MBIA 2Q Profit Down 89%

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

Guaranty insurer MBIA says its second quarter performance was good despite reporting a $1.2 billion drop in net income over the same period last year.

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

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

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

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

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

The result is prolonged litigation, says Brown, but he was confident that ultimately the split of the company would not be reversed.

In 2009, MBIA created National Public Finance Guarantee, a holding company that maintains it portfolio of healthy municipal bonds. MBIA retained its book of troubled structured finance policies.