Core Viewpoint - Ambac Financial Group's shares have increased nearly 10% over the past five trading sessions after a decline since the beginning of 2024, with expectations for cash earnings to materialize within one to two years following the sale of its legacy financial guarantee business [1] Group 1: Financial Performance and Projections - The sale of Ambac Financial Group's financial guarantee business to Oaktree Capital Management is expected to close by year-end, resulting in approximately $180 million of deployable cash after repaying the bridge loan [2] - Analyst Harry Fong upgraded the rating for Ambac Financial Group from Neutral to Buy and raised the price target from $13 to $15, indicating a positive outlook for the company's stock [1] - Following the sale, the company plans to initiate a share repurchase program of up to $50 million, which is anticipated to provide upside to the stock [1] Group 2: Strategic Initiatives - The company is expected to repurchase shares at current levels up to about $15 per share, as it requires capital for acquisitions primarily in the distribution business [2] - There are potential strategic changes that could enhance investor enthusiasm, such as the possible sale of its underwriting operation, which is not considered core to its strategy [2] - The rollout of the new specialty insurance distribution business will take time, but there are other strategic initiatives that could be implemented sooner [2] Group 3: Market Reaction - At the time of publication, shares of Ambac Financial Group had risen by 6.18% to $11.86 [3]

Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List, indicating a negative outlook for these companies based on recent earnings estimate revisions [1] Company Summaries - Ambac Financial Group, Inc. (AMBC) is a financial services holding company, with the Zacks Consensus Estimate for its current year earnings revised downward by 10.3% over the last 60 days [1] - Beazer Homes USA, Inc. (BZH) is a home-builder that constructs single and multi-family homes, with the Zacks Consensus Estimate for its current year earnings revised downward by 9.5% over the last 60 days [1] - CPI Card Group Inc. (PMTS) is a designer of financial cards, with the Zacks Consensus Estimate for its current year earnings revised downward by 4.5% over the last 60 days [1]

Financial Data and Key Metrics Changes - The company reported a net loss of just under $1 million for Q2 2024, an improvement from a net loss of $13 million in Q2 2023 [16] - Adjusted net income increased to $8 million or $0.18 per diluted share, compared to $3 million or $0.07 per diluted share in the prior year [17] - Consolidated EBITDA for the quarter was $27 million, reflecting strong growth in specialty P&C businesses [6][18] - Shareholders' equity stood at $1.37 billion or $30.25 per share as of June 30, 2024, compared to $30.19 at March 31, 2024 [24] Business Line Data and Key Metrics Changes - The specialty P&C insurance platform generated over $165 million in premium, a 75% increase year-over-year [13] - Everspan reported gross written premium of $111 million, up 109% from the previous year, with a combined ratio of 109.4%, improving from 112.7% [14][21] - The insurance distribution business placed over $53 million in premium, a 31% increase compared to the prior year [13] Market Data and Key Metrics Changes - The combined Cirrata and Beat insurance distribution platform is expected to generate approximately $1.4 billion in premium for 2024, effectively doubling the size of the P&C platform [11] - The company’s distribution businesses are focused on specialty and E&S lines, which have outperformed the broader P&C markets [10] Company Strategy and Development Direction - The company is transitioning to a pure-play specialty P&C company by selling its legacy financial guarantee business to Oaktree Capital for $420 million [7] - A share repurchase program of up to $50 million will be initiated post-sale closure, reflecting a commitment to returning capital to shareholders [8] - The combination of Cirrata and Beat is expected to create significant revenue, capital, and expense synergies, enhancing long-term shareholder value [9][25] Management's Comments on Operating Environment and Future Outlook - Management expressed strong conviction in the growth prospects of the combined business and the strategic direction taken [25] - The company anticipates continued volatility in the near term due to increased loss frequency in commercial auto but remains focused on disciplined underwriting [15] - Management is optimistic about leveraging key differentiated offerings to attract top MGA talent and enhance growth [12] Other Important Information - The company experienced significant growth in its specialty P&C businesses, with Cirrata premiums placed growing 31% year-over-year [17] - Consolidated investment income for Q2 2024 was $36 million, slightly up from $35 million in Q2 2023, driven by higher yields on fixed income securities [23] Q&A Session Summary Question: Potential obligations to fund minority interests at the MGAs - Management clarified that obligations relate to puts and calls with MGAs, with the first put call for Beat expected in 2026 [29] Question: Share repurchase authorization and market cap considerations - The $50 million repurchase plan will be initiated post-AAC transaction closure, with management indicating a strong belief in the company's undervalued stock [32] Question: Holdco leverage for funding growth opportunities - Management indicated a willingness to leverage the company prudently, with a target leverage range of 2 to 4 times EBITDA over the long term [36] Question: Breakdown of obligations related to Beat versus previous acquisitions - The majority of the obligations are expected to relate to Beat, with existing MGAs contributing a smaller portion [40] Question: Transaction costs and expenses related to the merger - Management confirmed that significant portions of transaction expenses have been accrued, with additional expenses expected in the coming quarters [51]

