MBI

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 8:30 a.m. ET Managing Director of Investor and Media Relations - Greg Diamond Chief Executive Officer - William Fallon Chief Financial Officer - Joseph Schachinger Operator: Welcome to the MBIA Inc. Second Quarter 2026 Financial Results Conference Call. I would now like to turn the call over to Greg Diamond, Managing Director of Investor and Media Relations at MBIA. Please go ahead, sir. Greg Diamond: Thank you, Angela. Yes, welcome to MBIA's conference call for our latest financial results. After the market closed yesterday, we issued and posted several items on our website, including our financial results, 10-Q, quarterly operating supplement and statutory financial statements for both MBIA Insurance Corporation and National Public Finance Guarantee Corporation. We also posted updates to the listings of our insurance company's insured portfolios. Regarding today's call, please note that anything said on the call is qualified by the information provided in the company's 10-K, 10-Qs and other SEC filings as our company's definitive disclosures are incorporated in those documents. We urge investors to read our 10-K and 10-Qs as they contain our most current disclosures about the company and its financial and operating results. Those documents also contain information that may not be addressed on today's call. The definitions and reconciliations of the non-GAAP terms included in our remarks today are also included in our 10-K and 10-Qs as well as our financial results report and our quarterly operating supplement. The recorded replay of today's call will become available on the MBIA website approximately 2 hours after the end of the call. Now here is our safe harbor disclosure statement. Our remarks on today's conference call may contain forward-looking statements. Important factors such as general market conditions and the competitive environment could cause our actual results to differ materially from the projected results referenced in our forward-looking statements. Risk factors are detailed in our 10-K and 10-Qs, which are available on our website at mbia.com. The company cautions not to place undue reliance on any such forward-looking statements. The company also undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such statement is no longer accurate. For our call today, Bill Fallon and Joe Schachinger will provide introductory comments and then a question-and-answer session will follow. Now here is Bill Fallon. William Fallon: Thanks, Greg. Good morning, everyone. Thank you for being with us today. Our second quarter and year-to-date financial results for 2026 provided favorable comparisons to the same periods for the prior year. Our priority continues to be resolving National's PREPA exposure. National's outstanding PREPA exposure reduced by $35 million to $390 million of gross par value due to the insurance policy claims paid by National on PREPA bonds that matured on July 1, 2026. There was also some progress on several of the litigations related to PREPA. The director of the White House Personnel Office, which appealed the injunctive relief that was awarded to 3 of the Oversight Board members that were fired by President Trump, has asked the First Circuit Court of Appeals to remand that case back to the trial court in light of the U.S. Supreme Court's rulings issued in late June regarding the Slaughter and Cook cases. In the case about the PREPA bondholders' counterclaim for the calculation of net revenues, Judge Swain lifted the self-imposed litigation stay, and that case is currently in discovery. With the administrative claim appeal to the First Circuit, that case is now fully briefed and scheduled for oral arguments in Boston on September 15. Separately, the Oversight Board nearly doubled their settlement offer to PREPA bondholders from $1.6 billion to approximately $3 billion. However, bondholders representing about 90% of the bondholder claims soundly dismissed the offer as unacceptable and inadequate. Regarding the balance of National's insured portfolio, those credits have continued to perform generally consistent with our expectations. The gross par amount outstanding for National's insured portfolio has declined by approximately $1.5 billion from year-end 2025 to about $20.8 billion at June 30, 2026. National's leverage ratio gross par to statutory capital is 21:1 at the end of the quarter, down from 24:1 at year-end 2025. As of June 30, 2026, National had total claims paying resources of $1.4 billion and statutory capital and surplus of about $970 million. Now Joe will provide additional comments about our financial results. Joseph Schachinger: Thank you, Bill, and good morning, everyone. I will begin with a review of our second quarter 2026 GAAP and non-GAAP results, followed by an overview of our holding company liquidity and our statutory results. The company reported a consolidated GAAP net loss of $46 million or a negative $0.91 per share for the second quarter of 2026 compared with a consolidated GAAP net loss of $56 million or a negative $1.12 per share for the second quarter of 2025. The lower GAAP net loss this quarter was primarily driven by 2 items. First, we recorded a reversal of legal expenses within a consolidated variable interest entity, or VIE, related to our Zohar CDO recoveries at MBIA Insurance Corp. And second, our results benefited from foreign exchange gains in the second quarter of 2026 compared with foreign exchange losses in the same period of 2025. These foreign exchange impacts were associated with the revaluation of euro-denominated medium-term note liabilities in our corporate segment and resulted from changes in foreign exchange rates. The company's adjusted net loss, which is a non-GAAP measure, was $7 million or a negative $0.14 per share for the second quarter of 2026 compared with an adjusted net loss of $8 million or a negative $0.17 per share for the second quarter of 2025. The modest improvement in our adjusted net loss this quarter was primarily driven by slightly lower loss and loss adjustment expenses, or LAE, at National related to its PREPA exposure. MBIA Inc.'s book value per share as of June 30, 2026, was negative $45.58 per share, reflecting a decrease of $1.31 per share from year-end 2025. This decrease was primarily due to our consolidated net loss of $86 million for the first 6 months of 2026. Included in MBIA Inc.'s book value per share as of June 30, 2026, is a negative $54.26 per share of MBIA Insurance Corp.'s book value. I will now spend a few minutes on our Corporate segment balance sheet. The Corporate segment, which primarily includes the activities of the holding company, MBIA Inc., had total assets of approximately $635 million as of June 30, 2026. Within this total are the following material assets. Unencumbered cash and liquid assets held by MBIA Inc. totaled $337 million compared with $357 million as of December 31, 2025. The decrease from year-end 2025 was primarily due to ongoing debt service payments and operating expenses net of investment income. We continue to manage holding company liquidity carefully with a primary focus on meeting our outstanding obligations and preserving financial flexibility. In addition to the unencumbered cash and liquid assets, the corporate segment's assets included approximately $183 million of assets at market value pledged to guaranteed investment agreement contract holders. These assets fully collateralized the principal amounts of those contracts. The segment's assets also included $66 million of assets at MBIA Services, our management services company, to support its operating obligations. I'll now turn to the insurance company statutory results. National reported statutory net income of $10 million for the second quarter of 2026 compared with statutory net income of $6 million for the second quarter of 2025. The favorable variance was primarily driven by higher earned premiums, which resulted from refundings of insured credits and lower loss in LAE and operating expenses in the current quarter. National's statutory capital as of June 30, 2026, was $968 million, up $31 million compared with December 31, 2025. The increase was mostly due to National's statutory net income for the first 6 months of 2026 as well as unrealized gains in its investment portfolio. As of June 30, 2026, National's claims paying resources were $1.4 billion, consistent with year-end 2025. Now I'll turn to MBIA Insurance Corp. MBIA Insurance Corp. reported statutory net income of $27 million for the second quarter of 2026 compared with statutory net income of $4 million for the second quarter of 2025. The favorable variance was primarily driven by a significantly larger loss in LAE benefit in the current quarter compared with the second quarter of 2025. The loss in LAE benefit this quarter was driven by our ongoing reassessment of recoveries of paid claims and other amounts owed to MBIA Insurance Corp. related to the Zohar CDOs. As of June 30, 2026, the statutory capital of MBIA Insurance Corp. was $106 million, reflecting an increase of $27 million from year-end 2025. This increase was primarily a result of net income of $28 