MBIA Reverses Prior-Year Loss
MBIA Inc. (MBI) reported adjusted reported net income for the quarter was $3.26 per share compared with a net loss of $3.23 per share in the fourth quarter of 2011. The reversal in the company results were brought about by changes in the fair value of insured credit derivatives.
The company reported net income for the quarter was $3.26 per share compared with a net loss of $3.23 per share in the fourth quarter of 2011.
Total revenue was $732 million, significantly improved from a revenue loss of $1.17 billion in the year-ago quarter.
Premiums earned were $141 million, up from $102 million in the year-ago quarter.
Net investment income was reported at $42 million, down from $84 million in the year-ago quarter.
For the full year 2012, net income was $6.33 per share, compared with a net loss of $6.69 per share. The reversal in net income was primarily due to $1.5 billion of net gains on insured credit derivatives, compared with $2.8 billion of net losses on insured credit derivatives in 2011.
Segmental Performance
The U.S. Public Finance Insurance segment is managed by its subsidiary National Public Finance, set up in February 2009.
Therefore, National virtually wrote no new business. Total premiums earned in the U.S. public finance insurance segment were $122 million, up 8% year over year. The increase was due to refunding premiums earned, partially offset by a decrease in scheduled premiums earned.
Pretax income was $202 million compared with $163 million in the prior-year quarter.
The Structured Finance and International Insurance business operations are managed by MBIA Corp. While no new business was written in this segment, the existing business generates the scheduled premiums earned. The segment suffered an adjusted pre-tax loss of $13 million compared with an adjusted pre-tax loss of $300 million in the prior-year quarter.
Premiums earned, net investment income, fee and reimbursements, and premiums and fees on insured derivatives totaled $115 million in the quarter.
The Advisory Services are managed by Cutwater Asset Management. Cutwater recorded a pre-tax loss of $1 million compared with a pre-tax loss of $9 million in prior-year quarter. The increase in the pre-tax loss was primarily due to lower fees from affiliates.
Adjusted book value per share (a non-GAAP measure) declined to $30.68 per share as of Dec 31, 2012, compared with $34.50 as of Dec 31, 2011.
MBIA Corp.'s statutory capital stood at $1.5 billion at year-end 2012 and claims-paying resources were $5.3 billion.
Other companies in the same industry, Radian Group Inc. (RDN), Genworth Financial Inc. (GNW) and MGIC Investment Corporation (MTG) are all witnessing losses from their mortgage businesses.
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