Financial Performance - Net premiums earned for the three months ended June 30, 2024, increased to $33 million from $15 million, representing a 120% growth year-over-year[9]. - Total revenues and other income for the three months ended June 30, 2024, reached $105 million, up from $62 million, marking a 69% increase compared to the same period last year[9]. - Net income attributable to common stockholders for the six months ended June 30, 2024, was $19 million, a significant recovery from a loss of $47 million in the same period of 2023[9]. - Total expenses for the three months ended June 30, 2024, were $103 million, compared to $73 million for the same period in 2023, reflecting a 41% increase[9]. - The company reported a pretax income of $2 million for the three months ended June 30, 2024, compared to a loss of $11 million in the prior year[9]. - Basic net income per share attributable to common stockholders for the three months ended June 30, 2024, was $(0.02), an improvement from $(0.29) in the same quarter of 2023[9]. - Total revenues for the six months ended June 30, 2024, were $207 million, an increase from $120 million for the same period in 2023, representing a 72.5% growth[55]. - Net premiums earned were $66 million for the first half of 2024, compared to $29 million in the same period of 2023, reflecting a 127.6% increase[55]. - The company reported a pretax income of $27 million for the first half of 2024, a significant improvement from a pretax loss of $40 million in the same period of 2023[55]. - The total comprehensive income (loss) for the three months ended June 30, 2024, was a loss of $175 million, compared to a loss of $209 million for the same period in 2023[174]. Assets and Liabilities - Total assets as of June 30, 2024, decreased to $8,184 million from $8,428 million as of December 31, 2023, representing a decline of approximately 2.9%[8]. - Total investments decreased to $2,632 million from $2,664 million, a reduction of about 1.2%[8]. - Long-term debt increased slightly to $515 million from $508 million, a change of approximately 1.4%[8]. - Stockholders' equity increased to $1,419 million from $1,415 million, reflecting a marginal increase of about 0.3%[8]. - Total financial assets amounted to $6,626 million as of June 30, 2024, a decrease from $7,022 million in the previous period[84]. - Total financial liabilities were reported at $5,258 million, slightly down from $5,474 million[84]. - The total gross loss and loss expense reserves as of June 30, 2024, were $762 million, compared to $724 million as of June 30, 2023, reflecting an increase of 5.2%[125]. - The ending balance of the premium receivable allowance for credit losses was $3 million as of June 30, 2024, unchanged from the previous year[121]. Investments - The amortized cost of fixed maturity securities was $2,078 million as of June 30, 2024, with an estimated fair value of $2,043 million[60]. - The company holds $240 million in residential mortgage-backed securities with an estimated fair value of $253 million[60]. - The company has a diversified investment portfolio, including municipal, corporate, and foreign obligations, with a total amortized cost of $1,737 million[60]. - The total fair value of fixed maturity securities was $1,113 million, with gross unrealized losses of $77 million[63]. - Total equity investments in pooled funds increased to $533 million as of June 30, 2024, up from $463 million at December 31, 2023, representing a growth of approximately 15.1%[75]. - The fair value of high-yield and leveraged loans products was $89 million as of June 30, 2024, compared to $39 million at December 31, 2023, reflecting a significant increase of 128.2%[75]. Cash Flow - Total cash provided by operating activities was $32 million for the six months ended June 30, 2024, down from $101 million in the same period of 2023[14]. - The company reported net cash used in investing activities of $120 million for the six months ended June 30, 2024, compared to cash provided of $489 million in the same period of 2023[14]. - Cash, cash equivalents, and restricted cash at the end of the period on June 30, 2024, were $97 million, down from $309 million at the end of June 30, 2023[14]. Reinsurance - Reinsurance recoverable on paid and unpaid losses rose to $277 million from $195 million, marking an increase of approximately 42.1%[8]. - The company ceded approximately 70% or more of its gross liability under all policies issued to capacity providers through quota share reinsurance agreements[134]. - The allowance for credit losses is based on ongoing reviews, with the top three reinsurers representing 66.1% of total reinsurance recoverables on paid and unpaid losses as of June 30, 2024[137]. Legal and Regulatory Matters - The company is involved in various legal proceedings, including litigation related to RMBS transactions, which may impact its financial position[192]. - The company is currently awaiting decisions on several pending litigation cases, including those related to student loan trusts and claims against the Puerto Rico government[190][201]. - The company has complied with all regulatory inquiries and requests for information regarding ongoing investigations[193]. - The company’s litigation matters are not expected to materially impact its operating results or financial position, although adverse outcomes could be material[196]. Miscellaneous - Ambac's liquidity and capital resources were discussed, highlighting the importance of maintaining adequate cash flow to meet financial obligations[6]. - The company is evaluating the impact of new accounting standards on its financial statements, with early adoption permitted for certain standards[44][48]. - Ambac's management and Board have approved the sale of Ambac Assurance Corporation, pending shareholder and regulatory approvals[27].

