Mbia Inc (MBI) SEC Filing 10-K Annual report for the fiscal year ending Wednesday, December 31, 2014

Exhibit 99.1

MBIA Inc. Reports Fourth Quarter and Full Year 2014 Financial Results

PURCHASE, N.Y.--(BUSINESS WIRE)--March 2, 2015--MBIA Inc. (NYSE:MBI) (the Company) today reported combined operating income (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $185 million for the year ended December 31, 2014 compared with a combined operating loss of $15 million in 2013. The improvement in combined operating income for the year ended December 31, 2014 was primarily the result of decreases in insurance losses and loss adjustment expenses (LAE) and lower operating expenses partially offset by lower premiums earned, a decline in net investment income and reduced fees and reimbursements.

The Company’s combined operating income for the fourth quarter of 2014 was $22 million compared with a combined operating loss of $383 thousand for the same period of 2013. The increase in combined operating income for the three months ended December 31, 2014 compared with the same period of 2013 was driven primarily by a lower provision for income taxes.

Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) was $24.87 as of December 31, 2014 compared with $24.05 as of December 31, 2013. The increase in ABV per share was primarily driven by combined operating income and a decrease in common shares outstanding resulting from share repurchases. The Company repurchased 3.3 million of its common shares during 2014.

As the Company returns its emphasis to value creation following a period where value conservation was its primary goal, it is supplementing its GAAP results by reporting its operating income (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures). Previously, the Company had used adjusted pre-tax income, a non-GAAP measure, to supplement the analysis of its results. The Company’s current version of operating income differs from the version used prior to its adoption of adjusted pre-tax income. The Company has also revised its definition of ABV to remove the impact of its non-core international and structured finance insurance, advisory services and conduit segments. Operating income and ABV per share provide investors with alternative views of the Company’s operating results that management finds useful in measuring financial performance. Reconciliations of ABV per share to book value per share, and operating income to net income, calculated in accordance with GAAP, are attached.

Consolidated GAAP net income was $20 million, or $0.10 per diluted share, for the fourth quarter of 2014 compared with consolidated net income of $132 million, or $0.68 per diluted share, for the same period of 2013. The decrease in reported consolidated net income in the fourth quarter of 2014 was primarily due to lower unrealized gains on insured derivatives, partially offset by a lower provision for income taxes. The Company recorded consolidated net income of $569 million, or $2.76 per diluted common share for the year ended December 31, 2014, compared with consolidated net income of $250 million, or $1.29 per diluted common share, for the full year 2013. The increase in consolidated net income for the full year 2014 compared with the prior year was primarily attributable to higher net gains on insured derivatives and a reduction in operating expenses.

“This is the third quarter in a row in which we saw positive operating income, cash flow and ABV growth, and the first full year of positive earnings since before the financial crisis,” said MBIA Inc. President and Chief Financial Officer Chuck Chaplin. “Our expense reduction efforts are paying off.”

“National Public Finance is again competing for new municipal bond insurance business, although new business production to date has been lower than we expected, primarily due to the low interest rate environment and competitive pricing levels. Low yields also limit our investment income. However, National’s capital position continues to strengthen, leaving us well-positioned when rates begin to increase,” Mr. Chaplin continued. “The capital position of MBIA Insurance Corp. also improved.”

U.S. Public Finance Insurance Results

The Company’s U.S. public finance insurance business is conducted through its National Public Finance Guarantee Corporation (National) subsidiary. The U.S. public finance insurance segment recorded $56 million of operating income in the fourth quarter of 2014 compared with $60 million of operating income in the same period of 2013.

Total premiums earned in the U.S. public finance insurance segment were $82 million in the fourth quarter of 2014, down 5 percent from $86 million of total premiums earned in the same period of 2013, reflecting a 5 percent decline in scheduled premiums earned and a 4 percent decline in refunded premiums earned. The decline in scheduled premiums earned resulted from portfolio amortization and high refunding volume over the past several years.

In addition to $300 million in the third quarter of 2014, National wrote approximately $43 million par amount of primary new insurance during the fourth quarter of 2014, and $26 million in January and February of 2015. Low interest rates, narrow spreads and competitive pricing levels continue to limit new business opportunities.

Net investment income for the U.S. public finance insurance segment was $29 million in the fourth quarter of 2014, down from $33 million in the fourth quarter of 2013 primarily due to lower average investment yields.