8-K
Mbia Inc (MBI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2021
MBIA INC.
(Exact name of registrant as specified in its charter)
| Connecticut | 001-9583 | 06-1185706 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| 1 Manhattanville Road, Suite 301<br> <br>Purchase, New York | 10577 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:
914-273-4545
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of Each Class | Trading<br> <br>Symbol | Name of Each Exchange<br> <br>on Which Registered |
|---|---|---|
| Common Stock, par value $1 per share | MBI | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| 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 August 4, 2021, MBIA Inc. (“MBIA”) issued a press release announcing that the Registrant’s results of operations for the quarter ended June 30, 2021 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 August 4, 2021, MBIA will post on its website, www.mbia.com, under the section “Investor Relations – Financial Information – Operating Supplements,” a Quarterly Operating Supplement for the second quarter of 2021 and under the section “Investor Relations – Financial Information – Statutory Statements,” 2021 Quarterly Statements for the second quarter of 2021 for each of MBIA Insurance Corporation and National Public Finance Guarantee Corporation. MBIA will also post on its website, under the section “Selected Exposures,” certain information on the Company’s insured portfolios as of June 30, 2021. The information will be posted as “MBIA Corp.’s Structured Finance Insured Portfolio,” “MBIA Corp.’s Non-U.S. Public Finance Insured Portfolio” and “National Public Finance Guarantee Corporation’s Insured Portfolio.” Information on National Public Finance Guarantee Corporation’s insured portfolio as of June 30, 2021 will also be posted on National Public Finance Guarantee Corporation’s website, www.nationalpfg.com, under the selection “Insured Portfolio.” Additional exposure information on certain credits insured by National Public Finance Guarantee Corporation will be posted on National Public Finance Guarantee Corporation’s website, www.nationalpfg.com, under the selection “Selected Exposures.”
On or about August 5, 2021, MBIA will also post on its website, www.mbia.com, under the section “Investor Relations – Investor Inquiries/FAQs,” updated Frequently Asked Questions.
| Item 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
|---|---|
| 99.1 | MBIA Inc., Second Quarter 2021 Financial Results dated August 4, 2021. |
| --- | --- |
| 104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document |
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.
| MBIA INC. | |
|---|---|
| By: | /s/Jonathan C. Harris |
| Jonathan C. Harris | |
| General Counsel |
Date: August 4, 2021
EX-99.1
Exhibit 99.1
MBIA Inc. Second Quarter 2021 Financial Results
August 4, 2021
MBIA Inc. (NYSE:MBI) (the Company) today reported a consolidated GAAP net loss of $61 million, or $(1.23) per share, for the second quarter of 2021 compared to a consolidated GAAP net loss of $106 million, or $(1.69) per share, for the second quarter of 2020. The improved result versus last year’s second quarter was primarily due to lower loss and loss adjustment expenses (LAE) in the insurance segments and gains related to the extinguishment of Corporate segment debt, partially offset by unfavorable variances from revenues of consolidated variable interest entities (VIEs), lower mark-to-market gains on National Public Finance Guarantee Corporation (National) investments and mark-to-market losses on interest rate swaps in the second quarter of 2021 compared with mark-to-market gains in the second quarter of 2020. The loss and LAE for the second quarter of 2021 resulted from losses at MBIA Insurance Corporation (MBIA Corp.), primarily due to losses on insurance loss recoveries on collateralized debt obligations and a largely offsetting loss benefit at National for recoveries on paid claims on its insured Puerto Rico exposure that was primarily due to the impact of decreases in discount rates during the quarter.
Book value per share was negative $0.66 as of June 30, 2021 compared with a positive $2.55 as of December 31, 2020. The decrease in book value per share since year-end 2020 was primarily due to the year-to-date net loss, which was primarily driven by the net loss of MBIA Corp. that largely resulted from expenses for its surplus notes interest and losses and LAE.
The Company also reported Adjusted Net Income (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $37 million or $0.76 per diluted share for the second quarter of 2021 compared with an Adjusted Net Loss of $72 million or $(1.15) per diluted share for the second quarter of 2020. The improved result was primarily due to the favorable variance of losses and LAE at National that largely resulted from its insured Puerto Rico exposure.