Filed by Ambac Financial Group, Inc. pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Ambac Financial Group, Inc. Commission File No.: 1-10777 Date: August 5,2024 Exhibit 99.1 Ambac Reports Second Quarter 2024 Results Closes the acquisition of Beat Capital Partners NEW YORK, NY, August 5, 2024 (BUSINESS WIRE) -- Ambac Financial Group, Inc. (NYSE: AMBC) ("Ambac" or "AFG"), a financial services holding company, today reported its results for the quarter ended June 30, 2024. S ...

NEW YORK, July 10, 2024 (GLOBE NEWSWIRE) -- Kuehn Law, PLLC, a shareholder litigation law firm, is investigating potential claims related to the below-listed proposed mergers. Kuehn Law may seek additional disclosures or other relief on behalf of the shareholders of these companies. Kuehn Law is investigating whether the Boards of the below companies 1) acted to maximize shareholder value, 2) failed to disclose material information, and 3) conducted a fair process: Morphic Holding, Inc. has agreed to be acq ...

SOUTHAMPTON, N.Y., June 05, 2024 (GLOBE NEWSWIRE) -- Kuehn Law, PLLC, a shareholder litigation law firm, is investigating potential claims related to the below-listed proposed mergers. Kuehn Law may seek additional disclosures or other relief on behalf of the shareholders of these companies. Kuehn Law is investigating whether the Boards of the below companies 1) acted to maximize shareholder value, 2) failed to disclose material information, and 3) conducted a fair process: Ambac Financial Group signed a de ...

One stock that might be an intriguing choice for investors right now is Ambac Financial Group, Inc. (AMBC) . This is because this security in the Insurance - Property and Casualty space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably t ...

Have you been paying attention to shares of Ambac Financial Group (AMBC) ? Shares have been on the move with the stock up 22.5% over the past month. The stock hit a new 52-week high of $18.45 in the previous session. Ambac Financial Group has gained 11.2% since the start of the year compared to the 2.7% move for the Zacks Finance sector and the 14.2% return for the Zacks Insurance - Property and Casualty industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surpr ...

Ambac Financial Group, Inc. (NYSE:AMBC) Q1 2024 Earnings Conference Call May 7, 2024 8:30 AM ET Company Participants Charles Sebaski - Head of Investor Relations Claude LeBlanc - President & Chief Executive Officer David Trick - Executive Vice President, Chief Financial Officer & Treasurer Conference Call Participants Geoffrey Dunn - Dowling & Partners Giuliano Bologna - Compass Point Operator Greetings, and welcome to the Ambac Financial Group, Inc. First Quarter 2024 Earnings Call. At this time all partic ...