million for the first 6 months of 2026. Claims paying resources totaled $342 million as of June 30, 2026, up $25 million from year-end 2025. MBIA Insurance Corp.'s insured gross par outstanding was just under $1.8 billion as of June 30, 2026, down approximately 12% from year-end 2025 due to regular amortization of the insured portfolio. And now we will turn the call over to the operator to begin the question-and-answer session. Operator: [Operator Instructions] And we'll take our first question from Tommy McJoynt with KBW. Unknown Analyst: This is [ Molly Knoll ] on for Tommy McJoynt. First, can you talk about the latest PREPA settlement proposal from the Oversight Board? From your perspective, was there anything incrementally positive about the offering terms relative to prior proposals? Or in your view, are we no closer to a potential resolution than previously? William Fallon: Yes. Thank you, [ Molly ]. With regard to the PREPA proposal that came across, the positive was that it was, from their perspective, a substantial increase. Other than that, there's not a whole lot to talk about. As I said in my comments, the bondholders dismissed it as clearly inadequate. So hard to say where we go from here in terms of how much time. As I mentioned, several of the litigations are moving forward. And as you know, there is some uncertainty with regard to the composition of the Oversight Board. Currently, only 4 members, 3 of whom are fighting the dismissal by the Trump administration. So hard to tell with regard to timing and exactly how this will play out, but those are our thoughts with regard to that proposal. Unknown Analyst: And I guess, secondly, after you paid the special dividend out of National a couple of years ago, that caused National's capital ratio to dip from just over 3% to about 2%. Should we think of any portion of the capital ratio above that roughly 2% figure as potentially being available to distribute up to the holdco as the insured portfolio continues to run down? William Fallon: Yes. So with regard to National and any distributions from National to the holding company, you're correct. It was at the end of 2023 that we had a special distribution from National to the holding company. While everyone looks at different metrics and does their own financial analysis, as the book gets smaller, it becomes a very tailored analysis with regard to what's in the National portfolio. So I understand how everyone looks at metrics and that's, in a sense, fine, but it probably has to be even a more detailed analysis to determine exactly what the potential dividend or distribution could be. Operator: And our next question will come from investor, [ Carlos Pardo ]. Unknown Attendee: This is [ Carlos Pardo ] from London. So just a few questions. I mean on the buybacks, I saw that the capacity is still $71 million. And I just wanted to make sure that you confirm that it is available and it still could be deployed. William Fallon: That is correct. There is $71 million available. Unknown Attendee: So basically, there is no other constraint, not just the legal constraint, but also it's basically up to you to decide when you think that this is in the interest of the shareholders. My impression is that since the share price has dropped as you have seen over the last year, maybe now it is the time to consider whether deploying these buybacks. And of course, I mean, I will be sending you my idea of basically the levels and the volumes as to how this could be done. But basically, at the moment with yesterday's price, I mean, you could retire approximately 14 million shares. And since I expect that the Oversight Board will have some good news in terms of the composition of the Oversight Board soon, I think that probably this drop to around $5 is a good opportunity. So just to let you know that I will be sending you a proposal. Of course, it's always up to you to decide whether to implement it. William Fallon: Okay. Unknown Attendee: Then on the custodial receipts, I saw that you have done another transaction for $30 million. I assume that this $30 million correspond to the payments that we made under PREPA on the 1st of July and I think that there was another one on the 1st of January? William Fallon: So with regard to the custodial receipts and the debt service payment that we made on July 1. So we paid $35 million on July 1. $5 million was a secondary policy. So $30 million now have been transferred into a custody account. We have the custodial receipts as we did last year, those could be sold. And then the $5 million that were secondary, those can be sold as well. So we have $35 million that could be sold. If we think there is an appropriate price or offer that we received, then we would sell up to $35 million. Unknown Attendee: That's fantastic. And then on PREPA payments, the only payments that we will have to make over the next 2 years is $20 million in '27 and $20 million in '28. So I mean it is relatively benign, the payment schedule. William Fallon: That's correct. The debt service payments on PREPA declined significantly over the period you just mentioned. Unknown Attendee: That's fantastic. That's good news. And also related to the potential use of the buybacks, I think that could theoretically make sense. But of course, I mean, it's always up to you guys that you have the full picture. Then on the co-op, basically, the co-op has been extended until, I think that is August 2027, which I think that it makes sense in terms of the recent decisions and the potential for new members of the Oversight Board. But I just wanted to know the terms of the co-op has not changed. So basically, if only one party to the co-op is opposing an agreement that has been reached by all the other parties to the co-op. This party, let's say, for example, Assured Guaranty, could not block this agreement. Is that correct? Are those terms still valid? William Fallon: Essentially, yes. Unknown Attendee: Yes. So basically, they could not block -- I mean, let's say, for example, Assured Guaranty does not agree with an agreement that has been reached by the rest of the co-op members, they cannot block it. My question there is, since this resolution of PREPA is so important for MBIA and we have basically put any further move on sale or similar on hold until this is resolved. How does the conversations within the co-op look like? Are we actively seeking to propose potential solutions to the other members of the co-op? Or are we more on a passive mode? William Fallon: I can't get into the details in terms of the views of all the different members that is the bondholders. I can assure you we're not passive, but we obviously have a very vested interest in the outcome. And we're looking -- up to 90% of the bondholders are in the co-op agreement. And I think the biggest issue really has been the Oversight Board, that is the uncertainty with regard to the composition of the Board and also the litigation related to it. We think that could be a real catalyst, that is either the objection of the 3 vacant positions or the resolution of the litigation. Hopefully, that would be, again, a catalyst to move this forward. Unknown Attendee: When do you expect -- I mean, of course, I mean we are dealing with the Puerto Rico bankruptcy, so predicting is impossible. But when do you think that -- in your opinion that this -- after the recent decision, I think it was last week, when do you think that there will be some kind of green light for new members? What is your expectation of the Board? William Fallon: It's very hard to predict. It really depends on how the administration wants to move forward. Again, we hope it's as soon as possible, but it's just very hard to predict. Unknown Attendee: Yes. And is the co-op contacting also the administration in terms of trying to get them to accelerate this situation or... William Fallon: Again, I can't speak to the specific actions that the co-op Board is taking. But I think it's reasonable to assume that not only are we, but all bondholders doing everything they can to move this to a resolution. Unknown Attendee: Fantastic. I will be also sending you some kind of proposal as to what I would do in terms of trying to get the co-op to move, of course, knowing that the key catalyst, as you said, is the appointment of the new members of the Board. But I will be sending you for -- send it to you for your consideration. William Fallon: Okay. Operator: [Operator Instructions] We'll move next to John Staley with Staley Capital Advisers. John Staley: Bill, a quick question. As the offer from the Oversight Board doubled roughly. How -- what's your estimate of how much of a spread there is between your offer and what the bondholders would consider to be reasonable? Do they have to double again or triple again? I don't know the magnitude of it. William Fallon: Yes, John, again, it's difficult to answer because I think every bondholder probably has a different number in mind. But roughly speaking, the offer that came across was somewhere probably in between $0.30 and $0.40, depending on how you value everything. That's going to be $0.40 on $1 of par. And just as a benchmark, the bonds right now in the