MBIA INC [MBI] Filings

10-Q 1 mbi-20230930.htm 10-Q 10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-9583

MBIA INC.

(Exact name of registrant as specified in its charter)


Connecticut (State or other jurisdiction of incorporation or organization)	06-1185706 (I.R.S. Employer Identification No.)

1 Manhattanville Road, Suite 301, Purchase, New York (Address of principal executive offices)	10577 (Zip Code)

(914) 273-4545

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	MBI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 26, 2023, 51,139,497 shares of Common Stock, par value $1 per share, were outstanding.


PART I FINANCIAL INFORMATION
Item 1.	Financial Statements MBIA Inc. and Subsidiaries (Unaudited)	1
	Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (Unaudited)	1
	Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (Unaudited)	2
	Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022 (Unaudited)	3
	Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2023 and 2022 (Unaudited)	4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (Unaudited)	5
	Notes to Consolidated Financial Statements (Unaudited)	6
	Note 1: Business Developments and Risks and Uncertainties	6
	Note 2: Significant Accounting Policies	9
	Note 3: Recent Accounting Pronouncements	10
	Note 4: Variable Interest Entities	11
	Note 5: Loss and Loss Adjustment Expense Reserves	12
	Note 6: Fair Value of Financial Instruments	17
	Note 7: Investments	30
	Note 8: Derivative Instruments	35
	Note 9: Income Taxes	39
	Note 10: Business Segments	40
	Note 11: Earnings Per Share	45
	Note 12: Accumulated Other Comprehensive Income	46
	Note 13: Commitments and Contingencies	48
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	76
Item 4.	Controls and Procedures	76
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	77
Item 1A.	Risk Factors	77
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	78
Item 6.	Exhibits	79
SIGNATURES		80

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

This quarterly report of MBIA Inc., together with its consolidated subsidiaries, (collectively, “MBIA”, the “Company”, “we”, “us” or “our”) includes statements that are not historical or current facts and are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe”, “anticipate”, “project”, “plan”, “expect”, “estimate”, “intend”, “will likely result”, “looking forward”, or “will continue” and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. MBIA cautions readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. We undertake no obligation to publicly correct or update any forward-looking statement if the Company later becomes aware that such result is not likely to be achieved.

The following are some of the general factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the Company’s forward-looking statements:

•

increased credit losses or impairments on public finance obligations that National Public Finance Guarantee Corporation (“National”) insures issued by state, local and territorial governments and finance authorities and other providers of public services, located in the U.S. or abroad, that are experiencing fiscal stress;

•

the possibility that loss reserve estimates are not adequate to cover potential claims;

•

a disruption in the cash flow from National or an inability to access the capital markets and our exposure to significant fluctuations in liquidity and asset values in the global credit markets as a result of collateral posting requirements;

•

our ability to fully implement our strategic plan;

•

the possibility that MBIA Insurance Corporation will have inadequate liquidity or resources to timely pay claims as a result of higher than expected losses on certain insured transactions or as a result of a delay or failure in collecting expected recoveries, which could lead the New York State Department of Financial Services (“NYSDFS”) to put MBIA Insurance Corporation into a rehabilitation or liquidation proceeding under Article 74 of the New York Insurance Law and/or take such other actions as the NYSDFS may deem necessary to protect the interests of MBIA Insurance Corporation’s policyholders;

•

deterioration in the economic environment and financial markets in the United States or abroad, real estate market performance, credit spreads, interest rates and foreign currency levels; and

•

the effects of changes to governmental regulation, including insurance laws, securities laws, tax laws, legal precedents and accounting rules.

The above factors provide a summary of and are qualified in their entirety by the risk factors discussed under “Risk Factors” in Part II, Other Information, Item 1A included in Quarterly Report on Form 10-Q. The Company encourages readers to review these risk factors in their entirety.

This quarterly report of MBIA Inc. also includes statements of the opinion and belief of MBIA management which may be forward-looking statements subject to the preceding cautionary disclosure. Unless otherwise indicated herein, the basis for each statement of opinion or belief of MBIA management in this report is the relevant industry or subject matter experience and views of certain members of MBIA’s management. Accordingly, MBIA cautions readers not to place undue reliance on any such statements, because like all statements of opinion or belief they are not statements of fact and may prove to be incorrect. We undertake no obligation to publicly correct or update any statement of opinion or belief if the Company later becomes aware that such statement of opinion or belief was not or is not then accurate. In addition, readers are cautioned that each statement of opinion or belief may be further qualified by disclosures set forth elsewhere in this report or in other disclosures by MBIA.

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

MBIA INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions except share and per share amounts)


