WASHINGTON (dpa-AFX) - Bond Insurer MBIA, Inc. (MBI) reported Wednesday a significant profit for the third quarter compared to a loss last year, reflecting an hefty gain from the change in fair value of insured derivatives.
Armonk, New York-based MBIA reported net income of $444 million or $2.26 per share for the third quarter, compared to a net loss of $213 million or $1.06 per share in the prior-year quarter.
Excluding impairments and fair-value changes, adjusted pre-tax loss for the quarter sharply widened to $430 million from $24 million in the year-ago quarter, reflecting an increase in estimated losses on insured pools of commercial mortgage-backed securities.
The results were driven by a $776 million unrealized gain on insured credit derivatives associated with a reduced market perception of MBIA Insurance Corp. (MBIA Corp.) credit quality and commutations of insured exposures. The year-ago quarter had $1.04 billion of losses.
The results for the latest quarter include a gain from the change in fair value of insured derivatives of $723 million, while the year-ago quarter included a loss from the change in fair value of insured derivatives of $492 million.
Total revenues for the quarter was $1.12 billion, compared to negative revenues of $191 million in the same quarter last year.
Total premiums earned for the quarter grew 28 percent to $176 million, while net investment income decreased 18 percent to 92 million, and fees and reimbursements grew a billion dollar to $16 million from last year.
The company noted that total amount of insured exposure commuted in the third quarter was $8.5 billion, consisting of certain multi-sector CDO and investment grade corporate CDO transactions.
Total expenses for the quarter more than doubled to $375 million from $165 million in the year-ago quarter.
MBIA's adjusted book value was $35.51 per share at the end of the third quarter, compared to $37.22 per share at the end of the second quarter. Book value per share was $12.17 at the end of the third quarter.
MBI closed Wednesday's regular trading session at $7.88, down $0.58 or 6.86% on a volume of 1.94 million shares. However, the stock gained $0.10 or 1.25% in after-hours trading.
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