marketplace, while it's not a really deep or liquid market, but the last indications, those were trading at about $0.75. So that at least gives you some reference point between what the offer was and what the so-called marketplace is saying. John Staley: Yes. Terrific. And as you review your current insured portfolio, do you factor in the political trends of the protected or liberal side of the parties in the so-called blue states and this democratic socialist group who have no respect for existing contracts. Has that factored into you with any potential thoughts that you might have some impairment because of political trends not supporting honoring existing contracts and permits? William Fallon: So when we look at the portfolio, we look at obviously many factors. What you just described is, one, it's not a new factor. We have looked at the way different administrations have handled, whether it be state or local obligations for a long time. Clearly, you're looking at some of the trends and situations that are developing across the country right now. We look at all of those things. So without getting into what probably could be a week's long discussion on the topic that you're highlighting, it is something that we factor into our analysis. There are no impairments that we have taken in this quarter, specifically related to those type of administrations for some reason choosing not to meet a contractual obligation. We hope all administrations will continue to fulfill their obligations, and we'll just continue to monitor the situation. John Staley: And I interpret the various updates you had on PREPA as being quite as positive as it could be. I don't know how the Supreme Court ruling could have been any more positive other than if they talk, they literally said that you could fire. They basically implied they have the right to fire anybody. So I suspect this is finally moving to a more hopefully clear resolution. William Fallon: We would love for things to move quickly, just as you would. Operator: And we'll go next to Patrick Stadelhofer with Kahn. Patrick Stadelhofer: I just wanted to ask about a kind of thoughts around the potential sale process given all the gating items from last time you're making progress on. And obviously, there's ongoing cash burn in the business. Just wanted to think how -- kind of what steps are remaining for you to do so? And would you again do it as a public process the way you did 3 or 4 years ago? Or would you do it behind the scenes this time around? William Fallon: Yes. Patrick, thank you. With regard to the sale process, and again, you're referring to, I guess, it was 4 years ago, we announced we had hired Barclays to help us with a sale process, we then decided to stop that process and pursue the distribution from National and shareholder dividend. But with regard to how we would do this moving forward, the answer is it depends. I think the probability of a transaction goes up every time we reduce our exposure to PREPA. Obviously, different potential acquirers will view the PREPA situation differently. There are some who probably look at a resolution similar to what we might think of in terms of value or potential value. So again, at this point, we don't have any specific decision. If we decided that we were going to run a process similar to what we did 4 years ago, my guess is we would announce that. There's also the possibility that individuals contact us at any point in time or given that we probably can identify potential acquirers, we can reach out to them at any point in time if we thought it was advantageous for shareholders. So again, nothing specific on that at this point in time, but something that we look at constantly. Operator: And at this time, I'm showing no further questions. I'd like to turn the floor back over to Greg Diamond for closing remarks. Greg Diamond: Thanks again, Angela, and thanks to those of you listening to our call. Please contact us directly if you have any additional questions. We also recommend that you visit our website at mbia.com for additional information on our company. Thank you for your interest in MBIA. Good day, and goodbye. Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect. 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Interested in MBIA, Inc.? Here are five stocks we like better. MBIA’s second-quarter loss narrowed: GAAP net loss improved to $46 million, or $0.91 per share, from $56 million a year earlier, while adjusted net loss decreased to $7 million. PREPA remains the central issue: National’s outstanding PREPA exposure fell by $35 million to $390 million, but bondholders representing about 90% of claims rejected Puerto Rico’s roughly $3 billion settlement proposal. Litigation and negotiations remain unresolved. Capital and strategic flexibility improved, though challenges remain: National’s leverage declined to 21-to-1 and statutory capital rose to about $968 million. MBIA also had $337 million in unencumbered cash and liquid assets, $71 million remaining under its buyback authorization, and continues to evaluate potential strategic transactions. MBIA (NYSE:MBI) reported a narrower second-quarter net loss as lower expenses tied to its Puerto Rico Electric Power Authority, or PREPA, exposure and favorable foreign-exchange movements helped results. Management said its principal priority remains resolving National Public Finance Guarantee Corp.’s remaining PREPA exposure, while litigation and negotiations surrounding the utility’s restructuring continue. The company posted a consolidated GAAP net loss of $46 million, or $0.91 per share, for the second quarter of 2026, compared with a $56 million loss, or $1.12 per share, a year earlier. Adjusted net loss, a non-GAAP measure, improved to $7 million, or $0.14 per share, from $8 million, or $0.17 per share, in the prior-year period. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Chief Financial Officer Joe Schachinger said the smaller GAAP loss reflected a reversal of legal expenses within a consolidated variable-interest entity related to Zohar CDO recoveries at MBIA Insurance Corp., as well as foreign-exchange gains. The currency gains were associated with the revaluation of euro-denominated medium-term-note liabilities in the corporate segment, compared with foreign-exchange losses in the second quarter of 2025. National’s outstanding PREPA exposure declined by $35 million during the quarter to $390 million of gross par value, following insurance-policy claims paid on PREPA bonds that matured July 1, CEO Bill Fallon said. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High The payment included $30 million that has been transferred to a custody account, for which National holds custodial receipts, and $5 million associated with a secondary policy. Fallon said the company could sell up to $35 million of those receipts if it receives what it considers an appropriate price or offer. Fallon also said PREPA debt-service payments are expected to decline substantially, with $20 million of payments in 2027 and another $20 million in 2028. → No Hangover: Revisiting Microsoft One Week After Earnings Meanwhile, the Financial Oversight and Management Board for Puerto Rico increased its settlement proposal to PREPA bondholders to about $3 billion from $1.6 billion. Fallon characterized the increase as positive from the board’s perspective but said bondholders representing roughly 90% of claims rejected the proposal as inadequate. In response to an analyst question, Fallon said the proposal appeared to equate to roughly 30 cents to 40 cents on the dollar of par value, depending on valuation assumptions. He noted that recent market indications for PREPA bonds were about 75 cents on the dollar, though he cautioned that the market was not especially deep or liquid. “Hard to say where we go from here in terms of how much time,” Fallon said, citing ongoing uncertainty over the composition of the oversight board and several continuing legal proceedings. The director of the White House Personnel Office has asked the First Circuit Court of Appeals to remand litigation concerning injunctive relief awarded to three oversight board members who were fired by President Trump. Separately, Judge Laura Taylor Swain lifted a self-imposed stay in litigation involving PREPA bondholders’ counterclaim concerning the calculation of net revenues; that case is now in discovery. An administrative-claim appeal is fully briefed and scheduled for oral argument in Boston on Sept. 15. National’s insured portfolio continued to perform generally in line with management’s expectations, Fallon said. Gross par outstanding declined by approximately $1.5 billion from year-end 2025 to about $20.8 billion as of June 30. National’s gross-par-to-statutory-capital leverage ratio improved to 21-to-1 from 24-to-1 at year-end 2025. Claims-paying resources were $1.4 billion as of June 30, unchanged from year-end. Statutory capital and surplus totaled about $970 million. Second-quarter statutory net income was $10 million, compared with $6 million a year earlier. Schachinger said National’s favorable statutory earnings comparison was driven by higher earned premiums resulting from refundings of