MBIA Inc. filed SEC Form 8-K: Results of Operations and Financial Condition, Regulation FD Disclosure, Financial Statements and Exhibits
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CURRENT REPORT
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Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
The following information, including Exhibit 99.1 to this Form 8-K, is being furnished, not filed, pursuant to Item 2.02 - Results of Operations and Financial Condition of Form 8-K.
On November 7, 2024, MBIA Inc. (“MBIA”) issued a press release announcing that the Registrant’s results of operations for the quarter ended September 30, 2024, were available via a financial results report on the Registrant’s website at https://investor.mbia.com/investor-relations/financial-information/default.aspx. A copy of the financial results report is attached as Exhibit 99.1 to this Form 8-K and is incorporated by reference to this Item 2.02 as if fully set forth herein.
Item 7.01. REGULATION FD DISCLOSURE.
The following information is being furnished, not filed, pursuant to Item 7.01 - Regulation FD Disclosure of Form 8-K. Information contained on MBIA’s website is not incorporated by reference into this Current Report on Form 8-K.
On November 7, 2024, MBIA will post on its website, www.mbia.com, under the section “Investor Relations – Financial Information – Operating Supplements,” a Quarterly Operating Supplement for the third quarter of 2024 and under the section “Investor Relations – Financial Information – Statutory Statements,” 2024 Quarterly Statements for the third quarter of 2024 for each of MBIA Insurance Corporation and National Public Finance Guarantee Corporation. MBIA will also post on its website, under the section “Insured Portfolio,” the Company’s insured portfolios as of September 30, 2024. The information will be posted as “National Public Finance Guarantee Corporation’s Insured Portfolio,” “MBIA Corp.’s Non-U.S. Public Finance Insured Portfolio and “MBIA Corp.’s Structured Finance Insured Portfolio.””
On or about November 8, 2024, MBIA will also post on its website, www.mbia.com, under the section “Investor Relations – Investor Inquiries / FAQs,” updated Investor Inquiries/FAQs.
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
99.1 Third Quarter 2024 Financial Results issued by MBIA Inc., dated November 7, 2024.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MBIA INC. |
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Date: |
November 7, 2024 |
By: |
/s/ William J. Rizzo |
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William J. Rizzo |
Exhibit 99.1
MBIA Inc. Third Quarter 2024 Financial Results
November 7, 2024
MBIA Inc. (NYSE:MBI) (the Company) today reported a consolidated GAAP net loss of $56 million, or $(1.18) per share, for the third quarter of 2024 compared to a consolidated GAAP net loss of $185 million, or $(3.94) per share, for the third quarter of 2023. The smaller loss versus last year’s third quarter was primarily due to lower losses and loss adjustment expenses (LAE) associated with Puerto Rico Electric Power Authority (PREPA) exposure at National Public Finance Guarantee Corporation (National) and lower losses related to Variable Interest Entities (VIEs).
Book value per share was negative $39.19 as of September 30, 2024 compared with a negative $32.56 as of December 31, 2023. The decrease in book value per share since year-end 2023 was primarily due to the net loss for the first nine months of 2024.
The Company also reported an Adjusted Net Loss (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $174 thousand or $(0.00) per diluted share for the third quarter of 2024 compared with Adjusted Net Loss of $138 million or $(2.92) per diluted share for the third quarter of 2023. The favorable comparison was primarily due to decreased losses and LAE at National that primarily related to its insurance of PREPA debt.
Adjusted Net Income (Loss) provides investors with views of the Company’s operating results that management uses in measuring financial performance. Reconciliations of Adjusted Net Income (Loss) to net income, calculated in accordance with GAAP, are available in the current quarter's Operating Supplement.
Year-to-Date Results
The Company recorded a consolidated GAAP net loss of $396 million, or $(8.37) per diluted common share, for the nine months ended September 30, 2024 compared with a consolidated GAAP net loss of $353 million, or $(7.25) per diluted common share, for the first nine months of 2023. The greater net loss for 2024 was largely due to a loss on the valuation of recoveries of paid insurance claims associated with Zohar CDOs insured by MBIA Insurance Corporation (MBIA Corp.), partially offset by lower losses related to VIEs.
The Company’s non-GAAP Adjusted Net Loss for the nine months ended September 30, 2024 was $162 million or $(3.43) per diluted share compared with an Adjusted Net Loss of $161 million or $(3.31) per diluted share for the first nine months of 2023.
MBIA Inc.
As of September 30, 2024, MBIA Inc.’s liquidity position totaled $326 million, consisting primarily of cash and cash equivalents and liquid invested assets.
There were no purchases of MBIA shares during the quarter. As of October 31, 2024, there was $71 million of remaining capacity under the Company’s share repurchase authorization and 51.0 million of the Company’s common shares outstanding.
National Public Finance Guarantee Corporation
National had statutory capital of $1.0 billion and claims-paying resources totaling $1.6 billion as of September 30, 2024. National’s total fixed income investments plus cash and cash equivalents had a book/adjusted carrying value of $1.3 billion as of September 30, 2024. National’s insured portfolio declined by $1.1 billion during the quarter, ending the quarter with $25.9 billion of gross par outstanding. National ended the quarter with a leverage ratio of gross par to statutory capital of 26:1, compared to 25:1 at year-end 2023.
