Aca Capital Holdings Inc (1304623) SEC Filing 10-K Annual report for the fiscal year ending Sunday, December 31, 2006

Exhibit 99.1

ACA Capital Reports Financial and Economic Results for the Fourth Quarter and Year Ended December 31, 2006

NEW YORK — February 14, 2007 — ACA Capital Holdings, Inc. (NYSE: ACA) today announced fourth quarter 2006 net income of $16.5 million, or $0.49 per diluted share.  This represents a 293% increase from fourth quarter 2005 net income of $4.2 million, and a 250% increase in earnings per diluted share of $0.14 in the fourth quarter of 2005.

For the year ended December 31, 2006, ACA Capital reported net income of $58.7 million, or $1.89 per diluted share.  This represents a 104% increase as compared to the year ended December 31, 2005 net income of $28.8 million and a 97% increase in earnings per diluted share of $0.96 for this same period.

“ACA Capital’s fourth quarter results wrapped-up an exceptional 2006.  Our business strategy has produced strong growth and revenue diversification while reducing our overall risk profile,” said President and Chief Executive Officer Alan S. Roseman.  “Our record 2006 net income of $58.7 million and net economic income of $55.4 million is further evidence that our unique position in the alternative fixed income capital markets is leading to significant value creation for the stockholders of ACA Capital.”

Net income and net income per diluted share are computed in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  Additionally, to assist investors in their understanding of the Company’s quarterly results and their measurement of the Company’s growth and profitability, ACA Capital provides other non-GAAP information, including net economic income and base economic income.

Net economic income for the fourth quarter 2006 was of $14.6 million, or $0.43 per diluted share.  This represents a 165% increase from fourth quarter 2005 net economic income of $5.5 million, and a 139% increase in net economic income per diluted share of $0.18 in the fourth quarter of 2005.

For the year ended December 31, 2006, ACA Capital reported net economic income of $55.4 million, or $1.78 per diluted share.  This represents a 68% increase as compared to the year ended December 31, 2005 net economic income of $32.9 million and a 62% increase in net economic income per diluted share of $1.10 for this same period.

Net Economic Income

In managing its business and measuring growth and profitability from a strategic and financial planning perspective, in addition to GAAP net income results, ACA Capital’s management and Board of Directors consider a supplemental measurement, net economic income.  Net economic income excludes the net income impact of:

1.                  Unrealized gains (losses) on derivatives included in:

a.   Net insured credit swap revenue;

1