insured credits, along with lower loss and loss-adjustment expenses and operating expenses. National’s statutory capital rose $31 million from year-end to $968 million, primarily reflecting first-half statutory earnings and unrealized investment gains. When asked whether capital above a roughly 2% capital ratio could potentially be distributed to the holding company as National’s insured portfolio runs off, Fallon said a more detailed, credit-by-credit evaluation would be required. While investors may use broad financial metrics, he said the declining portfolio requires a “very tailored analysis” of potential dividends or distributions. MBIA’s corporate segment, which primarily includes the holding company, held approximately $635 million in total assets as of June 30. Unencumbered cash and liquid assets totaled $337 million, down from $357 million at Dec. 31, primarily because of debt-service payments and operating expenses, net of investment income. Schachinger said management remains focused on meeting obligations and preserving financial flexibility. Corporate assets also included about $183 million of market-value assets pledged to guaranteed investment agreement contract holders, fully collateralizing the principal amounts of those contracts, and $66 million of assets at MBIA Services to support operating obligations. MBIA Insurance Corp. reported statutory net income of $27 million in the second quarter, up from $4 million a year earlier. The improvement was primarily attributed to a larger loss and loss-adjustment-expense benefit tied to the company’s ongoing reassessment of recoveries of paid claims and other amounts owed in connection with Zohar CDOs. MBIA Insurance Corp.’s statutory capital rose $27 million from year-end to $106 million, while claims-paying resources increased $25 million to $342 million. Its insured gross par outstanding was just under $1.8 billion, down about 12% from year-end because of regular portfolio amortization. MBIA’s book value per share was negative $45.58 as of June 30, a decrease of $1.31 from year-end 2025. Schachinger said the decline primarily reflected the company’s consolidated net loss of $86 million for the first six months of 2026. MBIA Insurance Corp.’s book value represented negative $54.26 per share of that total. During the question-and-answer session, Fallon confirmed that MBIA had $71 million remaining under its share-repurchase authorization. He did not discuss whether or when the company would deploy the authorization. Fallon also said the company continues to consider potential strategic transactions, though it has made no specific decision regarding a sale process. He said the likelihood of a transaction increases as MBIA reduces its PREPA exposure, but potential acquirers may value the unresolved situation differently. If MBIA decided to initiate a formal sale process similar to one it announced several years ago, Fallon said the company would likely disclose it. He added that the company also could be approached by interested parties or contact potential acquirers directly if management determined doing so would benefit shareholders. MBIA Inc is a financial guarantee insurance company specializing in credit enhancement and risk mitigation solutions for public finance and structured finance transactions. The company provides guaranty insurance for municipal bonds, asset-backed securities and other credit-sensitive obligations, protecting investors against the risk of payment default. Through its core insurance subsidiary, MBIA Insurance Corp., the firm offers financial guarantees, reinsurance support and customized credit solutions designed to improve the marketability and pricing of debt instruments. Founded in 1973 as the Municipal Bond Insurance Association, MBIA built its reputation by insuring U.S. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "MBIA Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Consolidated GAAP Net Loss: $46 million, or negative $0.91 per share, for Q2 2026, compared with a net loss of $56 million (negative $1.12 per share) in Q2 2025. Adjusted Net Loss (non-GAAP): $7 million, or negative $0.14 per share, for Q2 2026, compared with an adjusted net loss of $8 million (negative $0.17 per share) in Q2 2025. Book Value Per Share: Negative $45.58 as of June 30, 2026, down $1.31 per share from year-end 2025. National Statutory Net Income: $10 million for Q2 2026, up from $6 million in Q2 2025. MBIA Insurance Corp. Statutory Net Income: $27 million for Q2 2026, compared with $4 million in Q2 2025. National Statutory Capital: $968 million as of June 30, 2026, up $31 million from year-end 2025. MBIA Insurance Corp. Statutory Capital: $106 million as of June 30, 2026, up $27 million from year-end 2025. National Claims-Paying Resources: $1.4 billion as of June 30, 2026, consistent with year-end 2025. MBIA Insurance Corp. Claims-Paying Resources: $342 million as of June 30, 2026, up $25 million from year-end 2025. National Insured Portfolio Gross Par: Approximately $20.8 billion at June 30, 2026, down about $1.5 billion from year-end 2025. MBIA Insurance Corp. Insured Gross Par Outstanding: Just under $1.8 billion as of June 30, 2026, down approximately 12% from year-end 2025. National Leverage Ratio (Gross Par to Statutory Capital): 21 to 1 at the end of Q2 2026, down from 24 to 1 at year-end 2025. Unencumbered Cash and Liquid Assets (MBIA Inc.): $337 million as of June 30, 2026, compared with $357 million at year-end 2025. Warning! GuruFocus has detected 4 Warning Signs with MBI. Is MBI fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. MBIA Inc (NYSE:MBI) reported a lower consolidated GAAP net loss of $46 million in Q2 2026, compared to $56 million in Q2 2025, driven by a reversal of legal expenses and favorable foreign exchange gains. National's PREPA exposure reduced by $35 million to $390 million of gross par value, with debt service payments expected to decline significantly over the next two years, easing future cash flow pressure. National's leverage ratio improved to 21:1 from 24:1 at year-end 2025, and statutory capital increased to $968 million, reflecting stronger financial health. MBIA Insurance Corp reported statutory net income of $27 million in Q2 2026, up from $4 million in Q2 2025, driven by a larger loss and LAE benefit from Zohar CDO recoveries. The company has $71 million available for share buybacks, and management confirmed it can deploy this capital at its discretion, potentially enhancing shareholder value at current price levels. The Oversight Board nearly doubled its settlement offer to PREPA bondholders to approximately $3 billion, indicating progress in negotiations, even though bondholders rejected it as inadequate. MBIA Inc (NYSE:MBI) continues to report a negative book value per share of -$45.58 as of June 30, 2026, reflecting ongoing losses and a challenging financial position. The PREPA settlement offer from the Oversight Board remains inadequate, with bondholders dismissing it, and the gap between the offer (around $0.30-$0.40 on the dollar) and market prices (about $0.75) remains wide. Uncertainty persists regarding the composition of the PREPA Oversight Board, with only four members and three fighting dismissal, which could delay resolution and prolong litigation. Holding company liquidity decreased to $337 million from $357 million at year-end 2025, due to ongoing debt service and operating expenses, limiting financial flexibility. The insured portfolio continues to run off, with National's gross par outstanding declining by $1.5 billion to $20.8 billion, reducing future premium income and potential revenue streams. The company faces ongoing litigation and legal costs related to PREPA, including a fully briefed appeal scheduled for oral arguments in September 2026, adding uncertainty to the timeline for resolution. Q: Can you talk about the latest PREPA settlement proposal from the Oversight Board? Was there anything incrementally positive about the offering terms relative to prior proposals, or are we no closer to a potential resolution?A: William Fallon (CEO): The positive was that it was a substantial increase from their perspective. However, the bondholders dismissed it as clearly inadequate. Several litigations are moving forward, but there is uncertainty regarding the compensation of the oversight board, which currently has only four members, three of whom are fighting their dismissal by the Trump administration. It is hard to tell with regard to timing and how this will play out. Q: After paying the special dividend out of National a couple of years ago, which caused its capital ratio to dip from just over 3% to about 2%, should we think of any portion of capital ratio above that roughly 2% figure as potentially being available to distribute up to the holdco as the insured portfolio continues to run down?A: William Fallon (CEO): You are correct that there was a special distribution at the end of 2023. While everyone looks at different metrics, as the book gets smaller, it becomes a very tailored analysis with regard to what is in the National portfolio. It probably has to be an even more detailed analysis to determine exactly what the potential dividend