Bermuda-based American Overseas Group Ltd (formerly RAM Holdings Ltd) returned to profit with a net income of $26.9 million or $1.02 per share during the third quarter of 2011.This compared to a net loss of $2.8 million or 11 cents per share for the same period in 2010.Net income for the nine month period ended September 30, 2011 was $31.4 million or $1.19 per share versus $25.3 million or 96 cents per share a year previous.During the third quarter, the operating loss, a non-GAAP financial measure, was $8 million or 30 cents per share compared to operating income of $2.2 million or eight cents per share, during the same time last year. The operating loss during the nine month period ended September 30, 2011 was $5.7 million or 21 cents per share versus an operating income of $600,000 or three cents per share for the nine month period ended September 30, 2010.American Overseas Group Ltd’s CEO, David Steel, said: “Our third quarter net income was largely the result of a $33.4 million unrealised gain within the change in fair value of credit derivatives during the period. As I have pointed out in the past, we view operating income, which excludes unrealised gains on derivatives, as a better measure of quarterly performance. In the third quarter our operating income suffered from a pick-up in losses on our insured financial guaranty portfolio.“The losses were related to further loss development on US RMBS, declining revenues in a print media whole business securitisation and the Chapter 9 Bankruptcy filing of Jefferson County, Alabama. In addition, our reserves also increased due to declining interest rates, which reduced the discount rates we use to calculate them.“In Q3 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. In connection with this strategic initiative, we are pleased to announce our change of name and new address.”