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 also attached.
Statement from Company Representative
Bill Fallon, MBIA’s Chief Executive Officer noted, “We are pleased to see the debt restructuring agreements that will largely resolve National’s Puerto Rico exposure continue to progress towards confirmation and implementation. Once these debt restructuring plans are confirmed, anticipated to occur before the end of 2022, we will be in better position to implement our longer term strategic plans for the Company.”
Year-to-Date Results
The Company recorded a consolidated GAAP net loss of $167 million, or $(3.38) per diluted common share, for the six months ended June 30, 2021 compared with a consolidated GAAP net loss of $439 million, or $(6.51) per diluted common share, for the first six months of 2020. The lower net loss for 2021 was primarily due to lower loss and loss adjustment expenses related to lower losses insurance loss recoveries on collateralized debt obligations insured by MBIA Corp. and lower net losses on Puerto Rico bonds insured by National.
The Company’s non-GAAP Adjusted Net Loss for the six months ended June 30, 2021 was $79 million or $(1.60) per diluted share compared with an Adjusted Net Loss of $119 million or $(1.77) per diluted share for the first six months of 2020. The lesser adjusted net loss for the first six months of 2021 was primarily due to lower loss and loss adjustment expense at National that largely resulted from its insured Puerto Rico exposure.
MBIA Inc.
As of June 30, 2021, MBIA Inc.’s liquidity position totaled $238 million, consisting primarily of cash and cash equivalents and other liquid invested assets. During the quarter, the Company repurchased $63 million par value outstanding of GFL medium-term notes issued by the corporate segment at a weighted average cost of approximately 78% of par value. As of July 28, 2021, there were 54.3 million of the Company’s common shares outstanding.
National Public Guarantee Financial Corporation
National had statutory capital of $2.0 billion and claims-paying resources totaling $3.1 billion as of June 30, 2021. National’s total fixed income investments plus cash and cash equivalents had a book/adjusted carrying value of $2.0 billion as of June 30, 2021. National’s insured portfolio declined by $0.9 billion during the quarter, ending the quarter with $39.5 billion of gross par outstanding. National ended the quarter with a leverage ratio of gross par to statutory capital of 20 to 1, down from 21 to 1 as of year-end 2020.
MBIA Insurance Corporation
The statutory capital of MBIA Insurance Corporation as of June 30, 2021 was $160 million and claims-paying resources totaled $786 million. As of June 30, 2021, MBIA Insurance Corporation’s liquidity position (excluding resources from its subsidiaries and branches) totaled $461 million consisting primarily of cash and cash equivalents and other liquid invested assets.
Conference Call
The Company will host a webcast and conference call for investors tomorrow, Thursday, August 5, 2021 at 8:00 AM (ET) to discuss its second quarter 2021 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 (877) 694-4769 in the U.S. and (404) 665-9935 from outside the U.S. The conference call code is 3781469. 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 end of the call on August 5 and will remain available until 11:59 p.m. on August 19 by dialing (800) 585-8367 in the U.S. or (404) 537-3406 from outside the U.S. The code for the replay of the call is also 3781469. 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; changes in general economic and competitive conditions; and the impact on our insured portfolios or business operations caused by the global spread of the novel coronavirus COVID-19. 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:
| • | Negative book value of MBIA Corp. - We remove the negative book value of MBIA Corp. based on our view that<br>given MBIA Corp.’s current financial condition, the regulatory regime in which it operates, the priority given to its policyholders, surplus note holders and preferred stock holders with respect to<br> |
|---|---|
| <br>the distribution of assets, and its legal structure, it is not and will not likely be in a position to upstream any economic benefit to MBIA Inc. Further, MBIA Inc. does not face any material<br>financial liability arising from MBIA Corp. | |
