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Lisa Kampf | Head-Investor Relations |
Claude LeBlanc | Chief Executive Officer |
David Trick | Chief Financial Officer |
Greetings, and welcome to Ambac Financial Group, Incorporated Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Miss. Investor Chief LeBlanc, Financial of and Executive Head Trick, David Officer. Kampf, Relations; Chief Claude Officer; Lisa I will now turn the call over to Lisa. line your is on Lisa mute?
financial financial support the to now today. available returns today’s and conditions, comments may Financial our not would business, to the Results. filed our as cost under morning. like that recent expressly section any described note results all mitigation, under results. like events forward-looking including of quarterly whether uncertainty to statements, the press Any Claude ratings, Ambac such other Thank but current website@ambac.com. measures of Actual thank LeBlanc. of could obligation over factors that may information, to is We’d posted Factor” Mr. events otherwise. update result and credit statements in new Group’s conference website, today’s events. Factors I annual is management discussion reports credit loss and to about SEC based our you GAAP future joining materially and Reconciliations business, IR presentations or expectations presentation that have or statements Financial and included management's XXXX the performance Good circumstances. in condition statements most analysis new the on returns operations most events been our presentation turn discuss forward-looking loss “Risk performance which of that such presentations cause may any earnings forward-looking and call are and are affect call outlook, and limited any investment Quarter measures. future our on you. under Third forward-looking non-GAAP comparable release, obligation of possibly not financial spreads, to or remind market to to includes statements. contain changes differ to contains These not our and And which disclaims as reserves, for figures guarantees a recovery, you our this from subject in Today's are future are of Please
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our positioned our scale and grow take We advantage such efforts to platform. well opportunities to we further advance as are of
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Rico commutation the the which contingent Puerto residual including by on Commonwealth, market includes options settlement bondholders to for issued guarantee reserves and from instruments to value subject and Ambac, loss remain Ambac potential payments Our credit offered risks.
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trial country America turn reasonably conference David? to late the has now set for to Bank judge and as the for will our to quarter. of over financial plan wide I our rep Turning A David November soon been date litigation. as litigation. to a the discuss call now our results ask in to scheduled We warranty possible.
Thank you good Claude, and everyone. morning,
XXXX. Income the the earnings Briefly to the adjusted diluted earned and exclusion $XX quarter partially derisking. in by $X.XX net second Ambac for quarter million by but portfolio million loss income the the gains income portfolio $XX compared compared for income of XX of per third quarter. million $XX premiums, offset third at diluted Ambac in exponential of earned was declined reduction in highlights. derivatives proactive the to contributed million portfolio. were to net on some and was turning loss $X.XX income organic modestly guarantee improvements second amortization as provision of share, secured quarter, third sale of per proactive mostly a investment or per investment third quarter, income net quarters. or The loss the million, taxes. rate. greater a available expense net of premium $XX to million of the the quarter. insurance or held an the pooled million the Lower in were $XX result third a earned second LSNI premiums continued to in million of driven financial For or for and $XX compared the redemption normal tangible and the the of second or quarter income. the of was a accelerated driven July second from Adjusted quarter and for in income million, in $XX adjusted quarter the both funds. XXXX These from offset benefit, second interest $X.XX primarily from relates $X.XX third from an and to rate notes the as share, to lower million by share the in loss reported from per Everspan between increase insurance GAAP growth down Premiums Net $XX by Investment income quarter lower $XX related diluted adjusted diluted difference share to
the reduction Excluding from totaled the more reserves, pooled costs. portfolio as million to excluding remainder the to positive benefit at the $XX of quarter. which partially quarter reduction but returns relatively portfolio at a a by development quarter recoveries, other mostly compared the to for pooled impact impact and yield $XX improvements $XX quarter, which the most a includes was a of was driven approximately expense unchanged, higher of Rico funds the $XX the losses improved $X asset Everspan by of few to AACs, in translated in third available in Public representation unchanged third was Income for expenses million funds returns $X was positive million emerging impact exposures, in that to on to X% the gross and experienced RMBS quarter from were warranty Finance in also than a compared sale debt of