Ambac Reports Second Quarter 2024 Results
Ambac Financial Group (NYSE: AMBC) reported its second quarter 2024 results. Key highlights include a net loss under $1 million or $0.02 per diluted share and an adjusted net income of $8 million or $0.18 per diluted share.
Insurance Distribution generated net income of $1 million and EBITDA of $2 million on $53 million of premiums placed. Specialty P&C Insurance reported gross premiums written of $111 million, up 109% from Q2 2023, and total P&C premium production of $165 million, a 75% increase.
Ambac completed the acquisition of a 60% controlling stake in Beat Capital Partners for $278 million, effective July 31, 2024. The company also agreed to sell its Legacy Financial Guarantee Business for $420 million to Oaktree Capital Management.
Other notable metrics include a 94% improvement in net income attributable to common stockholders, which stood at $(0.7) million compared to $(13.1) million in Q2 2023. EBITDA increased by 125% to $26.6 million. Gross written premiums and net premiums earned grew by 107% and 113%, respectively.
Ambac Financial Group (NYSE: AMBC) ha riportato i risultati del secondo trimestre del 2024. I punti salienti includono una perdita netta inferiore a 1 milione di dollari, o 0,02 dollari per azione diluita, e un reddito netto rettificato di 8 milioni di dollari, o 0,18 dollari per azione diluita.
Distribuzione di Assicurazioni ha generato un reddito netto di 1 milione di dollari e un EBITDA di 2 milioni di dollari su 53 milioni di dollari di premi collocati. Assicurazioni Specializzate P&C hanno riportato premi lordi scritti di 111 milioni di dollari, con un incremento del 109% rispetto al Q2 2023, e una produzione totale di premi P&C di 165 milioni di dollari, con un aumento del 75%.
Ambac ha completato l'acquisizione di una partecipazione di controllo del 60% in Beat Capital Partners per 278 milioni di dollari, a partire dal 31 luglio 2024. L'azienda ha anche accettato di vendere la propria attività di Garanzia Finanziaria Legacy per 420 milioni di dollari a Oaktree Capital Management.
Altre metriche notevoli includono un miglioramento del 94% nel reddito netto attribuibile agli azionisti ordinari, che si è attestato a $(0,7) milioni rispetto a $(13,1) milioni nel Q2 2023. L'EBITDA è aumentato del 125% a 26,6 milioni di dollari. I premi scritti lordi e i premi netti guadagnati sono cresciuti rispettivamente del 107% e del 113%.
Ambac Financial Group (NYSE: AMBC) informó sobre sus resultados del segundo trimestre de 2024. Los puntos destacados incluyen una pérdida neta de menos de 1 millón de dólares o 0.02 dólares por acción diluida, y un ingreso neto ajustado de 8 millones de dólares o 0.18 dólares por acción diluida.
Distribución de Seguros generó un ingreso neto de 1 millón de dólares y un EBITDA de 2 millones de dólares sobre 53 millones de dólares en primas colocadas. Seguros Especializados P&C reportaron primas brutas escritas de 111 millones de dólares, un aumento del 109% con respecto al Q2 2023, y una producción total de primas P&C de 165 millones de dólares, un incremento del 75%.
Ambac completó la adquisición de una participación controladora del 60% en Beat Capital Partners por 278 millones de dólares, a partir del 31 de julio de 2024. La compañía también acordó vender su negocio de Garantía Financiera Legacy por 420 millones de dólares a Oaktree Capital Management.
Otras métricas notables incluyen una mejora del 94% en el ingreso neto atribuible a los accionistas comunes, que se situó en $(0.7) millones en comparación con $(13.1) millones en Q2 2023. El EBITDA aumentó en un 125% a 26.6 millones de dólares. Las primas brutas escritas y las primas netas ganadas crecieron un 107% y un 113%, respectivamente.
Ambac Financial Group (NYSE: AMBC)는 2024년 2분기 실적을 발표했습니다. 주요 내용으로는 100만 달러 미만의 순손실 즉, 희석주당 0.02달러와 조정된 순이익 800만 달러 즉, 희석주당 0.18달러가 포함되어 있습니다.
보험 유통은 100만 달러의 순이익과 2백만 달러의 EBITDA를 5300만 달러의 프리미엄으로 발생시켰습니다. 전문 P&C 보험은 1억 1100만 달러의 총 서면 보험료를 보고했으며, 이는 2023년 2분기 대비 109% 증가한 수치입니다. 총 P&C 보험료 생산은 1억 6500만 달러로 75% 증가했습니다.
Ambac는 2024년 7월 31일부터 유효한 278백만 달러에 Beat Capital Partners의 60% 지분을 인수했습니다. 이 회사는 또한 Oaktree Capital Management에 4억 2000만 달러에 Legacy Financial Guarantee Business를 판매하기로 합의했습니다.
기타 눈에 띄는 지표로는 공통 주주에게 귀속되는 순이익이 $(0.7) 백만 달러로 94% 개선되었고, 이는 2023년 2분기 $(13.1) 백만 달러와 비교됩니다. EBITDA는 125% 증가하여 2660만 달러에 달했습니다. 총 서면 프리미엄과 순 프리미엄 수익은 각각 107% 및 113% 증가했습니다.
Ambac Financial Group (NYSE: AMBC) a annoncé ses résultats pour le deuxième trimestre de 2024. Les points saillants incluent une perte nette inférieure à 1 million de dollars, soit 0,02 dollar par action diluée, et un revenu net ajusté de 8 millions de dollars, soit 0,18 dollar par action diluée.
Distribution d'Assurances a généré un revenu net de 1 million de dollars et un EBITDA de 2 millions de dollars sur 53 millions de dollars de primes placées. Assurances Spécialisées P&C ont déclaré des primes brutes souscrites de 111 millions de dollars, en hausse de 109 % par rapport au Q2 2023, et une production totale de primes P&C de 165 millions de dollars, soit une augmentation de 75 %.
Ambac a finalisé l'acquisition d'une participation contrôlante de 60 % dans Beat Capital Partners pour 278 millions de dollars, effective au 31 juillet 2024. L'entreprise a également convenu de vendre son activité de Garantie Financière Legacy pour 420 millions de dollars à Oaktree Capital Management.
D'autres indicateurs notables incluent une amélioration de 94 % du revenu net attribuable aux actionnaires ordinaires, qui s'élevait à $(0,7) millions par rapport à $(13,1) millions au Q2 2023. L'EBITDA a augmenté de 125 % pour atteindre 26,6 millions de dollars. Les primes brutes souscrites et les primes nettes gagnées ont augmenté de 107 % et 113 %, respectivement.
Ambac Financial Group (NYSE: AMBC) hat die Ergebnisse des zweiten Quartals 2024 veröffentlicht. Zu den wichtigsten Punkten gehört ein Nettoverlust von weniger als 1 Million Dollar oder 0,02 Dollar pro verwässerter Aktie sowie ein bereinigter Nettogewinn von 8 Millionen Dollar oder 0,18 Dollar pro verwässerter Aktie.
