MBIA (MBI) Q2 2024 earnings summary

Executive summary

• Reported a consolidated GAAP net loss of $254 million ($5.34/share) for Q2 2024, compared to a net loss of $74 million ($1.46/share) in Q2 2023, mainly due to increased loss reserves for PREPA and losses on financial instruments.

• Year-to-date GAAP net loss was $340 million ($7.21/share) for the first six months of 2024, up from $167 million ($3.51/share) loss in the same period of 2023.

• Adjusted net loss (non-GAAP) was $138 million ($2.90/share) for Q2 2024, versus $22 million ($0.45/share) in Q2 2023, primarily due to higher loss and loss adjustment expenses at National related to PREPA.

• Book value per share decreased to negative $39.07 as of June 30, 2024, down from negative $32.56 at year-end 2023, driven by a $340 million consolidated net loss year-to-date.

• PREPA defaulted on National-insured bonds in January and July 2024, resulting in gross claims paid of $16 million and $122 million, respectively; ongoing litigation and mediation create uncertainty for future recoveries.

Financial highlights

• National's gross par outstanding declined by $1.4 billion from year-end 2023 to $27 billion at Q2 2024 end.

• National's leverage ratio (gross par to statutory capital) was 28:1 at Q2 2024 end, up from 25:1 at year-end 2023.

• National's claims-paying resources were $1.6 billion and statutory capital about $1 billion as of June 30, 2024.

• MBIA Insurance Corp. statutory capital was $85 million, with claims-paying resources totaling $355 million at Q2 2024 end.

• Liquidity position as of June 30, 2024, was $315 million, primarily in cash and liquid assets.

Outlook and guidance

• Substantial resolution of PREPA is necessary before restarting the process to sell the company.

• Uncertainty remains regarding the outcome of PREPA's restructuring and the impact on National's loss reserves and recoveries.

• No material new business is expected; focus is on portfolio surveillance, remediation, and capital management.

• Operating expenses are expected to continue trending down, with management committed to further reductions over the next year.

• Management remains open to share repurchases if liquidity and obligations allow; $70–$100 million remains under the share repurchase authorization.