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MBIA posts larger 3Q profit in derivative gains

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November 12, 2013 06:39 PM EST | AP


NEW YORK (AP) — NEWS: Bond insurer MBIA said its net income climbed in the third quarter on gains from derivatives.

DETAILS: MBIA Inc. said Tuesday that it recorded $257 million in net gains on the fair value of insured derivatives during the quarter. Its gains from derivatives grew more than tenfold from the third quarter of 2012.

However the Armonk, N.Y., company said its results were disappointing. It reported greater losses on commercial mortgage-backed securities and took an impairment charge related to its headquarters property and a loss related to a salvage asset.

The company also said Kewsong Lee resigned from its board as of Monday. Lee joined the board in January 2008 nominated by Warburg Pincus, currently MBIA's largest shareholder. Warburg Pincus' remaining director on the MBIA board, David Coulter, has the right to designate a successor for Lee on the board, the company said.

NUMBERS: MBIA said its net income rose to $132 million, or 67 cents per share, from $7 million, or 4 cents per share. Total revenue jumped to $420 million from $281 million reflecting the derivatives gain, but premium revenue slipped to $104 million from $155 million.

FactSet says analysts expected MBIA to report net income of 14 cents per share.

FUTURE: Despite the charges and higher interest rates, President and Chief Financial Officer Chuck Chaplin said in a press release that MBIA "getting much closer to resuming more normal operations" as the global financial crisis recedes from view.

STOCK: Shares of MBIA lost 2 cents to $11.66 Tuesday and added 4 cents to $11.70 in aftermarket trading. The stock is up 49 percent in the year to date.