Versicherungsvertrieb erzielte einen Nettogewinn von 1 Million Dollar und ein EBITDA von 2 Millionen Dollar bei 53 Millionen Dollar an platzierten Prämien. Spezial P&C-Versicherungen meldeten brutto geschriebene Prämien von 111 Millionen Dollar, was einem Anstieg von 109 % im Vergleich zum Q2 2023 entspricht, und eine Gesamtproduktion von P&C-Prämien von 165 Millionen Dollar, was einem Anstieg von 75 % entspricht.
Ambac hat die Übernahme einer 60%igen Mehrheitsbeteiligung an Beat Capital Partners für 278 Millionen Dollar zum 31. Juli 2024 abgeschlossen. Das Unternehmen hat auch zugestimmt, sein Legacy Financial Guarantee Business für 420 Millionen Dollar an Oaktree Capital Management zu verkaufen.
Weitere bemerkenswerte Kennzahlen sind eine Verbesserung des Nettoergebnisses, das den Stammaktionären zuzurechnen ist, um 94 %, das bei $(0,7) Millionen Dollar stand, im Vergleich zu $(13,1) Millionen Dollar im Q2 2023. Das EBITDA stieg um 125 % auf 26,6 Millionen Dollar. Die brutto geschriebenen Prämien und die verdienten Netto-Prämien wuchsen um 107 % bzw. 113 %.
- Adjusted net income increased to $8 million or $0.18 per diluted share.
- Gross premiums written in Specialty P&C Insurance surged by 109% to $111 million.
- Total P&C premium production rose by 75% to $165 million.
- Net income attributable to common stockholders improved by 94%.
- EBITDA grew by 125% to $26.6 million.
- Net loss of $1 million or $0.02 per diluted share.
Insights
Ambac's Q2 2024 results show a mixed performance as the company continues its transition to a specialty P&C insurer. Key highlights:
- Net loss of
$(1) million or$(0.02) per share, but adjusted net income of$8 million or$0.18 per share - Specialty P&C segment saw strong growth with GPW up
109% to$111 million - Insurance Distribution segment grew premiums placed by
31% to$53 million - Legacy Financial Guarantee segment had net income of
$11 million
The acquisition of Beat Capital Partners and planned sale of the Legacy Financial Guarantee business mark significant steps in Ambac's transformation. However, elevated loss ratios in commercial auto and increased expenses are concerns to monitor. The
Ambac's Q2 results highlight the challenges and opportunities in its transition to a specialty P&C insurer:
- Strong premium growth in P&C (
109% ) and Insurance Distribution (31% ) segments shows market traction - However, the P&C combined ratio of
109.4% indicates underwriting losses, with a concerning85.1% loss ratio - Commercial auto frequency issues led to reserve reevaluation and a program moratorium
- Insurance Distribution EBITDA margin improved to
18.1% , showing potential for this capital-light business
The Beat Capital acquisition and Legacy Financial Guarantee sale are transformative, but successful execution is crucial. Ambac must improve underwriting results while maintaining growth to prove the viability of its new business model. The next few quarters will be critical in demonstrating the company's ability to navigate this transition effectively.
Closes the acquisition of Beat Capital Partners
Second Quarter 2024 Highlights
-
Net loss under
$(1) million $(0.02) $8 million $0.18 -
Insurance Distribution ("Cirrata") generated net income of
$1 million $2 million $53 million -
Specialty P&C Insurance ("Everspan") produced Gross Premium Written of
$111 million 109% from second quarter of 2023 -
Total P&C Premium Production of
$165 million 75% from the second quarter of 2023 -
Legacy Financial Guarantee segment net income of
$11 million -
Completed the acquisition of a
60% controlling stake in Beat Capital Partners, a rapidly expandingU.K. based MGA operator and incubator for$278 million -
Agreed to sell the Legacy Financial Guarantee Business for
$420M
Claude LeBlanc, President and Chief Executive Officer, stated, "This quarter we substantially advanced Ambac's transformation into a pure-play specialty P&C company, a goal we have been working towards for several years. We are turning the page on our past with the agreement to sell our Legacy Financial Guarantee Business for
LeBlanc continued, “In connection with these transactions, following the sale of our Legacy Financial Guarantee Business, Ambac will initiate a share repurchase program of up to
Ambac's Second Quarter 2024 Summary Results |
|||||||||||
|
|
|
|
|
|
B (W) Percent |
|||||
($ in millions, except per share data)1 |
|
|
2Q2024 |
|
|
|
2Q2023 |
|
|
||
Gross written premium |
|
$ |
113.1 |
|
|
$ |
54.7 |
|
|
107 |
% |
Net premiums earned |
|
|
32.6 |
|
|
|
15.3 |
|
|
113 |
% |
Commission income |
|
|
13.2 |
|
|
|
10.0 |
|
|
32 |
% |
Program fees |
|
|
3.3 |
|
|
|
2.1 |
|
|
60 |
% |
Net investment income |
|
|
36.2 |
|
|
|
35.2 |
|
|
3 |
% |
Pretax income (loss) |
|
|
2.0 |
|
|
|
(11.1 |
) |
|
118 |
% |
Net income (loss) attributable to common stockholders |
|
|
(0.7 |
) |
|
|
(13.1 |
) |
|
94 |
% |
Net income (loss) attributable to common stockholders per diluted share2,3 |
|
$ |
(0.02 |
) |
|
$ |
(0.29 |
) |
|
93 |
% |
EBITDA2,4 |
|
|
26.6 |
|
|
|
11.8 |
|
|
125 |
% |
Adjusted net income (loss) 2 |
|
|
8.3 |
|
|
|
3.4 |
|
|
147 |
% |
Adjusted net income (loss) per diluted share 2, 3 |
|
$ |
0.18 |
|
|
$ |
0.07 |
|
|
157 |
% |
Weighted-average diluted shares outstanding (in millions) |
|
|
46.2 |
|
|
|
45.8 |
|
|
(1 |
)% |
Ambac's Second Quarter 2024 Summary Results |
||||||||||||
|
|
June 30, 2024 |
|
March 31, 2024 |
|
B(W) |
||||||
($ in millions, except per share data)1 |
|
|
|
Amount |
|
Percent |
||||||
Total Ambac Financial Group, Inc. stockholders' equity |
|
$ |
1,368.1 |
|
$ |
1,365.2 |
|
$ |
2.9 |
|
— |
% |
Total Ambac Financial Group, Inc. stockholders' equity per share |
|
$ |
30.25 |
|
$ |
30.19 |
|
$ |
0.06 |
|
— |
% |
Adjusted book value1,2 |
|
$ |
1,321.8 |
|
$ |
1,313.1 |
|
$ |
8.7 |
|
1 |
% |
Adjusted book value per share 1,2 |
|
$ |
29.23 |
|
$ |
29.03 |
|
$ |
0.20 |
|
1 |
% |
(1) |
Some financial data in this press release may not add up due to rounding | |
(2) |
See Non-GAAP Financial Data section of this press release for further information | |
(3) |
Per diluted share includes the impact of adjusting redeemable noncontrolling interests to current redemption value | |
(4) |
EBITDA is prior to the impact of noncontrolling interests, relating to subsidiaries where Ambac does not own |
Results of Operations by Segment
Specialty Property & Casualty Insurance Segment
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
($ in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
||
Gross premiums written |
|
$ |
111.2 |
|
|
$ |
53.2 |
|
|
109 |
% |
|
$ |
207.6 |
|
|
$ |
105.1 |
|
|
98 |
% |
Net premiums written |
|
$ |
32.3 |
|
|
$ |
9.1 |
|
|
254 |
% |
|
$ |
58.5 |
|
|
$ |
18.3 |
|
|
220 |
% |
Net premiums earned |
|
$ |
27.1 |
|
|
$ |
7.8 |
|
|
248 |
% |
|
$ |
52.6 |
|
|
$ |
14.8 |
|
|
256 |
% |
Program fees earned |
|
$ |
3.3 |
|
|
$ |
2.1 |
|
|
60 |
% |
|
$ |
5.9 |
|
|
$ |
3.6 |
|
|
66 |
% |
Losses and loss expense |
|
$ |
23.0 |
|
|
$ |
5.7 |
|
|
301 |
% |
|
$ |
42.4 |
|
|
$ |
10.4 |
|
|
308 |
% |
Pretax income (loss) |
|
$ |
(1.1 |
) |
|
$ |
(0.1 |
) |
|
(831 |
)% |
|
$ |
0.7 |
|
|
$ |
(0.9 |
) |
|
180 |
% |
Combined Ratio |
|
|
109.4 |
% |
|
|
112.7 |
% |
|
-330 bps |
|
|
104.0 |
% |
|
|
117.1 |
% |
|
-1310 bps |
||
- Gross premium written ("GPW") and Net premium written ("NPW") grew substantially in the second quarter of 2024 relative to the second quarter of 2023 as Everspan continues to add new programs and existing programs scale.
