measure of quarterly performance. In the fourth quarter our operating loss suffered from increased losses on our insured financial guaranty portfolio, primarily related to the Company’s exposure to Greek sovereign debt, the Chapter 9 bankruptcy filing of Jefferson County, Alabama, and further loss development on US RMBS. We are pleased to note that despite the increase in losses during the second half of 2011, the Company’s capital held up well, remaining about the same as at year-end 2010.

“In the fourth quarter of 2011 we continued work on our plan to begin writing new business in the short-tail, non-catastrophe property/casualty reinsurance markets. Any such new business remains subject to regulatory approval.”

Reverse Stock Split

On November 8, 2011, as previously approved by the Company’s shareholders, the Company effected a reverse stock split of its issued common shares (the “Consolidation”). The Company’s issued common shares of par value US$0.10 each were consolidated into common shares of par value US$1.00 each on a 1 for 10 basis. After the Consolidation, a portion of the Company's additional paid in capital account was capitalized in order to issue fractions of common shares to any common shareholder who held a fraction of a common share as a result of the Consolidation, in order to round up any fractional shares to the next whole share. A total of 65.1 common shares were issued to effect this round up of fractional shares.

Appropriate adjustments were made to shareholders’ equity on the Company’s balance sheet as of December 31, 2011, and to the notes to the Company’s financial statements, to reflect the changes in the number of issued shares and the par value.

Net income (loss) per share and book value per share increased proportionately in the 2011 periods as a result of the Consolidation because there are fewer common shares outstanding, although the Consolidation had no effect on the Company’s aggregate net income (loss) or book value. All share and per share amounts for the comparative 2010 periods included in this earnings release have been adjusted to reflect the change in capital structure as if the Consolidation had occurred in those periods.

Summary of Operating Results

The Company reported a net loss of $30.5 million for the quarter ended December 31, 2011 and net income of $0.9 million for the year then ended.

Earned premiums in the fourth quarter 2011 of $3.7 million were 29% lower than the $5.2 million earned in the fourth quarter 2010. After eliminating accelerated premiums from refundings of $1.3 million and $1.0 million from total earned premiums in the fourth quarter of 2011 and 2010, respectively, core earned premiums in the fourth quarter 2011 were $2.4 million, or 43%, lower than the core earned premiums of $4.2 million during the comparable period in 2010. Earned premiums for the year ended December 31, 2011 were $15.8 million, including accelerated premiums from refundings of $4.1 million. Earned premiums for the 2011 year were 6% lower than the $16.8 million of earned premiums for the 2010 year, which included accelerated premiums from refundings of $2.5 million. After eliminating accelerated premiums from refundings, earned premiums for the years ended December 31, 2011 and 2010, were $11.7 million and $14.3 million, respectively. The decrease in earned premiums in the fourth quarter and full year 2011 as compared to comparable 2010 periods was primarily due to the reduction in ongoing earnings due to commutations and run off of the insured portfolio. The 2010 fourth quarter and full year also benefited from the Company's change in estimate to eliminate the one-month lag in reporting premium and acquisition cost information in the fourth quarter of 2010.

Net change in fair value of credit derivatives totaled a loss of $18.2 million in the fourth quarter 2011, which was $0.2 million less than the $18.4 million loss in the fourth quarter of 2010. Net change in fair value of credit derivatives for the fourth quarters of 2011 and 2010, were comprised of $0.7 million of realized gains and $7.0 million of realized losses, respectively, and $18.9 million and $11.4 million of unrealized losses on derivatives, respectively. The net unrealized loss in the fourth quarter 2011 was primarily attributable to (i) a decrease in the adjustment for the Company’s own nonperformance risk of $17.4 million, and (ii) an increase in gross unrealized losses on credit derivative policies of $1.5 million, the latter primarily due to the widening of credit spreads related to the US Residential Mortgage-Backed Securities. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820 - “Fair Value Measurements and Disclosures” (“ASC 820”), the Company calculates an adjustment for its own non-performance risk. The effect of ASC 820 on the Company’s derivative liabilities on its balance sheet was a reduction of approximately $97.8 million at December 31, 2011. Net change in fair value of credit derivatives was a $17.0 million gain in the full year 2011 and a $21.1 million loss in the full year 2010.

Net investment income for the fourth quarter 2011 was $2.1 million, 28% below the $2.9 million recorded in the fourth quarter 2010. For the full year 2011, net investment income was $9.3 million, 19% below the $11.5 million recorded in the full year 2010. The decrease in investment income in the fourth quarter and year ended December 31, 2011 was primarily due to a decrease in the book yield on the portfolio from 3.4% as of December 31, 2010 to 2.9% as of December 31, 2011.

