MBIA (MBI) Q1 2025 earnings summary

Executive summary

• Net loss for Q1 2025 narrowed to $62 million from $86 million year-over-year, driven by favorable revenue variances, lower losses in loss adjustment expenses, and reduced operating expenses, especially compensation.

• Adjusted net loss (non-GAAP) was $8 million, improved from $24 million year-over-year, reflecting lower losses on PREPA exposure.

• Book value per share was negative $42.22 as of March 31, 2025, down from negative $40.99 at year-end 2024, mainly due to the Q1 net loss.

• PREPA defaulted on National-insured bonds, resulting in $13 million in gross claims paid; $657 million of PREPA-insured debt service remains outstanding.

• MBIA Mexico substantially liquidated, returning $12 million of capital to MBIA Corp.

Financial highlights

• Total revenues were $14 million, up from $13 million in Q1 2024, driven by favorable changes in consolidated VIE revenues.

• Total expenses decreased to $76 million from $100 million, mainly due to lower losses and loss adjustment expenses and reduced operating costs.

• Net investment income declined by $5 million year-over-year due to a lower average asset base.

• Effective tax rate remained at 0% due to a full valuation allowance on net deferred tax assets.

• MBIA Insurance Corp's negative book value per share worsened to -$50.78 from -$49.48 at year-end.

Outlook and guidance

• Resolution of PREPA exposure is key to maximizing shareholder value and potentially selling the company; uncertainty remains high.

• No new financial guarantee policies expected to be written outside of remediation activities.

• National will continue to focus on portfolio surveillance, remediation, and investment management; MBIA Corp. will prioritize claim satisfaction and maximizing recoveries.

• Optimism expressed that court actions and political focus may move PREPA resolution forward after years of delay.

• Uncertainty remains regarding PREPA restructuring; adverse outcomes could materially impact loss reserves and recoveries.