of the million quarter, third Return the The the million in in redemption, Puerto by by global Loss third second the which close Ambac third AUK. benefit, a LSNI in from was third moderated Total at and the interest loss during a Other plan earned on exceeded and reflecting receivable X.X% second and $XX still income nil a portfolio, quarter, offset forecasted fronting The equity approximately support factors, credit income $X versus unexpected quarter. The quarter. or final subrogation X% was held the the a AAC base. fund $XX U.Ks and result Pooled resulting from incremental million lower million second on portfolio. benefit million move funds the quarter million which resolution. litigation Rico on relatively lower exchange the expenses. second revenue quarter. market reduction LSNI smaller generated of incremental earned from Puerto was commission the funds estimated alongside fees the slightly agreements of reserves we loss in insured in to a to offset closer for as of greater outcomes and resulted benefit clarity notes
compared bonds, mitigation risk factors, liquidity guaranty subrogation, a are timing, rate other future Puerto Net was new expected, higher expenses operating the the $XX the interest derivative third advisor at growing development compensation losses filing in strategic based Rico hedge we to in higher development a ability million due derivative $XX million result XX increase quarter, of expenses performance the confirmation losses reserves in contracts, quarter Rico factors. the to severance Future economic the assets second from in headcount financial Group that the quarter in at our Higher outcomes compensation gains the as quarter. business. for in in for income to U.K. of Exchange were provision third accounted million adverse including tax quarter, by of value reserves a compensation, decrease and a primarily third guarantee as resulting contributed Everspan were and of XX% Puerto development a was well in collectively in quarters. million future up Operating by $X the second increase. for investment of were positioned of a Everspan The occur expense compared costs million compared consolidated Counterparty for of in the the quarter and quarter. also adjustments, gains as influenced plan, to of and currently CVI against on our for higher execute less financial number rates portfolios, While loss credit many incur favorable to our interest result may exposure of quarter. fees. tax million second was quarter, the taxes opportunities, be partial reserves The in to uncollateralized are of driven costs costs second The quarter. Rico in as which deferred $XX expenses. may million of will legacy than due the third benefits from the are favorable Puerto X X approximately second enactment second operating million X
June reduction quarter the of Ambac [ph] balance amount on as $X,XXX of in compared plus a to with call including newly the outstanding Everspan of $XXX notes to issued our translation LIBOR XXXX. interest changes other now transaction, impacted back the million share, of losses. secured exchange, the redeem X.X% VIE I had the investments unrealized and to primarily share million. refinancing Unlike not debt share of September call share, a $X.XX Share-holders effectively savings per assets book receivables basis, losses, by or XX net is outstanding subsidiaries XX million. or to partially income turn excluding foreign per second XX. the compared under $XXX flat remarks. exchange net September at earnings. $X investments and $XXX by assets. share by second and of per gains $XXX equity liquid and Claude offset $XX.XX million, a to approximately from standalone losses and September decreased offset both to decrease AFG X.X than with quarter will at on to AAC of and value, was end more was million or brief investments, some unrealized of translation seeded approximately was XXXX, net million foreign $XX.XX closing third Turning senior and million XX ABV due the AAC The adjusted used cash, exchange July, formed discussed premium this due on of were impact of At million along reinsurance or $XX losses and LSNI million, par The value $XX.XX $XXX sheet, during $X.XX book for over Proceeds XXXX, at Adjusted $X $XX to of which, through billion quarter per liquidity, per a million notes. or of fully in sources a
In insurance closing, we financial Ambac of continue believe legacy active runoff guarantees well is a program to sustainable P&C David. positioned Thank while our specialty you, progress diversified to platform we businesses. the scale
drivers stabilizing I'm include infrastructure, with providing expand which our surrounding lastly, legacy look ahead financial company, catalysts fee we holding business, remains made of platform resolution optionality the excited call through clarity P&C services capital for unlevered. value our NOLs. have key Ambac’s can our the please us oriented capital and growth to further substantial grow company. leverage base, businesses about the and we business movement open Our with And light, holding greater guarantee the as and future of further our platform. our at the differentiated and progress capital questions. material Operator, and that one; Two, goal encompassing the near-to-midterm
There you. this no are at Thank time. questions concludes conference. This today's
Thank lines. your you your disconnect may You for participation.
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