-
Combined ratio of
109.4% for the second quarter of 2024 compared to112.7% in the second quarter of 2023 and98.4% in the prior quarter. -
The loss and loss expense ratio for the second quarter of 2024 was
85.1% compared to73.7% for the second quarter of 2023. This quarter's result include6.9% of prior accident year development which was partially offset by a sliding scale benefit recorded as an offset to acquisition costs. This quarter's loss ratio also includes a4.2% true-up from the first quarter of 2024, as elevated commercial auto frequency led to a reevaluation of loss picks. -
Expense ratio(1) of
24.3% for the second quarter of 2024 was down from39.0% in the prior year period as expenses continue to normalize on a relative basis. In addition, sliding scale commissions, linked to loss ratios on certain programs, reduced the expense ratio by5.6% in the second quarter of 2024 compared to4.2% in the prior year period. - During the quarter Everspan took several proactive measurers to address the rising loss trend in commercial auto. These included placing a moratorium on one commercial auto program for writing new business.
(1) |
Expense Ratio is defined as acquisition costs and general and administrative expenses, reduced by program fees divided by net premiums earned |
Insurance Distribution Segment
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
($ in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
||
Premiums placed |
|
$ |
53.4 |
|
|
$ |
40.9 |
|
|
31 |
% |
|
$ |
143.5 |
|
|
$ |
118.2 |
|
|
21 |
% |
Gross commissions |
|
$ |
13.2 |
|
|
$ |
10.0 |
|
|
32 |
% |
|
$ |
31.0 |
|
|
$ |
24.5 |
|
|
26 |
% |
Net commissions |
|
$ |
5.3 |
|
|
$ |
4.0 |
|
|
33 |
% |
|
$ |
13.2 |
|
|
$ |
10.9 |
|
|
21 |
% |
General and administrative expenses |
|
$ |
3.0 |
|
|
$ |
2.4 |
|
|
25 |
% |
|
$ |
6.1 |
|
|
$ |
4.8 |
|
|
27 |
% |
Pretax income |
|
$ |
1.3 |
|
|
$ |
0.7 |
|
|
92 |
% |
|
$ |
5.1 |
|
|
$ |
4.2 |
|
|
21 |
% |
EBITDA1 |
|
$ |
2.4 |
|
|
$ |
1.6 |
|
|
47 |
% |
|
$ |
7.4 |
|
|
$ |
6.2 |
|
|
20 |
% |
Pretax income margin2 |
|
|
9.5 |
% |
|
|
6.5 |
% |
|
300 bps |
|
|
16.4 |
% |
|
|
17.2 |
% |
|
-80 bps |
||
EBITDA margin 3 |
|
|
18.1 |
% |
|
|
16.3 |
% |
|
180 bps |
|
|
23.7 |
% |
|
|
25.2 |
% |
|
-150 bps |
||
(1) |
EBITDA is prior to the impact of noncontrolling interests, relating to subsidiaries where Ambac does not own |
|
(2) |
Represents Pretax income divided by total revenues | |
(3) |
See Non-GAAP Financial Data section of this press release for further information |
- Premiums placed and commission income grew during the second quarter of 2024 compared to the second quarter of 2023 driven by the August 2023 acquisition of Riverton Insurance Agency, organic growth elsewhere, particularly within our specialty commercial auto platform, and a change in timing related to a renewal at our A&H platform.
-
General and administrative expenses of
$3.0 million $2.4 million -
EBITDA of
$2.4 million 47.4% over second quarter of 2023; EBITDA margin of18.1% for the quarter compared to16.3% last year was positively impacted by business mix changes and growth initiatives.
Total Specialty P&C Insurance Production
Specialty P&C Insurance production, which includes gross premiums written by Ambac's Specialty P&C Insurance segment and premiums placed by the Insurance Distribution segment, totaled
Specialty P&C Insurance revenues are dependent on gross premiums written as specialty program insurance companies earn premiums based on the portion of gross premiums written retained (i.e. net premiums written) and fees on gross premiums written that are ceded to reinsurers. Insurance Distribution revenues are dependent on premium volume as Managing General Agents/Underwriters and brokers receive commissions based on the amount of premiums placed (i.e. gross premiums written on behalf of insurance carriers) with insurance carriers.
