NU Online News Service, May 18, 12:50 p.m. EDT

Ambac Financial Group, Inc. reported a 2010 first quarter net loss of more than $690 million--almost double the loss it experienced for the same period last year--and reiterated its expectation that it may seek bankruptcy.

The New York surety insurer's reported net loss amounted to $2.39 a share, compared to a net loss of $392 million or net loss of $1.36 a share for the 2009 first quarter.

Ambac said under new accounting standards adopted Jan. 1, it had to record a $495 million loss as the result of the consolidation of mortgage related insurance exposures.

Ambac said it placed the exposures into a segregated account on March 24 at the behest of the Office of the Commissioner of Insurance for Wisconsin for rehabilitation.

The carrier said the loss is considered non-recurring, and excluding the segregated account, the company's loss would have been $195 million, or 68 cents a share.

Net premiums earned were down 36 percent, or close to $72 million, to $125 million.

Net premiums earned during the period were negatively impacted by no new business written and the high level of refunding and terminations over the past two years, plus the consolidation of mortgage related insurance exposures, Ambac said.

The company said net investments grew 17 percent, or close to $17 million, to $118 million.

Ambac said it has "insufficient capital to finance its debt service and operating expense requirements beyond the second quarter of 2011 and may need to seek bankruptcy protection."

The company did not hold a conference call with financial analysts.

Ambac said its board will hold an annual stockholders meeting on July 14 at 1 p.m. in New York.

Special Reports /

Ambac Reports $690M 1Q Loss

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