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MBIA Inc. Reports Third Quarter 2011 Financial Results

The U.S. public finance insurance segment recorded $157 million of adjusted pre-tax income in the third quarter of 2011 compared with $167 million of adjusted pre-tax income in the third quarter of 2010. The decline in adjusted pre-tax income resulted primarily from lower net gains on sales of securities associated with the ongoing management of National’s investment portfolio, partially offset by an increase in total premiums earned.

Total premiums earned in the U.S. public finance insurance segment were $147 million in the third quarter of 2011 compared with $100 million in total premiums earned in the third quarter of 2010. The increase in total premiums earned resulted from greater refunding activity in the third quarter of 2011 partially offset by lower scheduled earned premiums due to insured portfolio amortization.

Net investment income for the U.S. public finance insurance segment declined 10 percent to $53 million in the third quarter of 2011 from $59 million in the comparable period of 2010 primarily due to lower average yields.

The U.S. public finance insurance segment’s loss and loss adjustment expenses totaled $10 million in the third quarter of 2011 compared with $6 million in the third quarter of 2010.

Expenses associated with the amortization of deferred acquisition costs totaled $22 million in the third quarter of 2011, up 44 percent from $16 million in the third quarter of 2010 and in line with insured portfolio amortization.

Operating expenses were $19 million in the third quarter of 2011, up 7 percent from $17 million in the comparable period of 2010. The increase in operating expenses was driven by higher allocated overhead and compensation expenses, partially offset by lower facilities-related expenses.

As of September 30, 2011, National’s statutory capital was $2.6 billion and its claims-paying resources totaled $5.5 billion.

Structured Finance and International Insurance Results

The structured finance and international insurance business is primarily conducted through MBIA Corp. and its subsidiaries.

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