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MI

MBIA INC (MBI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 GAAP net loss improved to $51.0M (vs. $138.0M in Q4 2023), driven by lower realized investment losses, FX gains, absence of derivative losses, and lower operating expenses; diluted EPS was $(1.07) .
  • Non-GAAP adjusted net loss was $22.0M ($(0.48) per share), reflecting higher losses and LAE at National tied to PREPA and lower net investment income, partially offset by lower Corporate opex .
  • Year-end book value per share declined to negative $40.99 (from negative $32.56 in 2023) on the consolidated net loss; MBIA Inc. liquidity rose to $380.0M; National paid a $69.0M as-of-right dividend to MBIA Inc. .
  • Management prioritized resolving National’s PREPA exposure (~$800M claim) and indicated bondholders filed to move litigation forward; progress on PREPA and potential capital returns (e.g., regulator-approved specials) are key catalysts for any sale process .

What Went Well and What Went Wrong

What Went Well

  • Lower consolidated GAAP net loss vs. prior year quarter due to reduced investment losses, FX gains on euro-denominated debt, absence of derivative losses, and lower compensation-driven opex .
  • National’s insured portfolio continued to amortize (gross par declined to $25.3B), with CPR at $1.5B and statutory capital ~$0.9B; insured leverage ratio at 28:1 .
  • Management highlighted portfolio performance outside PREPA as consistent with expectations, reinforcing stability in the remainder of exposures .

What Went Wrong

  • Adjusted net loss widened YoY in Q4 to $22.0M (from $8.0M) on higher losses and LAE (largely Puerto Rico) and lower net investment income at National .
  • Full-year book value per share deteriorated further to negative $40.99, reflecting ongoing consolidated GAAP losses and MBIA Corp.’s negative book value impact .
  • PREPA uncertainty continues to impede the sale process, with management indicating prospective buyers’ carve-out proposals are inadequate and more litigation progress is needed .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
GAAP Net Loss ($USD Millions)$254.0 $56.0 $51.0
Diluted EPS ($USD)$(5.34) $(1.18) $(1.07)
Adjusted Net Loss ($USD Millions)$138.0 $0.174 $22.0
Adjusted EPS ($USD)$(2.90) $(0.00) $(0.48)
Book Value per Share ($USD)$(39.07) $(39.19) $(40.99)
Liquidity ($USD Millions)$315.0 $326.0 $380.0
Revenue ($USD Millions)N/A – not disclosed in 8‑K; see Operating Supplement N/A – not disclosed in 8‑K; see Operating Supplement N/A – not disclosed in 8‑K; see Operating Supplement
Margin MetricsN/A – not applicable/disclosed in press materials N/A – not applicable/disclosed in press materials N/A – not applicable/disclosed in press materials

Segment and statutory metrics:

MetricQ2 2024Q3 2024Q4 2024
National Statutory Capital ($USD Billions)$1.0 $1.0 $0.9
National Claims-Paying Resources ($USD Billions)$1.6 $1.6 $1.5
National Gross Par Insured ($USD Billions)$27.0 $25.9 $25.3
National Leverage Ratio (Gross Par / Stat Capital)28:1 26:1 28:1
MBIA Corp Statutory Capital ($USD Millions)$85 $87 $88
MBIA Corp Claims-Paying Resources ($USD Millions)$355 $358 $356
MBIA Corp Gross Par Insured ($USD Billions)N/A N/A $2.3

Shareholder metrics:

MetricQ2 2024Q3 2024Q4 2024
Shares Outstanding (Millions)51.0 51.0 51.0
Share Repurchase Authorization Remaining ($USD Millions)$71.0 $71.0 $71.0
Dividend from National to MBIA Inc. ($USD Millions)N/A N/A $69.0

Additional full-year context:

