MBIA Inc. Q4 FY2025 earnings call

• Financial Results: Consolidated GAAP net loss for full year 2025 was $177 million compared to $447 million in 2024, driven by lower expenses and to a lesser extent higher revenues. Adjusted net income for full year 2025 was $23 million compared to an adjusted net loss of $184 million in 2024.
• National's PREPA Exposure: Priority is to resolve National's PREPA exposure, but substantive progress has been limited due to legal issues related to members of the Financial Oversight and Management Board.
• Corporate Segment Balance Sheet: Corporate segment had total assets of approximately $653 million as of 12/31/2025, including $357 million of unencumbered cash and liquid assets and ~$1.83 billion of assets pledged to Guaranteed Investment Agreement contract holders.

National

• 2025 Full Year: Statutory net income was $88 million compared to a statutory net loss of $133 million in 2024. The favorable variance was driven by lower loss and loss adjustment expense related to National's PREPA exposure.
• 2025 Fourth Quarter: Statutory net income was $5 million compared to a statutory net loss of $10 million in 2024.
• Portfolio and Leverage: Gross par amount outstanding for National's insured portfolio declined from ~$25 billion at year-end 2024 to ~$22 billion at the end of 2025. Leverage ratio of gross par to statutory capital was 24-to-1 at end of 2025, down from 28-to-1 at year-end 2024. Statutory capital and surplus exceeded $900 million, and claims-paying resources were $1.4 billion as of 12/31/2025.

MBIA Insurance Corporation

• 2025 Full Year: Statutory net loss was $26 million compared to a statutory net loss of $64 million in 2024. The lower net loss was primarily driven by lower losses and loss adjustment expense related to estimating recoveries of paid claims associated with the Zohar CDOs.
• Capital and Portfolio: Statutory capital was $79 million as of 12/31/2025, down from $88 million at year-end 2024. Insured gross par outstanding was approximately $2 billion as of 12/31/2025, down about 13% from year-end 2024.

• Special Dividend: Management is constantly looking at the potential for a special dividend, and the likelihood and amount increase as the portfolio runs off, especially with the reduction in PREPA exposure. No specific progress information currently.
• Strategic Process: Options to sell the company are still under consideration, and it could be the entire company or its components, with shareholder interests as the guiding principle.

• PREPA Legal Issues: Legal issues related to members of the Financial Oversight and Management Board are affecting substantive progress on resolving PREPA exposure.
• Political Factors: Political trends could impact the resolution process of PREPA, such as the President's role in appointing board members.

Q: Did you explore the potential for a special dividend in the most recent fourth quarter and have conversations with regulators about distributing capital?

A: Have been constantly looking at the potential for a special dividend, and the likelihood increases with portfolio runoff especially PREPA exposure reduction. No specific progress information currently, and have regular discussions with regulators.

Q: What are the latest updates on the strategic process including a potential sale of the company, and whether the entire company or just National would be sold?

A: Options to sell the company are still under consideration, and it could be the entire company or its components, with shareholder interests as the guiding principle.

Q: Is there a bid out there to sell the rest of your PREPA exposure and how does it compare to the last price?

A: The remaining $425 million of PREPA exposure cannot be sold via a custodial receipt like last year in the near term.

Q: Are you getting pressure from auditors for a higher valuation of reserves related to non-Puerto Rican credits due to political trends?

A: No, there is nothing identified currently that would cause additional reserves due to the mentioned political activities.

Q: How to handle the remaining guarantees of MBIA Insurance Corporation and when will it end?

A: Recovery process related to collateral with Zohar is ongoing, and after it is resolved, the runoff of MBIA Insurance Corporation may be accelerated.

Q: What is the gating item to act on a special dividend?

A: It is a matter constantly under consideration, with discussions with regulators on a regular basis, and approval and distribution will be announced when it occurs.