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||
($ in millions) |
|
|
2024 |
|
|
2023 |
|
% Change |
|
|
2024 |
|
|
2023 |
|
% Change |
||
Specialty Property & Casualty Insurance Gross Premiums Written |
|
$ |
111.2 |
|
$ |
53.2 |
|
109 |
% |
|
$ |
207.6 |
|
$ |
105.1 |
|
98 |
% |
Insurance Distribution Premiums Placed |
|
|
53.4 |
|
|
40.9 |
|
31 |
% |
|
|
143.5 |
|
|
118.2 |
|
21 |
% |
Specialty P&C Insurance Production |
|
$ |
164.6 |
|
$ |
94.1 |
|
75 |
% |
|
$ |
351.1 |
|
$ |
223.3 |
|
57 |
% |
Legacy Financial Guarantee Insurance Segment
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
($ in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
||
Net premiums earned |
|
$ |
5.6 |
|
|
$ |
7.5 |
|
|
(26 |
)% |
|
$ |
13.1 |
|
|
$ |
14.4 |
|
|
(9 |
)% |
Net investment income |
|
$ |
32.4 |
|
|
$ |
32.2 |
|
|
1 |
% |
|
$ |
70.5 |
|
|
$ |
63.4 |
|
|
11 |
% |
Losses and loss adjustment expenses (benefit) |
|
$ |
(5.3 |
) |
|
$ |
1.6 |
|
|
(424 |
)% |
|
$ |
(26.0 |
) |
|
$ |
14.6 |
|
|
(278 |
)% |
General and administrative expenses |
|
$ |
22.5 |
|
|
$ |
23.5 |
|
|
(4 |
)% |
|
$ |
43.9 |
|
|
$ |
51.6 |
|
|
(15 |
)% |
Pretax income (loss) |
|
$ |
13.1 |
|
|
$ |
(7.7 |
) |
|
269 |
% |
|
$ |
37.9 |
|
|
$ |
(39.8 |
) |
|
195 |
% |
EBITDA1 |
|
$ |
36.3 |
|
|
$ |
14.2 |
|
|
156 |
% |
|
$ |
88.6 |
|
|
$ |
4.9 |
|
|
1723 |
% |
(1) |
See Non-GAAP Financial Data section of this press release for further information |
-
Net premiums earned of
$5.6 million $7.5 million -
Watch List and Adversely Classified Credits ("WLACC") decreased
2.3% (2.2% , excluding the impact of FX) to$5.3 billion -
NPO was
$18.7 billion 1.9% (2.0% , excluding the impact of FX) from March 31, 2024, due to de-risking, run-off and the impact of FX rates. -
Second quarter of 2024 results included a one time net gain of
$12 million
Consolidated Financial Information
Net Premiums Earned
During the second quarter of 2024, net premiums earned of
Net Investment Income
Net investment income for the second quarter of 2024 was
Losses and Loss Expenses(Benefit)
Incurred Losses (Benefit) for the second quarter of 2024 were
The Incurred Loss for the second quarter of 2024 was driven by the growth and reserve development in the Specialty P&C segment which more than offset the
General and Administrative Expenses
General and administrative expenses for the second quarter 2024 were
AFG (holding company only) Assets
AFG on a standalone basis, excluding its ownership interests in its Specialty P&C Insurance, Insurance Distribution, and Legacy Financial Guarantee subsidiaries, had net assets of
Consolidated Ambac Financial Group, Inc. Stockholders' Equity
Stockholders’ equity at June 30, 2024, was
Non-GAAP Financial Data
In addition to reporting the Company’s quarterly financial results in accordance with GAAP, the Company is reporting non-GAAP financial measures: EBITDA, Adjusted Net Income, Adjusted Book Value and EBITDA Margin. These amounts are derived from our consolidated financial information, but are not presented in our consolidated financial statements prepared in accordance with GAAP.
We present non-GAAP supplemental financial information because we believe such information is of interest to the investment community, and that it provides greater transparency and enhanced visibility into the underlying drivers and performance of our businesses on a basis that may not be otherwise apparent on a GAAP basis. We view these non-GAAP financial measures as important indicators when assessing and evaluating our performance on a segmented and consolidated basis and they are presented to improve the comparability of our results between periods by eliminating the impact of the items that may not be representative of our core operating performance. These non-GAAP financial measures are not substitutes for the Company’s GAAP reporting, should not be viewed in isolation and may differ from similar reporting provided by other companies, which may define non-GAAP measures differently.
Adjusted Net Income (Loss) — We define Adjusted Net Income (Loss) as net income (loss) attributable to common stockholders adjusted to reflect the following items: (i) net investment (gains) losses, including impairments; (ii) amortization of intangible assets; (iii) litigation costs, including attorneys fees and other expenses to defend litigation against the Company, excluding loss adjustment expenses; (iv) foreign exchange (gains) losses; (v) workforce change costs, which primarily include severance and other costs related to employee terminations; and (vi) net (gain) loss on extinguishment of debt. Adjusted Net Income is also adjusted for the effect of the above items on both income taxes and noncontrolling interests. The income tax effects are determined by applying the statutory tax rate in each jurisdiction that generate these adjustments. The noncontrolling interest adjustments relate to subsidiaries where Ambac does not own
Adjusted Net Income (Loss) was
The following table reconciles net income (loss) attributable to common stockholders to the non-GAAP measure, Adjusted Net Income (Loss), for the three-month periods ended June 30, 2024 and 2023, respectively:
|
|
Three Months Ended June 30, |
||||||||||||||
|
|
2024 |
|
|
2023 |
|
||||||||||
($ in millions, other than per share data) |
|
$ Amount |
|
Per Share |
|
$ Amount |
|
Per Share |
||||||||
Net income (loss) attributable to common shareholders |
|
$ |
(0.7 |
) |
|
$ |
(0.02 |
) |
|
$ |
(13.1 |
) |
|
$ |
(0.29 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Net investment (gains) losses, including impairments |
|
|
(3.6 |
) |
|
|
(0.08 |
) |
|
|
3.4 |
|
|
|
0.07 |
|
Intangible amortization |
|
|
8.2 |
|
|
|
0.18 |
|
|
|
6.5 |
|
|
|
0.14 |
|
Litigation costs |
|
|
4.7 |
|
|
|
0.10 |
|
|
|
7.6 |
|
|
|
0.17 |
|
Foreign exchange (gains) losses |
|
|
0.3 |
|
|
|
0.01 |
|
|
|
(0.1 |
) |
|
|
— |
|
Workforce change costs |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
Pretax adjusted net income (loss) |
|
|
8.7 |
|
|
|
0.19 |
|
|
|
4.3 |
|
|
|
0.09 |
|
Income tax effects |
|
|
(0.2 |
) |
|
|
(0.01 |
) |
|
|
(0.7 |
) |
|
|
(0.02 |
) |
Net (gains) attributable to noncontrolling interests |
|
|
(0.2 |
) |
|
|
— |
|
|
|
(0.2 |
) |
|
|
— |
|
Adjusted Net Income (Loss) |
|
$ |
8.3 |
|
|
$ |
0.18 |
|
|
$ |
3.4 |
|
|
$ |
0.07 |
|
Weighted-average diluted shares outstanding (in millions) |
|
|
|
|
46.2 |
|
|
|
|
|
45.8 |
|
||||
(1) |
Per Diluted share includes the impact of adjusting the Insurance Distribution segment related noncontrolling interest to current redemption value |
|
|
|
|
|
|
|
|
|
||||||||
|
|
Six Months Ended June 30, |
||||||||||||||
|
|
2024 |
|
|
2023 |
|
||||||||||
($ in millions, other than per share data) |
|
$ Amount |
|
Per Share |
|
$ Amount |
|
Per Share |
||||||||
Net income (loss) attributable to common shareholders |
|
$ |
19.3 |
|
|
$ |
0.41 |
|
|
$ |
(46.5 |
) |
|
$ |
(1.02 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Net investment (gains) losses, including impairments |
|
|
(4.1 |
) |
|
|
(0.09 |
) |
|
|
7.8 |
|
|
|
0.17 |
|
Intangible amortization |
|
|
20.6 |
|
|
|
0.44 |
|
|
|
13.4 |
|
|
|
0.29 |
|
Litigation costs |
|
|
11.0 |
|
|
|
0.24 |
|
|
|
16.5 |
|
|
|
0.36 |
|
Foreign exchange (gains) losses |
|
|
0.7 |
|
|
|
0.02 |
|
|
|
(0.4 |
) |
|
|
(0.01 |
) |
Workforce change costs |
|
|
— |
|
|
|
— |
|
|
|
0.7 |
|
|
|
0.02 |
|
Pretax adjusted net income (loss) |
|
|
47.5 |
|
|
|
1.02 |
|
|
|
(8.5 |
) |
|
|
(0.19 |
) |
Income tax effects |
|
|
(0.4 |
) |
|
|
(0.01 |
) |
|
|
(1.5 |
) |
|
|
(0.03 |
) |
Net (gains) attributable to noncontrolling interests |
|
|
(0.4 |
) |
|
|
(0.01 |
) |
|
|
(0.4 |
) |
|
|
(0.01 |
) |
Adjusted Net Income (Loss) |
|
$ |
46.7 |
|
|
$ |
1.00 |
|
|
$ |
(10.4 |
) |
|
$ |
(0.23 |
) |
Weighted average diluted shares outstanding |
|
|
|
|
46.6 |
|
|
|
|
|
45.7 |
|
||||
EBITDA — We define EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization of intangible assets.
