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MBIA (MBI) - 2025 Q1 - Earnings Call Transcript
MBIMBIA (MBI)2025-05-09 13:00
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Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of 62millionoranegative62 million or a negative 1.28 per share for Q1 2025, compared to a net loss of 86millionoranegative86 million or a negative 1.84 per share for Q1 2024, indicating an improvement in financial performance [9][10] - The adjusted net loss for Q1 2025 was 8millionoranegative8 million or a negative 0.16 per share, compared to an adjusted net loss of 24millionoranegative24 million or a negative 0.52 per share for Q1 2024, reflecting a favorable change primarily due to lower losses in LAE [12][13] - The book value per share decreased by 1.23toanegative1.23 to a negative 42.22 as of March 31, 2025, from a negative 40.99asofDecember31,2024,primarilyduetotheconsolidatednetloss[13]BusinessLineDataandKeyMetricsChanges−Nationalreportedstatutorynetincomeof40.99 as of December 31, 2024, primarily due to the consolidated net loss [13] Business Line Data and Key Metrics Changes - National reported statutory net income of 4 million for Q1 2025, compared to a statutory net loss of 11millionforQ12024,drivenbylowerlossesinLAErelatedtoPREPAexposure[15][16]−MBIAInsuranceCorpreportedstatutorynetincomeof11 million for Q1 2024, driven by lower losses in LAE related to PREPA exposure [15][16] - MBIA Insurance Corp reported statutory net income of 2 million for Q1 2025, compared to a statutory net loss of 35millionforQ12024,alsoduetolowerlossesinLAE[16][17]−ThegrossparamountoutstandingforNational′sinsuredportfoliodeclinedbyapproximately35 million for Q1 2024, also due to lower losses in LAE [16][17] - The gross par amount outstanding for National's insured portfolio declined by approximately 500 million from year-end 2024 to about 25billionasofMarch31,2025[7]MarketDataandKeyMetricsChanges−National′sleverageratioofgrosspartostatutorycapitalwas27to1attheendofQ12025,withtotalclaimspayingresourcesof25 billion as of March 31, 2025 [7] Market Data and Key Metrics Changes - National's leverage ratio of gross par to statutory capital was 27 to 1 at the end of Q1 2025, with total claims paying resources of 1.5 billion and statutory capital surplus exceeding 900million[8]CompanyStrategyandDevelopmentDirection−ThecompanycontinuestoprioritizeresolvingNational′sPREPAexposure,whichremainsuncertain,andbelievesthatreducinguncertaintyregardingPREPAisessentialformaximizingshareholdervalue[7]−ThemanagementexpressedoptimismaboutthepotentialresolutionofthePREPAsituation,indicatingthatthefocusisshiftingtowardsaddressingkeylitigationissues[24]Management′sCommentsonOperatingEnvironmentandFutureOutlook−ManagementacknowledgedthecomplexityofthePREPAsituationandemphasizedongoingdiscussionsinWashington,D.C.,whileexpressingcautiousoptimismaboutmovingintoadifferentphaseregardingtheresolution[22][24]−Theoverallportfolioperformanceisconsistentwithexpectations,withnosignificantconcernsregardingothercredits[25]OtherImportantInformation−Thecorporatesegmenthadtotalassetsofapproximately900 million [8] Company Strategy and Development Direction - The company continues to prioritize resolving National's PREPA exposure, which remains uncertain, and believes that reducing uncertainty regarding PREPA is essential for maximizing shareholder value [7] - The management expressed optimism about the potential resolution of the PREPA situation, indicating that the focus is shifting towards addressing key litigation issues [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complexity of the PREPA situation and emphasized ongoing discussions in Washington, D.C., while expressing cautious optimism about moving into a different phase regarding the resolution [22][24] - The overall portfolio performance is consistent with expectations, with no significant concerns regarding other credits [25] Other Important Information - The corporate segment had total assets of approximately 685 million as of March 31, 2025, including unencumbered cash and liquid assets totaling $378 million [14] Q&A Session Summary Question: What is being done politically to resolve the PREPA situation? - Management highlighted that fixing PREPA is a top priority for Governor Gonzalez and that there are ongoing conversations in D.C. to facilitate resolution, with optimism about moving into a different phase [22][24] Question: Are there concerns about further write-offs in the National portfolio? - Management confirmed that the portfolio is performing within expectations and that PREPA is the primary focus, with no significant concerns about other credits [25]