| --- | |
| • | Net unrealized (gains) losses onavailable-for-sale (“AFS”) securities excluding MBIA Corp. - We remove net unrealized gains and losses on AFS securities recorded in accumulated other<br>comprehensive income since they will reverse from GAAP book value when such securities mature. Gains and losses from sales and impairment of AFS securities are recorded in book value through earnings. |
| --- | --- |
| • | Net unearned revenue in excess of expected losses of National - We include net unearned premium revenue in<br>excess of expected losses. Net unearned premium revenue in excess of expected losses consists of the financial guarantee unearned premium revenue of National in excess of expected insurance losses, net of reinsurance and deferred acquisition costs.<br>In accordance with GAAP, a loss reserve on a financial guarantee policy is only recorded when expected losses exceed the amount of unearned premium revenue recorded for that policy. As a result, we only add to GAAP book value the amount of unearned<br>premium revenue in excess of expected losses for each policy in order to reflect the full amount of our expected losses. The Company’s net unearned premium revenue will be recognized in GAAP book value in future periods, however, actual amounts<br>could differ from estimated amounts due to such factors as credit defaults and policy terminations, among others. |
| --- | --- |
Claims-payingResources (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
Investor and Media Relations
greg.diamond@mbia.com
MBIA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions except share and per share amounts)
| December 31, 2020 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Investments: | |||||
| Fixed-maturity securities held as<br>available-for-sale, at fair value (amortized cost 2,016 and 2,078) | 2,154 | $ | 2,257 | ||
| Investments carried at fair value | 223 | 196 | |||
| Investments pledged as collateral, at fair value (amortized cost 2 and 6) | 2 | 1 | |||
| Short-term investments, at fair value (amortized cost 418 and 281) | 418 | 282 | |||
| Total investments | 2,797 | 2,736 | |||
| Cash and cash equivalents | 342 | 158 | |||
| Premiums receivable (net of allowance for credit losses 5 and 5) | 206 | 216 | |||
| Deferred acquisition costs | 46 | 50 | |||
| Insurance loss recoverable | 1,561 | 1,677 | |||
| Other assets | 82 | 84 | |||
| Assets of consolidated variable interest entities: | |||||
| Cash | 5 | 9 | |||
| Investments carried at fair value | 63 | 77 | |||
| Loans receivable at fair value | 129 | 120 | |||
| Loan repurchase commitments | — | 604 | |||
| Other assets | 21 | 20 | |||
| Total assets | 5,252 | **** | $ | 5,751 | **** |
| Liabilities and Equity | |||||
| Liabilities: | |||||
| Unearned premium revenue | 372 | $ | 405 | ||
| Loss and loss adjustment expense reserves | 954 | 990 | |||
| Long-term debt | 2,283 | 2,229 | |||
| Medium-term notes (includes financial instruments carried at fair value of 105 and 110) | 638 | 710 | |||
| Investment agreements | 269 | 269 | |||
| Derivative liabilities | 140 | 215 | |||
| Other liabilities | 169 | 161 | |||
| Liabilities of consolidated variable interest entities: | |||||
| Variable interest entity notes (includes financial instruments carried at fair value of 321 and<br>350) | 450 | 623 | |||
| Total liabilities | 5,275 | **** | **** | 5,602 | **** |
| Equity: | |||||
| Preferred stock, par value 1 per share; authorized shares—10,000,000; issued and<br>outstanding—none | — | — | |||
| Common stock, par value 1 per share; authorized shares—400,000,000; issued<br>shares—283,186,115 and 283,186,115 | 283 | 283 | |||
| Additional paid-in capital | 2,934 | 2,962 | |||
| Retained earnings (deficit) | (180 | ) | (13 | ) | |
| Accumulated other comprehensive income (loss), net of tax of 8 and 8 | 103 | 115 | |||
| Treasury stock, at cost—228,780,540 and 229,508,967 shares | (3,176 | ) | (3,211 | ) | |
| Total shareholders’ equity of MBIA Inc. | (36 | ) | 136 | ||
| Preferred stock of subsidiary | 13 | 13 | |||
| Total equity | (23 | ) | **** | 149 | **** |
| Total liabilities and equity | 5,252 | **** | $ | 5,751 | **** |
All values are in US Dollars.