The following table reconciles net income (loss) attributable to common shareholders to the non-GAAP measure, EBITDA on a consolidation and segment basis.
|
|
Legacy
|
|
Specialty Property & Casualty Insurance |
|
Insurance Distribution |
|
Corporate & Other |
|
Consolidated |
|||||||||
Three Months Ended June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) (1) |
|
$ |
10.5 |
|
|
$ |
(1.1 |
) |
|
$ |
1.3 |
|
$ |
(11.3 |
) |
|
$ |
(0.5 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense |
|
|
16.0 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
16.0 |
|
Income taxes |
|
|
2.5 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
2.5 |
|
Depreciation |
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
|
0.3 |
|
|
|
0.5 |
|
Amortization of intangible assets |
|
|
7.0 |
|
|
|
— |
|
|
|
1.1 |
|
|
— |
|
|
|
8.2 |
|
EBITDA (2) |
|
$ |
36.3 |
|
|
$ |
(1.1 |
) |
|
$ |
2.4 |
|
$ |
(11.0 |
) |
|
$ |
26.6 |
|
Three Months Ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) (1) |
|
$ |
(9.3 |
) |
|
$ |
(0.1 |
) |
|
$ |
0.6 |
|
$ |
(4.3 |
) |
|
$ |
(13.0 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense |
|
|
16.0 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
16.0 |
|
Income taxes |
|
|
1.6 |
|
|
|
— |
|
|
|
— |
|
|
0.4 |
|
|
|
1.9 |
|
Depreciation |
|
|
0.4 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
0.4 |
|
Amortization of intangible assets |
|
|
5.5 |
|
|
|
— |
|
|
|
1.0 |
|
|
— |
|
|
|
6.5 |
|
EBITDA (2) |
|
$ |
14.2 |
|
|
$ |
(0.1 |
) |
|
$ |
1.6 |
|
$ |
(3.8 |
) |
|
$ |
11.8 |
|
(1) |
Net income (loss) is prior to the impact of noncontrolling interests. | |
(2) |
EBITDA is prior to the impact of noncontrolling interests, relating to subsidiaries where Ambac does not own |
|
|
Legacy
|
|
Specialty Property & Casualty Insurance |
|
Insurance Distribution |
|
Corporate & Other |
|
Consolidated |
|||||||||
Six Months Ended June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) (1) |
|
$ |
30.7 |
|
|
$ |
0.6 |
|
|
$ |
5.0 |
|
$ |
(16.1 |
) |
|
$ |
20.2 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense |
|
|
32.0 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
32.0 |
|
Income taxes |
|
|
7.1 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
(0.1 |
) |
|
|
7.2 |
|
Depreciation |
|
|
0.4 |
|
|
|
— |
|
|
|
— |
|
|
0.6 |
|
|
|
1.0 |
|
Amortization of intangible assets |
|
|
18.3 |
|
|
|
— |
|
|
|
2.3 |
|
|
— |
|
|
|
20.6 |
|
EBITDA (2) |
|
$ |
88.6 |
|
|
$ |
0.7 |
|
|
$ |
7.4 |
|
$ |
(15.6 |
) |
|
$ |
81.1 |
|
Six Months Ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) (1) |
|
$ |
(45.2 |
) |
|
$ |
(0.9 |
) |
|
$ |
4.1 |
|
$ |
(3.8 |
) |
|
$ |
(45.8 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense |
|
|
32.4 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
32.4 |
|
Income taxes |
|
|
5.4 |
|
|
|
— |
|
|
|
0.1 |
|
|
0.4 |
|
|
|
5.8 |
|
Depreciation |
|
|
0.8 |
|
|
|
— |
|
|
|
— |
|
|
0.1 |
|
|
|
0.9 |
|
Amortization of intangible assets |
|
|
11.5 |
|
|
|
— |
|
|
|
1.9 |
|
|
— |
|
|
|
13.4 |
|
EBITDA (2) |
|
$ |
4.9 |
|
|
$ |
(0.9 |
) |
|
$ |
6.2 |
|
$ |
(3.4 |
) |
|
$ |
6.8 |
|
(1) |
Net income (loss) is prior to the impact of noncontrolling interests. | |
(2) |
EBITDA is prior to the impact of noncontrolling interests, relating to subsidiaries where Ambac does not own |
|
(3) |
EBITDA margin — We define EBITDA margin as EBITDA divided by total revenues. We report EBITDA margin for the Insurance Distribution segment only. |
Adjusted Book Value. Adjusted book value is defined as Total Ambac Financial Group, Inc. stockholders’ equity as reported under GAAP, adjusted for after-tax impact of the following:
- Insurance intangible asset: Elimination of the financial guarantee insurance intangible asset that arose as a result of Ambac’s emergence from bankruptcy and the implementation of Fresh Start reporting. This adjustment ensures that all financial guarantee contracts are accounted for within adjusted book value consistent with the provisions of the Financial Services—Insurance Topic of the ASC.
- Net unearned premiums and fees in excess of expected losses: Addition of the value of the unearned premium revenue ("UPR") on financial guarantee contracts, in excess of expected losses, net of reinsurance. This non-GAAP adjustment presents the economics of UPR and expected losses for financial guarantee contracts on a consistent basis. In accordance with GAAP, stockholders’ equity reflects a reduction for expected losses only to the extent they exceed UPR. However, when expected losses are less than UPR for a financial guarantee contract, neither expected losses nor UPR have an impact on stockholders’ equity. This non-GAAP adjustment adds UPR in excess of expected losses, net of reinsurance, to stockholders’ equity for financial guarantee contracts where expected losses are less than UPR. This adjustment is only made for financial guarantee contracts since such premiums are non-refundable.
- Net unrealized investment (gains) losses in Accumulated Other Comprehensive Income: Elimination of the unrealized gains and losses on the Company’s investments that are recorded as a component of accumulated other comprehensive income (“AOCI”), net of income taxes.
