Finance
MBIA Inc (MBI) Q3 2024 Earnings Call Highlights: Navigating Financial Challenges and Strategic …
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Consolidated GAAP Net Loss: $56 million or negative $1.18 per share for Q3 2024.
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Adjusted Net Loss (Non-GAAP): $174,000 or essentially $0 per share for Q3 2024.
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Book Value Per Share: Decreased to negative $39.19 as of September 30, 2024, from negative $32.56 as of December 31, 2023.
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National’s Gross Par Outstanding: $26 billion as of September 30, 2024, down $2.5 billion from year-end 2023.
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National’s Leverage Ratio: 26 to 1 at the end of Q3 2024.
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National’s Claims Paying Resources: $1.6 billion as of September 30, 2024.
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National’s Statutory Net Income: $19 million for Q3 2024.
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MBIA Insurance Corp Statutory Net Income: $2 million for Q3 2024.
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MBIA Insurance Corp Statutory Capital: $87 million as of September 30, 2024.
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MBIA Insurance Corp Claims Paying Resources: $358 million as of September 30, 2024.
Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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MBIA Inc (NYSE:MBI) reported a lower consolidated GAAP net loss of $56 million for Q3 2024 compared to $185 million in Q3 2023, indicating an improvement in financial performance.
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The company’s revenues increased due to lower losses related to variable interest entities associated with MBIA Insurance Corp.
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National Public Finance Guarantee Corporation reported statutory net income of $19 million for Q3 2024, a significant improvement from a statutory net loss of $133 million in Q3 2023.
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The gross par amount outstanding for National’s insured portfolio declined by approximately $2.5 billion from year-end 2023, reflecting effective portfolio management.
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MBIA Inc (NYSE:MBI) has total claims-paying resources of $1.6 billion, providing a strong financial cushion for future claims.
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MBIA Inc (NYSE:MBI) reported a consolidated GAAP net loss of $56 million for Q3 2024, indicating ongoing financial challenges.
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The company’s book value per share decreased to a negative $39.19 as of September 30, 2024, from a negative $32.56 at the end of 2023, reflecting a decline in shareholder equity.
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MBIA Insurance Corp’s statutory capital decreased to $87 million as of September 30, 2024, from $152 million at year-end 2023, indicating a reduction in financial strength.
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The uncertainty surrounding the PREPA mediation and potential outcomes for National’s pre-bankruptcy claim of over $800 million poses a significant risk to the company’s financial stability.
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MBIA Inc (NYSE:MBI) faces challenges in selling the company due to unresolved issues related to Puerto Rico, impacting strategic options and shareholder value.
Q: With a billion dollars of capital at National, how much of that do you consider excess? Are you seeking approval to release any of that capital? A: William Fallon, CEO: We don’t focus on ratings anymore, so we don’t calculate excess capital like other companies. We do focus on obtaining extraordinary dividends when appropriate, as we did last year. We have an annual dividend that will be paid before the end of the year, but further progress on Puerto Rico is needed before engaging in discussions with the department.
Q: National paid a gross claim on July 1st of $122 million on PREPA, and the insurance loss recoverable increased by $57 million. Does this imply a 47% recovery on that claim? A: William Fallon, CEO: While we don’t comment on exact numbers, your approach is logical and reasonable.
Q: Why not engage in selling the company now, given the potential for different Puerto Rican outcomes and the rising value of competitors? A: William Fallon, CEO: The approach you described is a possibility, but feedback suggests it wouldn’t be beneficial for shareholders at this time. However, things can change, and it’s always a possibility.
Q: Do you see a path where the new political environment, including Trump’s election, might expedite the resolution of Puerto Rico’s financial issues? A: William Fallon, CEO: We are hopeful that the new political environment could serve as a catalyst for resolving these issues. We have heard early comments that align with this possibility, and we will see how things develop as the new administration takes office.
Q: Regarding the cooperation agreement with Golden Tree and others, can MBIA walk away from this agreement before March 2025 if better terms are offered? A: William Fallon, CEO: We have agreed to work with the other bondholders as part of the agreement. While scenarios could change, we are currently committed to this cooperation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.