MBIA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions except share and per share amounts)
| Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2021 | 2020 | |||||||||
| Revenues: | |||||||||||
| Premiums earned: | |||||||||||
| Scheduled premiums earned | 12 | $ | 15 | $ | 27 | $ | 31 | ||||
| Refunding premiums earned | 2 | 4 | 7 | 8 | |||||||
| Premiums earned (net of ceded premiums of 1, 1, 2 and 2) | 14 | 19 | 34 | 39 | |||||||
| Net investment income | 14 | 20 | 29 | 43 | |||||||
| Fees and reimbursements | 1 | — | 1 | — | |||||||
| Net gains (losses) on financial instruments at fair value and foreign exchange | (20 | ) | 24 | 31 | (39 | ) | |||||
| Net gains (losses) on extinguishment of debt | 14 | — | 14 | — | |||||||
| Revenues of consolidated variable interest entities: | |||||||||||
| Net investment income | — | 5 | — | 13 | |||||||
| Net gains (losses) on financial instruments at fair value and foreign exchange | — | 23 | (14 | ) | 38 | ||||||
| Other net realized gains (losses) | (5 | ) | 23 | (5 | ) | 14 | |||||
| Total revenues | 18 | 114 | 90 | 108 | |||||||
| Expenses: | |||||||||||
| Losses and loss adjustment | 9 | 136 | 107 | 379 | |||||||
| Amortization of deferred acquisition costs | 3 | 3 | 5 | 5 | |||||||
| Operating | 21 | 22 | 47 | 40 | |||||||
| Interest | 41 | 45 | 82 | 92 | |||||||
| Expenses of consolidated variable interest entities: | |||||||||||
| Operating | 1 | 1 | 3 | 3 | |||||||
| Interest | 4 | 13 | 13 | 28 | |||||||
| Total expenses | 79 | 220 | 257 | 547 | |||||||
| Income (loss) before income taxes | (61 | ) | (106 | ) | (167 | ) | (439 | ) | |||
| Provision (benefit) for income taxes | — | — | — | — | |||||||
| Net income (loss) | (61 | ) | $ | (106 | ) | $ | (167 | ) | $ | (439 | ) |
| Net income (loss) per common share: | |||||||||||
| Basic | (1.23 | ) | $ | (1.69 | ) | $ | (3.38 | ) | $ | (6.51 | ) |
| Diluted | (1.23 | ) | $ | (1.69 | ) | $ | (3.38 | ) | $ | (6.51 | ) |
| Weighted average number of common shares outstanding: | |||||||||||
| Basic | 49,488,368 | 62,605,656 | 49,373,883 | 67,347,335 | |||||||
| Diluted | 49,488,368 | 62,605,656 | 49,373,883 | 67,347,335 |
All values are in US Dollars.
ADJUSTED NET INCOME (LOSS) RECONCILIATION^(1)^
(In millions except per share amounts)
| Three Months EndedJune 30, | Six Months EndedJune 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net income (loss) | $ | (61 | ) | $ | (106 | ) | $ | (167 | ) | $ | (439 | ) |
| Less: adjusted net income (loss) adjustments: | ||||||||||||
| Income (loss) before income taxes of the international and structured finance insurance segment<br>and eliminations | (99 | ) | (59 | ) | (143 | ) | (279 | ) | ||||
| Adjustments to income before income taxes of the U.S. public finance insurance and corporate<br>segments: | ||||||||||||
| Mark-to-market<br>gains (losses) on financial instruments^(2)^ | (9 | ) | 17 | 29 | (60 | ) | ||||||
| Foreign exchange gains (losses)^(2)^ | (4 | ) | (8 | ) | 13 | — | ||||||
| Net gains (losses) on sales of<br>investments^(2)^ | — | 16 | (1 | ) | 19 | |||||||
| Net gains (losses) on extinguishment of debt | 14 | — | 14 | — | ||||||||
| Adjusted net income adjustment to the (provision) benefit for income tax | — | — | — | — | ||||||||
| Adjusted net income (loss) | $ | 37 | $ | (72 | ) | $ | (79 | ) | $ | (119 | ) | |
| Adjusted net income (loss) per diluted common share | $ | 0.76 | $ | (1.15 | ) | $ | (1.60 | ) | $ | (1.77 | ) | |
| (1) | A non-GAAP measure; please see Explanation of non-GAAP Financial Measures. | |||||||||||
| --- | --- | |||||||||||