or distribution could be. Q: On the buybacks, I saw that the capacity is still $71 million. Can you confirm that it is available and could still be deployed?A: William Fallon (CEO): That is correct. There is $71 million available. Q: On the custodial receipts, I saw that you have done another transaction for $30 million. I assume these correspond to the payments made on the PREPA bonds on July 1st?A: William Fallon (CEO): We paid $35 million on July 1st. $5 million was a secondary policy, so $30 million has now been transferred into a custody account. We have the custodial receipts as we did last year, and those could be sold. The $5 million that was secondary can be sold as well. So we have $35 million that could be sold if we think there is an appropriate price or offer. Q: On PREPA payments, the only payments we will have to make over the next two years are $20 million in 2027 and $20 million in 2028. Is that correct?A: William Fallon (CEO): That's correct. The debt service payments on PREPA declined significantly over the period you just mentioned. Q: The COP has been extended until August 2027. If only one party to the COP is opposing an agreement reached by all other parties, could that party block the agreement? Are we actively seeking to propose potential solutions to the other members, or are we more on a passive mode?A: William Fallon (CEO): Essentially, yes, one party cannot block an agreement. I can assure you we're not passive. We have a very vested interest in the outcome, and up to 90% of the bondholders are in the COP agreement. The biggest issue has been the oversight board and the uncertainty regarding its composition and related litigation. We think the resolution of that could be a real catalyst to move this forward. Q: Has the offer from the Oversight Board doubled? What is your estimate of how much of a spread there is between the offer and what the bondholders would consider reasonable?A: William Fallon (CEO): It's difficult to answer because every bondholder probably has a different number in mind. Roughly speaking, the offer that came across was somewhere between $0.30 and $0.40 on the dollar of par. As a benchmark, the bonds right now in the marketplace are trading at about $0.75, which gives you a reference point between what the offer was and what the marketplace is saying. Q: As you review your current insured portfolio, do you factor in the political trends of the so-called blue states and groups who have no respect for existing contracts? Has that led to any thoughts that you might have some impairment because of political trends not supporting honoring existing contracts?A: William Fallon (CEO): When we look at the portfolio, we look at many factors, and what you described is one of them. It is not a new factor. We have looked at how different administrations have handled state or local obligations for a long time. It is something that we factor into our analysis. There are no impairments that we have taken this quarter specifically related to those types of administrations choosing not to meet a contractual obligation. We hope all administrations will continue to fulfill their obligations. Q: Regarding the potential sale process, what steps are remaining for you to do so, and would you again do it as a public process as you did three or four years ago, or would you do it behind the scenes?A: William Fallon (CEO): With regard to a sale process, you are referring to when we hired Barclays four years ago, which we then stopped to pursue the distribution of National. The probability of a transaction goes up every time we reduce our exposure to PREPA, as different potential acquirers will view the PREPA situation differently. At this point, we don't have any specific decision. If we decided to run a process similar to what we did four years ago, we would announce that. There is also the possibility that individuals contact us, or we could reach out to potential acquirers if we thought it was advantageous for shareholders. It is something that we look at constantly. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance improvement was primarily driven by a reversal of legal expenses related to Zohar CDO recoveries and favorable foreign exchange gains on euro-denominated liabilities. Management is prioritizing the resolution of National's PREPA exposure, which decreased to $390 million following scheduled insurance policy claims paid in July 2026. The Oversight Board's nearly doubled settlement offer of $3 billion was rejected by 90% of bondholders as inadequate, maintaining the current strategic impasse. National's leverage ratio improved to 21:1 from 24:1 at year-end 2025, reflecting a $1.5 billion decline in gross par outstanding as the insured portfolio continues to amortize. MBIA Insurance Corp. saw a statutory net income boost to $27 million, largely due to a reassessment of recoveries related to the Zohar CDOs. Holding company liquidity is being managed with a focus on meeting debt service and operating expenses, with unencumbered cash standing at $337 million. Future distributions from National to the holding company will require a highly tailored analysis of the remaining portfolio rather than relying on simple capital ratio metrics. Management views the resolution of PREPA litigation and the appointment of new Oversight Board members as critical catalysts for moving toward a final settlement. The company maintains $71 million in share buyback capacity, which remains available for deployment based on market conditions and shareholder interest. The probability of a corporate sale or transaction is expected to increase as PREPA exposure is further reduced and the insured portfolio continues its natural runoff. Debt service payments on PREPA are projected to decline significantly over the next two years, with only $20 million due in both 2027 and 2028. Ongoing litigation regarding the Oversight Board's composition remains a source of uncertainty, with oral arguments for administrative claims scheduled for September 2026. The company holds $35 million in custodial receipts from July 1 payments that can be sold to enhance liquidity if appropriate market pricing is achieved. Management is monitoring political trends in 'blue states' regarding contractual obligations, though no impairments have been taken related to these macro-political factors. Book value per share remains significantly negative at -$45.58, largely weighed down by MBIA Insurance Corp.'s negative contribution of $54.26 per share. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted the recent $3 billion offer equates to roughly $0.30 to $0.40 on the dollar, while the secondary market is currently trading these bonds at approximately $0.75. The dismissal of the offer by 90% of bondholders underscores a significant disconnect between the Board's valuation and bondholder requirements. Management clarified that while the 2023 distribution set a precedent, future moves will depend on a detailed analysis of the specific credits remaining in the shrinking portfolio. They cautioned against using simple capital ratio benchmarks to predict the timing or size of future distributions. Management stated they look at sale possibilities constantly but have not yet decided whether to launch a formal public process like the one conducted four years ago. The resolution of PREPA remains the primary 'gating item' that will determine the attractiveness of the company to potential acquirers.

Radian (RDN) came out with quarterly earnings of $1.14 per share, missing the Zacks Consensus Estimate of $1.38 per share. This compares to earnings of $1.01 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -17.39%. A quarter ago, it was expected that this mortgage insurer would post earnings of $1.17 per share when it actually produced earnings of $1.27, delivering a surprise of +8.55%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Radian, which belongs to the Zacks Insurance - Multi line industry, posted revenues of $580.75 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.30%. This compares to year-ago revenues of $311.75 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Radian shares have added about 10.1% since the beginning of the year versus the S&P 500's gain of 13%. While Radian has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Radian was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.34 on $579.9 million in revenues for the coming quarter and $5.17 on $2.21 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Multi line is currently in the bottom 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, MBIA (MBI), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This insurance and reinsurance company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +70.