NU Online News Service, Aug. 10, 2:01 p.m.EDT

Guaranty insurer MBIA says its second quarter performance wasgood despite reporting a $1.2 billion drop in net income over thesame period last year.

“Overall, our results for the second quarter were positive,”says Chuck Chaplin, MBIA president and chief financial officer, ina statement.

Delinquencies in its mortgage book “were consistent” withexpectations, says the Armonk, N.Y.-based insurer, while volatilityremained mixed over its book of structured finance policies.

The company reported net income of $137 million for the secondquarter of this year compared to $1.3 billion for the same periodlast year. Total premiums earned were down more than $7 million to$149 million.

For the first six months of the year, the company reports netloss of $1.14 billion compared to a net loss of $185 million forthe same period last year. Total premiums earned stood at $286million compared to $313 million last year.

Speaking during a conference call with financial analyst'stoday, Joseph Brown Jr., MBIA's chief executive officer, shared hisdisappointment over the fact that attempts to halt a suit by a group of banks trying to dissolvethe split of the company failed.

The result is prolonged litigation, says Brown, but he wasconfident that ultimately the split of the company would not bereversed.

In 2009, MBIA created National Public Finance Guarantee, aholding company that maintains it portfolio of healthy municipalbonds. MBIA retained its book of troubled structured financepolicies.