MBIA Insurance Corporation
The statutory capital of MBIA Insurance Corporation as of September 30, 2024 was $87 million and claims-paying resources totaled $358 million. MBIA Insurance Corporation’s total fixed income investments plus cash and cash equivalents had a book/adjusted carrying value of $149 million as of September 30, 2024.
Conference Call
The Company will host a webcast and conference call for investors tomorrow, Friday, November 8, 2024 at 8:00 AM (ET) to discuss its third quarter 2024 financial results and other matters relating to the Company. The webcast and conference call will consist of brief remarks followed by a question and answer session.
The dial-in number for the call is (800) 225-9448 in the U.S. and (203) 518-9708 from outside the U.S. The conference call code is MBIAQ324. A live webcast of the conference call will also be accessible on www.mbia.com.
A replay of the conference call will become available approximately two hours after the completion of the call and will remain available until 11:59 p.m. on November 15 by dialing (800) 839-9719 in the U.S. or (402) 220-6091 from outside the U.S. In addition, a recorded replay of the call will become available on the Company's website approximately two hours after the completion of the call.
Forward-Looking Statements
This release includes statements that are not historical or current facts and are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believe,, "anticipate," "project," "plan," "expect," "estimate," "intend," "will," "will likely result," "looking forward," or "will continue," and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including, among other factors, the possibility that MBIA Inc. or National will experience increased credit losses or impairments on public finance obligations issued by state, local and territorial governments and finance authorities that are experiencing unprecedented fiscal stress; the possibility that loss reserve estimates are not adequate to cover potential claims; MBIA Inc.'s or National's ability to fully implement their strategic plan; and changes in general economic and competitive conditions. These and other factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying MBIA Inc.'s or National's forward-looking statements are discussed under the "Risk Factors" section in MBIA Inc.'s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which may be updated or amended in MBIA Inc.'s subsequent filings with the Securities and Exchange Commission. MBIA Inc. and National caution readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. National and MBIA Inc. undertake no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such result is not likely to be achieved.
MBIA Inc., headquartered in Purchase, New York is a holding company whose subsidiaries provide financial guarantee insurance for the public and structured finance markets. Please visit MBIA's website at www.mbia.com.
Explanation of Non-GAAP Financial Measures
The following are explanations of why the Company believes that the non-GAAP financial measures used in this press release, which serve to supplement GAAP information, are meaningful to investors.
Adjusted Net Income (Loss): Adjusted Net Income (Loss) is a useful measurement of performance because it measures income from the Company excluding its international and structured finance insurance segment, comprising the results of MBIA Corp. which given its capital structure and business prospects, we do not expect its financial performance to have a material impact on MBIA Inc. Also excluded from Adjusted Net Income (Loss) are investment portfolio realized gains and losses, gains and losses on financial instruments at fair value and foreign exchange, and realized gains and losses on extinguishment of debt. Adjusted Net Income (Loss) eliminates the tax provision (benefit) as a result of a full valuation allowance against the Company's net deferred tax asset. Trends in the underlying profitability of the Company's businesses can be more clearly identified without the fluctuating effects of the excluded items previously noted. Adjusted Net Income (Loss) as defined by the Company does not include all revenues and expenses required by GAAP. Adjusted Net Income (Loss) is not a substitute for and should not be viewed in isolation from GAAP net income.
Adjusted Net Income (Loss) per share represents that amount of Adjusted Net Income (Loss) allocated to each fully diluted weighted-average common share outstanding for the measurement period.
MBIA management further adjusts Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per share by removing the impact of our U.S. public finance insurance segment VIE consolidations. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company. However, since the Company does not own such VIEs, management uses certain measures that remove the impact of VIE
consolidations for our U.S. public finance insurance segment in order to reflect financial exposure limited to its financial guaranty contracts.
Book Value adjustments: Management adjusts GAAP book value to remove the book value of MBIA Corp. and for certain items which the Company believes will reverse from GAAP book value through GAAP earnings and comprehensive income, as well as add in the impact of certain items which the Company believes will be realized in GAAP book value in future periods. The Company has limited such adjustments to those items that it deems to be important when measuring financial performance and for which the likelihood and amount can be reasonably estimated. The following provides a description of management's adjustments to GAAP book value::
Claims-paying Resources (CPR): CPR is a key measure of the resources available to National and MBIA Corp. to pay claims under their respective insurance policies. CPR consists of total financial resources and reserves calculated on a statutory basis. CPR has been a common measure used by financial guarantee insurance companies to report and compare resources and continues to be used by MBIA's management to evaluate changes in such resources. The Company has provided CPR to allow investors and analysts to evaluate National and MBIA Corp. using the same measure that MBIA's management uses to evaluate their resources to pay claims under their respective insurance policies. There is no directly comparable GAAP measure.
Leverage Ratio: Gross Par Outstanding divided by Statutory Capital (Policyholders' Surplus plus Contingency Reserve).
Contacts
MBIA Inc.
Greg Diamond, 914-765-3190
Managing Director, Head of Investor and Media Relations
Please see the financial results tables in the current quarter's Operating Supplement, which is available at https://investor.mbia.com/investor-relations/financialinformation/default.aspx.