Ambac has a significant
Adjusted book value was
The following table reconciles Total Ambac Financial Group, Inc. stockholders’ equity to the non-GAAP measure adjusted book value as of each date presented:
|
|
June 30, 2024 |
|
March 31, 2024 |
||||||||||||
($ in millions, other than per share data) |
|
$ Amount |
|
Per Share |
|
$ Amount |
|
Per Share |
||||||||
Total AFG Stockholders' Equity |
|
$ |
1,368.1 |
|
|
$ |
30.25 |
|
|
$ |
1,365.2 |
|
|
$ |
30.19 |
|
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Insurance intangible asset |
|
|
(226.2 |
) |
|
|
(5.00 |
) |
|
|
(233.1 |
) |
|
|
(5.16 |
) |
Net unearned premiums and fees in excess of expected losses |
|
|
156.6 |
|
|
|
3.46 |
|
|
|
153.7 |
|
|
|
3.40 |
|
Net unrealized investment (gains) losses in Accumulated Other Comprehensive Income |
|
|
23.3 |
|
|
|
0.52 |
|
|
|
27.2 |
|
|
|
0.60 |
|
Adjusted book value |
|
$ |
1,321.8 |
|
|
$ |
29.23 |
|
|
$ |
1,313.1 |
|
|
$ |
29.03 |
|
Shares outstanding (in millions) |
|
|
|
|
45.2 |
|
|
|
|
|
45.2 |
|
||||
Earnings Call and Webcast
On August 6, 2024, at 8:00am ET, Claude LeBlanc, President and Chief Executive Officer, and David Trick, Executive Vice President and Chief Financial Officer, will discuss Ambac's second quarter 2024 results during a conference call. A live audio webcast of the call will be available through the Investor Relations section of Ambac’s website, https://ambac.com/investor-relations/events-and-presentations/. Participants may also listen via telephone by dialing (877) 407-9716 (Domestic) or (201) 493-6779 (International).
The webcast will be archived on Ambac's website. A replay of the call will be available through August 20, 2024, and can be accessed by dialing (Domestic) (844) 512-2921 or (International) (412) 317-6671; and using ID#13746740
Additional information is included in an operating supplement and presentations at Ambac's website at www.ambac.com.
About Ambac
Ambac Financial Group, Inc. (“Ambac” or “AFG”) is a specialty insurance holding company headquartered in
The Amended and Restated Certificate of Incorporation of Ambac contains substantial restrictions on the ability to transfer Ambac’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of
Forward-Looking Statements
In this press release, statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “plan,” “believe,” “anticipate,” “intend,” “planned,” “potential” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may,” or the negative of those expressions or verbs, identify forward-looking statements. We caution readers that these statements are not guarantees of future performance. Forward-looking statements are not historical facts but instead represent only our beliefs regarding future events, which may by their nature be inherently uncertain and some of which may be outside our control. These statements may relate to plans and objectives with respect to the future, among other things which may change. We are alerting you to the possibility that our actual results may differ, possibly materially, from the expected objectives or anticipated results that may be suggested, expressed or implied by these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those indicated in the forward-looking statements include, among others, those discussed under “Risk Factors” in our most recent SEC filed quarterly or annual report.
Any or all of management’s forward-looking statements here or in other publications may turn out to be incorrect and are based on management’s current belief or opinions. Ambac Financial Group’s (“AFG”) and its subsidiaries’ (collectively, “Ambac” or the “Company”) actual results may vary materially, and there are no guarantees about the performance of Ambac’s securities. Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the high degree of volatility in the price of AFG’s common stock; (2) uncertainty concerning the Company’s ability to achieve value for holders of its securities, whether from Ambac Assurance Corporation (“AAC”) and its subsidiaries or from the specialty property and casualty insurance business, the insurance distribution business, or related businesses; (3) inadequacy of reserves established for losses and loss expenses and the possibility that changes in loss reserves may result in further volatility of earnings or financial results; (4) potential for rehabilitation proceedings or other regulatory intervention or restrictions against AAC; (5) credit risk throughout Ambac’s business, including but not limited to credit risk related to insured residential mortgage-backed securities, student loan and other asset securitizations, public finance obligations (including risks associated with Chapter 9 and other restructuring proceedings), issuers of securities in our investment portfolios, and exposures to reinsurers; (6) our inability to effectively reduce insured financial guarantee exposures or achieve recoveries or investment objectives; (7) AAC’s inability to generate the significant amount of cash needed to service its debt and financial obligations, and its inability to refinance its indebtedness; (8) AAC’s substantial indebtedness could adversely affect the Company’s financial condition and operating flexibility; (9) Ambac may not be able to obtain financing, refinance its outstanding indebtedness, or raise capital on acceptable terms or at all due to its substantial indebtedness and financial condition; (10) greater than expected underwriting losses in the Company’s specialty property and casualty insurance business; (11) failure of specialty insurance program partners to properly market, underwrite or administer policies; (12) inability to obtain reinsurance coverage on expected terms; (13) loss of key relationships for production of business in specialty property and casualty and insurance distribution businesses or the inability to secure such additional relationships to produce expected results; (14) the impact of catastrophic public health, environmental or natural events, or global or regional conflicts; (15) credit risks related to large single risks, risk concentrations and correlated risks; (16) risks associated with adverse selection as Ambac’s financial guarantee insurance portfolio runs off; (17) the risk that Ambac’s risk management policies and practices do not anticipate certain risks and/or the magnitude of potential for loss; (18) restrictive covenants in agreements and instruments that impair Ambac’s ability to pursue or achieve its business strategies; (19) adverse effects on operating results or the Company’s financial position resulting from measures taken to reduce financial guarantee risks in its insured portfolio; (20) disagreements or disputes with Ambac's insurance regulators; (21) loss of control rights in transactions for which we provide financial guarantee insurance; (22) inability to realize expected recoveries of financial guarantee losses; (23) risks attendant to the change in composition of securities in Ambac’s investment portfolio; (24) adverse impacts from changes in prevailing interest rates; (25) events or circumstances that result in the impairment of our intangible assets and/or goodwill that was recorded in connection with Ambac’s acquisitions; (26) factors that may negatively influence the amount of installment premiums paid to Ambac; (27) the risk of litigation, regulatory inquiries, investigations, claims or proceedings, and the risk of adverse outcomes in connection therewith; (28) the Company’s ability to adapt to the rapid pace of regulatory change; (29) actions of stakeholders whose interests are not aligned with broader interests of Ambac's stockholders; (30) system security risks, data protection breaches and cyber attacks; (31) regulatory oversight of Ambac Assurance
Where to Find Additional Information
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the proposed sale of AAC to Oaktree Capital Management by AFG (the “proposed transaction”). In connection with the proposed transaction, AFG has filed a preliminary proxy statement with the SEC. When completed, a definitive proxy statement and a form of proxy will be mailed to the stockholders of AFG. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of the proxy statement (when available) and other documents filed by AFG with the SEC at http://www.sec.gov. Free copies of the proxy statement and AFG’s other filings with the SEC may also be obtained from AFG. Free copies of documents filed with the SEC by AFG will be made available free of charge on AFG’s investor relations website at https://ambac.com/investor-relations/investor-overview/default.aspx.
Participants in the Solicitation
AFG and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of AFG is set forth in its definitive proxy statement, which was filed with the SEC on April 26, 2024. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement and other relevant materials regarding the proposed transaction when they become available.