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. MBIA's revenues are expected to be $20 million, down 13% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Radian Group Inc. (RDN) : Free Stock Analysis Report MBIA, Inc. (MBI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Prudential (PRU) came out with quarterly earnings of $4.08 per share, beating the Zacks Consensus Estimate of $3.47 per share. This compares to earnings of $3.58 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +17.58%. A quarter ago, it was expected that this financial services company would post earnings of $3.24 per share when it actually produced earnings of $3.61, delivering a surprise of +11.42%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Prudential, which belongs to the Zacks Insurance - Multi line industry, posted revenues of $14.16 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.02%. This compares to year-ago revenues of $13.51 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Prudential shares have added about 9% since the beginning of the year versus the S&P 500's gain of 11%. While Prudential has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Prudential was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.42 on $14.51 billion in revenues for the coming quarter and $13.20 on $58.5 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Multi line is currently in the bottom 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, MBIA (MBI), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This insurance and reinsurance company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +70.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. MBIA's revenues are expected to be $20 million, down 13% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Prudential Financial, Inc. (PRU) : Free Stock Analysis Report MBIA, Inc. (MBI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Friday, May 8, 2026 at 8:30 a.m. ET Chief Executive Officer — William Fallon Chief Financial Officer — Joseph Schachinger Managing Director, Investor Relations — Greg Diamond Need a quote from a Motley Fool analyst? Email [email protected] Greg Diamond: Thank you, Nikki. Yes, welcome to MBIA's conference call for our latest financial results. After the market closed yesterday, we issued and posted several items on our website, including our financial results, 10-Q, quarterly operating supplement and the statutory statements for both MBIA Insurance Corporation and National Public Finance Guarantee Corporation. We also posted updates to the listings of our insurance company's insurance portfolios. Regarding today's call, please note that anything said on the call is qualified by the information provided in the company's 10-K, 10-Q and other SEC filings as our company's definitive disclosures are incorporated in those documents. We urge investors to read our 10-K and 10-Q as they contain our most current disclosures about the company and its financial and operating results. Those documents also contain information that may not be addressed on today's call. The definitions and reconciliations of those non-GAAP terms included in our remarks today are also included in our 10-K and 10-Q as well as our financial results report and our quarterly operating supplement. The recorded replay of today's call will become available approximately 2 hours after the end of the call. Now for our safe harbor disclosure statement. Our remarks on today's conference call may contain forward-looking statements. Important factors such as general market conditions and the competitive environment could cause our actual results to differ materially from the projected results referenced in our forward-looking statements. Risk factors are detailed in our 10-K and 10-Q, which are available on our website at mbia.com. The company cautions not to place undue reliance on any such forward-looking statements. The company also undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such statement is no longer accurate. For our call today, Bill Fallon and Joe Schachinger will provide introductory comments and then a question-and-answer session will follow. Now here is Bill Fallon. William Fallon: Thanks, Greg. Good morning, everyone. Thank you for being with us today. We had lower net losses for our first quarter 2026 financial results versus our first quarter 2025 results. National's losses and loss adjustment expense were essentially unchanged year-over-year. National's outstanding PREPA exposure remains unchanged from year-end 2025 at $425 million of gross par value. Our priority continues to be resolving National's PREPA exposure. In that regard, there has not been much substantive progress since our last conference call in February. Until the legal issues related to the members of the Financial Oversight and Management Board are resolved, it is unlikely that substantive progress will be made. Regarding the balance of National's insured portfolio, those credits have continued to perform generally consistent with our expectations. The gross par amount outstanding for National's insured portfolio has declined by approximately $900 million from year-end 2025 to about $21.5 billion at March 31, 2026. National's leverage ratio of gross par to statutory capital was 23:1 at the end of the quarter, down from 24:1 at year-end 2025. As of March 31, 2026, National had total claims paying resources of $1.4 billion and statutory capital and surplus of $950 million. Now Joe will provide additional comments about our financial results. Joseph Schachinger: Thank you, Bill, and good morning, all. I will begin with a review of our first quarter 2026 GAAP and non-GAAP results and then provide an overview of our statutory results. The company reported a consolidated GAAP net loss of $40 million or a negative $0.80 per share for the first quarter of 2026 compared with a consolidated GAAP net loss of $62 million or a negative $1.28 per share for the first quarter of 2025. The lower GAAP net loss this quarter was primarily driven by several items. We reported favorable variances in foreign exchange gains and losses at MBIA Insurance Corp. and within the Corporate segment. The variance at MBIA Insurance Corp. reflects losses recorded in 2025 related to the liquidation of its Mexican subsidiary with no comparable losses in 2026. The favorable variance in the Corporate segment related to Global Funding's euro-denominated medium-term notes and was driven by the U.S. dollar strengthening against the euro in the first quarter of 2026 compared to a weakening of the dollar against the euro in the first quarter of 2025. In addition, we reported a favorable variance in losses in LAE at MBIA Insurance Corp., primarily due to the impact of changes in the risk-free rates used to discount its loss reserves. In the first quarter of 2026, these rates increased, thereby reducing the present value of reserves compared with a decrease in rates in the first quarter of 2025, which increased the present value of reserves. And we reported a favorable variance in net realized investment gains and losses at National. In the first quarter of 2025, National recorded investment losses from sales of securities with no comparable activity in the first quarter of 2026. Partially offsetting these favorable variances was an unfavorable variance at MBIA Insurance Corp. related to gains on the extinguishment of variable interest entity debt recorded in the first quarter of 2025 with no comparable activity in the first quarter of 2026. The company's adjusted net loss, a non-GAAP measure, was $8 million or a negative $0.16 per share for the first quarter of 2026 compared with an adjusted net loss of also $8 million or a negative $0.16 per share for the first quarter of 2025. Slightly lower revenues in the first quarter of 2026 were offset by slightly lower expenses. During the quarter, MBIA Inc.'s book value per share decreased $0.55 to a negative $44.82 per share as of March 31, 2026. This decrease was primarily due to our consolidated net loss for the first quarter of 2026. In addition, included in MBIA Inc.'s book value as of March 31, 2026, is a negative $53.59 per share of MBIA Insurance Corp.'s book value. I will now spend a few minutes on our corporate segment balance sheet. The Corporate segment, which primarily comprises the activities of the holding company, MBIA Inc., had total assets of approximately $639 million as of March 31, 2026. Within this total are the following material assets. Unencumbered cash and liquid assets held by MBIA Inc. totaled $353 million, reflecting a small decrease compared with $357 million as of December 31, 2025. In addition to these unencumbered cash and liquid assets, -- the corporate segment's assets included approximately $181 million of assets at market value pledged to guaranteed investment agreement contract holders, which fully collateralized those contracts. Now I'll turn to the insurance company's statutory results. National reported statutory net income of $11 million for the first quarter of 2026 compared with statutory net income of $4 million for the first quarter of 2025. The favorable variance was primarily driven by net realized losses on the sale of investments in the first quarter of 2025 with no comparable losses in the current quarter. National statutory capital as of March 31, 2026, was $950 million, which was up $13 million compared with December 31, 2025. The increase was mostly due to National statutory net income for the current quarter. As of March 31, 2026, claims paying resources were $1.4 billion, consistent with year-end 2025. Now I'll turn