				September 30, 2023			December 31, 2022
Assets
Investments:
	Fixed-maturity securities held as available-for-sale, at fair value (amortized cost $1,808 and $2,044)			$	1,555		$	1,812
	Investments carried at fair value				346			511
	Short-term investments, at fair value (amortized cost $444 and $353)				444			353
	Other investments at amortized cost				3			-
			Total investments		2,348			2,676
Cash and cash equivalents					70			50
Premiums receivable (net of allowance for credit losses $0 and $0)					151			160
Deferred acquisition costs					32			35
Insurance loss recoverable					177			137
Assets held for sale					74			80
Other assets					78			73
Assets of consolidated variable interest entities:
	Cash				4			16
	Investments carried at fair value				22			47
	Loans receivable at fair value				32			78
	Other assets				2			23
			Total assets	$	2,990		$	3,375
Liabilities and Equity
Liabilities:
	Unearned premium revenue			$	240		$	266
	Loss and loss adjustment expense reserves				450			439
	Long-term debt				2,546			2,428
	Medium-term notes (includes financial instruments carried at fair value of $37 and $41)				495			501
	Investment agreements				225			233
	Derivative liabilities				23			49
	Liabilities held for sale				65			61
	Other liabilities				82			94
	Liabilities of consolidated variable interest entities:
		Variable interest entity debt (includes financial instruments carried at fair value of $78 and $172)			81			174
		Derivative liabilities			11			6
			Total liabilities		4,218			4,251
Commitments and contingencies (Refer to Note 13: Commitments and Contingencies)
Equity:
	Preferred stock, par value $1 per share; authorized shares--10,000,000; issued and outstanding--none				-			-
	Common stock, par value $1 per share; authorized shares--400,000,000; issued shares--283,186,115 and 283,186,115				283			283
	Additional paid-in capital				2,919			2,925
	Retained earnings (deficit)				(1,006	)		(653	)
	Accumulated other comprehensive income (loss), net of tax of $7 and $8				(263	)		(283	)
	Treasury stock, at cost--232,046,875 and 228,333,444 shares				(3,172	)		(3,154	)
			Total shareholders' equity of MBIA Inc.		(1,239	)		(882	)
	Preferred stock of subsidiary and noncontrolling interest held for sale				11			6
			Total equity		(1,228	)		(876	)
			Total liabilities and equity	$	2,990		$	3,375

The accompanying notes are an integral part of the consolidated financial statements.

MBIA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions except share and per share amounts)


					Three Months Ended September 30,						Nine Months Ended September 30,
					2023			2022			2023			2022

Revenues
	Premiums earned:
		Scheduled premiums earned			$	9		$	10		$	27		$	31
		Refunding premiums earned				1			1			1			6
			Premiums earned (net of ceded premiums of $0, $0, $0 and $1)			10			11			28			37
	Net investment income					26			24			89			67
	Net realized investment gains (losses)					(13	)		(13	)		(23	)		(37	)
	Net gains (losses) on financial instruments at fair value and foreign exchange					21			25			20			51
	Net gains (losses) on extinguishment of debt					-			-			1			4
	Fees and reimbursements					-			-			-			4
	Other net realized gains (losses)					(6	)		1			(5	)		(18	)
	Revenues of consolidated variable interest entities:
		Net gains (losses) on financial instruments at fair value and foreign exchange				(23	)		(36	)		(47	)		(16	)
		Other net realized gains (losses)				(7	)		5			(25	)		5
				Total revenues		8			17			38			97
Expenses
	Losses and loss adjustment					123			(12	)		158			57
	Amortization of deferred acquisition costs					1			2			3			5
	Operating					15			14			57			44
	Interest					53			46			157			130
	Expenses of consolidated variable interest entities:
		Operating				1			2			9			5
				Total expenses		193			52			384			241
Income (loss) from continuing operations before income taxes						(185	)		(35	)		(346	)		(144	)
Provision (benefit) for income taxes						-			-			-			-
Income (loss) from continuing operations						(185	)		(35	)		(346	)		(144	)
Income (loss) from discontinued operations, net of income taxes						(1	)		1			(2	)		1
Net income (loss)						(186	)		(34	)		(348	)		(143	)
	Less: Net income from discontinued operations attributable to noncontrolling interest					(1	)		-			5			-
Net income (loss) attributable to MBIA Inc.					$	(185	)	$	(34	)	$	(353	)	$	(143	)
Net income (loss) per common share attributable to MBIA Inc. - basic and diluted

MBIA INC [MBI] Filings
10-Q	[2023-11-02]
10-Q	[2023-08-02]
10-Q	[2023-05-09]
10-K	[2023-02-28]
10-Q	[2022-11-02]
10-Q	[2022-08-03]
10-Q	[2022-05-09]
10-K	[2022-02-28]
10-Q	[2021-11-03]
10-Q	[2021-08-04]
10-Q	[2021-05-10]
10-K	[2021-03-01]
10-Q	[2020-11-09]
10-Q	[2020-08-05]
10-Q	[2020-05-11]
10-K	[2020-02-27]
10-Q	[2019-11-05]
10-Q	[2019-08-06]
10-Q	[2019-05-08]
10-K	[2019-02-28]
10-Q	[2018-11-06]
10-Q	[2018-08-08]
10-Q	[2018-05-09]
10-K	[2018-03-01]
10-Q	[2017-11-07]
10-Q	[2017-08-08]
10-Q	[2017-05-10]
10-K	[2017-03-01]
10-Q	[2016-11-08]
10-Q	[2016-08-08]
10-Q	[2016-05-09]
10-K	[2016-02-29]
10-Q	[2015-11-04]
10-Q	[2015-08-04]
10-Q	[2015-05-11]
10-K	[2015-03-02]
10-Q	[2014-11-05]
10-Q	[2014-08-06]
10-Q	[2014-05-12]
10-K	[2014-03-03]
10-Q	[2013-11-12]
10-Q	[2013-08-07]
10-Q	[2013-05-09]
10-K	[2013-02-27]
10-Q	[2012-11-07]
10-Q	[2012-08-08]
10-Q	[2012-05-10]
10-K	[2012-02-29]

MBIA INC [MBI] Filings

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