AMBAC FINANCIAL GROUP, INC. AND SUBSIDIARIES |
||||||||||||||||
Consolidated Statements of Income (Loss) (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
($ in millions, except share data) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Net premiums earned |
|
$ |
33 |
|
|
$ |
15 |
|
|
$ |
66 |
|
|
$ |
29 |
|
Commission income |
|
|
13 |
|
|
|
10 |
|
|
|
31 |
|
|
|
25 |
|
Program fees |
|
|
3 |
|
|
|
2 |
|
|
|
6 |
|
|
|
4 |
|
Net investment income |
|
|
36 |
|
|
|
35 |
|
|
|
78 |
|
|
|
69 |
|
Net investment gains (losses), including impairments |
|
|
4 |
|
|
|
(3 |
) |
|
|
4 |
|
|
|
(8 |
) |
Net gains (losses) on derivative contracts |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
(3 |
) |
Income (loss) on variable interest entities |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
(1 |
) |
Other income |
|
|
16 |
|
|
|
2 |
|
|
|
18 |
|
|
|
5 |
|
Total revenues and other income |
|
|
105 |
|
|
|
62 |
|
|
|
207 |
|
|
|
120 |
|
Expenses: |
|
|
|
|
|
|
|
|
||||||||
Losses and loss adjustment expenses (benefit) |
|
|
18 |
|
|
|
7 |
|
|
|
16 |
|
|
|
25 |
|
Amortization of deferred acquisition costs, net |
|
|
5 |
|
|
|
1 |
|
|
|
10 |
|
|
|
3 |
|
Commission expense |
|
|
8 |
|
|
|
6 |
|
|
|
18 |
|
|
|
14 |
|
General and administrative expenses |
|
|
47 |
|
|
|
36 |
|
|
|
83 |
|
|
|
72 |
|
Intangible amortization |
|
|
8 |
|
|
|
7 |
|
|
|
21 |
|
|
|
13 |
|
Interest expense |
|
|
16 |
|
|
|
16 |
|
|
|
32 |
|
|
|
32 |
|
Total expenses |
|
|
103 |
|
|
|
73 |
|
|
|
180 |
|
|
|
160 |
|
Pretax income (loss) |
|
|
2 |
|
|
|
(11 |
) |
|
|
27 |
|
|
|
(40 |
) |
Provision for income taxes |
|
|
2 |
|
|
|
2 |
|
|
|
7 |
|
|
|
6 |
|
Net income (loss) |
|
|
(1 |
) |
|
|
(13 |
) |
|
|
20 |
|
|
|
(46 |
) |
Less: net (gain) attributable to noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
Net income (loss) attributable to common stockholders |
|
$ |
(1 |
) |
|
$ |
(13 |
) |
|
$ |
19 |
|
|
$ |
(47 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per basic share |
|
$ |
(0.02 |
) |
|
$ |
(0.29 |
) |
|
$ |
0.42 |
|
|
$ |
(1.02 |
) |
Net income (loss) per diluted share |
|
$ |
(0.02 |
) |
|
$ |
(0.29 |
) |
|
$ |
0.41 |
|
|
$ |
(1.02 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
46,209,250 |
|
|
|
45,757,234 |
|
|
|
46,019,145 |
|
|
|
45,661,288 |
|
Diluted |
|
|
46,209,250 |
|
|
|
45,757,234 |
|
|
|
46,568,862 |
|
|
|
45,661,288 |
|
AMBAC FINANCIAL GROUP, INC. AND SUBSIDIARIES |
||||||||
Consolidated Balance Sheets (Unaudited) |
||||||||
($ in millions, except share data) |
|
June 30,
|
|
March 31,
|
||||
Assets: |
|
|
|
|
||||
Investments: |
|
|
|
|
||||
Fixed maturity securities, at fair value (amortized cost: |
|
$ |
1,703 |
|
|
$ |
1,687 |
|
Fixed maturity securities pledged as collateral, at fair value (amortized cost: |
|
|
25 |
|
|
|
26 |
|
Fixed maturity securities - trading |
|
|
31 |
|
|
|
29 |
|
Short-term investments, at fair value (amortized cost: |
|
|
314 |
|
|
|
382 |
|
Other investments (includes |
|
|
558 |
|
|
|
558 |
|
Total investments (net of allowance for credit losses of |
|
|
2,632 |
|
|
|
2,682 |
|
Cash and cash equivalents (including |
|
|
35 |
|
|
|
44 |
|
Premium receivables (net of allowance for credit losses of |
|
|
317 |
|
|
|
299 |
|
Reinsurance recoverable on paid and unpaid losses (net of allowance for credit losses of |
|
|
277 |
|
|
|
224 |
|
Deferred ceded premium |
|
|
232 |
|
|
|
217 |
|
Deferred acquisition costs |
|
|
12 |
|
|
|
12 |
|
Subrogation recoverable |
|
|
128 |
|
|
|
130 |
|
Intangible assets, less accumulated amortization |
|
|
285 |
|
|
|
293 |
|
Goodwill |
|
|
70 |
|
|
|
70 |
|
Other assets |
|
|
163 |
|
|
|
129 |
|
Variable interest entity assets: |
|
|
|
|
||||
Fixed maturity securities, at fair value |
|
|
2,101 |
|
|
|
2,162 |
|
Restricted cash |
|
|
62 |
|
|
|
252 |
|
Loans, at fair value |
|
|
1,567 |
|
|
|
1,604 |
|
Derivative and other assets |
|
|
303 |
|
|
|
313 |
|
Total assets |
|
$ |
8,184 |
|
|
$ |
8,429 |
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
||||
Liabilities: |
|
|
|
|
||||
Unearned premiums |
|
$ |
445 |
|
|
$ |
429 |
|
Loss and loss adjustment expense reserves |
|
|
890 |
|
|
|
851 |
|
Ceded premiums payable |
|
|
140 |
|
|
|
110 |
|
Deferred program fees and reinsurance commissions |
|
|
7 |
|
|
|
7 |
|
Long-term debt |
|
|
515 |
|
|
|
512 |
|
Accrued interest payable |
|
|
500 |
|
|
|
487 |
|
Other liabilities |
|
|
203 |
|
|
|
199 |
|
Variable interest entity liabilities: |
|
|
|
|
||||
Long-term debt (includes |
|
|
2,853 |
|
|
|
2,925 |
|
Derivative liabilities |
|
|
1,136 |
|
|
|
1,170 |
|
Other liabilities |
|
|
59 |
|
|
|
245 |
|
Total liabilities |
|
|
6,748 |
|
|
|
6,993 |
|
Redeemable noncontrolling interest |
|
|
17 |
|
|
|
17 |
|
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock, par value |
|
|
— |
|
|
|
— |
|
Common stock, par value |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
295 |
|
|
|
291 |
|
Accumulated other comprehensive income (loss) |
|
|
(175 |
) |
|
|
(175 |
) |
Retained earnings |
|
|
1,265 |
|
|
|
1,266 |
|
Treasury stock, shares at cost: 1,434,172 and 1,463,774 |
|
|
(17 |
) |
|
|
(17 |
) |
Total Ambac Financial Group, Inc. stockholders’ equity |
|
|
1,368 |
|
|
|
1,365 |
|
Nonredeemable noncontrolling interest |
|
|
51 |
|
|
|
53 |
|
Total stockholders’ equity |
|
|
1,419 |
|
|
|
1,418 |
|
Total liabilities, redeemable noncontrolling interest and stockholders’ equity |
|
$ |
8,184 |
|
|
$ |
8,429 |
|
The following table presents segment financial results and includes the non-GAAP measure, EBITDA on a segment and consolidated basis.