  • Full-year 2024 consolidated GAAP net loss was $447.0M ($(9.43) per diluted share); adjusted net loss was $184.0M ($(3.90) per diluted share) .
  • Drivers included lower realized investment losses (National and Corporate), lower VIE-related losses (MBIA Corp), lower opex; offset by fair value losses tied to Zohar CDO recoveries, lower net investment income, and higher losses and LAE at National .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q4 2024None provided None provided Maintained (no formal guidance)
EPSFY/Q4 2024None provided None provided Maintained (no formal guidance)
Margins/OpEx/Tax/SegmentsFY/Q4 2024None provided None provided; commentary on lower opex and drivers only Maintained (no formal guidance)
Dividends (National → MBIA Inc.)FY 2024/Q4Regular as‑of‑right annual dividend historically Paid $69.0M as‑of‑right dividend in Q4; specials require regulator approval; management prefers PREPA clarity first Clarified process; no numeric guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q2 2024)Previous Mentions (Q-1: Q3 2024)Current Period (Q4 2024)Trend
PREPA exposure and litigationLosses/LAE at National primarily from PREPA; sale of MBIA contingent on PREPA resolution; CEO stressed adverse impact and priority Lower losses/LAE vs prior year largely related to PREPA; portfolio continuing to amortize Claim >$800M; bondholders filed to move litigation forward; Oversight Board viewed as key obstacle; sale process requires reduced PREPA uncertainty Intensifying legal focus; timing emphasis
Capital returns from NationalNo share repurchases; liquidity update; no dividend detail in Q2 No share repurchases; liquidity update Paid $69M as‑of‑right dividend; management open to smaller specials pending regulator approval and PREPA clarity Incremental clarity; cautious stance
Portfolio runoff (National)Gross par $27.0B; leverage 28:1 Gross par $25.9B; leverage 26:1 Gross par $25.3B; leverage 28:1 Continued amortization; leverage fluctuates
FX and derivativesQ2 press focused on fair value losses at MBIA Corp (Zohar) —Q4 FX gains on euro debt; no derivative losses vs. 2023 Positive variance in Q4
Operating expenses——Lower opex due to reduced compensation costs Cost control benefits

Management Commentary

  • “Our priority continues to be resolving National's PREPA exposure… the path and timing for resolving PREPA's outstanding debt remains largely uncertain.”
  • “Given the uncertainty associated with… National’s PREPA bankruptcy claim, which is in excess of $800 million, we continue to believe that the process to sell the company… will likely require substantially reducing the uncertainty regarding PREPA.”
  • CFO: “The lower GAAP net loss this quarter was driven by… favorable change in net realized investment losses… foreign exchange gains on euro denominated debt… and lower operating expenses… [and] no comparable [derivative] losses in 2024.”
  • CFO: “Adjusted net loss… unfavorable change was primarily due to higher loss and LAE and lower net investment income at National, partially offset by lower operating expenses.”

Q&A Highlights

  • Capital releases: Management can pursue measured special dividends from National, subject to regulator approval; preference to wait for more certainty around PREPA given ~$800M claim .
  • Sale process: Buyers’ carve-out proposals for PREPA deemed inadequate; better to “play out the PREPA situation” rather than accept unfavorable structures .
  • Litigation timing: Bondholders filed to move litigation forward; timing is critical for shareholder value, with strong alignment among bondholders on recovery and timing objectives .

Estimates Context

  • Wall Street consensus via S&P Global for Q4 2024 revenue and EPS was unavailable at the time of this analysis due to access limits. We attempted to fetch consensus and will update vs-estimate comparisons when available. [GetEstimates error: Daily Request Limit Exceeded]*
  • Given the lack of published numeric guidance and unavailable consensus, formal “beat/miss vs. estimates” cannot be determined for Q4 at this time .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q4 showed operational improvement on GAAP loss vs. prior year, aided by lower realized investment losses, FX gains, and lower opex; adjusted loss widened on PREPA-related LAE and lower net investment income .
  • National’s portfolio continues to amortize (gross par to $25.3B), with CPR at $1.5B and statutory capital ~$0.9B; leverage ratio oscillated, ending Q4 at 28:1 .
  • PREPA remains the pivotal variable: management highlighted a >$800M claim and recent bondholder filing; resolution timing likely dictates sale process feasibility and scope for capital returns .
  • MBIA Inc. liquidity strengthened to $380.0M; National paid a $69.0M as‑of‑right dividend; share repurchase authorization remained at $71.0M with 51.0M shares outstanding .
  • Near-term trading implications: news flow around PREPA litigation, regulator stance on special dividends, and any updates to sale discussions may drive sentiment and volatility .
  • Medium-term thesis: stability in non-PREPA exposures and disciplined cost control support capital preservation while PREPA resolution serves as the gating factor for strategic actions (sale and incremental capital returns) .
  • Monitor Operating Supplement and statutory filings for detailed portfolio and reserve dynamics (as referenced in 8‑K and press releases) .

Additional references

  • Earnings press release posting and 8‑K furnishing confirmation .
  • Investor call scheduling and replay details .