Realized gains on investments for the fourth quarter 2011, were $0.1 million compared to $0.7 million of realized gains for the same period in 2010. For the full years ended December 31, 2011 and 2010, realized gains on investments were $2.3 million and $2.4 million, respectively.

During the full year 2010, (i) net gains on extinguishment of debt of $15.3 million were recognized on the repurchase of the remaining portion of the Company’s unsecured senior notes (the “Senior Notes”), and (ii) gains of $11.5 million were recognized on the repurchase of 15,300 of the Company’s Redeemable Series A preference shares (the “Series A Preference Shares”). During the full year 2011, there were no such repurchase activities.

Losses and loss adjustment expenses were $13.2 million in the fourth quarter 2011, contributing to a loss ratio of 352%, compared to losses and loss adjustment expenses of $0.5 million and a loss ratio of 10% for the comparable 2010 period. For the full year 2011, losses and loss adjustment expenses were $26.0 million, contributing to a loss ratio of 164%, compared to losses of $5.7 million and a loss ratio of 34% for the full year 2010. The increase in the quarter and year ended December 31, 2011 loss ratios was primarily attributable to the Company’s exposure to Greek sovereign debt, further adverse development on US residential mortgage backed securities (“RMBS”) policies, declining revenues in a print-media whole business securitization and the Chapter 9 bankruptcy filing of Jefferson County, Alabama.

Acquisition expenses were $3.5 million in the fourth quarter of 2011 compared to $1.0 million for the comparable 2010 period. Acquisition expenses for the full years 2011 and 2010 were $10.7 million and $6.1 million, respectively. The increase in acquisition expenses in the quarter and year ended December 31, 2011 as compared to the respective comparable 2010 periods was primarily due to the write off of $1.8 million and $3.8 million of deferred acquisition costs (“DAC”) in the fourth quarter and full year 2011, which were considered irrecoverable. The fourth quarter and full year 2010 had also benefited from the early termination of an installment policy, for which the associated DAC had been previously written off as irrecoverable, resulting in a $1.3 million credit to acquisition expenses. Excluding these items, acquisition expenses are closely related to earned premiums, and the change in acquisition expenses for the quarter and year ended December 31, 2011, as compared to prior year is consistent with the change in earned premiums in the respective periods.

Fourth quarter 2011 operating expenses of $1.6 million were $0.8 million, or 33% below the level of operating expenses in the fourth quarter of 2010. For the full years ended December 31, 2011 and 2010, operating expenses were $6.8 million and $11.9 million, respectively. The decrease in operating expenses for the year ended December 31, 2011 as compared to 2010 was primarily due to (i) reductions in staff made during May 2010, (ii) a decline in legal fees and (iii) non-recurring expenses in 2010 relating to the repurchase of a portion of the Company’s Series A Preference Shares and a portion of the Class B preference shares of the Company's subsidiary, American Overseas Reinsurance Company Limited (the “Operating Subsidiary”).

Balance Sheet

Total assets of $401.2 million at December 31, 2011 were $7.2 million, or 2% below the level of total assets at December 31, 2010. This decrease was primarily related to the reduction in DAC with the run off of the Company’s financial guaranty reinsurance portfolio and the write off of DAC discussed above. Shareholders’ equity of $93.9 million was $3.1 million, or 3%, above the level of shareholders' equity at December 31, 2010, primarily due to the net income earned in the full year 2011 and an increase in the unrealized gains on the Company’s investment portfolio. Book value per share was $35.5, an increase of 3% from year-end 2010, when book value per share was $34.4. Operating book value per share and adjusted operating book value per share, both of which are non-GAAP financial measures, were $51.6 and $80.2, respectively, at December 31, 2011, a decrease of 8% and 14%, respectively, from year-end 2010 when operating book value per share and adjusted operating book value per share were $56.3 and $93.2, respectively (*)

*Prior year per share amounts are restated for the effects of the reverse stock split discussed above.

Information About the Company

American Overseas Group Limited is a Bermuda-based holding company. Its operating subsidiary, American Overseas Reinsurance Company Ltd., has historically provided financial guaranty reinsurance for U.S. and international public finance and structured finance transactions. More information can be found at www.aoreltd.com.

The complete text of this release along with the full 2011 financial results are available on the Company’s website at www.aoreltd.com under "Investor Information". If you are a shareholder of American Overseas Group Limited and wish to receive a hard copy of the financial statements by mail, please contact:

American Overseas Group Limited

Schroders House

131 Front Street

Hamilton, HM 12

Bermuda

Attention: David Steel

Telephone: 441-296-6501

Email: info@aoreltd.com