Assured Guaranty’s Earnings Jump In Q/3
Assured Guaranty yesterday [Nov. 14] reported income of $762.2 million, or $4.13 per share, for its third quarter, a significant earnings jump for the Bermuda-based mortgage bond insurer.
The monoline reported in the second quarter a loss of $57.7 million, or 31 cents per share, and third-quarter earnings increased from $164.6 million, or 88 cents per share, for the same quarter a year ago.
Assured said in its earnings release Monday that its third-quarter income is, “primarily driven by net fair value gains on credit derivatives and financial guaranty variable interest entities” that total $749.4 million and “are expected to reverse to zero as the assets and liabilities approach their maturities.”
“As a result of our extensive recovery efforts for breaches of representations and warranties, the third quarter loss development was significantly offset by an increase in the R&W benefit,” President and CEO Dominic Frederico said in the release.
Expected losses on US residential mortgage-backed securities increased slightly to $2.59 billion at the end of the third quarter from $2.53 billion at the second-quarter close.
The company representations and warrants benefit rose from $1.64 billion in the second quarter to $1.74 billion in the third.