($ in millions) |
|
Legacy
|
|
Specialty Property & Casualty Insurance |
|
Insurance Distribution |
|
Corporate & Other |
|
Consolidated |
|||||||||
Three Months Ended June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross premiums written |
|
$ |
1.9 |
|
|
$ |
111.2 |
|
|
|
|
|
|
$ |
113.1 |
|
|||
Net premiums written |
|
|
1.5 |
|
|
|
32.3 |
|
|
|
|
|
|
|
33.8 |
|
|||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net premiums earned |
|
|
5.6 |
|
|
|
27.1 |
|
|
|
|
|
|
|
32.6 |
|
|||
Commission income |
|
|
|
|
|
$ |
13.2 |
|
|
|
|
13.2 |
|
||||||
Program fees |
|
|
|
|
3.3 |
|
|
|
|
|
|
|
3.3 |
|
|||||
Net investment income |
|
|
32.4 |
|
|
|
1.5 |
|
|
|
0.1 |
|
$ |
2.2 |
|
|
|
36.2 |
|
Net investment gains (losses), including impairments |
|
|
(1.0 |
) |
|
|
— |
|
|
|
|
|
4.5 |
|
|
|
3.6 |
|
|
Net gains (losses) on derivative contracts |
|
|
0.7 |
|
|
|
|
|
|
|
(0.4 |
) |
|
|
0.2 |
|
|||
Other income |
|
|
15.8 |
|
|
|
— |
|
|
|
— |
|
|
(0.4 |
) |
|
|
15.4 |
|
Total revenues and other income |
|
|
53.5 |
|
|
|
31.8 |
|
|
|
13.3 |
|
|
5.9 |
|
|
|
104.5 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Losses and loss adjustment expenses (benefit) |
|
|
(5.3 |
) |
|
|
23.0 |
|
|
|
|
|
|
|
17.8 |
|
|||
Commission expense |
|
|
|
|
|
|
7.9 |
|
|
|
|
7.9 |
|
||||||
Amortization of deferred acquisition costs, net |
|
|
— |
|
|
|
5.4 |
|
|
|
|
|
|
|
5.4 |
|
|||
General and administrative expenses |
|
|
22.5 |
|
|
|
4.5 |
|
|
|
3.0 |
|
|
16.9 |
|
|
|
46.9 |
|
Total expenses included for EBITDA |
|
|
17.2 |
|
|
|
32.9 |
|
|
|
10.9 |
|
|
16.9 |
|
|
|
77.9 |
|
EBITDA |
|
|
36.3 |
|
|
|
(1.1 |
) |
|
|
2.4 |
|
|
(11.0 |
) |
|
|
26.6 |
|
Less: Interest expense |
|
|
16.0 |
|
|
|
|
|
|
|
|
|
16.0 |
|
|||||
Less: Depreciation expense |
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
|
0.3 |
|
|
|
0.5 |
|
Less: Intangible amortization |
|
|
7.0 |
|
|
|
|
|
1.1 |
|
|
|
|
8.2 |
|
||||
Pretax income (loss) |
|
|
13.1 |
|
|
|
(1.1 |
) |
|
|
1.3 |
|
|
(11.3 |
) |
|
|
2.0 |
|
Income tax expense (benefit) |
|
|
2.5 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
2.5 |
|
Net income (loss) |
|
$ |
10.5 |
|
|
$ |
(1.1 |
) |
|
$ |
1.3 |
|
$ |
(11.3 |
) |
|
$ |
(0.5 |
) |
Three Months Ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross premiums written |
|
$ |
1.5 |
|
|
$ |
53.2 |
|
|
|
|
|
|
$ |
54.7 |
|
|||
Net premiums written |
|
|
(54.0 |
) |
|
|
9.1 |
|
|
|
|
|
|
|
(44.9 |
) |
|||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net premiums earned |
|
|
7.5 |
|
|
|
7.8 |
|
|
|
|
|
|
|
15.3 |
|
|||
Commission income |
|
|
|
|
|
$ |
10.0 |
|
|
|
|
10.0 |
|
||||||
Program fees |
|
|
|
|
2.1 |
|
|
|
|
|
|
|
2.1 |
|
|||||
Net investment income |
|
|
32.2 |
|
|
|
0.8 |
|
|
|
|
$ |
2.2 |
|
|
|
35.2 |
|
|
Net investment gains (losses), including impairments |
|
|
(3.4 |
) |
|
|
— |
|
|
|
|
|
— |
|
|
|
(3.4 |
) |
|
Net gains (losses) on derivative contracts |
|
|
0.6 |
|
|
|
|
|
|
|
(0.1 |
) |
|
|
0.5 |
|
|||
Other income |
|
|
2.4 |
|
|
|
0.1 |
|
|
|
— |
|
|
— |
|
|
|
2.5 |
|
Total revenues and other income |
|
|
39.4 |
|
|
|
10.7 |
|
|
|
10.1 |
|
|
2.1 |
|
|
|
62.2 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Losses and loss adjustment expenses (benefit) |
|
|
1.6 |
|
|
|
5.7 |
|
|
|
|
|
|
|
7.4 |
|
|||
Amortization of deferred acquisition costs, net |
|
|
0.1 |
|
|
|
1.4 |
|
|
|
|
|
|
|
1.4 |
|
|||
Commission expense |
|
|
|
|
|
|
6.0 |
|
|
|
|
6.0 |
|
||||||
General and administrative expenses |
|
|
23.5 |
|
|
|
3.8 |
|
|
|
2.4 |
|
|
5.9 |
|
|
|
35.6 |
|
Total expenses included for EBITDA |
|
|
25.2 |
|
|
|
10.8 |
|
|
|
8.4 |
|
|
5.9 |
|
|
|
50.4 |
|
EBITDA |
|
|
14.2 |
|
|
|
(0.1 |
) |
|
|
1.6 |
|
|
(3.8 |
) |
|
|
11.8 |
|
Less: Interest expense |
|
|
16.0 |
|
|
|
|
|
|
|
|
|
16.0 |
|
|||||
Less: Depreciation expense |
|
|
0.4 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
0.4 |
|
Less: Intangible amortization |
|
|
5.5 |
|
|
|
|
|
1.0 |
|
|
|
|
6.5 |
|
||||
Pretax income (loss) |
|
|
(7.7 |
) |
|
|
(0.1 |
) |
|
|
0.7 |
|
|
(3.9 |
) |
|
|
(11.1 |
) |
Income tax expense (benefit) |
|
|
1.6 |
|
|
|
— |
|
|
|
— |
|
|
0.4 |
|
|
|
1.9 |
|
Net income (loss) |
|
$ |
(9.3 |
) |
|
$ |
(0.1 |
) |
|
$ |
0.6 |
|
$ |
(4.3 |
) |
|
$ |
(13.0 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240805233686/en/
Charles J. Sebaski
Managing Director, Investor Relations
(212) 208-3222
csebaski@ambac.com
Source: Ambac Financial Group, Inc.
FAQ
What were Ambac's second quarter 2024 net income and adjusted net income?
How did Ambac's Specialty P&C Insurance perform in Q2 2024?
What is the status of Ambac's Legacy Financial Guarantee Business?
What are the total P&C premium production figures for Ambac in Q2 2024?
What acquisition did Ambac complete in Q2 2024?
