MBIA Inc (MBI) (Q4 2024) Earnings Call Highlights: Navigating Challenges with Improved Losses

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Sat, Mar 1, 2025, 10:01 AM 4 min read

Consolidated GAAP Net Loss (Q4 2024): $51 million or a negative $1.07 per share.
Consolidated GAAP Net Loss (Q4 2023): $138 million or a negative $2.94 per share.
Adjusted Net Loss (Q4 2024): $22 million or a negative $0.48 per share.
Adjusted Net Loss (Q4 2023): $8 million or a negative $0.16 per share.
Consolidated GAAP Net Loss (Full Year 2024): $447 million or a negative $9.43 per share.
Consolidated GAAP Net Loss (Full Year 2023): $491 million or a negative $10.18 per share.
Adjusted Net Loss (Full Year 2024): $184 million or a negative $3.90 per share.
Adjusted Net Loss (Full Year 2023): $169 million or a negative $3.49 per share.
Book Value Per Share (Dec 31, 2024): Negative $40.99 per share.
Book Value Per Share (Dec 31, 2023): Negative $32.56 per share.
National's Gross Par Amount Outstanding (End of 2024): Approximately $25 billion.
National's Leverage Ratio (End of 2024): 28 to 1.
National's Total Claims Paying Resources (Dec 31, 2024): $1.5 billion.
National's Statutory Capital and Surplus (Dec 31, 2024): In excess of $900 million.
MBIA Insurance Corp's Statutory Net Income (Q4 2024): $4 million.
MBIA Insurance Corp's Statutory Net Income (Q4 2023): $6 million.
MBIA Insurance Corp's Statutory Net Loss (Full Year 2024): $64 million.
MBIA Insurance Corp's Statutory Net Loss (Full Year 2023): $28 million.
MBIA Insurance Corp's Statutory Capital (Dec 31, 2024): $88 million.
MBIA Insurance Corp's Claims Paying Resources (Dec 31, 2024): $356 million.
MBIA Insurance Corp's Insured Gross Par Outstanding (Dec 31, 2024): $2.3 billion.

Warning! GuruFocus has detected 5 Warning Signs with MBI.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

MBIA Inc (NYSE:MBI) reported lower net losses for the full year and fourth quarter of 2024 compared to 2023.
The company benefited from reduced investment losses and lower operating expenses in 2024.
National's insured portfolio credits performed generally consistent with expectations.
The gross par amount outstanding for National's insured portfolio declined by approximately $3.1 billion from year-end 2023 to the end of 2024.
MBIA Inc (NYSE:MBI) successfully declared and paid an as-of-right dividend of $69 million to MBIA Inc, partially offsetting the decrease in cash and liquid assets during 2024.

Negative Points

MBIA Inc (NYSE:MBI) reported a consolidated GAAP net loss of $51 million for the fourth quarter of 2024.
The company's adjusted net loss was $22 million for the fourth quarter of 2024, higher than the adjusted net loss of $8 million in the same period of 2023.
MBIA Inc's book value per share decreased to a negative $40.99 per share as of December 30, 2024, from a negative $32.56 per share as of December 31, 2023.
National's statutory capital decreased by $205 million compared to December 31, 2023, largely due to its statutory net loss for full year 2024.
The uncertainty surrounding the resolution of PREPA's outstanding debt remains a significant challenge for MBIA Inc (NYSE:MBI), impacting potential sale processes and shareholder value.

Q & A Highlights

Q: Can MBIA consider more frequent, smaller special capital releases from National beyond the regular dividend? A: William Fallon, CEO, stated that while it is possible to pursue more frequent special dividends, it requires regulatory approval. Given the current size of the portfolio and the uncertainty surrounding PREPA, the company would likely wait for more certainty regarding PREPA before seeking additional special dividends.

Q: Regarding the PREPA litigation, how does MBIA's position align with other creditors, and is there a focus on expediting resolution over maximizing recoveries? A: William Fallon, CEO, explained that MBIA considers both the dollar recovery and timing as important factors. While there is alignment among bondholders, the main challenge is the oversight board's position. MBIA is actively pursuing litigation to expedite resolution, as timing is crucial.

Q: Is it possible to carve out the PREPA obligation in a sale of MBIA, using a contingent instrument to adjust the purchase price based on recovery outcomes? A: William Fallon, CEO, acknowledged that while such discussions have occurred, the offers received have been inadequate for shareholders. The complexity and size of the PREPA claim make prospective buyers hesitant to offer acceptable terms, making it preferable to resolve the PREPA situation first.

Q: Why are potential buyers hesitant to offer satisfactory terms for MBIA, excluding the PREPA obligation? A: William Fallon, CEO, suggested that the complexity and size of the PREPA claim deter buyers from offering terms that would be acceptable to shareholders. As a result, it is better to wait for the PREPA situation to play out.

Q: What is the current status of MBIA's financial performance and statutory results? A: John Staley, Analyst, reported that MBIA's consolidated GAAP net loss for Q4 2024 was $51 million, an improvement from the $138 million loss in Q4 2023. The company's statutory net loss for National was $10 million for Q4 2024, with a full-year statutory net loss of $133 million, reflecting lower net realized investment losses and lower operating expenses.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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