| (2) | Reported within “Net gains (losses) on financial instruments at fair value and foreign exchange” on<br>the Company’s consolidated statements of operations. | |||||||||||
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COMPONENTS OF BOOK VALUE PER SHARE
| As ofJune 30, 2021 | As ofDecember 31, 2020 | |||||
|---|---|---|---|---|---|---|
| Reported Book Value per Share | $ | (0.66 | ) | $ | 2.55 | |
| Management’s book value per share adjustments: | ||||||
| Remove negative book value of MBIA Corp. | (33.51 | ) | (31.97 | ) | ||
| Remove net unrealized gains (losses) on available-for-sale securities included in other comprehensive income (loss) | 2.01 | 2.86 | ||||
| Include net unearned premium revenue in excess of expected losses | 3.87 | 4.29 | ||||
| Shares outstanding in millions | 54.4 | 53.7 |
INSURANCE OPERATIONS
Selected Financial Data Computed on a Statutory Basis
(Dollars in millions)
National Public Finance GuaranteeCorporation
| June 30, 2021 | December 31, 2020 | |||||
|---|---|---|---|---|---|---|
| Policyholders’ surplus | $ | 1,534 | $ | 1,526 | ||
| Contingency reserves | 428 | 445 | ||||
| Statutory capital | 1,962 | 1,971 | ||||
| Unearned premiums | 338 | 355 | ||||
| Present value of installment premiums^(1)^ | 128 | 129 | ||||
| Premium resources^(2)^ | 466 | 484 | ||||
| Net loss and loss adjustment expense reserves^(1)^ | (322 | ) | (301 | ) | ||
| Salvage reserves on paid claims^(1)^ | 1,000 | 961 | ||||
| Gross loss and loss adjustment expense reserves | 678 | 660 | ||||
| Total claims-paying resources | $ | 3,106 | $ | 3,115 | ||
| Net debt service outstanding | $ | 75,092 | $ | 79,074 | ||
| Gross par outstanding | $ | 39,535 | $ | 41,856 | ||
| Capital ratio^(3)^ | 38:1 | 40:1 | ||||
| Claims-paying ratio^(4)^ | 24:1 | 25:1 | ||||
| Leverage Ratio^(5)^ | 20:1 | 21:1 | ||||
| MBIA Insurance Corporation | ||||||
| June 30, 2021 | December 31, 2020 | |||||
| Policyholders’ surplus | $ | 118 | $ | 106 | ||
| Contingency reserves | 42 | 167 | ||||
| Statutory capital | 160 | 273 | ||||
| Unearned premiums | 72 | 79 | ||||
| Present value of installment premiums^(6)(8)^ | 64 | 73 | ||||
| Premium resources^(2)^ | 136 | 152 | ||||
| Net loss and loss adjustment expense reserves^(6)^ | 151 | (478 | ) | |||
| Salvage reserves on paid claims^(6)(7)^ | 339 | 1,045 | ||||
| Gross loss and loss adjustment expense reserves | 490 | 567 | ||||
| Total claims-paying resources | $ | 786 | $ | 992 | ||
| Net debt service outstanding | $ | 7,707 | $ | 9,327 | ||
| Capital ratio^(3)^ | 48:1 | 34:1 | ||||
| Claims-paying ratio^(4)^ | 10:1 | 9:1 | ||||
| (1) | Calculated using discount rates of 3.49% as of June 30, 2021 and December 31, 2020.<br> | |||||
| --- | --- | |||||
| (2) | Includes financial guarantee and insured credit derivative related premiums. | |||||
| --- | --- | |||||
| (3) | Net debt service outstanding divided by statutory capital. | |||||
| --- | --- | |||||
| (4) | Net debt service outstanding divided by the sum of statutory capital, unearned premium reserve (after-tax), present value of installment premiums (after-tax), net loss and loss adjustment expense reserves and salvage reserves. | |||||
| --- | --- | |||||
| (5) | Gross par outstanding divided by statutory capital. | |||||
| --- | --- | |||||
| (6) | Calculated using discount rates of 5.10% as of June 30, 2021 and December 31, 2020.<br> | |||||
| --- | --- | |||||
| (7) | This amount primarily consists of expected recoveries related to the Company’s excess spread, put-backs and CDOs. | |||||
| --- | --- | |||||
| (8) | Based on the Company’s estimate of the remaining life for its insured exposures. | |||||
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