to MBIA Insurance Corp. MBIA Insurance Corp. reported statutory net income of $1 million for the first quarter of 2026 compared with statutory net income of $2 million for the first quarter of 2025. The unfavorable variance was primarily driven by a smaller loss in LAE benefit in the current quarter compared with the first quarter of 2025. As of March 31, 2026, the statutory capital of MBIA Insurance Corp. was $79 million, unchanged from year-end 2025. As of March 31, 2026, claims paying resources totaled $316 million, down just $1 million from year-end 2025. MBIA Insurance Corp.'s insured gross par outstanding was just under $2 billion as of March 31, 2026, which is down about 7% from year-end 2025. And now we will turn the call over to the operator to begin the question-and-answer session. Operator: [Operator Instructions] We'll take our first question from Tommy McJoynt with KBW. Thomas Mcjoynt-Griffith: A question on the corporate segment balance sheet, looking at the liability side there. Occasionally, you've been able to redeem some of those liabilities at a discount early. It didn't look like there were any actions taken in the quarter. So can you just go through the opportunity there going forward to satisfy some of those obligations early and potentially accretively just as a use of capital that could be good for shareholders? Joseph Schachinger: Sure, Tommy. It's Joe. So we're consistently looking for opportunities in which we can buy back the holding company debt at discounts. We haven't seen a whole lot of that recently. We are focused on repaying the debt coming up in '27 and '28 -- the debt beyond that, once we get into the 2030s is not yet in our liquidity window, but we expect that to be within the next couple of years. So we'll have more opportunities there. And that's where we'll see more of the benefit to our capital in trying to get those back at discounts. Thomas Mcjoynt-Griffith: Okay. And then since we last spoke around fourth quarter earnings a few months ago, have there been any updates on the strategic process to the extent of hiring advisers or bankers to explore options? Any updates over the past couple of months? William Fallon: There's nothing that we've chosen to communicate to anybody at this point in time, Tommy. Operator: We will move next with John Staley with Staley Capital Advisors. John Staley: I have 2 questions. One, what is the projected cash requirement to meet the guarantees on the outstanding Puerto Rico PREPA debt in 2026? And secondly, this lawsuit the oversight Board being a non-lawyer strike me as being awfully frivolous. I mean it's an appointed position. The entities that appointed said, well, you're not here anymore. I'm trying to understand the basis of the litigation in which they are suing to be restored? Is there a payment that they get and they're suing because they felt they should be entitled to be paid? Or what's the basis that they're suing? I had lost. I thought it was -- I don't know if there was a voluntary position, but it wasn't anything you paying for, you were appointed. And it seemed to me that a lawyer, the President through C has the right to do whatever Hey wants in terms of who sits on that Board. So those are my 2 questions. William Fallon: Thanks, John. With regard to your first question, the PREPA payments, the debt service that we have is approximately $35 million for the rest of the year. So with regard to your second question, the Oversight Board litigation in those positions, you're correct. Those positions are not compensated. So there is no remuneration to any of the Oversight Board members. The lawsuit, as you mentioned, is somewhat complicated. Most of the argument, we believe, comes down to whether the process was appropriate in terminating what now are the 3 Oversight Board members who have sued to retain their positions. As you know, one judge has already put them back on saying that the -- until the whole case is heard that they should be on the Board. That case is essentially on hold until a different case, which is the Federal Reserve, which is the Lisa Cook case is decided, at which point then the Puerto Rico court will resume this case. So it may take a little time for this to get resolved. It is not about compensation, and it really is, we think, primarily around the process that was either followed or not follow. There is, I suppose, a longshot argument whether or not the administration that is the President has the right to terminate them. But we think most likely, the answer to that is yes that he does as long as it's for cause and that there is a procedure that's followed. John Staley: Do you have any time line on it? Isn't the Cook case expected to be handed down by the Supreme Court very shortly? William Fallon: Yes. And so as soon as that decision is rendered, then we believe that the case can resume in Puerto Rico, and hopefully, that will move quickly. I should mention there are 3 open positions that the administration with obviously the President's approval could fill those spots after, again, the recommendations are made to the President. We think that would actually help move the process along in terms of potentially negotiating a settlement between the bondholders and the Oversight Board. But again, no words specifically on when those 3 positions might be filled. Operator: [Operator Instructions]We will move next with Paul Saunders with Hutch Capital. Paul Saunders: All right. Great. So I've got just a quick question on selling the company, like we've talked about our strategic actions. And this is a hypothetical, so you might not be able to answer it, but I'm going to ask it anyway just to get your thoughts. And the idea behind this is just that considering the amount that you've reduced the PREPA exposure a couple of quarters ago and the fact that you were able to sell that amount at your current mark now. And so there's a pretty established value for the recovery there and that balance is pretty small. It seems like that band has gotten pretty small in terms of uncertainty. So I wanted to ask you just in a hypothetical, let's imagine PREPA doesn't exist anymore. You've satisfied all those claims. You've paid the salvage at your mark. So the adjusted book value remains the same in the kind of low 13s per share. And now you're in a position where you feel like you can sell the company. Can you kind of describe -- I would imagine at that point, there's bids that come in and it's some sort of discount to the book value and the discussion is really over what the size of that discount should be. So I was curious if you could kind of describe on both sides of a buyer, what's their argument for asking for what you think is an unreasonable discount to book value? Like why would they be asking for that? And then on the other side of that, what's kind of the selling point to the buyer of why it should be closer to the book value per share or something like that? Just to give us some context of like how people are thinking about this between the buyer and the seller. William Fallon: Yes. In some ways, Paul, what you're describing, and again, thank you for your question, is a typical process that a company would go through when it decides to sell the company, and we went through a process along those lines at this point about 3 years ago. There are all different ways. And so a lot of the potential parties involved don't even use adjusted book value. So in some ways, it's hard to answer it with the construct that you put forth. They all put forth a proposed acquisition amount. We have an analysis or we do an analysis in your hypothetical situation with what our alternatives are that is pursuing any of those, if they're just a straight sale of the entire company, that's pretty straightforward. If it was something other than that, for example, people have suggested selling just National. People have suggested mergers. People have suggested reinsurance. People have suggested we continue or compare that to continuing to run the company off a loan. So it's hard to answer in terms of the discounts to adjusted book value, it gets more -- I think your question gets at the right issue, which is what are all the different ways and what would be the bids for the company and what are the choices that we have for the company going forward. So in some ways, I think it's a pretty typical sale process. Operator: And at this time, I am showing no further questions. I would like to turn the floor back over to management for closing remarks. Greg Diamond: Thanks again, Nikki, and thanks to those of you listening to our call. Please contact me directly if you have any additional questions. We also recommend that you visit our website at mbia.com for additional information about our company. Thank you for your interest in MBIA. Good day, and goodbye. Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect. Before you buy stock in MBIA, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MBIA wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $463,900!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,294,401!* Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of June 1, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. MBIA (MBI) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in MBIA, Inc.? Here are five stocks we like better. MBIA’s first-quarter loss narrowed to a GAAP net loss of $40 million, or $0.80 per share, versus $62 million a year earlier, helped by favorable foreign exchange moves, lower reserve impacts and the absence of some prior-year investment losses. On an adjusted basis, the net loss was unchanged at $8 million. PREPA remains the key issue for National, with exposure unchanged at $425 million gross par value. Management said progress has stalled amid legal disputes involving Puerto Rico Oversight Board members, though they expect about $35 million in PREPA debt service needs for the rest of 2026. National’s capital position improved as insured gross par outstanding fell to about $21.5 billion and leverage eased to 23-to-1 from 24-to-1 at year-end 2025. National also posted $11 million in statutory net income, while MBIA Inc. ended the quarter with $353 million in unencumbered cash and liquid assets. MBIA (NYSE:MBI) reported a narrower first-quarter GAAP net loss, as management said favorable foreign exchange movements, lower reserve impacts and the absence of certain prior-year investment losses helped offset other items. The company posted a consolidated GAAP net loss of $40 million, or $0.80 per share, for the first quarter of 2026, compared with a net loss of $62 million, or $1.28 per share, in the prior-year quarter, EVP and Chief Financial Officer Joe Schachinger said on the company’s earnings call. → Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum On an adjusted basis, MBIA’s net loss was unchanged year over year at $8 million, or $0.16 per share. Schachinger said slightly lower revenue in the quarter was offset by slightly lower expenses. Schachinger said the lower GAAP net loss was primarily driven by several favorable year-over-year variances. At MBIA Insurance Corp., the company recorded no comparable 2026 losses related to the liquidation of its Mexican subsidiary, which had affected results in the first quarter of 2025. → 3 Ways to Target the Resources Powering AI and Data Centers The corporate segment also benefited from foreign exchange movements tied to Global Funding’s euro-denominated medium-term notes. Schachinger said the U.S. dollar strengthened against the euro in the first quarter of 2026, compared with a weakening of the dollar against the euro in the year-earlier period. MBIA Insurance Corp. also reported a favorable variance in losses and loss adjustment expenses, which Schachinger attributed primarily to changes in the risk-free rates used to discount loss reserves. Those rates increased in the first quarter of 2026, reducing the present value of reserves, compared with a decrease in rates in the first quarter of 2025. → Quantum Earnings Season Is Ramping Up—What to Watch From 2 Major Players National Public Finance Guarantee Corp. recorded a favorable variance in net realized investment gains and losses. Schachinger said National recorded investment losses from sales of securities in the first quarter of 2025, with no comparable activity in the current quarter. Those positive factors were partially offset by an unfavorable variance at MBIA Insurance Corp. related to gains on the extinguishment of variable interest entity debt recorded in the first quarter of 2025, with no comparable activity in the first quarter of 2026. Management said National’s outstanding exposure to the Puerto Rico Electric Power Authority, or PREPA, remained unchanged from year-end 2025 at $425 million of gross par value. Bill Fallon, speaking for MBIA management, said the company’s priority continues to be resolving National’s PREPA exposure. “There has not been much substantive progress since our last conference call in February,” Fallon said, adding that until legal issues related to members of the Financial Oversight and Management Board are resolved, “it is unlikely that substantive progress will be made.” During the question-and-answer session, management said the projected PREPA debt service requirement for the remainder of 2026 is approximately $35 million. Asked about litigation involving members of the Oversight Board, management said the dispute is not about compensation, noting that the board positions are not paid. Management said it believes the litigation primarily concerns the process used in terminating three board members who have sued to retain their positions. The company also said the case is effectively on hold pending a decision in a separate Federal Reserve-related case involving Lisa Cook. Management added that three open Oversight Board positions could be filled by the administration with the president’s approval and said that doing so could help move the process toward a possible negotiated settlement between bondholders and the Oversight Board. Outside of PREPA, Fallon said the balance of National’s insured portfolio has continued to perform generally in line with company expectations. National’s insured gross par outstanding declined by approximately $900 million from year-end 2025 to about $21.5 billion at March 31, 2026. National’s leverage ratio, measured as gross par to statutory capital, was 23-to-1 at the end of the quarter, down from 24-to-1 at year-end 2025. As of March 31, National had total claims-paying resources of $1.4 billion and statutory capital and surplus of $950 million. Schachinger said National reported statutory net income of $11 million for the first quarter of 2026, compared with statutory net income of $4 million in the first quarter of 2025. The favorable variance was primarily driven by net realized losses on investment sales in the first quarter of 2025, with no comparable losses in the current quarter. National’s statutory capital increased by $13 million from year-end 2025, mostly due to current-quarter statutory net income. Claims-paying resources were consistent with year-end 2025. MBIA Inc.’s book value per share decreased by $0.55 during the quarter to negative $44.82 as of March 31, 2026. Schachinger said the decline was primarily due to the consolidated net loss for the quarter. Included in that figure was negative $53.59 per share of MBIA Insurance Corp.’s book value. The corporate segment, which primarily includes holding company activities, had total assets of approximately $639 million as of March 31. Unencumbered cash and liquid assets held by MBIA Inc. totaled $353 million, down slightly from $357 million at Dec. 31, 2025. The corporate segment also included approximately $181 million of assets at market value pledged to guaranteed investment agreement contract holders, which Schachinger said fully collateralized those contracts. MBIA Insurance Corp. reported statutory net income of $1 million in the first quarter of 2026, compared with $2 million in the year-earlier period. Schachinger said the unfavorable variance was primarily due to a smaller loss and loss adjustment expense benefit in the current quarter. MBIA Insurance Corp.’s statutory capital was $79 million as of March 31, unchanged from year-end 2025. Its claims-paying resources totaled $316 million, down $1 million from year-end. Insured gross par outstanding was just under $2 billion, down about 7% from year-end 2025. In response to a question from Tommy McJoynt of KBW, Schachinger said MBIA continues to look for opportunities to buy back holding company debt at a discount, though it has not recently seen many such opportunities. He said the company is focused on repaying debt coming due in 2027 and 2028. “The debt beyond that, once we get into the 2030s, is not yet in our liquidity window,” Schachinger said, adding that the company expects it to be within that window in the next couple of years. Asked whether there were updates on a strategic process, including the potential hiring of advisers or bankers, management said there was “nothing that we’ve chosen to communicate to anybody at this point in time.” In a separate exchange about potential strategic actions, management said a sale process could involve a range of alternatives, including a sale of the entire company, a sale of National, mergers, reinsurance or continuing to run the company off. Management said potential parties do not necessarily use adjusted book value as the basis for valuation and that the company would evaluate available alternatives in any hypothetical process. MBIA Inc is a financial guarantee insurance company specializing in credit enhancement and risk mitigation solutions for public finance and structured finance transactions. The company provides guaranty insurance for municipal bonds, asset-backed securities and other credit-sensitive obligations, protecting investors against the risk of payment default. Through its core insurance subsidiary, MBIA Insurance Corp., the firm offers financial guarantees, reinsurance support and customized credit solutions designed to improve the marketability and pricing of debt instruments. Founded in 1973 as the Municipal Bond Insurance Association, MBIA built its reputation by insuring U.S. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "MBIA Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.